Document:

Exhibit
10.25

 

 

September
10, 2003

 

Roy
A. Ziegler

42
Isleworth Drive

Henderson,
NV 89052

 

Dear
Roy,

This letter sets forth the substance of the
agreement (the “Agreement”) between you and First Consulting Group, Inc.
(“FCG”) regarding your separation of employment.

 

1. Separation.  You will cease to be an officer, director or
employee of FCG or any of its subsidiaries or affiliates (individually, an “FCG
Company” or collectively, the “FCG Companies”) effective September 26, 2003
(the “Separation Date”). To the extent you are a director serving on the board
of any FCG Company, this Agreement shall serve as your resignation from such
directorships.

 

2. Accrued Salary and Paid Time Off.  On
or after the Separation Date, in conformance with applicable state laws, FCG
will pay you all accrued and unpaid salary, and all accrued and unused paid
time off earned through the Separation Date, subject to standard payroll
deductions and withholdings.  You are
entitled to these payments regardless of whether or not you sign this
Agreement.  Unused personal choice
holidays are not paid out.

 

3. Severance Payments.  FCG will pay to you the following amounts as
full consideration for your obligations and covenants under this Agreement and
in full satisfaction of any amount that may be owed to you upon your separation
from FCG under any agreement or arrangement between you and FCG or any other
FCG Company: twelve (12) months of base salary, or approximately $405,000, less
federal, state and other applicable taxes and other authorized
withholdings.  Payment of this amount
will be paid as a lump sum distribution within ten (10) days after the later
of: (i) the date this signed agreement is received by FCG; (ii) your Separation
Date; or (iii) the date you have returned to FCG all of the FCG property and
equipment in your possession in accordance with Section 13 below.

 

In addition, in the event
that (i) you have not secured full time employment with an organization other
than FCG; and (ii) you are not in violation of any of the terms of this
Agreement, you will be eligible to receive additional severance as follows:

 

•                  If you are not employed prior to September
30, 2004, you will receive three additional months of base salary on September
30, 2004, or approximately

 

 

$101,250, less federal, state and other
applicable taxes and authorized withholdings.

 

The additional severance benefits set forth in the
preceding paragraph and bullets shall no longer be available once you are
employed with an organization other than FCG, even if you secure employment and
then are subsequently not employed by such non-FCG organization on the dates
above.  For example, if you secure
employment in January 2004 and then are not employed as of September 30, 2004,
you will not be eligible to receive any additional severance under this
Agreement.

 

For purposes of this Agreement, “employed” or
“employment” shall mean full
time employment as an employee, consultant or independent contractor.  For purposes of clarification, “full time”
shall not include temporary or interim positions where you may be engaged full
time in terms of working hours, but not in terms of expected length of service
(i.e., a one month consulting engagement that is 20 hours or more per week but
is not a full time position as an employee or an extended period of full time
service as a consultant or contractor for you with that non-FCG organization).

 

You must return this signed Agreement within three (3)
weeks of the Separation Date in order to be eligible to receive the severance
benefits outlined above. All
severance payments under this Agreement will be by manual checks.

 

You will also receive an
Executive Outplacement Package of four (4) months of assistance with Right
Management Consultants.  Information in
regard to this assistance will be sent to your home and a representative from
Right Management Consultants will be contacting you shortly.  It is your option to begin the four months
now or wait until your Separation Date.

 

4. Health
Insurance.  According to company policy, your FCG group
health insurance benefits will be cancelled effective with the Separation Date.
After the Separation Date, you will be eligible to continue your group health
insurance benefits at your sole cost and expense (except as noted below)  to the extent provided by federal COBRA
law, state insurance laws and by FCG’s current group health insurance policies.
You may do this by making the COBRA election and submitting your premiums
directly to our COBRA administrator in the Long Beach office.  A package of information will be sent to you
via mail within 21 days of the Separation Date detailing the process and
premium amounts for COBRA coverage, including the deadline by which you must
elect COBRA coverage. Should you elect COBRA within the time requirements, coverage
will be effective retroactive to the Separation Date.

 

Should you elect to continue your group health
insurance benefits through COBRA, and subject to your execution of this
Agreement, FCG will pay your COBRA premiums until the earlier of (1) September 30, 2004; or (2) the date
you become eligible for group health insurance benefits through a new
employer.  You agree to notify FCG
promptly upon obtaining new employment.  Although FCG will pay the cost of your COBRA
until

 

 

the date specified above, your coverage will not be
reinstated until you have received, signed and returned the COBRA election
form.  At that time, the carriers will
be notified of your election and your coverage will be reinstated.  In the meantime, if you should require any
medical/dental services, you will need to pay for those services and submit
your receipts, with a claim form, to the insurance company for reimbursement
after you have signed and returned your COBRA election form.

 

In addition, if you have
not secured any employment (as defined in Section 3 above) with an organization
other than FCG and you are not in violation of any of the terms of this
Agreement, you will be provided additional COBRA premium support based on the
following schedule:

 

•                  If you are not employed prior to September
30, 2004, you will be provided an additional three months of company paid COBRA
coverage premiums.

 

Your
eligibility to receive this additional three months of COBRA coverage is the
same as your eligibility to receive additional severance as set forth in
Section 3 above.

 

5.
Flexible Spending Accounts. Coverage under Flexible Spending Accounts ceases on the Separation
Date, subject to your ability to continue your Health Care Flexible Spending
Account through the balance of the year on an after-tax basis. Additional
details are provided in the COBRA notification.

 

6. Life
Insurance. Your FCG
group life insurance coverage will end effective on the Separation Date.  If you would like to convert your coverage,
please contact the Benefits Service Center within 30 days of the Separation
Date at 800-471-8853, ext. 2363.

 

7.
Disability/Long Term Care Coverage. Coverage under the disability and Long Term Care programs will
terminate effective on the Separation Date. 
If you would like to convert your coverage(s), please contact the
Benefits Service Center within 30 days of the Separation Date at the number
above.

 

8.
Associate Stock Purchase Plan (ASPP).   Participation in the ASPP will
terminate effective with the Separation Date. 
Year-to-date deductions that have not already been used to purchase
stock will be refunded within two pay periods after the Separation Date.  Stock already purchased will remain in your
personal E*TRADE account. You should contact E*TRADE directly with any
questions regarding your account.

 

9. Stock Options.  Any
options to purchase FCG stock that you hold will cease to vest on the
Separation Date and all of your unvested stock options will be cancelled.  You will have 90 days following the
Separation Date to exercise any vested options you received under FCG’s option
plans. A closing statement containing information on your vested options will
be mailed to your home from the FCG Corporate Affairs department.

 

 

Also,
status of your stock options is available online through E*TRADE at
www.optionslink.com.

 

10. Other
Benefits.  You and FCG hereby agree and acknowledge the
following:

 

(a) SERP
and 401(k).  As of the Separation Date, you no longer may
contribute funds to FCG’s 401(k) plan or the Supplemental Executive Retirement
Plan (“SERP”), nor will FCG contribute any matching or other funds to such
plans on your behalf; provided that, you will receive the full FCG contribution
under the SERP for 2003.   No payroll
deductions for pre-tax contributions will be taken from your severance
pay.    Nothing in this Agreement
terminates or otherwise affects any right or interest you may have in vested
funds and assets under FCG’s 401(k), ASOP and SERP plans.

 

You will receive detailed information from New York Life regarding the
distribution of your contributions and any vested funds from the 401(k) and
ASOP account.  As you will read in that
material, you should wait until the middle of the month after the month
in which your last 401(k) deduction is made before applying for a distribution.  Contact New York Life directly at (800)
294-3575 regarding any questions, including account rollover transactions.  You may also visit their website at
www.bcomplete.com.  If you currently
have an outstanding loan, you may maximize the tax deferral of this benefit by
electing to repay the loan prior to taking a distribution from the Plan.  If you choose not to, the outstanding loan
balance will be defaulted and treated as a taxable distribution to you.  You may coordinate the prepayment of the outstanding
loan balance with New York Life.

 

You will receive detailed information from Human Resources regarding the
distribution of your contributions and any vested funds from the SERP.  You agree and acknowledge that amounts
distributed from your SERP account will be less any amounts payable under
Section 21 of this Agreement and you hereby authorize FCG to withhold such
amounts from your SERP distribution. 
You may contact Human Resources if you have any questions.

 

(b) Other Amounts.  You
acknowledge that, except as expressly provided in this Agreement, you will not
receive any additional compensation, bonus, severance or benefits after the
Separation Date.

 

11.
Unemployment Benefits.
Because of the nature of your separation with FCG, you may be eligible for
unemployment insurance benefits. 
Contact your local employment commission office for information
regarding unemployment compensation.

 

12.
Expense Reimbursement.
Any outstanding unreimbursed expenses will be paid based on the submission of
your final Time and Expense Report and the appropriate documentation. It is
acknowledged that you may receive cellular phone, long distance and other
business related charges after the Separation Date; please

 

 

submit those expenses for
reimbursement as they occur to FCG c/o Jan Blue in the Long Beach, California
office.

 

13. Return
of FCG Property.  Except as noted below, on or before the
Separation Date, you agree to return to FCG all FCG Company documents (and all
copies thereof) and other FCG Company property that you have had in your
possession at any time, including (i) any materials of any kind that contain or
embody any proprietary or confidential information of an FCG Company (and all
reproductions thereof), and (ii) computers and other electronic devices,
cellular phones, credit cards, phone cards, entry cards, identification badges
and keys. If you have a cell phone and have had it for at least 3 months, it is
yours to keep.  Any firm-provided
service will be cancelled and you will need to establish your own service.  You will receive a Federal Express pack,
with a pre-paid shipping label, to ship your equipment back to Long Beach.
Please return items to the FCG Help Desk in Long Beach as soon as practicable,
at least within 7 days.

 

You
will be permitted to keep your laptop computer at no cost to you, except that
the value of the computer will be added to your taxable wages and appropriate
state and federal taxes will be deducted. 
The applications software on your laptop is licensed for FCG use only
and it is your responsibility to delete any applications software from the
computer with the exception of the operating system.

 

14. Vice
President Agreement; Indemnity Agreement. You hereby acknowledge and agree to your
continuing obligations, both during and after your employment with FCG, to
abide by the terms of that certain Vice President Agreement between you and FCG
dated January 12, 2001.  The terms of
that certain Indemnity Agreement between you and FCG dated February 9, 1998
shall remain in full force and effect and you are entitled to indemnification
by FCG in accordance with and subject to the terms of FCG’s charter documents
and the Indemnity Agreement.

 

15.
Confidentiality.  The provisions of this Agreement will be
held in strictest confidence by you and FCG and will not be publicized or
disclosed in any manner whatsoever; provided, however, that:  (a) you may
disclose this Agreement to your immediate family; (b)
the parties may disclose this Agreement in confidence to their respective
attorneys, accountants, auditors, tax preparers, and financial advisors; (c) FCG may disclose this Agreement as necessary to
fulfill standard or legally required corporate reporting or disclosure
requirements; and (d) the parties may disclose
this Agreement insofar as such disclosure may be necessary to enforce its terms
or as otherwise required by law.  In
particular, and without limitation, you agree not to disclose the terms of this
Agreement to any current or former FCG employee.

 

16.
Nondisparagement.   Both you and FCG agree not to
disparage the other party, and the other party’s officers, directors,
employees, shareholders and agents, in any manner likely to be harmful to them
or their business, business reputation or

 

 

personal reputation;
provided that both you and FCG will respond accurately and fully to any
question, inquiry or request for information when required by legal process.

 

17.
Release of the FCG Companies.   You hereby release, acquit and
forever discharge each of the FCG Companies and their respective parents and
subsidiaries, and each of their respective officers, directors, agents,
servants, employees, attorneys, shareholders, successors, assigns and
affiliates, of and from any and all claims, liabilities, demands, causes of
action, costs, expenses, attorneys’ fees, damages, indemnities and obligations
of every kind and nature, in law, equity, or otherwise, known and unknown,
suspected and unsuspected, disclosed and undisclosed, arising out of or in any
way related to agreements, events, acts or conduct at any time prior to and
including the Effective Date of this Agreement, including but not limited to:
all such claims and demands directly or indirectly arising out of or in any way
connected with your employment with any FCG Company or the termination of that
employment; claims or demands related to salary, bonuses, commissions, stock,
stock options or any other ownership interests in any FCG Company, vacation
pay, fringe benefits, expense reimbursements, severance pay or any other form
of compensation; claims arising from any employment agreement or arrangement
between you and any FCG Company; claims pursuant to any federal, state or local
law, statute or cause of action including, but not limited to, the federal
Civil Rights Act of 1964, as amended; the federal Americans with Disabilities
Act of 1990; the federal Age Discrimination in Employment Act of 1967, as
amended (“ADEA”); the California Fair Employment and Housing Act, as amended;
tort law; contract law; wrongful discharge; discrimination; harassment; fraud;
defamation; emotional distress; and breach of the implied covenant of good
faith and fair dealing.  You further
agree not to initiate or continue any proceeding based upon the claims released
herein.  Notwithstanding the foregoing,
your release of the FCG Companies in accordance with this Section shall not be
deemed to release (i) any of the FCG Companies’ duties or obligations under
this Agreement, including, but not limited to, FCG’s indemnification
obligations to you described in Section 14 of this Agreement; or (ii) any of
your rights as a stockholder of FCG.

 

18. ADEA Waiver.   You
acknowledge that you are knowingly and voluntarily waiving and releasing any
rights you may have under the ADEA, as amended.  You also acknowledge that the consideration given for the waiver
and release in the preceding paragraph hereof is in addition to anything of
value to which you were already entitled. 
You further acknowledge that you have been advised by this writing, as
required by the ADEA, that:  (a) your
waiver and release do not apply to any rights or claims that may arise after
the execution date of this Agreement; (b) you have been advised hereby that you
have the right to consult with an attorney prior to executing this Agreement;
(c) you have twenty-one (21) days to consider this Agreement (although you may
choose to voluntarily execute this Agreement earlier); (d) you have seven (7)
days following the execution of this Agreement by the parties to revoke the
Agreement; and (e) this Agreement will not be effective until the date upon
which the revocation period has expired, which will be the eighth day after
this Agreement is executed by

 

 

you, provided that FCG has
also executed this Agreement by that date (“Effective Date”).

 

19. Section 1542 Waiver.   In
giving the above release, which includes claims which may be unknown to you at
present, you acknowledge that you have read and understand Section 1542 of the
California Civil Code which reads as follows: 
“A
general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor.”  You hereby expressly waive and relinquish
all rights and benefits under that section and any law of any jurisdiction of
similar effect with respect to your release of any unknown or unsuspected
claims you may have against an FCG Company.

 

20.
Indemnification and Attorneys’ Fees.  You understand and agree that
if you hereafter commence, join in, or in any manner seek relief through any
lawsuit, charge or complaint with any court, administrative agency,
governmental authority or otherwise in any matter arising out of, based upon,
or relating to the claims released in this Agreement, then you will pay FCG in
addition to any other expenses, costs or damages caused to FCG thereby, all
FCG’s attorneys’ fees incurred in defending or otherwise responding to such
lawsuit, charge, or complaint.  This
section will not apply to any claim brought by you under the ADEA or to
challenge the validity of the waiver in this Agreement of any such claim or any
claim to enforce FCG’s obligations hereunder or any rights you may have as an
FCG stockholder.

 

21. 
FCG Stock.   You
and FCG previously have entered into an Affirmation Agreement dated January 12,
2001 (the “Affirmation Agreement”)
and the following agreements (collectively, the “Stock Purchase Agreements”): (i) Amended and Restated
Restricted Stock Agreement (the “Stock
Agreement”), (ii) Secured Promissory Notes (“Secured Notes”) and (iii) Loan and Pledge
Agreement (“Loan Agreement”).  Under the Stock Purchase Agreements, which
you affirmed through the Affirmation Agreement, you acquired 173,516 shares of
FCG common stock (the “FCG Stock”)
and borrowed $259,619.48 in payment of those shares.  As of this date of the Agreement, you have made repayments under
the Secured Note totaling $186,553.22, and still owe FCG an aggregate of
$73,066.26, which amount you agree to repay from your SERP distribution
(referenced and authorized in Section 10(a) above).  Upon your payment of the amount owing, your FCG Stock and all
outstanding indebtedness will be fully paid.

 

22. Miscellaneous. 
This Agreement constitutes the entire agreement between you and FCG with
regard to this subject matter.  It is
entered into without reliance on any promise or representation, written or
oral, other than those expressly contained herein, and it supersedes any other
such promises, warranties or representations. 
This Agreement may not be modified or amended except in a writing signed
by both you and FCG.  This Agreement
will bind and inure to the benefit of the heirs, personal

 

 

representatives, successors
and assigns of both you and FCG.  If any
provision of this Agreement is determined to be invalid or unenforceable, in
whole or in part, this determination will not affect any other provision of
this Agreement and the provision in question will be modified by the court so
as to be rendered enforceable.  This
Agreement will be deemed to have been entered into and will be construed and
enforced in accordance with the laws of the State of California as applied to
contracts made and to be performed entirely within California.

 

We appreciate your service to FCG and we wish you all the best in
wherever your future endeavors may take you.

 

If this Agreement is acceptable to you, please sign below and return the
original to Jan Blue at First Consulting Group, Inc., 111 West Ocean Boulevard,
10th Floor, Long Beach, California 90802.

 

Sincerely,

 

First
Consulting Group, Inc.

 

 

	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   Luther Nussbaum

  	
  Date

  
	
   

  	
   Chairman/CEO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Agreed:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   Roy A. Ziegler

  	
  Date

  
	
   

  
	
  cc:

  	
  Jan Blue, Vice PresidentExhibit
10.1

 

[EXECUTION COPY]

 

 

FIFTH AMENDED AND
RESTATED CREDIT AGREEMENT,

 

 

dated as of
January 21, 2004

 

(amending and restating
the Fourth Amended and Restated

Credit Agreement, dated as of August 20, 2003),

 

among

 

 

WEIGHT WATCHERS
INTERNATIONAL, INC.,

as the Borrower,

 

 

VARIOUS FINANCIAL
INSTITUTIONS,

as the Lenders,

 

 

CREDIT SUISSE FIRST
BOSTON,

acting through its Cayman Islands Branch,

as the Syndication Agent,

a Lead Arranger and a Book Manager, and

 

THE BANK OF NOVA SCOTIA,

as the Administrative Agent,

a Lead Arranger and a Book Manager.

 

 

Table
of Contents

 

	
  ARTICLE I

  	
  DEFINITIONS AND ACCOUNTING TERMS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.1.

  	
  Defined
  Terms

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.2.

  	
  Use of
  Defined Terms

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.3.

  	
  Cross-References

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.4.

  	
  Accounting
  and Financial Determinations

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.5.

  	
  Currency
  Conversions

  	
   

  
	
   

  	
   

  
	
  ARTICLE II

  	
  COMMITMENTS, BORROWING AND ISSUANCE
  PROCEDURES, NOTES AND LETTERS OF CREDIT

  	
   

  
	
   

  	
   

  
	
  SECTION 2.1.

  	
  Loan
  Commitments

  	
   

  
	
   

  	
   

  
	
   

  	
  SECTION 2.1.1.

  	
  Term
  Loan Commitments

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.1.2.

  	
  Revolving
  Loan Commitment and Swing Line Loan Commitment

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.1.3.

  	
  Letter
  of Credit Commitment

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.1.4.

  	
  Lenders
  Not Permitted or Required to Make Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.1.5.

  	
  Issuer
  Not Permitted or Required to Issue Letters of Credit

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.1.6.

  	
  Designated
  Additional Loans

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.2.

  	
  Reduction
  of the Commitment Amounts

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.2.1.

  	
  Optional

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.2.2.

  	
  Mandatory

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.3.

  	
  Borrowing
  Procedures and Funding Maintenance

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.3.1.

  	
  Term
  Loans and Revolving Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.3.2.

  	
  Swing
  Line Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.4.

  	
  Continuation
  and Conversion Elections

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.5.

  	
  Funding

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.6.

  	
  Issuance
  Procedures

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.6.1.

  	
  Other
  Lenders’ Participation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.6.2.

  	
  Disbursements;
  Conversion to Revolving Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.6.3.

  	
  Reimbursement

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.6.4.

  	
  Deemed
  Disbursements

  	
   

  
							

 

i

 

	
   

  	
  SECTION 2.6.5.

  	
  Nature
  of Reimbursement Obligations

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.7.

  	
  Notes

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.8.

  	
  Registered
  Notes

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  REPAYMENTS, PREPAYMENTS, INTEREST AND
  FEES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.1.

  	
  Repayments
  and Prepayments; Application

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 3.1.1.

  	
  Repayments
  and Prepayments

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 3.1.2.

  	
  Application

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.2.

  	
  Interest
  Provisions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 3.2.1.

  	
  Rates

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 3.2.2.

  	
  Post-Maturity
  Rates

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 3.2.3.

  	
  Payment
  Dates

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.3.

  	
  Fees

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 3.3.1.

  	
  Commitment
  Fee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 3.3.2.

  	
  Administrative
  Agent’s Fee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 3.3.3.

  	
  Letter
  of Credit Fee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  CERTAIN LIBO RATE AND OTHER PROVISIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.1.

  	
  LIBO
  Rate Lending Unlawful

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.2.

  	
  Deposits
  Unavailable

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.3.

  	
  Increased
  LIBO Rate Loan Costs, etc

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.4.

  	
  Funding
  Losses

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.5.

  	
  Increased
  Capital Costs

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.6.

  	
  Taxes

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.7.

  	
  Payments,
  Computations, etc

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.8.

  	
  Sharing
  of Payments

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.9.

  	
  Setoff

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.10.

  	
  Mitigation

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  CONDITIONS
  TO EFFECTIVENESS AND TO FUTURE CREDIT EXTENSIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.1.

  	
  Conditions
  Precedent to the Effectiveness of this Agreement and Making of Credit
  Extensions

  	
   

  
						

 

ii

 

	
   

  	
  SECTION 5.1.1.

  	
  Resolutions,
  etc

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 5.1.2.

  	
  Effective Date Certificate

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 5.1.3.

  	
  Delivery
  of Notes

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 5.1.4.

  	
  Affirmation
  and Consent

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 5.1.5.

  	
  Opinions
  of Counsel

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 5.1.6.

  	
  Required
  Approvals

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 5.1.7.

  	
  Litigation;
  Proceedings

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 5.1.8.

  	
  Subsidiary Guaranty
  Supplement

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.2.

  	
  All
  Credit Extensions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 5.2.1.

  	
  Compliance
  with Warranties, No Default, etc

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 5.2.2.

  	
  Credit Extension Request

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 5.2.3.

  	
  Satisfactory
  Legal Form

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  REPRESENTATIONS AND
  WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.1.

  	
  Organization,
  etc

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.2.

  	
  Due
  Authorization, Non-Contravention, etc

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.3.

  	
  Government
  Approval, Regulation, etc

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.4.

  	
  Validity,
  etc

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.5.

  	
  [INTENTIONALLY
  OMITTED]

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.6.

  	
  No Material Adverse Change

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.7.

  	
  Litigation, Labor
  Controversies, etc

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.8.

  	
  Subsidiaries

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.9.

  	
  Ownership
  of Properties

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.10.

  	
  Taxes

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.11.

  	
  Pension and Welfare Plans

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.12.

  	
  Environmental Warranties

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.13.

  	
  Regulations
  U and X

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.14.

  	
  Accuracy
  of Information

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.15.

  	
  Seniority of Obligations,
  etc

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.16.

  	
  Solvency

  	
   

  
						

 

iii

 

	
  ARTICLE VII

  	
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.1.

  	
  Affirmative
  Covenants

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.1.1.

  	
  Financial
  Information, Reports, Notices, etc

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.1.2.

  	
  Compliance with Laws, etc

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.1.3.

  	
  Maintenance of Properties

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.1.4.

  	
  Insurance

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.1.5.

  	
  Books
  and Records

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.1.6.

  	
  Environmental
  Covenant

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.1.7.

  	
  Future
  Subsidiaries

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.1.8.

  	
  Future
  Leased Property and Future Acquisitions of Real Property

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.1.9.

  	
  Use
  of Proceeds, etc

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.2.

  	
  Negative
  Covenants

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.2.1.

  	
  Business
  Activities

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.2.2.

  	
  Indebtedness

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.2.3.

  	
  Liens

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.2.4.

  	
  Financial
  Condition

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.2.5.

  	
  Investments

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.2.6.

  	
  Restricted Payments, etc

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.2.7.

  	
  Capital Expenditures, etc

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.2.8.

  	
  Consolidation, Merger, etc

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.2.9.

  	
  Asset
  Dispositions, etc

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.2.10.

  	
  Modification of
  Certain Agreements

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.2.11.

  	
  Transactions with
  Affiliates

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.2.12.

  	
  Negative
  Pledges, Restrictive Agreements, etc

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.2.13.

  	
  Stock
  of Subsidiaries

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.2.14.

  	
  Sale
  and Leaseback

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.2.15.

  	
  Fiscal
  Year

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.2.16.

  	
  Designation of
  Senior Indebtedness

  	
   

  
						

 

iv

 

	
  ARTICLE VIII

  	
  [INTENTIONALLY OMITTED]

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  EVENTS OF DEFAULT

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.1.

  	
  Listing of Events of
  Default

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 9.1.1.

  	
  Non-Payment of Obligations

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 9.1.2.

  	
  Breach
  of Warranty

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 9.1.3.

  	
  Non-Performance
  of Certain Covenants and Obligations

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 9.1.4.

  	
  Non-Performance
  of Other Covenants and Obligations

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 9.1.5.

  	
  Default on Other
  Indebtedness

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 9.1.6.

  	
  Judgments

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 9.1.7.

  	
  Pension
  Plans

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 9.1.8.

  	
  Change
  in Control

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 9.1.9.

  	
  Bankruptcy, Insolvency, etc

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 9.1.10.

  	
  Impairment of Security, etc

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 9.1.11.

  	
  Subordinated
  Debt

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 9.1.12.

  	
  Redemption

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.2.

  	
  Action if Bankruptcy, etc

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.3.

  	
  Action if Other Event
  of Default

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  THE AGENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.1.

  	
  Actions

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.2.

  	
  Funding
  Reliance, etc

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.3.

  	
  Exculpation

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.4.

  	
  Successor

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.5.

  	
  Credit Extensions by
  each Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.6.

  	
  Credit Decisions

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.7.

  	
  Copies,
  etc

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.8.

  	
  Reliance by the
  Administrative Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.9.

  	
  Defaults

  	
   

  
						

 

v

 

	
  ARTICLE XI

  	
  MISCELLANEOUS PROVISIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.1.

  	
  Waivers, Amendments, etc

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.2.

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.3.

  	
  Payment of Costs and
  Expenses

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.4.

  	
  Indemnification

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.5.

  	
  Survival

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.6.

  	
  Severability

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.7.

  	
  Headings

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.8.

  	
  Execution in
  Counterparts; Effectiveness

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.9.

  	
  Governing Law; Entire
  Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.10.

  	
  Successors
  and Assigns

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.11.

  	
  Sale
  and Transfer of Loans and Notes; Participations in Loans and Notes

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 11.11.1.

  	
  Assignments

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 11.11.2.

  	
  Participations

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 11.11.3.

  	
  Register

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 11.12.

  	
  Other
  Transactions

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.13.

  	
  Forum
  Selection and Consent to Jurisdiction

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.14.

  	
  Waiver
  of Jury Trial

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.15.

  	
  Confidentiality

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.16.

  	
  Judgment
  Currency

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.17.

  	
  Release of Security
  Interests

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE I

  	
  -

  	
   

  	
  Disclosure Schedule

  	
   

  
	
  SCHEDULE II

  	
  -

  	
   

  	
  Commitments and Percentages

  	
   

  
	
  SCHEDULE III

  	
  -

  	
   

  	
  Notice
  Information, Domestic Offices and LIBOR Offices

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT A-1

  	
  -

  	
   

  	
  Form of Revolving Note

  	
   

  
	
  EXHIBIT A-2

  	
  -

  	
   

  	
  Form of Swing Line Note

  	
   

  
	
  EXHIBIT A-3

  	
  -

  	
   

  	
  Form of Term B Note

  	
   

  
	
  EXHIBIT A-4

  	
  -

  	
   

  	
  Form of Registered Note

  	
   

  
	
  EXHIBIT B-1

  	
  -

  	
   

  	
  Form of Borrowing
  Request

  	
   

  
	
  EXHIBIT B-2

  	
  -

  	
   

  	
  Form of Issuance
  Request

  	
   

  
	
  EXHIBIT C

  	
  -

  	
   

  	
  Form of
  Continuation/Conversion Notice

  	
   

  
								

 

vi

 

	
  EXHIBIT D

  	
  -

  	
   

  	
  Form of Lender Assignment
  Agreement

  	
   

  
	
  EXHIBIT E

  	
  -

  	
   

  	
  Form of Compliance
  Certificate

  	
   

  
	
  EXHIBIT F

  	
  -

  	
   

  	
  Form of Effective Date
  Certificate

  	
   

  

 

vii

 

FIFTH AMENDED AND
RESTATED CREDIT AGREEMENT

 

THIS FIFTH AMENDED AND
RESTATED CREDIT AGREEMENT, dated as of January 21, 2004 (amending and
restating the Fourth Amended and Restated Credit Agreement, dated as of
August 20, 2003), is among WEIGHT WATCHERS INTERNATIONAL, INC., a Virginia
corporation (the “Borrower”), the various financial institutions as are
or may become parties hereto (collectively, the “Lenders”), CREDIT
SUISSE FIRST BOSTON, acting through its Cayman Islands Branch (“CSFB”),
as the syndication agent and as a lead arranger (in such capacities, the “Syndication
Agent” and a “Lead Arranger”, respectively), and THE BANK OF NOVA
SCOTIA (“Scotia Capital”), as (x) the administrative agent for the
Lenders, and (y) a lead arranger for the Lenders (in such capacities, the “Administrative
Agent” and a “Lead Arranger”, respectively) and as Issuer (as
defined below).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to the
Fourth Amended and Restated Credit Agreement, dated as of August 20, 2003
(as amended or otherwise modified prior to the date hereof, the “Existing
Credit Agreement”), among the Borrower, WW Funding Corp., a Delaware
corporation (“SP1”), certain financial institutions and other Persons
from time to time party thereto (the “Existing Lenders”) and the Agents,
the Existing Lenders made or continued the following extensions of credit to the
Borrower which currently remain outstanding on the Effective Date in the
amounts set forth below:

 

(a)                                  the
term A loans existing on the date thereof (the “Existing Term A Loans”)
continued to remain outstanding as Term A Loans thereunder and are outstanding
on the Effective Date in an aggregate principal amount of $24,339,628.87;

 

(b)                                 the
additional term B facility was made consisting of (i) a tranche of additional
term B loans (the “Existing Term B Loans”) of which an aggregate
principal amount of $380,936,879.32 is outstanding on the Effective Date and
(ii) additional TLCs (the “Existing TLCs”) of which an aggregate
principal amount of $48,903,120.68 is outstanding on the Effective Date; and

 

(c)                                  the
continuation of the revolving loans (the “Existing Revolving Loans”) and
the swing line loans (the “Existing Swing Line Loans”; together with the
Existing Term A Loans, the Existing Term B Loans, the Existing Revolving
Loans and the Existing TLCs, the “Existing Loans”) to the Borrower and
SP1;

 

WHEREAS, in connection
with the Current Refinancing (defined below) and the ongoing working capital
and general corporate needs of the Borrower, the Borrower desires to, among
other things, refinance the Existing Loans (the “Current Refinancing”)
with Loans under this Agreement and maintain and obtain the Commitments to make
Credit Extensions set forth herein;

 

WHEREAS, the Borrower has
requested that the Existing Credit Agreement be amended and restated in its
entirety to become effective and binding on the Borrower pursuant to the terms
of this Agreement and the Lenders (including the Existing Lenders) have agreed
to amend and restate the Existing Credit Agreement in its entirety to read as
set forth in this Agreement, and it 

 

 

has been agreed by the
parties to the Existing Credit Agreement that the letters of credit issued and
outstanding under the Existing Credit Agreement (the “Existing Letters of
Credit”) shall be governed by and deemed to be outstanding under the
amended and restated terms and conditions contained in this Agreement, with the
intent that the terms of this Agreement shall supersede the terms of the
Existing Credit Agreement (each of which shall hereafter have no further effect
upon the parties thereto, other than as referenced herein and other than for
accrued fees and expenses, and indemnification provisions, accrued and owing
under the terms of the Existing Credit Agreement on or prior to the date hereof
or arising (in the case of an indemnification) under the terms of the Existing
Credit Agreement, in each case to the extent provided for in the Existing
Credit Agreement); provided, that any Rate Protection Agreements with
any one or more Existing Lenders (or their respective Affiliates) shall
continue unamended and in full force and effect;

 

WHEREAS, the Borrower
desires to obtain or continue the following financing facilities from the
Lenders as set forth below:

 

(a)  a revolving loan commitment (to include
availability for revolving loans, swing line loans and letters of credit)
pursuant to which Borrowings of revolving loans are and will continue to be
made to the Borrower from time to time as set forth herein;

 

(b)  a letter of credit commitment pursuant to
which the Issuer will continue to issue letters of credit for the account of
the Borrower or any of its Subsidiaries (as defined below) from time to time;
and

 

(c)  a term loan commitment pursuant to which
Borrowings of term loans are made to the Borrower on the Effective Date;

 

WHEREAS, all Obligations
shall continue to be and shall be guaranteed pursuant to the Subsidiary
Guaranty executed and delivered by each Subsidiary party thereto required to do
so under the Existing Credit Agreement and secured pursuant to the Security
Agreements executed and delivered by the Borrower and the applicable
Subsidiaries pursuant to the Existing Credit Agreement; and

 

WHEREAS,
the Lenders and the Issuer are willing, on the terms and subject to the
conditions hereinafter set forth, to so amend and restate the Existing Credit Agreement and to maintain or extend such Commitments
and make such Loans to the Borrower and issue or maintain (or participate in)
Letters of Credit for the account of the Borrower;

 

NOW, THEREFORE, the
parties hereto hereby agree to amend and restate the Existing Credit Agreement,
and the Existing Credit Agreement is amended and restated in its entirety as
set forth herein.

 

2

 

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

 

SECTION 1.1.  Defined Terms.  The following terms (whether or not underscored)
when used in this Agreement, including its preamble and recitals, shall, except
where the context otherwise requires, have the following meanings (such
meanings to be equally applicable to the singular and plural forms thereof):

 

“Acquisition”
means the acquisition by the Borrower or one of its Subsidiaries of certain of
the business and assets of The WW Group Inc., a Pennsylvania corporation, The
WW Group West L.L.C., a Delaware limited liability company and The WW Group
East L.L.C., a Michigan limited liability company (collectively, the “Sellers”),
which will include Weight Watchers franchise numbers 11, 23, 39, 40, 60, 64,
73, 77 and 302 and was consummated on April 1, 2003.

 

“Administrative Agent”
is defined in the preamble and includes each other Person as shall have
subsequently been appointed as the successor Administrative Agent pursuant to Section 10.4.

 

“Affiliate” of any
Person means any other Person which, directly or indirectly, controls, is
controlled by or is under common control with such Person (excluding any
trustee under, or any committee with responsibility for administering, any
Plan).  A Person shall be deemed to be
“controlled by” any other Person if such other Person possesses, directly or
indirectly, power

 

(a)                                  to
vote 15% or more of the securities (on a fully diluted basis) having ordinary
voting power for the election of directors or managing general partners; or

 

(b)                                 to
direct or cause the direction of the management and policies of such Person
whether by contract or otherwise.

 

“Agents” means,
collectively, the Administrative Agent and the Syndication Agent.

 

“Agreement” means,
on any date, this Credit Agreement, as amended and restated hereby and as
further amended, supplemented, amended and restated, or otherwise modified from
time to time and in effect on such date.

 

“Alternate Base Rate”
means, on any date and with respect to all Base Rate Loans, a fluctuating rate
of interest per annum equal to the higher of

 

(a)                                  the
rate of interest most recently established by the Administrative Agent at its
Domestic Office as its base rate for U.S. Dollar loans in the United States;
and

 

(b)                                 the
Federal Funds Rate most recently determined by the Administrative Agent plus
1/2 of 1%.

 

The Alternate Base Rate
is not necessarily intended to be the lowest rate of interest determined by the
Administrative Agent in connection with extensions of credit.  Changes in the rate of interest on that
portion of any Loans maintained as Base Rate Loans will take effect

 

3

 

simultaneously with each
change in the Alternate Base Rate.  The
Administrative Agent will give notice promptly to the Borrower and the Lenders
of changes in the Alternate Base Rate.

 

“Applicable Margin”
means at all times,

 

(a)                                  with
respect to the unpaid principal amount of Term B Loans maintained as a

 

(i)                                     Base
Rate Loan, 0.75% per annum; and

 

(ii)                                  LIBO
Rate Loan, 1.75% per annum;

 

(b)                                 from
the Effective Date until the last day of the first two Fiscal Quarters
following the Effective Date (the “Reset Date”), with respect to the
unpaid principal amount of each Revolving Loan and Swing Line Loans maintained
as a

 

(i)                                     Base
Rate Loan, 0.75% per annum; and

 

(ii)                                  LIBO
Rate Loan, 1.75% per annum;

 

(c)                                  at
any time after the Reset Date, if the Borrower’s senior secured debt rating is
greater than or equal to BBB- by S&P or Baa3 by Moody’s, with respect to
the unpaid principal amount of each Revolving Loan and Swing Line Loans
maintained as a

 

(i)                                     Base
Rate Loan, 0.50% per annum; and

 

(ii)                                  LIBO
Rate Loan, 1.50% per annum; and

 

(d)                                 at
any time after the Reset Date, if the Borrower’s senior secured debt rating is
not greater than or equal to BBB- by S&P or Baa3 by Moody’s (or not rated
at all), with respect to the unpaid principal amount of each Revolving Loan and
Swing Line Loans maintained as a

 

(i)                                     Base
Rate Loan, 0.75% per annum; and

 

(ii)                                  LIBO
Rate Loan, 1.75% per annum.

 

The Applicable Margin for
Designated New Term Loans shall be determined pursuant to Section 2.1.6.

 

“ARTAL” means
ARTAL Luxembourg S.A., a corporation organized under the laws of Luxembourg.

 

“ARTAL Pledge
Agreement” means the Pledge Agreement, dated September 29, 1999,  by ARTAL, in favor of the Administrative
Agent as amended, amended and restated, supplemented or otherwise modified from
time to time pursuant to the terms thereof.

 

 “Assignee Lender”
is defined in Section 11.11.1.

 

4

 

“Australian Guaranty”
means the Guaranty, dated September 29, 1999, by WW Australia, FPL and GB
in favor of the Administrative Agent, as amended, amended and restated,
supplemented or otherwise modified from time to time in accordance with its
terms.

 

“Australian Pledge
Agreement” means the Australian Share Mortgage Agreement, dated
September 29, 1999, by WW Australia and FPL in favor of the Administrative
Agent, together with each Supplement thereto delivered pursuant to clause (b)
of Section 7.1.7, as amended, amended and restated,
supplemented or otherwise modified from time to time pursuant to the terms
thereof.

 

“Australian Security
Agreement” means the Security Agreement, dated September 29, 1999, by
WW Australia, FPL and GB in favor of the Administrative Agent, together with
each Supplement thereto delivered pursuant to clause (a) of Section 7.1.7,
as amended, amended and restated, supplemented or otherwise modified from time
to time pursuant to the terms thereof.

 

“Australian Subsidiary”
means any Subsidiary that is organized under the laws of Australia or any
territory thereof.

 

“Authorized Officer”
means, relative to any Obligor, those of its officers whose signatures and
incumbency shall have been certified to the Administrative Agent and the
Lenders in writing from time to time.

 

“Average Life”
means, as of the date of determination, with respect to any Indebtedness, the
quotient obtained by dividing:

 

(x)                                   the
sum of the products of numbers of years from the date of determination to the
dates of each successive scheduled principal payment of or redemption or
similar payment with respect to such Indebtedness multiplied by the amount of
such payment

 

by

 

(y)                                 the
sum of all such payments.

 

“Base Amount” is defined in Section 7.2.7.

 

“Base Rate Loan”
means a Loan bearing interest at a fluctuating rate determined by reference to
the Alternate Base Rate.

 

“Borrower” is
defined in the preamble.

 

“Borrowing” means
the Loans of the same type and, in the case of LIBO Rate Loans, having the same
Interest Period made by the relevant Lenders on the same Business Day and
pursuant to the same Borrowing Request in accordance with Section 2.1.

 

“Borrowing Request”
means a loan request and certificate duly executed by an Authorized Officer of
the Borrower, substantially in the form of Exhibit B-1 hereto.

 

5

 

“Business Day” means

 

(a)                                  any
day which is neither a Saturday or Sunday nor a legal holiday on which banks
are authorized or required to be closed in New York City; and

 

(b)                                 relative
to the making, continuing, prepaying or repaying of any LIBO Rate Loans, any day
on which dealings in U.S. Dollars are carried on in the London interbank
market.

 

“Capital Expenditures”
means for any period, the sum, without duplication, of

 

(a)                                  the
aggregate amount of all expenditures of the Borrower and its Subsidiaries for
fixed or capital assets made during such period which, in accordance with GAAP,
would be classified as capital expenditures; and

 

(b)                                 the
aggregate amount of all Capitalized Lease Liabilities incurred during such
period.

 

“Capital Securities”
means, (i) any and all shares, interests, participations or other
equivalents of or interests in (however designated) corporate stock, including
shares of preferred or preference stock, (ii) all partnership interests
(whether general or limited) in any Person which is a partnership,
(iii) all membership interests or limited liability company interests in
any limited liability company, and (iv) all equity or ownership interests
in any Person of any other type.

 

“Capitalized Lease
Liabilities” means, without duplication, all monetary obligations of the
Borrower or any of its Subsidiaries under any leasing or similar arrangement
which, in accordance with GAAP, would be classified as capitalized leases, and,
for purposes of this Agreement and each other Loan Document, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP, and the stated maturity thereof shall be the date of the last
payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.

 

“Cash Equivalent Investment” means, at any
time:

 

(a)                                  any
evidence of Indebtedness, maturing not more than one year after such time,
issued or guaranteed by the United States Government;

 

(b)                                 commercial
paper, maturing not more than nine months from the date of issue, which is
issued by

 

(i)                                     a
corporation (other than an Affiliate of any Obligor) organized under the laws
of any state of the United States or of the District of Columbia and rated at
least A-l by S&P or P-l by Moody’s, or

 

(ii)                                  any
Lender which is an Eligible Institution (or its holding company);

 

6

 

(c)                                  any
certificate of deposit or bankers acceptance, maturing not more than one year
after such time, which is issued by either

 

(i)                                     a
commercial banking institution that is a member of the Federal Reserve System
and has a combined capital and surplus and undivided profits of not less than
$500,000,000, or

 

(ii)                                  any
Lender;

 

(d)                                 short-term
tax-exempt securities rated not lower than MIG-1/1+ by either Moody’s or
S&P with provisions for liquidity or maturity accommodations of 183 days or
less;

 

(e)                                  any
money market or similar fund the assets of which are comprised exclusively of
any of the items specified in clauses (a) through (d) above and
as to which withdrawals are permitted at least every 90 days; or

 

(f)                                    in
the case of any Subsidiary of the Borrower organized in a jurisdiction outside
the United States:  (i) direct
obligations of the sovereign nation (or any agency thereof) in which such
Subsidiary is organized and is conducting business or in obligations fully and
unconditionally guaranteed by such sovereign nation (or any agency thereof),
(ii) investments of the type and maturity described in clauses (a)
through (e) above of foreign obligors, which investments or obligors (or
the parents of such obligors) have ratings described in such clauses or
equivalent ratings from comparable foreign ratings agencies or
(iii) investments of the type and maturity described in clauses (a)
through (e) above of foreign obligors (or the parents of such obligors),
which investments or obligors (or the parents of such obligors) are not rated
as provided above but which are, in the reasonable judgment of the Borrower,
comparable in investment quality to such investments and obligors (or the
parents of such obligors); provided that the aggregate face amount
outstanding at any time of such investments of all foreign Subsidiaries of the
Borrower made pursuant to this clause (iii)
does not exceed $25,000,000.

 

“CERCLA” means the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended.

 

“CERCLIS” means
the Comprehensive Environmental Response Compensation Liability Information
System List.

 

“Change in Control” means

 

(a)                                  any
“person” or “group” (as such terms are used in Rule 13d-5 under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), and
Sections 13(d) and 14(d) of the Exchange Act) of persons (other than the
Permitted ARTAL Investor Group) becomes, directly or indirectly, in a single
transaction or in a related series of transactions by way of merger,
consolidation, or other business combination or otherwise, the “beneficial
owner” (as such term is used in Rule 13d-3 of the Exchange Act) of more
than 20% of the total voting power in the aggregate of all classes of Capital
Securities of

 

7

 

the Borrower then outstanding entitled to vote generally in elections
of directors of the Borrower;

 

(b)                                 at
all times, as applicable, individuals who on the Effective Date constituted the
Board of Directors of the Borrower (together with any new directors whose
election to such Board or whose nomination for election by the stockholders of
the Borrower was approved by a member of the Permitted ARTAL Investor Group or
a vote of 66.67% of the directors 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 the Borrower then in office;

 

(c)                                  at
all times, as applicable, the failure of the Borrower to own, free and clear of
all Liens (other than in favor of the Administrative Agent pursuant to a Loan
Document), all of the outstanding shares of Capital Securities of each of (x)
UKHC1, UKHC2 and WW Australia (other than shares of Capital Securities issued
pursuant to a Local Management Plan), and (y) SP1, in each case on a fully
diluted basis; or

 

(d)                                 any
other event constituting a Change of Control (as defined in the Senior
Subordinated Note Indenture).

 

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

 

“Commitment”
means, as the context may require, a Lender’s Letter of Credit Commitment,
Revolving Loan Commitment, Swing Line Loan Commitment or Term B Loan
Commitment.

 

“Commitment Amount”
means, as the context may require, the Letter of Credit Commitment Amount, the
Revolving Loan Commitment Amount, the Swing Line Loan Commitment Amount or the
Term B Loan Commitment Amount.

 

“Commitment Termination Event” means

 

(a)                                  the
occurrence of any Event of Default described in clauses (a) through (d)
of Section 9.1.9; or

 

(b)                                 the
occurrence and continuance of any other Event of Default and either

 

(i)                                     the
declaration of the Loans to be due and payable pursuant to Section 9.3,
or

 

(ii)                                  in
the absence of such declaration, the giving of notice by the Administrative
Agent, acting at the direction of the Required Lenders, to the Borrower that
the Commitments have been terminated.

 

“Compliance
Certificate” means a certificate duly completed and executed by the chief
financial Authorized Officer of the Borrower, substantially in the form of Exhibit E
hereto.

 

8

 

“Contingent Liability”
means any agreement, undertaking or arrangement by which any Person guarantees,
endorses or otherwise becomes or is contingently liable upon (by direct or
indirect agreement, contingent or otherwise, to provide funds for payment, to
supply funds to, or otherwise to invest in, a debtor, or otherwise to assure a
creditor against loss) the indebtedness, obligation or any other liability of
any other Person (other than by endorsements of instruments in the course of
collection), or guarantees the payment of dividends or other distributions upon
the shares of any other Person.  The
amount of any Person’s obligation under any Contingent Liability shall (subject
to any limitation set forth therein) be deemed to be the outstanding principal
amount (or maximum principal amount, if larger) of the debt, obligation or
other liability guaranteed thereby.

 

“Continuation/Conversion
Notice” means a notice of continuation or conversion and certificate duly
executed by an Authorized Officer of the Borrower, substantially in the form of
Exhibit C hereto.

 

“Controlled Group”
means all members of a controlled group of corporations and all members of a
controlled group of trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414(b) or 414(c) of the Code or Section 4001
of ERISA.

 

“Copyright Security
Agreement” means the Copyright Security Agreement, dated September 29,
1999, delivered by the Borrower and each of its U.S. Subsidiaries party thereto
in favor of the Administrative Agent, as amended, supplemented, amended and
restated or otherwise modified.

 

“Credit Extension”
means, as the context may require,

 

(a)                                  the
making of a Loan by a Lender; or

 

(b)                                 the
issuance of any Letter of Credit, or the extension of any Stated Expiry Date of
any previously issued Letter of Credit, by the Issuer.

 

“Current Assets”
means, on any date, without duplication, all assets (other than cash) which, in
accordance with GAAP, would be included as current assets on a consolidated
balance sheet of the Borrower and its Subsidiaries at such date as current
assets (excluding, however, amounts due and to become due from Affiliates of
the Borrower which have arisen from transactions which are other than
arm’s-length and in the ordinary course of its business).

 

“Current Liabilities”
means, on any date, without duplication, all amounts which, in accordance with
GAAP, would be included as current liabilities on a consolidated balance sheet
of the Borrower and its Subsidiaries at such date, excluding current maturities
of Indebtedness.

 

“Current Refinancing”
is defined in the second recital.

 

“Debt” means the
outstanding principal amount of all Indebtedness of the Borrower and its
Subsidiaries of the type referred to in clauses (a), (b), (c)
and (e) of the definition of “Indebtedness” or any Contingent Liability
in respect thereof.

 

9

 

“Debt to EBITDA Ratio”
means, as of the last day of any Fiscal Quarter, the ratio of

 

(a)                                  Debt
outstanding on the last day of such Fiscal Quarter

 

to

 

(b)                                 EBITDA
computed for the period consisting of such Fiscal Quarter and each of the three
immediately preceding Fiscal Quarters.

 

“Default” means
any Event of Default or any condition, occurrence or event which, after notice
or lapse of time or both, would constitute an Event of Default.

 

“Designated Additional
Revolving Loan Commitments” is defined in Section 2.1.6.

 

“Designated Additional
Term B Loans” is defined in Section 2.1.6.

 

“Designated New Loan”
means, as the context requires, a Designated Additional Term B Loan and/or a
Designated New Term Loan.

 

“Designated New Term
Loans” is defined in Section 2.1.6.

 

“Designated Subsidiary”
means The Weight Watchers Foundation, Inc., a New York not-for-profit
corporation.

 

“Disbursement” is defined in Section 2.6.2.

 

“Disbursement Date” is defined in Section 2.6.2.

 

“Disbursement Due Date” is defined in Section 2.6.2.

 

“Disclosure Schedule”
means the Disclosure Schedule attached hereto as Schedule I,
as it may be amended, supplemented or otherwise modified from time to time by
the Borrower with the written consent of the Required Lenders.

 

“Disposition” (or
correlative words such as “Dispose”) means any sale, transfer, lease
contribution or other conveyance (including by way of merger) of, or the
granting of options, warrants or other rights to, any of the Borrower’s or its
Subsidiaries’, assets (including accounts receivable and Capital Securities of
Subsidiaries) to any other Person (other than to another Obligor) in a single
transaction or series of transactions.

 

“Domestic Office”
means, relative to any Lender, the office of such Lender designated as such on Schedule III
hereto or designated in the Lender Assignment Agreement or such other office of
a Lender (or any successor or assign of such Lender) within the United States
as may be designated from time to time by notice from such Lender, as the case
may be, to each other Person party hereto.

 

“EBITDA” means,
for any applicable period, the sum (without duplication) of

 

(a)                                  Net
Income,

 

10

 

plus

 

(b)                                 the
amount deducted, in determining Net Income, representing amortization of assets
(including amortization with respect to goodwill, deferred financing costs,
other non-cash interest and all other intangible assets),

 

plus

 

(c)                                  the
amount deducted, in determining Net Income, of all income taxes (whether paid
or deferred) of the Borrower and its Subsidiaries,

 

plus

 

(d)                                 Interest
Expense,

 

plus

 

(e)                                  the
amount deducted, in determining Net Income, representing depreciation of
assets,

 

plus

 

(f)                                    an
amount equal to all non-cash charges deducted in arriving at Net Income,

 

plus

 

(g)                                 an
amount equal to all minority interest charges deducted in determining Net
Income (net of Restricted Payments made in respect of such minority interest),

 

plus

 

(h)                                 an
amount equal to the cash royalty payment received pursuant to the Warnaco
Agreement, to the extent not included in the calculation of Net Income,

 

plus

 

(i)                                     the
amount deducted, in determining Net Income, due to foreign currency translation
required by FASB 52 or FASB 133 arising after June 30, 1997,

 

plus

 

(j)                                     the
amount deducted in determining Net Income of expenses incurred in connection
with the Weighco Acquisition, the Acquisition and the Tender Offer,

 

minus

 

(k)                                  an
amount equal to the amount of all non-cash credits included in arriving at Net
Income.

 

11

 

“Effective Date”
means the date on which all the conditions precedent set forth in Article V
have been satisfied in the reasonable judgment of the Administrative Agent.

 

“Eligible Institution”
means a financial institution that either (a) has combined capital and surplus
of not less than $500,000,000 or its equivalent in foreign currency, whose
long-term certificate of deposit rating or long-term senior unsecured debt
rating is rated “BBB” or higher by S&P and “Baa2” or higher by Moody’s or
an equivalent or higher rating by a nationally recognized rating agency if both
of the two named rating agencies cease publishing ratings of investments or (b)
is reasonably acceptable to the Administrative Agent and, in the case of
assignments of a Revolving Loan and/or a Revolving Loan Commitment, the Issuer.

 

“Environmental Laws”
means all applicable federal, state, local or foreign statutes, laws,
ordinances, codes, rules and regulations (including consent decrees and
administrative orders) relating to public health and safety and protection of
the environment.

 

“ERISA” means the
Employee Retirement Income Security Act of 1974, as amended.

 

“Euro” means the
single currency of participating member States of the European Union.

 

“Event of Default” is defined in Section 9.1.

 

“Existing Credit Agreement” is defined in the first recital.

 

“Existing Lenders” is defined in the first recital.

 

“Existing Loans”
is defined in clause (d) of the first recital.

 

“Existing Revolving Loans” is defined in clause
(d) of the first recital.

 

“Existing Swing Line Loans” is defined in clause
(d) of the first recital.

 

“Existing Term A Loans” is defined in clause
(a) of the first recital.

 

“Existing Term B Loans” is defined in clause
(b) of the first recital.

 

“Existing TLCs” is defined in clause (b)
of the first recital.

 

“Federal Funds Rate”
means, for any period, a fluctuating interest rate per annum equal for each day
during such period to

 

(a)                                  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 for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York; or

 

(b)                                 if
such rate is not so published for any day which is a Business Day, the average
of the quotations for such day on such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it.

 

12

 

“Fee Letters”
means, collectively, (a) the confidential fee letter, dated as of July 20,
1999, between Artal International S.A., a Luxembourg corporation (“AI”),
and the Administrative Agent, as assumed by ARTAL, (b) the confidential fee
letter, dated as of December 21, 2001, among the Borrower, the
Administrative Agent and the Syndication Agent, (c) the confidential fee
letter, dated as of March 31, 2003, among the Borrower, the Administrative
Agent and the Syndication Agent, (d) the confidential fee letter, dated as of
August 23, 2003, among the Borrower, the Administrative Agent and the
Syndication Agent and (e) the confidential fee letter, dated as of the
Effective Date, among the Borrower, the Administrative Agent and the
Syndication Agent, in each case, as amended, supplemented, restated or
otherwise modified from time to time pursuant to the terms thereof.

 

“Final Termination Date” means the later of
(i) the Stated Maturity Date with respect to Term B Loans, and (ii) the date on
which all Obligations are satisfied and paid in full.

 

“Fiscal Quarter”
means any three-month period ending on a Saturday closest to March 31,
June 30, September 30, or December 31 of any Fiscal Year.

 

“Fiscal Year”
means any year ending on the Saturday closest to December 31 (e.g., the “2004
Fiscal Year” refers to the Fiscal Year ending on January 1, 2005).

 

“FNZ” means Weight
Watchers New Zealand Unit Trust, a New Zealand trust which owns and operates
the Weight Watchers classroom franchise and business in New Zealand.

 

“FNZ Guaranty”
means the Guaranty, dated December 16, 1999, made by FNZ in favor of the
Administrative Agent, as amended, supplemented, restated or otherwise modified
from time to time in accordance with its terms.

 

“FNZ Security
Agreement” means the Security Agreement, dated December 16, 1999, by
FNZ in favor of the Administrative Agent, together with each Supplement thereto
delivered pursuant to clause (c) of Section 7.1.13, as
amended, amended and restated, supplemented or otherwise modified from time to
time pursuant to the terms thereof.

 

“Foreign Currency”
means any currency other than U.S. Dollars.

 

“FPL” means
Fortuity Pty. Ltd. (ACN 007 148 683), an Australian company incorporated in the
State of Victoria which operates the Weight Watchers classroom franchise and
business in Victoria.

 

“F.R.S. Board”
means the Board of Governors of the Federal Reserve System or any successor
thereto.

 

“Franchise Acquisition”
means the acquisition of any Weight Watchers franchise by the Borrower or one
of its Subsidiaries.

 

“GAAP” is defined
in Section 1.4.

 

“GB” means
Gutbusters Pty. Ltd. (ACN 059 073 157), an Australian company incorporated in
the State of New South Wales.

 

13

 

“Governmental
Authority” means the government of the United States of America, any other
nation or any political subdivision thereof, whether state or local (or the
equivalent thereof), and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.

 

“Guaranties”
means, collectively, (a)  the Australian Guaranty, (b) the Subsidiary
Guaranty, (c) the FNZ Guaranty and (d) each other guaranty delivered from
time to time pursuant to the terms of this Agreement.

 

“Guarantor” means
any Person which has or may issue a Guaranty hereunder.

 

“Hazardous Material” means

 

(a)                                  any
“hazardous substance”, as defined by CERCLA or equivalent applicable foreign
law;

 

(b)                                 any
“hazardous waste”, as defined by the Resource Conservation and Recovery Act, as
amended or equivalent applicable foreign law;

 

(c)                                  any
petroleum product; or

 

(d)                                 any
pollutant or contaminant or hazardous, dangerous or toxic chemical, material or
substance within the meaning of any other applicable federal, state or local
law, regulation, ordinance or requirement (including consent decrees and
administrative orders) relating to or imposing liability or standards of
conduct concerning any hazardous, toxic or dangerous waste, substance or
material, all as amended or hereafter amended.

 

“Hedging Obligations”
means, with respect to any Person, all liabilities of such Person under
interest rate swap agreements, interest rate cap agreements and interest rate
collar agreements, and all other agreements or arrangements designed to protect
such Person against fluctuations in interest rates or currency exchange rates,
including but not limited to Rate Protection Agreements.

 

“herein”, “hereof”,
“hereto”, “hereunder” and similar terms contained in this
Agreement or any other Loan Document refer to this Agreement or such other Loan
Document, as the case may be, as a whole and not to any particular Section,
paragraph or provision of this Agreement or such other Loan Document.

 

“HJH” means H.J.
Heinz Company, a Pennsylvania Corporation.

 

“HJH Pledge Agreement”
means the HJH Pledge Agreement, dated September 29, 1999, by HJH in favor
of the Administrative Agent, as amended, amended and restated, supplemented or
otherwise modified from time to time pursuant to the terms thereof.

 

“Immaterial Subsidiary”
means, at any date of determination, any Subsidiary or group of Subsidiaries of
the Borrower having assets as at the end of or EBITDA for the immediately

 

14

 

preceding four Fiscal
Quarter period for which the relevant financial information has been delivered
pursuant to clause (a) or clause (b) of Section 7.1.1
of less than 5% of total assets of the Borrower and its Subsidiaries or
$2,000,000, respectively, individually or in the aggregate.

 

“Impermissible
Qualification” means, relative to the opinion or certification of any
independent public accountant as to any financial statement of any Obligor, any
qualification or exception to such opinion or certification

 

(a)                                  which
is of a “going concern” or similar nature;

 

(b)                                 which
relates to the limited scope of examination of matters relevant to such
financial statement; or

 

(c)                                  which
relates to the treatment or classification of any item in such financial
statement and which, as a condition to its removal, would require an adjustment
to such item the effect of which would be to cause such Obligor to be in
default of any of its obligations under Section 7.2.4.

 

“including” means
including without limiting the generality of any description preceding such
term, and, for purposes of this Agreement and each other Loan Document, the
parties hereto agree that the rule of ejusdem  generis shall not
be applicable to limit a general statement, which is followed by or referable
to an enumeration of specific matters, to matters similar to the matters
specifically mentioned.

 

“Indebtedness” of
any Person means, without duplication:

 

(a)                                  all
obligations of such Person for borrowed money and all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments for
borrowed money in respect thereof;

 

(b)                                 all
obligations, contingent or otherwise, relative to the face amount of all
letters of credit, whether or not drawn, and banker’s acceptances issued for
the account of such Person;

 

(c)                                  all
obligations of such Person as lessee under leases which have been or should be,
in accordance with GAAP, recorded as Capitalized Lease Liabilities;

 

(d)                                 net
liabilities of such Person under all Hedging Obligations;

 

(e)                                  whether
or not so included as liabilities in accordance with GAAP, all obligations of
such Person to pay the deferred purchase price of property or services, other
than indebtedness (excluding prepaid interest thereon and interest not yet due)
secured by a Lien on property owned or being purchased by such Person
(including indebtedness arising under conditional sales or other title
retention agreements), whether or not such indebtedness shall have been assumed
by such Person or is limited in recourse; provided, however,
that, for purposes of determining the amount of any Indebtedness of the type
described in this clause, if recourse with respect to such Indebtedness is
limited to specific property financed with such Indebtedness, the amount

 

15

 

of such Indebtedness shall be limited to the fair market value
(determined on a basis reasonably acceptable to the Administrative Agent) of
such property or the principal amount of such Indebtedness, whichever is less;
and

 

(f)                                    all
Contingent Liabilities of such Person in respect of any of the foregoing;

 

provided,
that, Indebtedness shall not include unsecured Indebtedness incurred in the
ordinary course of business in the nature of accrued liabilities and open
accounts extended by suppliers on normal trade terms in connection with
purchases of goods and services, but excluding the Indebtedness incurred
through the borrowing of money or Contingent Liabilities in connection therewith.  For all purposes of this Agreement, the
Indebtedness of any Person shall include the Indebtedness of any partnership or
joint venture in which such Person is a general partner or a joint venturer (to
the extent such Person is liable for such Indebtedness).

 

“Indemnified Liabilities” is defined in Section 11.4.

 

“Indemnified Parties” is defined in Section 11.4.

 

“Initial Public
Offering” means any sale of the Capital Securities of the Borrower to the
public pursuant to an initial, primary offering registered under the Securities
Act of 1933 and, for purposes of the Change in Control definition only,
pursuant to which no less than 10% of the Capital Securities of the Borrower
outstanding after giving effect to such offering was sold pursuant to such
offering.

 

“Intercompany
Subordination Agreement” means the Intercompany Subordination Agreement,
dated September 29, 1999, by the Borrower, SP1 and each of the Guarantors
in favor of the Administrative Agent, as amended, amended and restated,
supplemented or otherwise modified from time to time in accordance with its
terms.

 

“Interest Coverage
Ratio” means, at the close of any Fiscal Quarter, the ratio computed for
the period consisting of such Fiscal Quarter and each of the three immediately
prior Fiscal Quarters of:

 

(a)                                  EBITDA
(for such period)

 

to

 

(b)                                 Interest
Expense (for such period).

 

“Interest Expense”
means, for any Fiscal Quarter, the aggregate consolidated cash interest expense
(net of interest income) of the Borrower and its Subsidiaries for such Fiscal
Quarter, as determined in accordance with GAAP, including the portion of any
payments made in respect of Capitalized Lease Liabilities allocable to interest
expense.

 

“Interest Period”
means, relative to any LIBO Rate Loans, the period beginning on (and including)
the date on which such LIBO Rate Loan is made or continued as, or converted
into, a LIBO Rate Loan pursuant to Section 2.3.1 or 2.4 and
shall end on (but exclude) the day which numerically corresponds to such date
one, two, three or six or, with the consent of each

 

16

 

applicable Lender, nine
or twelve months thereafter (or, if such month has no numerically corresponding
day, on the last Business Day of such month), in either case as the Borrower
may select in its relevant notice pursuant to Section 2.3 or 2.4;
provided, however, that

 

(a)                                  the
Borrower shall not be permitted to select Interest Periods to be in effect at
any one time which have expiration dates occurring on more than ten different dates;

 

(b)                                 Interest
Periods commencing on the same date for Loans comprising part of the same
Borrowing shall be of the same duration;

 

(c)                                  if
such Interest Period would otherwise end on a day which is not a Business Day,
such Interest Period shall end on the next following Business Day (unless such
next following Business Day is the first Business Day of a calendar month, in
which case such Interest Period shall end on the Business Day next preceding
such numerically corresponding day); and

 

(d)                                 no
Interest Period for any Loan may end later than the Stated Maturity Date for
such Loan.

 

“Investment”
means, relative to any Person,

 

(a)                                  any
loan or advance made by such Person to any other Person (excluding commission,
travel and similar advances to officers and employees made in the ordinary
course of business);

 

(b)                                 any
ownership or similar interest held by such Person in any other Person; and

 

(c)                                  any
purchase or other acquisition of all or substantially all of the assets of any
Person or any division thereof.

 

The amount of any
Investment shall be the original principal or capital amount thereof less all
returns of principal or equity thereon (and without adjustment by reason of the
financial condition of such other Person) and shall, if made by the transfer or
exchange of property other than cash, be deemed to have been made in an
original principal or capital amount equal to the fair market value of such
property at the time of such transfer or exchange.

 

“Issuance Request”
means a Letter of Credit request and certificate duly executed by an Authorized
Officer of the Borrower, substantially in the form of Exhibit B-2
hereto.

 

“Issuer” means,
collectively, Scotia Capital in its individual capacity hereunder as issuer of
the Letters of Credit and such other Lender as may be designated by Scotia
Capital (and agreed to by the Borrower and such Lender) in its individual
capacity as the issuer of Letters of Credit.

 

“Lead Arrangers”
means Scotia Capital and CSFB.

 

17

 

“Lender Assignment
Agreement” means a Lender Assignment Agreement substantially in the form of
Exhibit D hereto.

 

“Lenders” is
defined in the preamble.

 

“Lender’s
Environmental Liability” means any and all losses, liabilities,
obligations, penalties, claims, litigation, demands, defenses, costs,
judgments, suits, proceedings, damages (including consequential damages),
disbursements or expenses of any kind or nature whatsoever (including
reasonable attorneys’ fees at trial and appellate levels and experts’ fees and
disbursements and expenses incurred in investigating, defending against or
prosecuting any litigation, claim or proceeding) which may at any time be
imposed upon, incurred by or asserted or awarded against the Administrative
Agent, the Syndication Agent, any Lead Arranger, any Lender or any Issuer or
any of such Person’s Affiliates, shareholders, directors, officers, employees,
and agents in connection with or arising from:

 

(a)                                  any
Hazardous Material on, in, under or affecting all or any portion of any
property of the Borrower or any of its Subsidiaries, the groundwater
thereunder, or any surrounding areas thereof to the extent caused by Releases
from the Borrower or any of its Subsidiaries’ or any of their respective
predecessors’ properties;

 

(b)                                 any
misrepresentation, inaccuracy or breach of any warranty, contained or referred
to in Section 6.12;

 

(c)                                  any
violation or claim of violation by the Borrower or any of its Subsidiaries of
any Environmental Laws; or

 

(d)                                 the
imposition of any lien for damages caused by or the recovery of any costs for
the cleanup, release or threatened release of Hazardous Material by the
Borrower or any of its Subsidiaries, or in connection with any property owned
or formerly owned by the Borrower or any of its Subsidiaries.

 

“Letter of Credit” is defined in Section 2.1.3.

 

“Letter of Credit
Commitment” means, with respect to the Issuer, the Issuer’s obligation to
issue Letters of Credit pursuant to Section 2.1.3 and, with respect
to each of the other Lenders that has a Revolving Loan Commitment, the
obligations of each such Lender to participate in such Letters of Credit
pursuant to Section 2.6.1.

 

“Letter of Credit
Commitment Amount” means, on any date, a maximum amount of $10,000,000, as
such amount may be reduced from time to time pursuant to Section 2.2.

 

“Letter of Credit
Outstandings” means, on any date, an amount equal to the sum of

 

(a)                                  the
then aggregate amount which is undrawn and available under all issued and
outstanding Letters of Credit,

 

18

 

plus

 

(b)                                 the
then aggregate amount of all unpaid and outstanding Reimbursement Obligations
in respect of such Letters of Credit.

 

“LIBO Rate” means,
relative to any Interest Period for LIBO Rate Loans, the rate of interest equal
to the average (rounded upwards, if necessary, to the nearest 1/16 of 1%) of
the rates per annum at which U.S. Dollar deposits in immediately available
funds are offered to the Administrative Agent’s LIBOR Office in the London
interbank market as at or about 11:00 a.m. London time two Business Days prior
to the beginning of such Interest Period for delivery on the first day of such
Interest Period, and in an amount approximately equal to the amount of the
Administrative Agent’s LIBO Rate Loan and for a period approximately equal to
such Interest Period.

 

“LIBO Rate Loan”
means a Loan bearing interest, at all times during an Interest Period
applicable to such Loan, at a fixed rate of interest determined by reference to
the LIBO Rate (Reserve Adjusted).

 

“LIBO Rate (Reserve
Adjusted)” means, relative to any Loan to be made, continued or maintained
as, or converted into, a LIBO Rate Loan for any Interest Period, a rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) determined
pursuant to the following formula:

 

	
  LIBO Rate

  	
  =

  	
  LIBO Rate

  	
   

  
	
  (Reserve Adjusted)

  	
   

  	
  1.00 - LIBOR Reserve Percentage

  

 

The LIBO Rate (Reserve
Adjusted) for any Interest Period for LIBO Rate Loans will be determined by the
Administrative Agent on the basis of the LIBOR Reserve Percentage in effect on,
and the applicable rates furnished to and received by the Administrative Agent
from Scotia Capital, two Business Days before the first day of such Interest
Period.

 

“LIBOR Office”
means, relative to any Lender, the office of such Lender designated as such on Schedule III
hereto or designated in the Lender Assignment Agreement or such other office of
a Lender as designated from time to time by notice from such Lender to the
Borrower and the Administrative Agent, whether or not outside the United
States, which shall be making or maintaining LIBO Rate Loans of such Lender
hereunder.

 

“LIBOR Reserve
Percentage” means, relative to any Interest Period for LIBO Rate Loans, the
reserve percentage (expressed as a decimal) equal to the maximum aggregate
reserve requirements (including all basic, emergency, supplemental, marginal
and other reserves and taking into account any transitional adjustments or
other scheduled changes in reserve requirements) specified under regulations
issued from time to time by the F.R.S. Board and then applicable to assets or
liabilities consisting of and including “Eurocurrency Liabilities”, as
currently defined in Regulation D of the F.R.S. Board, having a term
approximately equal or comparable to such Interest Period.

 

“Lien” means any
security interest, mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or otherwise), charge against or
interest in property, or

 

19

 

any filing or recording
of any instrument or document in respect of the foregoing, to secure payment of
a debt or performance of an obligation or other priority or preferential
arrangement of any kind or nature whatsoever.

 

“Loan” means, as
the context may require, a Revolving Loan, a Swing Line Loan, a Term B
Loan  and a Designated New Loan.

 

“Loan Document”
means this Agreement, the Notes, the Letters of Credit, each Rate Protection
Agreement under which that counterpart to such agreement is (or at the time
such Rate Protection Agreement was entered into, was) a Lender or an Affiliate
of a Lender relating to Hedging Obligations of the Borrower or any of its
Subsidiaries, the Fee Letters, each Pledge Agreement, each Guaranty, each
Security Agreement, the Intercompany Subordination Agreement and each other
agreement, document or instrument delivered in connection with this Agreement
or any other Loan Document, whether or not specifically mentioned herein or
therein.

 

“Local Management Plan”
means an equity plan or program for (i) the sale or issuance of Capital
Securities of a Subsidiary in an amount not to exceed 5% of the outstanding
common equity of such Subsidiary to local management or a plan or program in
respect of Subsidiaries of the Borrower whose principal business is conducted
outside of the United States, (ii) the direct purchase from ARTAL by the
Borrower management employees, in one transaction or a series of transactions,
of not more than 3% in the aggregate of the WWI Common Shares owned by ARTAL or
(iii) the issuance by the Borrower to its management employees, in one
transaction or a series of transactions, of stock options to purchase not more
than 6% in the aggregate of the WWI Common Shares on a fully diluted basis.

 

“Material Adverse Effect”
means (a) a material adverse effect on the financial condition, operations,
assets, business or properties of the Borrower and its Subsidiaries, taken as a
whole, (b) a material impairment other than an event or set of
circumstances described in clause (a) of the ability of any Obligor
(other than any Immaterial Subsidiary) to perform its respective material
obligations under the Loan Documents to which it is or will be a party, or
(c) an impairment of the validity or enforceability of, or a material impairment
of the rights, remedies or benefits available to the Administrative Agent, the
Issuer or the Lenders under, this Agreement or any other Loan Document.

 

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

 

“Mortgage” means,
collectively, each Mortgage or Deed of Trust executed and delivered pursuant to
the terms of this Agreement, including clause (b) of Section 7.1.8,
as such Mortgage or Deed of Trust is amended, amended and restated,
supplemented or otherwise modified from time to time in accordance with its
terms.

 

“Net Debt to EBITDA
Ratio” means, as of the last day of any Fiscal Quarter, the ratio of

 

(a)                                  Debt
outstanding on the last day of such Fiscal Quarter (less the amount of cash and
Cash Equivalent Investments of the Borrower and its Subsidiaries as of such
date)

 

20

 

to

 

(b)                                 EBITDA
computed for the period consisting of such Fiscal Quarter and each of the three
immediately preceding Fiscal Quarters.

 

“Net Disposition
Proceeds” means, with respect to a Permitted Disposition of the assets of
the Borrower or any of its Subsidiaries, the excess of

 

(a)                                  the
gross cash proceeds received by the Borrower or any of its Subsidiaries from
any Permitted Disposition and any cash payments received in respect of
promissory notes or other non-cash consideration delivered to the Borrower or
such Subsidiary in respect of any Permitted Disposition,

 

less

 

(b)                                 the
sum of

 

(i)                                     all
reasonable and customary fees and expenses with respect to legal, investment
banking, brokerage and accounting and other professional fees, sales
commissions and disbursements and all other reasonable fees, expenses and
charges, in each case actually incurred in connection with such Permitted
Disposition which have not been paid to Affiliates of the Borrower,

 

(ii)                                  all
taxes and other governmental costs and expenses actually paid or estimated by
the Borrower (in good faith) to be payable in cash in connection with such
Permitted Disposition, and

 

(iii)                               payments made by the
Borrower or any of its Subsidiaries to retire Indebtedness (other than the
Loans) of the Borrower or any of its Subsidiaries where payment of such
Indebtedness is required in connection with such Permitted Disposition;

 

provided,
however, that if, after the payment of all taxes with respect to such
Permitted Disposition, the amount of estimated taxes, if any, pursuant to clause
(b)(ii) above exceeded the tax amount actually paid in cash in respect of
such Permitted Disposition, the aggregate amount of such excess shall be immediately
payable, pursuant to clause (b) of Section 3.1.1, as Net
Disposition Proceeds.

 

Notwithstanding the
foregoing, Net Disposition Proceeds shall not include fees or other amounts
paid to the Borrower or its Subsidiaries in respect of a license of intellectual
property (not related to the classroom business of the Borrower or its
Subsidiaries) having customary terms and conditions for similar licenses.

 

“Net Income”
means, for any period, the net income of the Borrower and its Subsidiaries for
such period on a consolidated basis, excluding extraordinary gains.

 

“Netco” means
Weight Watchers.com Inc., a Delaware corporation.

 

21

 

“Non-Excluded Taxes”
means any taxes other than (i) net income and franchise taxes imposed with
respect to any Secured Party by a Governmental Authority under the laws of
which such Secured Party is organized or in which it maintains its applicable
lending office and (ii) any taxes imposed on a Secured Party by any
jurisdiction as a result of any former or present connection between such
Secured Party and such jurisdiction other than a connection arising from a
Secured Party entering into this Agreement or making any loan hereunder.

 

“Non-Guarantor
Subsidiary” means the Designated Subsidiary and any other Subsidiary of the
Borrower other than any Person which has or may issue a Guaranty hereunder.

 

“Non-U.S. Lender”
means any Lender (including each Assignee Lender) that is not (i) a
citizen or resident of the United States, (ii) a corporation, partnership
or other entity created or organized in or under the laws of the United States
or any state thereof, or (iii) any estate or trust that is subject to U.S.
Federal income taxation regardless of the source of its income.

 

“Note” means, as
the context may require, a Revolving Note, a Swing Line Note, a Registered
Note, a Term B Note or any promissory note representing a Designated New Loan.

 

“Obligations”
means all obligations (monetary or otherwise) of the Borrower and each other
Obligor arising under or in connection with this Agreement, the Notes, each
Letter of Credit and each other Loan Document, and Hedging Obligations owed to
a Lender or an Affiliate thereof (unless the Lender or such Affiliate otherwise
agrees).

 

“Obligor” means the
Borrower or any other Person (other than any Agent, any Lender or the Issuer)
obligated under any Loan Document.

 

“Organic Document”
means, relative to any Obligor, its certificate of incorporation, and its
by-laws (or other similar organizational and/or governing documents) and all
shareholder agreements, voting trusts and similar arrangements (or the foreign
equivalent thereof) applicable to any of its authorized shares of Capital
Securities.

 

“Other Taxes”
means any and all stamp, documentary or similar taxes, or any other excise or
property taxes or similar levies that arise on account of any payment made or
required to be made under any Loan Document or from the execution, delivery,
registration, recording or enforcement of any Loan Document.

 

“Participant” is defined in Section 11.11.2.

 

“Patent Security
Agreement” means the Patent Security Agreement, dated September 29,
1999, by the Borrower and each of its U.S. Subsidiaries in favor of the
Administrative Agent, as amended, supplemented, amended and restated or
otherwise modified.

 

“PBGC” means the
Pension Benefit Guaranty Corporation and any successor entity.

 

“Pension Plan”
means a “pension plan”, as such term is defined in section 3(2) of
ERISA, which is subject to Title IV of ERISA (other than a multiemployer plan
as defined in section 4001(a)(3) of ERISA), and to which the Borrower or
any corporation, trade or business that is, along with the Borrower, a member
of a Controlled Group, has or within the prior six years has

 

22

 

had any liability,
including any liability by reason of having been a substantial employer within
the meaning of section 4063 of ERISA at any time during the preceding five
years, or by reason of being deemed to be a contributing sponsor under
section 4069 of ERISA.

 

“Percentage”
means, relative to any Lender, the applicable percentage relating to Term B
Loans, any Tranche of Designated New Loans, Swing Line Loans or Revolving
Loans, as the case may be, as set forth opposite its name on Schedule II
hereto under the applicable column heading or set forth in Lender Assignment
Agreement(s) under the applicable column heading, as such percentage may be
adjusted from time to time pursuant to Lender Assignment Agreement(s) executed
by such Lender and its Assignee Lender(s) and delivered pursuant to Section 11.11.  A Lender shall not have any Commitment to
make a particular Tranche of Loans (as the case may be) if its percentage under
the respective column heading is zero.

 

“Permitted Acquisition”
means an acquisition (whether pursuant to an acquisition of Capital Securities,
assets or otherwise) by the Borrower or any of the Subsidiaries from any Person
of a business in which the following conditions are satisfied:

 

(a)                                  immediately
before and after giving effect to such acquisition no Default shall have
occurred and be continuing or would result therefrom (including under Section 7.2.1);

 

(b)                                 if
the acquisition is of Capital Securities of a Person such Person becomes a
Subsidiary; and

 

(c)                                  in
the event the aggregate amount of consideration (including cash and incurrence
or assumption of Indebtedness) exceeds $50,000,000 for such acquisition, the
Borrower shall have delivered to the Agents a Compliance Certificate for the
period of four full Fiscal Quarters immediately preceding such acquisition
(prepared in good faith and in a manner and using such methodology which is
consistent with the most recent financial statements delivered pursuant to Section 7.1.1)
giving pro  forma effect to the consummation of such acquisition
and evidencing compliance with the covenants set forth in Section 7.2.4.

 

“Permitted ARTAL
Investor Group” means ARTAL or any of its direct or indirect Wholly-owned
Subsidiaries and ARTAL Group S.A., a Luxembourg corporation or any of its
direct or indirect Wholly-owned Subsidiaries.

 

“Permitted Disposition”
means a Disposition in accordance with the terms of clause (b) (other
than as permitted by clause (a)) of Section 7.2.9.

 

“Person” means any
natural person, corporation, partnership, firm, association, trust, government,
governmental agency, limited liability company or any other entity, whether
acting in an individual, fiduciary or other capacity.

 

“Plan” means any
Pension Plan or Welfare Plan.

 

“Pledge Agreements”
means, collectively, (a) the WWI Pledge Agreement, (b) the ARTAL
Pledge Agreement, (c) the HJH Pledge Agreement, (d) the Australian
Pledge

 

23

 

Agreement, (e) the
U.K. Pledge Agreement, and (f) each other pledge agreement delivered from time
to time pursuant to clause (b) of Section 7.1.7.

 

“Qualified Assets” is defined in clause (b) of Section 3.1.1.

 

“Quarterly Payment
Date” means the last day of each March, June, September and December,
or, if any such day is not a Business Day, the next succeeding Business Day.

 

“Rate Protection
Agreements” means, collectively, arrangements entered into by any Person
designed to protect such Person against fluctuations in interest rates or
currency exchange rates, pursuant to the terms of this Agreement.

 

“Recapitalization”
means those transactions contemplated and undertaken pursuant to the
Recapitalization Agreement.

 

“Recapitalization
Agreement” means that certain Recapitalization and Stock Purchase
Agreement, dated as of July 22, 1999 among the Borrower, ARTAL and HJH.

 

“Refinance” means,
in respect of any Indebtedness, to refinance, extend, renew, refund, repay,
prepay, redeem, defease or retire, or to issue other Indebtedness in exchange
or replacement for such Indebtedness.  “Refinanced”
and “Refinancing” shall have correlative meanings.

 

“Refinancing
Indebtedness” means Indebtedness that Refinances any Indebtedness of the
Borrower or any of its Subsidiaries existing on the Effective Date or otherwise
permitted hereunder, including Indebtedness that Refinances Refinancing
Indebtedness; provided, however, that:

 

(i)                                     such
Refinancing Indebtedness has a Stated Maturity no earlier than the Stated
Maturity of the Indebtedness being Refinanced;

 

(ii)                                  such
Refinancing Indebtedness has an Average Life at the time such Refinancing
Indebtedness is incurred that is equal to or greater than the Average Life of
the Indebtedness being Refinanced; and

 

(iii)                               such Refinancing
Indebtedness has an aggregate principal amount (or if incurred with original
issue discount, an aggregate issue price) that is equal to or less than the
aggregate principal amount (or if incurred with original issue discount, the
aggregate accreted value) then outstanding or committed (plus fees and
expenses, including any premium and defeasance costs) under the Indebtedness
being Refinanced;

 

provided
further, however, that Refinancing Indebtedness shall not include
(A) Indebtedness of a Subsidiary that Refinances Indebtedness of the
Borrower or (B) Indebtedness of the Borrower or a Subsidiary that
Refinances Indebtedness of another Subsidiary.

 

“Refunded Swing Line Loans” is defined in clause (b) of Section 2.3.2.

 

“Register” is defined in Section 11.11.3.

 

24

 

“Registered Note”
means a promissory note of the Borrower payable to any Registered Noteholder,
in the form of Exhibit A-6 hereto (as such promissory note may be
amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of the Borrower to such Lender resulting from
outstanding Term Loans, and also means all other promissory notes accepted from
time to time in substitution therefor or renewal thereof.

 

“Registered Noteholder”
means any Lender that has been issued a Registered Note.

 

“Reimbursement Obligation” is defined in Section 2.6.3.

 

“Related Fund”
means, with respect to any Lender which is a fund that invests in loans, any
other fund that invests in loans and is advised, controlled or managed by the
same investment advisor as such Lender or by an Affiliate of such investment
advisor or collateralized debt or loan obligation fund advised, managed or
operated by a Lender or an Affiliate of a Lender.

 

“Release” means a
“release”, as such term is defined in CERCLA.

 

“Required Lenders”
means, at any time, Lenders holding at least 51% of the Total Exposure Amount.

 

“Resource Conservation
and Recovery Act” means the Resource Conservation and Recovery Act, 42
U.S.C. Section 6901, et  seq., as in effect from time to
time.

 

“Restricted Payments” is defined in Section 7.2.6.

 

“Revolving Lender”
is defined in clause (a) of Section 2.1.2.

 

“Revolving Loan” is defined in clause (a) of Section 2.1.2.

 

“Revolving Loan Commitment” is defined in clause (a) of Section 2.1.2.

 

“Revolving Loan
Commitment Amount” means, on any date, $350,000,000, as such amount may be
(i) reduced from time to time pursuant to Section 2.2 or (ii)
increased pursuant to Section 2.1.6.

 

“Revolving Loan Commitment Termination Date”
means the earliest of

 

(a)                                  March 31,
2009;

 

(b)                                 the
date on which the Revolving Loan Commitment Amount is terminated in full or
reduced to zero pursuant to Section 2.2; and

 

(c)                                  the
date on which any Commitment Termination Event occurs.

 

Upon the occurrence of
any event described in clauses (b) or (c), the Revolving Loan
Commitments shall terminate automatically and without any further action.

 

25

 

“Revolving Note”
means a promissory note of the Borrower payable to a Lender, substantially in
the form of Exhibit A-1 hereto (as such promissory note may be amended,
endorsed or otherwise modified from time to time), evidencing the aggregate
Indebtedness of the Borrower to such Lender resulting from outstanding
Revolving Loans, and also means all other promissory notes accepted from time
to time in substitution therefor or renewal thereof.

 

“S&P” means
Standard & Poor’s Ratings Group, a division of The McGraw-Hill Companies,
Inc.

 

“Scotia Capital” is defined in the preamble.

 

“Secured Parties”
means, collectively, the Lenders, the Issuers, the Administrative Agent, the
Syndication Agent, the Lead Arrangers, each counterparty to a Rate Protection
Agreement that is (or at the time such Rate Protection Agreement was entered
into, was) a Lender or an Affiliate thereof and (in each case) and each of
their respective successors, transferees and assigns.

 

“Security Agreements”
means, collectively, (a) the WWI Security Agreement, (b) the Australian
Security Agreement, (c) the U.K. Security Agreement, (d) the Patent Security
Agreements, the Trademark Security Agreements and the Copyright Security
Agreements, (e) the FNZ Security Agreement and (f) each other security
agreement executed and delivered from time to time pursuant to clause (a)
of Section 7.1.7, in each case, as amended, amended and restated,
supplemented or otherwise modified from time to time pursuant to the terms
thereof.

 

“Sellers” is
defined in the second recital.

 

“Senior Debt”
means all Debt other than Subordinated Debt.

 

“Senior Subordinated
Debt” means, collectively, debt of the Borrower under its 13% Senior
Subordinated Notes in an initial aggregate principal amount of $150,000,000 and
its 13% Senior Subordinated Notes in an initial aggregate principal amount of
Euro 100,000,000, issued under the Senior Subordinated Note Indenture pursuant
to a Rule 144A private placement.

 

“Senior Subordinated
Note Indenture” means, collectively, that certain Senior Subordinated Note
Indenture, dated as of September 29, 1999 between the Borrower and Norwest
Bank Minnesota, National Association, as trustee, related to the issuance of
$150,000,000 Senior Subordinated Notes and that certain Senior Subordinated
Note Indenture, dated as of September 29, 1999, between the Borrower and
Norwest Bank Minnesota, National Association, as trustee, related to the
issuance of Euro 100,000,000 Senior Subordinated Notes.

 

“Senior Subordinated
Noteholder” means, at any time, any holder of a Senior Subordinated Note.

 

“Senior Subordinated
Notes” means those certain 13% Senior Subordinated Notes due 2009, issued
pursuant to the Senior Subordinated Note Indenture.

 

“Solvent” means,
with respect to any Person on a particular date, that on such date (a) the fair
value of the property of such Person is greater than the total amount of
liabilities, including

 

26

 

contingent liabilities,
of such Person, (b) the present fair salable value of the assets of such Person
is not less than the amount that will be required to pay the probable liability
of such Person on its debts as they become absolute and matured, (c) such
Person does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person’s ability to pay as such debts and liabilities
mature, and (d) such Person is not engaged in business or a transaction, and
such person is not about to engage in business or a transaction, for which such
Person’s property would constitute an unreasonably small capital.  The amount of contingent liabilities at any
time shall be computed as the amount that, in the light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.

 

“SP1” is defined
in the first recital.

 

“Stated Amount” of
each Letter of Credit means the total amount available to be drawn under such
Letter of Credit upon the issuance thereof.

 

“Stated Expiry Date” is defined in Section 2.6.

 

“Stated Maturity”
means, with respect to any security, the date specified in such security as the
fixed date on which the final payment of principal of such security is due and
payable, including pursuant to any mandatory redemption provision (but
excluding any provision providing for the repurchase of such security at the
option of the holder thereof upon the happening of any contingency unless such
contingency has occurred).

 

“Stated Maturity Date” means

 

(a)                                  in
the case of any Revolving Loan, March 31, 2009;

 

(b)                                 in
the case of any Term B Loan, March 31, 2010; and

 

(c)                                  in
the case of any Designated New Loan, as determined in accordance with Section 2.1.6.

 

“Subordinated Debt”
means, as the context may require, (i) the unsecured Debt of the Borrower
evidenced by the Senior Subordinated Notes and (ii) any other unsecured
subordinated Debt of the Borrower which shall (i) contain subordination
provisions that are no less favorable to the holders of “Senior Indebtedness”,
“Senior Debt” or terms of similar import as used in such documents than the
subordination provisions contained in the Senior Subordinated Note Indenture,
(ii) not provide for any amortization (in whole or in part) of the Debt
issued thereunder prior to 6 months after the Stated Maturity Date for Term B
Loans and (iii) contain such other terms and conditions which, taken as a
whole, are comparable to those contained in the Senior Subordinated Note
Indenture, as modified pursuant to Section 7.2.10.

 

“Subordinated Guaranty”
means, collectively, (i) the Guaranty executed and delivered by certain
Subsidiaries of the Borrower pursuant to Section 4.13 of the Senior
Subordinated Note Indenture and (ii) each other guaranty, if any, executed from
time to time by any Subsidiary of the Borrower pursuant to which the guarantor
thereunder has any Contingent Liability with respect to any other Subordinated
Debt.

 

27

 

“Subordination Provisions” is defined in Section 9.1.11.

 

“Subsidiary”
means, with respect to any Person, any corporation, partnership or other
business entity of which more than 50% of the outstanding Capital Securities
(or other ownership interest) having ordinary voting power to elect a majority
of the board of directors, managers or other voting members of the governing
body of such entity (irrespective of whether at the time Capital Securities (or
other ownership interest) of any other class or classes of such entity shall or
might have voting power upon the occurrence of any contingency) is at the time
directly or indirectly owned by such Person, by such Person and one or more
other Subsidiaries of such Person, or by one or more other Subsidiaries of such
Person.  Unless the context otherwise
specifically requires, the term “Subsidiary” shall be a reference to a
Subsidiary of the Borrower.

 

“Subsidiary Guaranty”
means the Guaranty, dated September 29, 1999, by the U.S. Subsidiaries
signatory thereto, UKHC1, UKHC2 and WWUK and its Subsidiaries in favor of the
Administrative Agent, as amended, supplemented, restated or otherwise modified
from time to time in accordance with its terms.

 

“Swing Line Lender”
means Scotia Capital (or another Lender designated by Scotia Capital with the
consent of the Borrower, if such Lender agrees to be the Swing Line Lender
hereunder), in such Person’s capacity as the maker of Swing Line Loans.

 

“Swing Line Loan” is defined in clause (b) of Section 2.1.2.

 

“Swing Line Loan
Commitment” means, with respect to the Swing Line Lender, the Swing Line
Lender’s obligation pursuant to clause (b) of Section 2.1.2
to make Swing Line Loans and, with respect to each Revolving Lender (other than
the Swing Line Lender), such Revolving Lender’s obligation to participate in
Swing Line Loans pursuant to Section 2.3.2.

 

“Swing Line Loan
Commitment Amount” means, on any date, $5,000,000, as such amount may be
reduced from time to time pursuant to Section 2.2.

 

“Swing Line Note”
means a promissory note of the Borrower payable to the Swing Line Lender, in
substantially the form of Exhibit A-3 hereto (as such promissory note
may be amended, endorsed or otherwise modified from time to time), evidencing
the aggregate Indebtedness of the Borrower to the Swing Line Lender resulting
from outstanding Swing Line Loans, and also means all other promissory notes
accepted from time to time in substitution therefor or renewal thereof.

 

“Syndication Agent” is defined in the preamble.

 

“Tender Offer”
means the tender by the Borrower for up to all of its Senior Subordinated Notes
made in connection with the execution and delivery of the Existing Agreement.

 

“Term B Loan” is defined in clause (a) of Section 2.1.1.

 

“Term B Loan Commitment” is defined in clause (a) of Section 2.1.1.

 

“Term B Loan Commitment Amount” means
$150,000,000.

 

28

 

“Term B Loan
Lender” means any Lender which has a Percentage of the Term B Loan
Commitment Amount.

 

“Term B Note”
means a promissory note of the Borrower, payable to the order of any Lender, in
the form of Exhibit A-2 hereto (as such promissory note may be
amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of the Borrower to such Lender resulting from
outstanding Term B Loans (including Designated Additional Term B
Loans), and also means all other promissory notes accepted from time to time in
substitution therefor or renewal thereof.

 

“Term Loans”
means, collectively, the Term B Loans and the Designated Additional Term B
Loans.

 

“Total Exposure Amount”
means, on any date of determination, the then outstanding principal amount of
all Term Loans and the then effective Revolving Loan Commitment Amount.

 

“Trademark Security
Agreement” means the Trademark Security Agreement, dated September 29,
1999, by the Borrower and each of its U.S. Subsidiaries signatory thereto in
favor of the Administrative Agent, as amended, supplemented, amended and
restated or otherwise modified from time to time.

 

“Tranche” means,
as the context may require, the Loans constituting Term B Loans, Swing Line
Loans, Revolving Loans or Designated New Loans.

 

“type” means,
relative to any Loan, the portion thereof, if any, being maintained as a Base
Rate Loan or a LIBO Rate Loan.

 

“UCC” means the
Uniform Commercial Code as in effect from time to time in the State of New
York.

 

“UKHC1” means
Weight Watchers UK Holding Ltd, a company incorporated under the laws of
England.

 

“UKHC2” means
Weight Watchers International Ltd, a company incorporated under the laws of
England.

 

“U.K. Pledge Agreement”
means, collectively, (i) the Deeds of Charge executed and delivered by the
Borrower to UKHC1, UKHC2 and WWUK and its Subsidiaries and (ii) each other
pledge agreement delivered pursuant to clause (b) of Section 7.1.7,
as amended, amended and restated, supplemented or otherwise modified from time
to time pursuant to the terms thereof.

 

“U.K. Security
Agreement” means, collectively, (i) the Debentures executed and
delivered by UKHC1, UKHC2 and WWUK and each of its Subsidiaries and
(ii) each other security agreement delivered pursuant to clause (a)
of Section 7.1.7, as amended, amended and restated, supplemented or
otherwise modified from time to time pursuant to the terms thereof.

 

29

 

“U.K. Subsidiary”
means any Subsidiary that is incorporated under the laws of England.

 

“United States” or
“U.S.” means the United States of America, its fifty States and the
District of Columbia.

 

“U.S. Dollar” and
the sign “$” mean lawful money of the United States.

 

“U.S. Subsidiary”
means any Subsidiary that is incorporated or organized under the laws of the
United States or a state thereof or the District of Columbia.

 

“Voting Stock”
means, with respect to any Person, Capital Securities of any class or kind
ordinarily having the power to vote for the election of directors, managers or
other voting members of the governing body of such Person.

 

“Waiver” means an
agreement in favor of the Administrative Agent for the benefit of the Lenders
and the Issuer in form and substance reasonably satisfactory to the
Administrative Agent.

 

“Warnaco Agreement”
means that certain License Agreement, dated as of January 8, 1999, between
Warnaco Inc., a Delaware corporation, and the Borrower.

 

“Weighco Acquisition”
the acquisition by the Borrower and its Subsidiaries of substantially all of
the assets and business of Weighco Enterprises, Inc., and various of its Affiliates
on January 16, 2001.

 

“Welfare Plan”
means a “welfare plan”, as such term is defined in section 3(1) of
ERISA, and to which the Borrower or any of its Subsidiaries has any liability.

 

“Wholly-owned
Subsidiary” shall mean, with respect to any Person, any Subsidiary of such
Person all of the Capital Securities (and all rights and options to purchase
such Capital Securities) of which, other than directors’ qualifying shares or
shares sold pursuant to Local Management Plans, are owned, beneficially and of
record, by such Person and/or one or more Wholly-owned Subsidiaries of such
Person.

 

“WW Australia”
means Weight Watchers International Pty. Ltd. (ACN 070 836 449), an Australian
company incorporated in the State of New South Wales and resident in Australia
and the direct corporate parent of FPL and SP1.

 

“WWI Common Shares”
means shares of common stock of the Borrower, par value $1.00 per share.

 

“WWI Pledge Agreement”
means the Pledge Agreement, dated September 29, 1999, by the Borrower and
its U.S. Subsidiaries signatory thereto in favor of the Administrative Agent,
together with each Supplement thereto delivered pursuant to clause (b)
of Section 7.1.7, as amended, amended and restated, supplemented or
otherwise modified from time to time pursuant to the terms thereof.

 

30

 

“WWI Security
Agreement” means the Security Agreement dated September 29, 1999, by
the Borrower and all U.S. Subsidiaries of the Borrower (other than the
Designated Subsidiary) in favor of the Administrative Agent, together with each
Supplement thereto delivered pursuant to clause (a) of Section 7.1.7,
as amended, amended and restated, supplemented or otherwise modified from time
to time pursuant to the terms thereof.

 

“WWUK” means Weight
Watchers UK Limited and its Subsidiaries.

 

SECTION 1.2.  Use of Defined Terms.  Unless otherwise defined or the context
otherwise requires, terms for which meanings are provided in this Agreement
shall have such meanings when used in the Disclosure Schedule and in each
other Loan Document, notice and other communication delivered from time to time
in connection with this Agreement or any other Loan Document.

 

SECTION 1.3.  Cross-References.  Unless otherwise specified, references in
this Agreement and in each other Loan Document to any Article or
Section are references to such Article or Section of this
Agreement or such other Loan Document, as the case may be, and, unless
otherwise specified, references in any Article, Section or definition to
any clause are references to such clause of such Article, Section or
definition.

 

SECTION 1.4.  Accounting and Financial Determinations.  All accounting determinations and
computations made pursuant to Section 7.2.4 shall be made in
accordance with those generally accepted accounting principles (“GAAP”)
as in effect as of December 28, 2002.  For purposes of providing the financial
statements required to be delivered hereunder, “GAAP” shall mean those
generally accepted accounting principles as in effect at such time.    For purposes of computing the covenants set
forth in Section 7.2.4 (and any financial calculations required to
be made or included within such ratios) as of the end of any Fiscal Quarter,
all components of such ratios for the period of four Fiscal Quarters ending at
the end of such Fiscal Quarter shall include (or exclude), without duplication,
such components of such ratios attributable to any business or assets that have
been acquired (or disposed of) by the Borrower or any of the Subsidiaries (including
through mergers or consolidations) after the first day of such period of four
Fiscal Quarters and prior to the end of such period, on a pro forma basis for
such period of four Fiscal Quarters as if such acquisition or disposition had
occurred on such first day of such period.

 

SECTION 1.5.  Currency Conversions.  If it shall be necessary for purposes of
this Agreement to convert an amount in one currency into another currency,
unless otherwise provided herein, the exchange rate shall be determined by reference
to the New York foreign exchange selling rates (such determination to be made
as at the date of the relevant transaction), as determined by the
Administrative Agent (in accordance with its standard practices).

 

31

 

ARTICLE II

COMMITMENTS, BORROWING AND ISSUANCE PROCEDURES, NOTES AND

LETTERS OF CREDIT

 

SECTION 2.1.  Loan Commitments.  On the terms and subject to the conditions
of this Agreement (including Article V), the Lenders, the Swing
Line Lender and the Issuer severally agree to the continuation of Existing
Loans and to make Credit Extensions as set forth below.

 

SECTION 2.1.1.  Term Loan Commitments.  Subject to compliance by the Obligors with
the terms of Sections 2.1.4, 5.1 and 5.2:

 

(a)                                  in
a single Borrowing occurring on the Effective Date, each Lender that has a Term
B Loan Commitment will make loans (relative to such Lender, its “Term B
Loans”) to the Borrower in an amount equal to such Lender’s Percentage of
the aggregate amount of the Borrowing of Term B Loans requested by the Borrower
to be made on such day (with the commitment of each such Lender described in
this clause (a) herein referred to as its “Term B Loan
Commitment”); and

 

(b)                                 no
amounts paid or prepaid with respect to Term Loans may be reborrowed.

 

SECTION 2.1.2.  Revolving Loan Commitment and Swing Line
Loan Commitment.  Subject to
compliance by the Obligors with the terms of Section 2.1.4, Section 5.1
and Section 5.2, the Revolving Loans and Swing Line Loans will be
continued and/or made as set forth below:

 

(a)                                  From
time to time on any Business Day occurring concurrently with (or after) the
making of the Term B Loans but prior to the Revolving Loan Commitment
Termination Date, each Lender that has a Revolving Loan Commitment (a “Revolving
Lender”) will make loans (relative to such Lender, its “Revolving Loans”)
to the Borrower in U.S. Dollars, equal to such Lender’s Percentage of the
aggregate amount of the Borrowing of the Revolving Loans requested by the
Borrower to be made on such day.  The
Commitment of each Lender described in this clause (a) is herein
referred to as its “Revolving Loan Commitment”.  On the terms and subject to the conditions
hereof, the Borrower may from time to time borrow, prepay and reborrow the
Revolving Loans.  All Existing Revolving
Loans shall be continued as Revolving Loans hereunder.

 

(b)                                 From
time to time on any Business Day occurring concurrently with (or after) the
making of the Term B Loans, but prior to the Revolving Loan Commitment
Termination Date, the Swing Line Lender will make loans (relative to the Swing
Line Lender, its “Swing Line Loans”) to the Borrower equal to the
principal amount of the Swing Line Loans requested by the Borrower.  On the terms and subject to the conditions
hereof, the Borrower may from time to time borrow, prepay and reborrow such
Swing Line Loans.  All Existing Swing
Line Loans shall be continued as Swing Line Loans hereunder.

 

32

 

SECTION 2.1.3.  Letter of Credit Commitment.  Subject to compliance by the Obligors with
the terms of Section 2.1.5, Section 5.1 and Section 5.2,
from time to time on any Business Day occurring from and after
September 29, 1999 but prior to the Revolving Loan Commitment Termination
Date, the Issuer will

 

(a)                                  issue
one or more standby or documentary letters of credit (each referred to as a “Letter
of Credit”) for the account of the Borrower in the Stated Amount requested
by the Borrower on such day; or

 

(b)                                 extend
the Stated Expiry Date of an existing standby Letter of Credit previously
issued hereunder to a date not later than the earlier of (x) the Revolving
Loan Commitment Termination Date and (y) one year from the date of such
extension.

 

All Existing Letters of
Credit shall be maintained as Letters of Credit hereunder.

 

SECTION 2.1.4.  Lenders Not Permitted or Required to Make
Loans.  No Lender shall be permitted
or required to, and the Borrower shall not request that any Lender, make

 

(a)                                  any
Term B Loan if, after giving effect thereto, the aggregate original principal
amount of all the Term B Loans:

 

(i)                                     of
all Lenders would exceed the Term B Loan Commitment Amount; or

 

(ii)                                  of
such Lender would exceed such Lender’s Percentage of the Term B Loan Commitment
Amount;

 

(b)                                 any
Revolving Loan or Swing Line Loan if, after giving effect thereto, the
aggregate outstanding principal amount of all the Revolving Loans and Swing
Line Loans

 

(i)                                     of
all the Lenders with Revolving Loan Commitments, together with the aggregate
amount of all Letter of Credit Outstandings, would exceed the Revolving Loan
Commitment Amount; or

 

(ii)                                  of
such Lender with a Revolving Loan Commitment (other than the Swing Line
Lender), together with such Lender’s Percentage of the aggregate amount of all
Letter of Credit Outstandings, would exceed such Lender’s Percentage of the
Revolving Loan Commitment Amount; or

 

(c)                                  any
Swing Line Loan if after giving effect to the making of such Swing Line Loan,
the outstanding principal amount of all Swing Line Loans would exceed the then
existing Swing Line Loan Commitment Amount.

 

SECTION 2.1.5.  Issuer Not Permitted or Required to Issue
Letters of Credit.  No Issuer shall
be permitted or required to issue any Letter of Credit if, after giving effect
thereto, (a) the aggregate amount of all Letter of Credit Outstandings
would exceed the Letter of Credit Commitment Amount or (b) the sum of the
aggregate amount of all Letter of Credit Outstandings

 

33

 

plus the aggregate
principal amount of all Revolving Loans and Swing Line Loans then
outstanding would exceed the Revolving Loan Commitment Amount.

 

SECTION 2.1.6.  Designated Additional Loans.  At any time that no Default has occurred and
is continuing, the Borrower may notify the Administrative Agent that the
Borrower is requesting that, on the terms and subject to the conditions
contained in this Agreement, the Lenders and/or other lenders not then a party
to this Agreement provide up to an aggregate amount of $200,000,000 in
commitments to provide (i) (A) additional Revolving Loan Commitments or (B)
loans to be provided under a new tranche of revolving loans which have terms
and conditions (including interest rate and maturity date), as mutually agreed
to by the Borrower, the Administrative Agent, the Syndication Agent and the
Person(s) providing such new tranche of Loans (in either case, “Designated
Additional Revolving Loan Commitments), (ii) additional Term B Loans (“Designated
Additional Term B Loans”) and/or (iii) loans to be provided under a new
tranche of term loans (“Designated New Term Loans”) which have terms and
conditions (including interest rate and amortization schedule), as mutually
agreed to by the Borrower, the Administrative Agent, the Syndication Agent and
the Person(s) providing such new tranche of Loans.  Upon receipt of any such notice, the Administrative Agent shall
use commercially reasonable efforts to arrange for the Lenders or other
Eligible Institutions to provide such additional commitments; provided
that the Administrative Agent will first offer each of the Lenders that then
has a Percentage of the Commitment or Loans of the type proposed to be obtained
a pro  rata portion of any such additional commitment.  Nothing contained in this Section 2.1.6
or otherwise in this Agreement is intended to commit any Lender or any Agent to
provide any portion of any such additional commitments.  If and to the extent that any Lenders and/or
other lenders agree, in their sole discretion, to provide any such additional
commitments, (i) in the case of Designated Additional Revolving Loan
Commitments of the type set forth in (i)(A) above, the Revolving Loan
Commitment Amount shall be increased by the amount of the additional Revolving
Loan Commitments agreed to be so provided, (ii) subject to compliance with the
terms of Section 5.2 and such other terms and conditions mutually
agreed to among the Borrower, the Administrative Agent, the Syndication Agent
and the Lenders providing any such other commitments, Loans of the type
requested by the Borrower will be made on the date as agreed among such
Persons, (iii) the Percentages of the respective Lenders in respect of the
applicable Commitment or type of Loan shall be proportionally adjusted
(provided that the Percentage of each Lender shall not be increased without the
consent of such Lender), (iv) in the case of Designated Additional Revolving
Loan Commitment of the type set forth in (i)(A) above at such time and
in such manner as the Borrower and the Administrative Agent shall agree (it
being understood that the Borrower and the Agents will use commercially
reasonable efforts to avoid the prepayment or assignment of any LIBO Rate Loan
on a day other than the last day of the Interest Period applicable thereto),
the Lenders shall assign and assume outstanding Revolving Loans and
participations in outstanding Letters of Credit so as to cause the amounts of
such Revolving Loans and participations in Letters of Credit held by each
Lender to conform to the respective Percentages of the Revolving Loan Commitment
of the Lenders and (v) the Borrower shall execute and deliver any additional
Notes or other amendments or modifications to this Agreement or any other Loan
Document as the Administrative Agent may reasonably request.  Any fees payable in respect of any
commitment provided for in this Section 2.1.6 shall be as agreed to
by the Borrower and the Administrative Agent. Any designation of a commitment
hereunder (i) shall be irrevocable, (ii) shall reduce the amount of commitments
that

 

34

 

may be requested
under this Section 2.1.6  pro tanto and (iii) shall be in a
minimum principal amount of $5,000,000 and integral multiples of $1,000,000.

 

SECTION 2.2.  Reduction of the Commitment Amounts.  The Commitment Amounts are subject to
reductions from time to time pursuant to this Section 2.2.

 

SECTION 2.2.1.  Optional.  The Borrower may, from time to time on any Business Day
occurring after the time of the initial Credit Extension hereunder, voluntarily
reduce the Swing Line Loan Commitment Amount, the Letter of Credit Commitment
Amount or the Revolving Loan Commitment Amount; provided, however,
that all such reductions shall require at least three Business Days’ prior
notice to the Administrative Agent and be permanent, and any partial reduction
of any Commitment Amount shall be in a minimum amount of $1,000,000 and in an
integral multiple of $100,000.  Any
reduction of the Revolving Loan Commitment Amount which reduces the Revolving
Loan Commitment Amount below the sum of (i) the Swing Line Loan Commitment
Amount and (ii) the Letter of Credit Commitment Amount shall result in an
automatic and corresponding reduction of the Swing Line Loan Commitment Amount
and/or Letter of Credit Commitment Amount (as directed by the Borrower in a
notice to the Administrative Agent delivered together with the notice of such
voluntary reduction in the Revolving Loan Commitment Amount) to an aggregate
amount not in excess of the Revolving Loan Commitment Amount, as so reduced,
without any further action on the part of the Swing Line Lender or the Issuer.

 

SECTION 2.2.2.  Mandatory.  Following the prepayment in full of the Term Loans, the Revolving
Loan Commitment Amount shall, without any further action, automatically and
permanently be reduced on the date the Term Loans would otherwise have been
required to be prepaid with any Net Disposition Proceeds, in an amount equal to
the amount by which the Term Loans would otherwise be required to be prepaid if
Term Loans had been outstanding.  Any
reduction of the Revolving Loan Commitment Amount which reduces the Revolving
Loan Commitment Amount below the sum of (i) the Swing Line Loan Commitment
Amount and (ii) the Letter of Credit Commitment Amount shall result in an
automatic and corresponding reduction of the Swing Line Loan Commitment Amount
and/or Letter of Credit Commitment Amount (as directed by the Borrower in a
notice to the Administrative Agent) to an aggregate amount not in excess of the
Revolving Loan Commitment Amount, as so reduced, without any further action on
the part of the Swing Line Lender or the Issuer.

 

SECTION 2.3.  Borrowing Procedures and Funding
Maintenance.  Loans shall be made by
the Lenders in accordance with this Section.

 

SECTION 2.3.1.  Term Loans and Revolving Loans.  By delivering a Borrowing Request to the
Administrative Agent on or before 12:00 noon, New York time, on a Business Day,
the Borrower may from time to time irrevocably request, on not less than one
(in the case of Base Rate Loans) and three (in the case of LIBO Rate Loans) nor
more than (in each case) five Business Days’ notice, that a Borrowing be made,
in the case of LIBO Rate Loans, in a minimum amount of $2,000,000, and an
integral multiple of $500,000, and in the case of Base Rate Loans, in a minimum
amount of $500,000 and an integral multiple thereof or, in either case, in the
unused amount of the applicable Commitment. 
On the terms and subject to the conditions of this Agreement, each
Borrowing shall be comprised of the type of Loans, and shall be made

 

35

 

on the Business
Day, specified in such Borrowing Request. 
On or before 11:00 a.m., New York time, on such Business Day each
Lender shall deposit with the Administrative Agent same day funds in an amount
equal to such Lender’s Percentage of the requested Borrowing.  Such deposit will be made to an account
which the Administrative Agent shall specify from time to time by notice to the
Lenders.  To the extent funds are
received from the Lenders, the Administrative Agent shall make such funds
available to the Borrower by wire transfer to the accounts the Borrower shall
have specified in its Borrowing Request. 
No Lender’s obligation to make any Loan shall be affected by any other
Lender’s failure to make any Loan.

 

SECTION 2.3.2.  Swing Line
Loans.

 

(a)                                  By
telephonic notice, promptly followed (within three Business Days) by the
delivery of a confirming Borrowing Request, to the Swing Line Lender on or
before 11:00 a.m., New York time, on a Business Day, the Borrower may from
time to time irrevocably request that Swing Line Loans be made by the Swing
Line Lender in an aggregate minimum principal amount of $200,000 and an
integral multiple of $100,000.  Each
request by the Borrower for a Swing Line Loan shall constitute a representation
and warranty by the Borrower that on the date of such request and (if
different) the date of the making of the Swing Line Loan, both immediately
before and after giving effect to such Swing Line Loan and the application of
the proceeds thereof, the statements made in Section 5.2.1 are true
and correct.  All Swing Line Loans shall
be made as Base Rate Loans and shall not be entitled to be converted into LIBO
Rate Loans.  The proceeds of each Swing
Line Loan shall be made available by the Swing Line Lender, by its close of
business on the Business Day telephonic notice is received by it as provided in
the preceding sentences, to the Borrower by wire transfer to the accounts the
Borrower shall have specified in its notice therefor.

 

(b)                                 If
(i) any Swing Line Loan shall be outstanding for more than four full
Business Days or (ii) after giving effect to any request for a Swing Line
Loan or a Revolving Loan the aggregate principal amount of Revolving Loans and
Swing Line Loans outstanding to the Swing Line Lender, together with the Swing
Line Lender’s Percentage of all Letter of Credit Outstandings, would exceed the
Swing Line Lender’s Percentage of the Revolving Loan Commitment Amount, the
Swing Line Lender, at any time in its sole and absolute discretion may request
each Lender that has a Revolving Loan Commitment, and each such Lender,
including the Swing Line Lender hereby agrees, to make a Revolving Loan (which
shall always be initially funded as a Base Rate Loan) in an amount equal to
such Lender’s Percentage of the amount of the Swing Line Loans (“Refunded
Swing Line Loans”) outstanding on the date such notice is given.  On or before 11:00 a.m. (New York time)
on the first Business Day following receipt by each Lender of a request to make
Revolving Loans as provided in the preceding sentence, each such Lender (other
than the Swing Line Lender) shall deposit in an account specified by the
Administrative Agent to the Lenders from time to time the amount so requested
in same day funds, whereupon such funds shall be immediately delivered to the
Swing Line Lender (and not the Borrower) and applied to repay the Refunded
Swing Line Loans.  On the day such
Revolving Loans are made, the Swing Line Lender’s Percentage of the Refunded
Swing Line Loans shall be deemed to be paid. 
Upon the making of any Revolving Loan pursuant to this clause, the
amount so funded shall

 

36

 

become due under such Lender’s Revolving Note and shall no longer be owed
under the Swing Line Note.  Each
Lender’s obligation to make the Revolving Loans referred to in this clause
shall be absolute and unconditional and shall not be affected by any
circumstance, including, (i) any setoff, counterclaim, recoupment, defense
or other right which such Lender may have against the Swing Line Lender, the
Borrower or any other Person for any reason whatsoever; (ii) the
occurrence or continuance of any Default; (iii) any adverse change in the
condition (financial or otherwise) of the Borrower or any other Obligor,
subsequent to the date of the making of a Swing Line Loan; (iv) the
acceleration or maturity of any Loans or the termination of the Revolving Loan
Commitment after the making of any Swing Line Loan; (v) any breach of this
Agreement by the Borrower, any other Obligor or any other Lender; or
(vi) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing.

 

(c)                                  In
the event that (i) the Borrower or any Subsidiary is subject to any bankruptcy
or insolvency proceedings as provided in Section 9.1.9 or
(ii) the Swing Line Lender otherwise requests, each Lender with a
Revolving Loan Commitment shall acquire without recourse or warranty an
undivided participation interest equal to such Lender’s Percentage of any Swing
Line Loan otherwise required to be repaid by such Lender pursuant to the
preceding clause by paying to the Swing Line Lender on the date on which such
Lender would otherwise have been required to make a Revolving Loan in respect of
such Swing Line Loan pursuant to the preceding clause, in same day funds, an
amount equal to such Lender’s Percentage of such Swing Line Loan, and no
Revolving Loans shall be made by such Lender pursuant to the preceding clause.  From and after the date on which any Lender
purchases an undivided participation interest in a Swing Line Loan pursuant to
this clause, the Swing Line Lender shall distribute to such Lender
(appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Lender’s participation interest is outstanding
and funded) its ratable amount of all payments of principal and interest in
respect of such Swing Line Loan in like funds as received; provided, however,
that in the event such payment received by the Swing Line Lender is required to
be returned to the Borrower, such Lender shall return to the Swing Line Lender
the portion of any amounts which such Lender had received from the Swing Line
Lender in like funds.

 

(d)                                 Notwithstanding
anything herein to the contrary, the Swing Line Lender shall not be obligated
to make any Swing Line Loans if it has elected after the occurrence of a
Default not to make Swing Line Loans and has notified the Borrower in writing
or by telephone of such election.  The
Swing Line Lender shall promptly give notice to the Lenders of such election
not to make Swing Line Loans.

 

SECTION 2.4.  Continuation and Conversion Elections.  By delivering a Continuation/Conversion
Notice to the Administrative Agent on or before 12:00 noon, New York time, on a
Business Day, the Borrower may from time to time irrevocably elect, on not less
than one (in the case of a conversion of LIBO Rate Loans to Base Rate Loans)
and three (in the case of a continuation of LIBO Rate Loans or a conversion of
Base Rate Loans into LIBO Rate Loans) nor more than (in each case) five
Business Days’ notice that all, or any portion in an aggregate minimum amount
of $2,000,000 and an integral multiple of $500,000, in the case of the
continuation of, or conversion into, LIBO Rate Loans, or an aggregate minimum
amount of

 

37

 

$500,000 and an
integral multiple thereof, in the case of the conversion into Base Rate Loans
(other than Swing Line Loans as provided in clause (a) of Section 2.3.2)
be, in the case of Base Rate Loans, converted into LIBO Rate Loans or, in the
case of LIBO Rate Loans, be converted into a Base Rate Loan or continued as a
LIBO Rate Loan (in the absence of delivery of a Continuation/Conversion Notice
with respect to any LIBO Rate Loan at least three Business Days before the last
day of the then current Interest Period with respect thereto, such LIBO Rate
Loan shall, on such last day, automatically convert to a Base Rate Loan); provided,
however, that (x) each such conversion or continuation shall be pro
rated among the applicable outstanding Loans of the relevant Lenders, and
(y) no portion of the outstanding principal amount of any Loans may be
continued as, or be converted into, LIBO Rate Loans when any Default has
occurred and is continuing.

 

SECTION 2.5.  Funding.  Each Lender may, if it so elects, fulfill its obligation to make,
continue or convert LIBO Rate Loans hereunder by causing one of its foreign
branches or Affiliates (or an international banking facility created by such
Lender) to make or maintain such LIBO Rate Loan, so long as such action does
not result in increased costs to the Borrower; provided, however,
that such LIBO Rate Loan shall nonetheless be deemed to have been made and to
be held by such Lender, and the obligation of the Borrower to repay such LIBO
Rate Loan shall nevertheless be to such Lender for the account of such foreign
branch, Affiliate or international banking facility; and provided  further,
however, that such Lender shall cause such foreign branch, Affiliate or
international banking facility to comply with the applicable provisions of clause
(b) of Section 4.6 with respect to such LIBO Rate Loan.  In addition, the Borrower hereby consents
and agrees that, for purposes of any determination to be made for purposes of Sections 4.1,
4.2, 4.3 or 4.4, it shall be conclusively assumed that
each Lender elected to fund all LIBO Rate Loans by purchasing U.S. Dollar
deposits in its LIBOR Office’s interbank eurodollar market.

 

SECTION 2.6.  Issuance Procedures.  By delivering to the Administrative Agent an
Issuance Request on or before 12:00 noon, New York time, on a Business
Day, the Borrower may, from time to time irrevocably request, on not less than
three nor more than ten Business Days’ notice (or such shorter notice as may be
acceptable to the Issuer), in the case of an initial issuance of a Letter of
Credit, and not less than three nor more than ten Business Days’ notice (unless
a shorter notice period is acceptable to the Issuer) prior to the then existing
Stated Expiry Date of a Letter of Credit, in the case of a request for the
extension of the Stated Expiry Date of a Letter of Credit, that the Issuer
issue, or extend the Stated Expiry Date of, as the case may be, an irrevocable
Letter of Credit for the Borrower’s account or for the account of any
wholly-owned U.S. Subsidiary of the Borrower that is a party to the Subsidiary
Guaranty and the WWI Security Agreement and whose outstanding Capital
Securities is pledged to the Administrative Agent for the benefit of the
Lenders pursuant to the WWI Pledge Agreement, in such form as may be requested
by the Borrower and approved by the Issuer, solely for the purposes described
in Section 7.1.9. 
Notwithstanding anything to the contrary contained herein or in any
separate application for any Letter of Credit, the Borrower hereby acknowledges
and agrees that it shall be obligated to reimburse the Issuer upon each
Disbursement of a Letter of Credit, and it shall be deemed to be the obligor
for purposes of each such Letter of Credit issued hereunder (whether the
account party on such Letter of Credit is the Borrower or a Subsidiary of the
Borrower).  Upon receipt of an Issuance
Request, the Administrative Agent shall promptly notify the Issuer and each
Lender thereof.  Each Letter of Credit
shall by its terms be stated to expire on a date (its

 

38

 

“Stated Expiry
Date”) no later than the earlier to occur of (i) the Revolving Loan
Commitment Termination Date or (ii) one year from the date of its
issuance.  The Issuer will make
available to the beneficiary thereof the original of each Letter of Credit
which it issues hereunder.

 

SECTION 2.6.1.  Other Lenders’ Participation.  Upon the issuance of each Letter of Credit
issued by the Issuer pursuant hereto (or the continuation of an Existing Letter
of Credit hereunder), and without further action, each Lender (other than the
Issuer) that has a Revolving Loan Commitment shall be deemed to have irrevocably
purchased from the Issuer, to the extent of its Percentage to make Revolving
Loans, and the Issuer shall be deemed to have irrevocably granted and sold to
such Lender a participation interest in such Letter of Credit (including the
Contingent Liability and any Reimbursement Obligation and all rights with
respect thereto), and such Lender shall, to the extent of its Revolving Loan
Commitment Percentage, be responsible for reimbursing promptly (and in any
event within one Business Day) the Issuer for Reimbursement Obligations which
have not been reimbursed by the Borrower in accordance with Section 2.6.3.  In addition, such Lender shall, to the
extent of its Percentage to make Revolving Loans, be entitled to receive a
ratable portion of the Letter of Credit fees payable pursuant to Section 3.3.3
with respect to each Letter of Credit and of interest payable pursuant to Section 3.2
with respect to any Reimbursement Obligation. 
To the extent that any Lender has reimbursed the Issuer for a
Disbursement as required by this Section, such Lender shall be entitled to
receive its ratable portion of any amounts subsequently received (from the
Borrower or otherwise) in respect of such Disbursement.

 

SECTION 2.6.2.  Disbursements; Conversion to Revolving
Loans.  The Issuer will notify the
Borrower and the Administrative Agent promptly of the presentment for payment
of any Letter of Credit issued by the Issuer, together with notice of the date
(the “Disbursement Date”) such payment shall be made (each such payment,
a “Disbursement”).  Subject to
the terms and provisions of such Letter of Credit and this Agreement, the
Issuer shall make such payment to the beneficiary (or its designee) of such
Letter of Credit.  Prior to
12:00 noon, New York time, on the first Business Day following the
Disbursement Date (the “Disbursement Due Date”), the Borrower will
reimburse the Administrative Agent, for the account of the Issuer, for all
amounts which the Issuer has disbursed under such Letter of Credit, together
with interest thereon at the rate per annum otherwise applicable to Revolving
Loans (made as Base Rate Loans) from and including the Disbursement Date to but
excluding the Disbursement Due Date and, thereafter (unless such Disbursement
is converted into a Base Rate Loan on the Disbursement Due Date), at a rate per
annum equal to the rate per annum then in effect with respect to overdue
Revolving Loans (made as Base Rate Loans) pursuant to Section 3.2.2
for the period from the Disbursement Due Date through the date of such reimbursement;
provided, however, that, if no Default shall have then occurred
and be continuing, unless the Borrower has notified the Administrative Agent no
later than one Business Day prior to the Disbursement Due Date that it will
reimburse the Issuer for the applicable Disbursement, then the amount of the
Disbursement shall be deemed to be a Revolving Loan constituting a Base Rate
Loan and following the giving of notice thereof by the Administrative Agent to
the Lenders, each Lender with a commitment to make Revolving Loans (other than
the Issuer) will deliver to the Issuer on the Disbursement Due Date immediately
available funds in an amount equal to such Lender’s Percentage of such
Revolving Loan.  Each conversion of
Disbursement amounts into Revolving Loans shall constitute a representation and
warranty by the Borrower that on the date of the making of such Revolving Loan
all of the statements set forth in Section 5.2.1 are true and
correct.

 

39

 

SECTION 2.6.3.  Reimbursement.  The obligation (a “Reimbursement
Obligation”) of the Borrower under Section 2.6.2 to reimburse
the Issuer with respect to each Disbursement (including interest thereon) not
converted into a Base Rate Loan pursuant to Section 2.6.2, and,
upon the failure of the Borrower to reimburse the Issuer and the giving of
notice thereof by the Administrative Agent to the Lenders, each Lender’s (to
the extent it has a Revolving Loan Commitment) obligation under Section 2.6.1
to reimburse the Issuer or fund its Percentage of any Disbursement converted
into a Base Rate Loan, shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to
payment which the Borrower or such Lender, as the case may be, may have or have
had against the Issuer or any such Lender, including any defense based upon the
failure of any Disbursement to conform to the terms of the applicable Letter of
Credit (if, in the Issuer’s good faith opinion, such Disbursement is determined
to be appropriate) or any non-application or misapplication by the beneficiary
of the proceeds of such Letter of Credit; provided, however, that
after paying in full its Reimbursement Obligation hereunder, nothing herein
shall adversely affect the right of the Borrower or such Lender, as the case
may be, to commence any proceeding against the Issuer for any wrongful
Disbursement made by the Issuer under a Letter of Credit as a result of acts or
omissions constituting gross negligence or willful misconduct on the part of
the Issuer.

 

SECTION 2.6.4.  Deemed Disbursements.  Upon the occurrence and during the
continuation of any Event of Default of the type described in Section 9.1.9
or, with notice from the Administrative Agent acting at the direction of the
Required Lenders, upon the occurrence and during the continuation of any other
Event of Default,

 

(a)                                  an
amount equal to that portion of all Letter of Credit Outstandings attributable
to the then aggregate amount which is undrawn and available under all Letters
of Credit issued and outstanding shall, without demand upon or notice to the
Borrower or any other Person, be deemed to have been paid or disbursed by the
Issuer under such Letters of Credit (notwithstanding that such amount may not
in fact have been so paid or disbursed); and

 

(b)                                 upon
notification by the Administrative Agent to the Borrower of its obligations
under this Section, the Borrower shall be immediately obligated to reimburse
the Issuer for the amount deemed to have been so paid or disbursed by the
Issuer.

 

Any amounts so payable by
the Borrower pursuant to this Section shall be deposited in cash with the
Administrative Agent and held as collateral security for the Obligations in
connection with the Letters of Credit issued by the Issuer.  At such time when the Events of Default
giving rise to the deemed disbursements hereunder shall have been cured or
waived, the Administrative Agent shall return to the Borrower all amounts then
on deposit with the Administrative Agent pursuant to this Section, together
with accrued interest at the Federal Funds Rate, which have not been applied to
the satisfaction of such Obligations.

 

SECTION 2.6.5.  Nature of Reimbursement Obligations.  The Borrower and, to the extent set forth in
Section 2.6.1, each Lender with a Revolving Loan Commitment, shall
assume all risks of the acts, omissions or misuse of any Letter of Credit by
the beneficiary thereof.  The Issuer
(except to the extent of its own gross negligence or willful misconduct) shall
not be responsible for:

 

40

 

(a)                                  the
form, validity, sufficiency, accuracy, genuineness or legal effect of any
Letter of Credit or any document submitted by any party in connection with the
application for and issuance of a Letter of Credit, even if it should in fact
prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged;

 

(b)                                 the
form, validity, sufficiency, accuracy, genuineness or legal effect of any
instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or the proceeds thereof
in whole or in part, which may prove to be invalid or ineffective for any
reason;

 

(c)                                  failure
of the beneficiary to comply fully with conditions required in order to demand
payment under a Letter of Credit;

 

(d)                                 errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex or otherwise; or

 

(e)                                  any
loss or delay in the transmission or otherwise of any document or draft
required in order to make a Disbursement under a Letter of Credit.

 

None of the foregoing
shall affect, impair or prevent the vesting of any of the rights or powers
granted to the Issuer or any Lender with a Revolving Loan Commitment
hereunder.  In furtherance and extension
and not in limitation or derogation of any of the foregoing, any action taken
or omitted to be taken by the Issuer in good faith (and not constituting gross
negligence or willful misconduct) shall be binding upon the Borrower, each
Obligor and each such Lender, and shall not put the Issuer under any resulting
liability to the Borrower, any Obligor or any such Lender, as the case may be.

 

SECTION 2.7.  Notes.  Each Lender’s Loans under a Commitment for a
Loan shall be evidenced, if such Lender shall request, by a Note payable to the
order of such Lender in a maximum principal amount equal to such Lender’s
Percentage of the original applicable Commitment Amount.  All Swing Line Loans made by the Swing Line
Lender shall be evidenced by a Swing Line Note payable to the order of the
Swing Line Lender in a maximum principal amount equal to the Swing Line Loan
Commitment Amount.  The Borrower hereby
irrevocably authorizes each Lender to make (or cause to be made) appropriate
notations on the grid attached to such Lender’s Notes (or on any continuation
of such grid), which notations, if made, shall evidence, inter  alia,
the date of, the outstanding principal of, and the interest rate and Interest
Period applicable to the Loans evidenced thereby.  Such notations shall be conclusive and binding on the Borrower
absent manifest error; provided, however, that the failure of any
Lender to make any such notations shall not limit or otherwise affect any
Obligations of the Borrower or any other Obligor.

 

SECTION 2.8.  Registered Notes.  (a) 
Any Non-U.S. Lender that could become completely exempt from withholding
of any taxes in respect of payment of any interest due to such Non-U.S. Lender
under this Agreement if the Notes held by such Lender were in registered form
for U.S. Federal income tax purposes may request the Borrower (through the
Administrative Agent), and the Borrower agrees (i) to exchange for any
Notes held by such Lender, or (ii) to issue to such Lender on the date it
becomes a Lender, promissory notes(s)

 

41

 

registered as
provided in clause (b) of this Section 2.8 (each a
Registered Note).  Registered Notes may
not be exchanged for Notes that are not Registered Notes.

 

(b)                                 The
Administrative Agent shall enter, in the Register, the name of the registered
owner of the Non-U.S. Lender Obligation(s) evidenced by a Registered Note.

 

(c)                                  The
Register shall be available for inspection by the Borrower and any Lender at
any reasonable time upon reasonable prior notice.

 

ARTICLE III

REPAYMENTS, PREPAYMENTS, INTEREST AND FEES

 

SECTION 3.1.  Repayments and Prepayments; Application.

 

SECTION 3.1.1.  Repayments and Prepayments.  The Borrower shall repay in full the unpaid
principal amount of each Loan, as applicable, upon the Stated Maturity Date
therefor.  Prior thereto,

 

(a)                                  the
Borrower may, from time to time on any Business Day, make a voluntary
prepayment, in whole or in part, of the outstanding principal amount of any

 

(i)                                     Loan
(other than Swing Line Loans), provided, however, that

 

(A)                              any
such prepayment of the Term Loans and Designated New Term Loans shall be made pro
rata among such Term Loans and Designated New Term Loans of the same
type and if applicable, having the same Interest Period as all Lenders that
have made such Term Loans or Designated New Term Loans, and any such prepayment
of Revolving Loans shall be made pro  rata among the Revolving
Loans of the same type and, if applicable, having the same Interest Period as
all Lenders that have made such Revolving Loans;

 

(B)                                the
Borrower shall comply with Section 4.4 in the event that any LIBO
Rate Loan is prepaid on any day other than the last day of the Interest Period
for such Loan;

 

(C)                                all
such voluntary prepayments shall require at least three but no more than five
Business Days’ prior written notice to the Administrative Agent; and

 

(D)                               all
such voluntary partial prepayments shall be, in the case of LIBO Rate Loans, in
an aggregate minimum amount of $2,000,000 and an integral multiple of $500,000
and, in the case of Base Rate Loans, in an aggregate minimum amount of $500,000
and an integral multiple thereof; or

 

42

 

(ii)                                  Swing
Line Loans, provided that all such voluntary prepayments shall require
prior telephonic notice to the Swing Line Lender on or before 1:00 p.m., New
York time, on the day of such prepayment (such notice to be confirmed in
writing within 24 hours thereafter);

 

(b)                                 the
Borrower shall no later than one Business Day following the receipt by the
Borrower or any of its Subsidiaries of any Net Disposition Proceeds, deliver to
the Administrative Agent a calculation of the amount of such Net Disposition
Proceeds and, subject to the following proviso, make a mandatory
prepayment of the Term Loans in an amount equal to 100% of such Net Disposition
Proceeds, to be applied as set forth in Section 3.1.2; provided,
however, that, at the option of the Borrower and so long as no Default
shall have occurred and be continuing, the Borrower may use or cause the
appropriate Subsidiary to use the Net Disposition Proceeds to purchase assets
useful in the business of the Borrower and its Subsidiaries or to purchase a
majority controlling interest in a Person owning such assets or to increase any
such controlling interest already maintained by it; provided, that
if such Net Disposition Proceeds arise from or are related to a Disposition of
assets of a Guarantor then any such reinvestment must either be made by or in a
Guarantor or a Person which upon the making of such reinvestment becomes a
Guarantor (with such assets or interests collectively referred to as “Qualified
Assets”) within 365 days after the consummation (and with the Net
Disposition Proceeds) of such sale, conveyance or disposition, and in the event
the Borrower elects to exercise its right to purchase Qualified Assets with the
Net Disposition Proceeds pursuant to this clause, the Borrower shall deliver a
certificate of an Authorized Officer of the Borrower to the Administrative
Agent within 30 days following the receipt of Net Disposition Proceeds setting
forth the amount of the Net Disposition Proceeds which the Borrower expects to
use to purchase Qualified Assets during such 365 day period; provided  further,
that the Borrower and its Subsidiaries shall only be permitted to reinvest Net
Disposition Proceeds in Qualified Assets to the extent permitted by Section 7.2.5
over the term of this Agreement.  If and
to the extent that the Borrower has elected to reinvest Net Disposition
Proceeds as permitted above, then on the date which is 365 days (in the
case of clause (b)(i) below) and 370 days (in the case of clause
(b)(ii) below) after the relevant sale, conveyance or disposition, the
Borrower shall (i) deliver a certificate of an Authorized Officer of the
Borrower to the Administrative Agent certifying as to the amount and use of
such Net Disposition Proceeds actually used to purchase Qualified Assets and
(ii) deliver to the Administrative Agent, for application in accordance
with this clause and Section 3.1.2, an amount equal to the
remaining unused Net Disposition Proceeds;

 

(c)                                  [INTENTIONALLY
OMITTED];

 

(d)                                 [INTENTIONALLY
OMITTED];

 

(e)                                  the
Borrower shall, on each date when any reduction in the Revolving Loan
Commitment Amount shall become effective, including pursuant to Section 2.2
or Section 3.1.2, make a mandatory prepayment of Revolving Loans
and (if necessary) Swing Line Loans, and (if necessary) deposit with the
Administrative Agent cash collateral for Letter of Credit Outstandings) in an
aggregate amount equal to the excess, if

 

43

 

any, of the aggregate outstanding principal amount of all Revolving
Loans, Swing Line Loans and Letters of Credit Outstanding over the Revolving
Loan Commitment Amount as so reduced;

 

(f)                                    the
Borrower shall, on the Stated Maturity Date and on each Quarterly Payment Date
occurring on or during any period set forth below, make a scheduled repayment
of the aggregate outstanding principal amount, if any, of all Term B Loans in
an amount equal to the amount set forth below opposite the Stated Maturity Date
or such Quarterly Payment Date (as such amounts may have otherwise been reduced
pursuant to this Agreement), as applicable:

 

	
  03/31/04
  through (and including)

  03/31/09

  	
   

  	
  $

  	
  375,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6/30/09
  through (and including)

  Stated Maturity Date

  	
   

  	
  $

  	
  35,531,250.00;

  	
   

  

 

provided,
that each remaining amortization amount of Term B Loans occurring after
the date of the making of a Designated Additional Term B Loan will be increased
pro  rata by the aggregate principal amount of any Designated
Additional Term B Loan.

 

(g)                                 [INTENTIONALLY
OMITTED]

 

(h)                                 [INTENTIONALLY
OMITTED]

 

(i)                                     the
Borrower shall, immediately upon any acceleration of the Stated Maturity Date
of any Loans or Obligations pursuant to Section 9.2 or Section 9.3,
repay all Loans and provide the Administrative Agent with cash collateral in an
amount equal to the Letter of Credit Outstandings, unless, pursuant to Section 9.3,
only a portion of all Loans and Obligations are so accelerated (in which case
the portion so accelerated shall be so prepaid or cash collateralized with the
Administrative Agent); and

 

(j)                                     [INTENTIONALLY
OMITTED]

 

(k)                                  the
Borrower shall pay the principal amount of the Designated New Term Loans at
such times and in such amounts as determined pursuant to Section 2.1.6.

 

Each prepayment of any
Loans made pursuant to this Section shall be without premium or penalty,
except as may be required by Section 4.4.  No prepayment of principal of any Revolving Loans or Swing Line
Loans pursuant to clauses (a) of Section 3.1.1 shall cause a
reduction in the Revolving Loan Commitment Amount or the Swing Line Loan
Commitment Amount, as the case may be.

 

SECTION 3.1.2.  Application.

 

(a)                                  Subject
to clause (b), each prepayment or repayment of the principal of the
Loans shall be applied, to the extent of such prepayment or repayment, first,
to the principal amount thereof being maintained as Base Rate Loans or bearing
interest with

 

44

 

reference to the Base Rate, as the case may be, and second, to
the principal amount thereof being maintained as LIBO Rate Loans or bearing
interest with reference to the LIBO Rate, as the case may be.

 

(b)                                 Each
voluntary prepayment of Term Loans and each prepayment of Term Loans made
pursuant to clause (b) of Section 3.1.1 shall be applied pro
rata to a mandatory prepayment of the outstanding principal amount of
all Term Loans (with the amount of such prepayment of the Term Loans being
applied to the remaining Term Loan amortization payments, as the case may be,
required pursuant to clauses (f) and (k) of Section 3.1.1,
in each case pro  rata in accordance with the amount of each such
remaining amortization payment), until all such Term Loans have been paid in
full.

 

SECTION 3.2.  Interest Provisions.  Interest on the outstanding principal amount
of Loans shall accrue and be payable in accordance with this Section 3.2.

 

SECTION 3.2.1.  Rates.  Pursuant to an appropriately
delivered Borrowing Request or Continuation/Conversion Notice, the Borrower may
elect that Loans comprising a Borrowing accrue interest at a rate per annum:

 

(a)                                  on
that portion maintained from time to time as a Base Rate Loan, equal to the sum
of the Alternate Base Rate from time to time in effect plus the Applicable
Margin for such Loans; and

 

(b)                                 on
that portion maintained as a LIBO Rate Loan, during each Interest Period
applicable thereto, equal to the sum of the LIBO Rate (Reserve Adjusted) for
such Interest Period plus the Applicable Margin for such Loans.

 

All LIBO Rate Loans shall
bear interest from and including the first day of the applicable Interest
Period to (but not including) the last day of such Interest Period at the
interest rate determined as applicable to such LIBO Rate Loan.

 

SECTION 3.2.2.  Post-Maturity Rates.  After the date any principal amount of
any Loan shall have become due and payable (whether on the Stated Maturity
Date, upon acceleration or otherwise), or any other monetary Obligation (other
than overdue Reimbursement Obligations which shall bear interest as provided in
Section 2.6.2) of the Borrower shall have become due and payable,
the Borrower shall pay, but only to the extent permitted by law, interest
(after as well as before judgment) on such amounts at a rate per annum equal
to:

 

(a)                                  in
the case of any overdue principal amount of Loans, overdue interest thereon,
overdue commitment fees or other overdue amounts owing in respect of Loans or
other obligations (or the related Commitments) under a particular Tranche, the
rate that would otherwise be applicable to Base Rate Loans under such Tranche
pursuant to Section 3.2.1 plus 2%; and

 

(b)                                 in
the case of overdue monetary Obligations (other than as described in clause (a)),
the Alternate Base Rate plus 4%.

 

45

 

SECTION 3.2.3.  Payment Dates.  Interest accrued on each Loan shall be
payable, without duplication:

 

(a)                                  on
the Stated Maturity Date therefor;

 

(b)                                 on
the date of any payment or prepayment, in whole or in part, of principal
outstanding on such Loan;

 

(c)                                  with
respect to Base Rate Loans, in arrears on each Quarterly Payment Date occurring
after the date of the initial Borrowing hereunder;

 

(d)                                 with
respect to LIBO Rate Loans, the last day of each applicable Interest Period
(and, if such Interest Period shall exceed three months, on the third month
anniversary of such Interest Period);

 

(e)                                  with
respect to any Base Rate Loans converted into LIBO Rate Loans on a day when
interest would not otherwise have been payable pursuant to clause (c),
on the date of such conversion; and

 

(f)                                    on
that portion of any Loans the Stated Maturity Date of which is accelerated
pursuant to Section 9.2 or Section 9.3, immediately
upon such acceleration.

 

Interest accrued on
Loans, Reimbursement Obligations or other monetary Obligations arising under
this Agreement or any other Loan Document after the date such amount is due and
payable (whether on the Stated Maturity Date, upon acceleration or otherwise)
shall be payable upon demand.

 

SECTION 3.3.  Fees.  The Borrower agrees to pay the fees set
forth in this Section 3.3. 
All such fees shall be non-refundable.

 

SECTION 3.3.1.  Commitment Fee.  The Borrower agrees to pay to the
Administrative Agent for the account of each Lender that has a Revolving Loan
Commitment, for the period (including any portion thereof when any of the
Lender’s Commitments are suspended by reason of the Borrower’s inability to
satisfy any condition of Article V) commencing on the Effective
Date and continuing through the Revolving Loan Commitment Termination Date, a
commitment fee at the rate of .375% per annum of the average daily unused
portion of the Revolving Loan Commitment Amount.  Such commitment fees shall be payable by the Borrower in arrears
on each Quarterly Payment Date, and on the Revolving Loan Commitment
Termination Date.  The making of Swing
Line Loans by the Swing Line Lender shall constitute the usage of the Revolving
Loan Commitment with respect to the Swing Line Lender only and the commitment
fees to be paid by the Borrower to the Lenders (other than the Swing Line
Lender) shall be calculated and paid accordingly.

 

SECTION 3.3.2.  Administrative Agent’s Fee.  The Borrower agrees to pay to the Administrative
Agent, for its own account, the non-refundable fees in the amounts and on the
dates set forth in the applicable Fee Letter.

 

46

 

SECTION 3.3.3.  Letter of Credit Fee.  The Borrower agrees to pay to the
Administrative Agent, for the pro  rata account of the Issuer and
each other Lender that has a Revolving Loan Commitment, a Letter of Credit fee
in an amount equal to the Applicable Margin per annum for Revolving Loans that
are maintained as LIBO Rate Loans, multiplied by the aggregate Stated Amount of
all outstanding Letters of Credit, such fees being payable quarterly in arrears
on each Quarterly Payment Date.  The
Borrower further agrees to pay to the Issuer for its own account an issuance
fee in an amount as agreed to by the Borrower and the Issuer.

 

ARTICLE IV

CERTAIN LIBO RATE AND OTHER PROVISIONS

 

SECTION 4.1.  LIBO Rate Lending Unlawful.  If any Lender shall determine (which
determination shall, upon notice thereof to the Borrower and the Lenders, be
conclusive and binding on the Borrower) that the introduction of or any change
in or in the interpretation of any law makes it unlawful, or any central bank
or other governmental authority asserts that it is unlawful, for such Lender to
make, continue or maintain any Loan as, or to convert any Loan into, a LIBO
Rate Loan, the obligations of such Lender to make, continue, maintain or
convert any Loans as LIBO Rate Loans shall, upon such determination, forthwith
be suspended until such Lender shall notify the Administrative Agent that the
circumstances causing such suspension no longer exist (with the date of such
notice being the “Reinstatement Date”), and (i) all LIBO Rate Loans
previously made by such Lender shall automatically convert into Base Rate Loans
at the end of the then current Interest Periods with respect thereto or sooner,
if required by such law or assertion and (ii) all Loans thereafter made by
such Lender and outstanding prior to the Reinstatement Date shall be made as
Base Rate Loans, with interest thereon being payable on the same date that
interest is payable with respect to corresponding Borrowing of LIBO Rate Loans
made by Lenders not so affected.

 

SECTION 4.2.  Deposits Unavailable.  If the Administrative Agent shall have
determined that

 

(a)                                  U.S.
Dollar deposits in the relevant amount and for the relevant Interest Period are
not available to the Administrative Agent in its relevant market; or

 

(b)                                 by
reason of circumstances affecting the Administrative Agent’s relevant market,
adequate means do not exist for ascertaining the interest rate applicable
hereunder to LIBO Rate Loans,

 

then, upon notice from
the Administrative Agent to the Borrower and the Lenders, the obligations of
all Lenders under Section 2.3 and Section 2.4 to make
or continue any Loans as, or to convert any Loans into, LIBO Rate Loans shall
forthwith be suspended until the Administrative Agent shall notify the Borrower
and the Lenders that the circumstances causing such suspension no longer exist.

 

SECTION 4.3.  Increased LIBO Rate Loan Costs, etc.  The Borrower agrees to reimburse each Lender
for any increase in the cost to such Lender of, or any reduction in the amount
of any sum receivable by such Lender in respect of, making, continuing or
maintaining (or of its

 

47

 

obligation to
make, continue or maintain) any Loans as, or of converting (or of its
obligation to convert) any Loans into, LIBO Rate Loans (excluding any amounts,
whether or not constituting taxes, referred to in Section 4.6)
arising after the date of any change in, or the introduction, adoption,
effectiveness, interpretation, reinterpretation or phase-in of, any law or
regulation, directive, guideline, decision or request (whether or not having
the force of law) of any court, central bank, regulator or other Governmental
Authority that results in such increase in cost or reduction in amounts
receivable, except for such changes with respect to increased capital costs and
taxes which are governed by Sections 4.5 and 4.6,
respectively.  Such Lender shall
promptly notify the Administrative Agent and the Borrower in writing of the
occurrence of any such event, such notice to state, in reasonable detail, the
reasons therefor and the additional amount required fully to compensate such
Lender for such increased cost or reduced amount.  Such additional amounts shall be payable by the Borrower directly
to such Lender within five days of its receipt of such notice, and such notice
shall, in the absence of manifest error, be conclusive and binding on the
Borrower.

 

SECTION 4.4.  Funding Losses.  In the event any Lender shall incur any loss
or expense (including any loss or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by such Lender to make,
continue or maintain any portion of the principal amount of any Loan as, or to
convert any portion of the principal amount of any Loan into, a LIBO Rate Loan)
as a result of

 

(a)                                  any
conversion or repayment or prepayment of the principal amount of any LIBO Rate
Loans on a date other than the scheduled last day of the Interest Period
applicable thereto, whether pursuant to Section 3.1 or otherwise;

 

(b)                                 any
Loans not being made as LIBO Rate Loans in accordance with the Borrowing
Request therefor; or

 

(c)                                  any
Loans not being continued as, or converted into, LIBO Rate Loans in accordance
with the Continuation/Conversion Notice therefor,

 

then, upon the written
notice of such Lender to the Borrower (with a copy to the Administrative
Agent), the Borrower shall, within five days of its receipt thereof, pay
directly to such Lender such amount as will (in the reasonable determination of
such Lender) reimburse such Lender for such loss or expense.  Such written notice (which shall include
calculations in reasonable detail) shall, in the absence of manifest error, be
conclusive and binding on the Borrower.

 

SECTION 4.5.  Increased Capital Costs.  If any change in, or the introduction,
adoption, effectiveness, interpretation, reinterpretation or phase-in of, any
law or regulation, directive, guideline, decision or request (whether or not
having the force of law) of any court, central bank, regulator or other
Governmental Authority affects or would affect the amount of capital required
or expected to be maintained by any Lender or any Person controlling such
Lender, and such Lender determines (in its sole and absolute discretion) that
the rate of return on its or such controlling Person’s capital as a consequence
of its Commitments, participation in Letters of Credit or the Loans made or
continued by such Lender is reduced to a level below that which such Lender or
such controlling Person could have achieved but for the occurrence of any such
circumstance, then, in any such case upon notice from time to time by such
Lender to the

 

48

 

Borrower shall
immediately pay directly to such Lender additional amounts sufficient to
compensate such Lender or such controlling Person for such reduction in rate of
return.  A statement of such Lender as
to any such additional amount or amounts (including calculations thereof in
reasonable detail) shall, in the absence of manifest error, be conclusive and
binding on the Borrower.  In determining
such amount, such Lender may use any method of averaging and attribution that
it (in its sole and absolute discretion) shall deem applicable.

 

SECTION 4.6.  Taxes.  The Borrower covenants and agrees as follows with respect to
taxes:

 

(a)                                  Unless
required by law, any and all payments made by the Borrower under this Agreement
and each other Loan Document shall be made without setoff, counterclaim or
other defense, and free and clear of, and without deduction or withholding for
or on account of, any taxes.  In the
event that any taxes are required by law to be deducted or withheld from any
payment required to be made by the Borrower to or on behalf of any Secured
Party under any Loan Document, then:

 

(i)                                     subject
to clause (f) below, if such taxes are Non-Excluded Taxes, the relevant
Borrower shall together with such payment pay an additional amount so that each
Secured Party receives free and clear of any Non-Excluded Taxes, the full
amount which it would have received if no such deduction or withholding of such
Non-Excluded Taxes had been required; and

 

(ii)                                  the
relevant Borrower shall pay to the relevant Governmental Authority imposing
such taxes the full amount of the deduction or withholding made by it.

 

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

 

(c)                                  As
promptly as practicable after the payment of any taxes or Other Taxes, and in
any event within 45 days of any such payment being due, the Borrower shall
furnish to the Administrative Agent a copy of an official receipt (or a
certified copy thereof), evidencing the payment of such taxes or Other
Taxes.  The Administrative Agent shall
make copies thereof available to any Lender upon request therefor.

 

(d)                                 Subject
to clause (f) below, the Borrower shall indemnify each Secured Party for
any Non-Excluded Taxes and Other Taxes levied, imposed or assessed on (and
whether or not paid directly by) such Secured Party that have not been paid
previously by the Borrower (whether or not such Non-Excluded Taxes or Other
Taxes are correctly or legally asserted by the relevant Governmental
Authority).  Promptly upon having
knowledge that any such Non-Excluded Taxes or Other Taxes have been levied,
imposed or assessed, and promptly upon notice thereof by any Secured Party, the
Borrower shall pay such Non-Excluded Taxes or Other Taxes directly to the
relevant Governmental Authority (provided, however, that no
Secured Party shall be under any obligation to provide any such notice to the
Borrower).   In addition, provided
that the Borrower have

 

49

 

been notified promptly by a relevant Secured Party which has determined
in its sole discretion that a Non-Excluded Tax or Other Tax has been levied,
imposed or assessed against such Secured Party, each Borrower shall indemnify
each Secured Party for any incremental taxes that may become payable by such
Secured Party as a result of any failure of the Borrower to pay any taxes when
due to the appropriate Governmental Authority or to deliver to the
Administrative Agent, pursuant to clause (c) above, documentation
evidencing the payment of taxes or Other Taxes.  With respect to indemnification for Non-Excluded Taxes and Other
Taxes actually paid by any Secured Party or the indemnification provided in the
immediately preceding sentence, such indemnification shall be made within 30
days after the date such Secured Party makes written demand therefor.  Each Borrower acknowledges that any payment
made to any Secured Party or to any Governmental Authority in respect of the
indemnification obligations of the Borrower provided in this clause shall
constitute a payment in respect of which the provisions of clause (a)
above and this clause shall apply.

 

(e)                                  Each
Non-U.S. Lender, on or prior to the date on which such Non-U.S. Lender becomes
a Lender hereunder (and from time to time thereafter upon the request of the
Borrower or the Administrative Agent, but only for so long as such Non-U.S.
Lender is legally entitled to do so), shall deliver to the Borrower and the
Administrative Agent either

 

(i)                                     two
duly completed copies of either (x) Internal Revenue Service Form W-8BEN or (y)
Internal Revenue Service Form W-8EC1, or in either case an applicable successor
form, establishing, in either case, a complete exemption from United States
federal withholding taxes; or

 

(ii)                                  in
the case of a Non-U.S. Lender that is not legally entitled to deliver either
form listed in clause (e)(i)(x) above, (x) a certificate of a duly authorized
officer of such Non-U.S. Lender to the effect that such Non-U.S. Lender is not
(A) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (B) a
“10 percent shareholder” of the Borrower within the meaning of
Section 881(c)(3)(B) of the Code, or (C) a controlled foreign corporation
receiving interest from a related person within the meaning of
Section 881(c)(3)(C) of the Code (such certificate, an “Exemption
Certificate”) and (y) two duly completed copies of  Internal Revenue Service Form W-8 or
applicable successor form.

 

(f)                                    The
Borrower shall not be obligated to gross up any payments to any Lender pursuant
to clause (a) above, or to indemnify any Lender pursuant to clause (d)
above, in respect of United States federal withholding taxes to the extent
imposed as a result of (i) the failure of such Lender to deliver to the
Borrower the form or forms and/or an Exemption Certificate, as applicable to
such Lender, pursuant to clause (e), (ii) such form or forms
and/or Exemption Certificate not establishing a complete exemption from U.S.
federal withholding tax or the information or certifications made therein by
the Lender being untrue or inaccurate on the date delivered in any material
respect, or (iii) the Lender designating a successor lending office at which it
maintains its Loans which has the effect of causing such Lender to become
obligated for tax payments in excess of

 

50

 

those in effect immediately prior to such designation; provided,
however, that a Borrower shall be obligated to gross up any payments to
any such Lender pursuant to clause (a) above, and to indemnify any
such Lender pursuant to clause (d) above, in respect of United
States federal withholding taxes if (i) any such failure to deliver a form
or forms or an Exemption Certificate or the failure of such form or forms or
Exemption Certificate to establish a complete exemption from U.S. federal
withholding tax or inaccuracy or untruth contained therein resulted from a
change in any applicable statute, treaty, regulation or other applicable law or
any interpretation of any of the foregoing occurring after the date hereof,
which change rendered such Lender no longer legally entitled to deliver such
form or forms or Exemption Certificate or otherwise ineligible for a complete
exemption from U.S. federal withholding tax, or rendered the information or
certifications made in such form or forms or Exemption Certificate untrue or
inaccurate in a material respect, (ii) the redesignation of the Lender’s
lending office was made at the request of any of the Borrower or (iii) the
obligation to gross up payments to any such Lender pursuant to clause (a)
above or to indemnify any such Lender pursuant to clause (d) is
with respect to an Assignee Lender that becomes an Assignee Lender as a result
of an assignment made at the request of the Borrower.

 

(g)                                 If
a Secured Party determines in its sole discretion that it has received a refund
in respect of Non-Excluded Taxes that were paid by the Borrower, it shall pay
the amount of such refund, together with any other amounts paid by the Borrower
in connection with such refunded Non-Excluded Taxes, to the Borrower, net of
any out-of-pocket expenses incurred by such Secured Party in obtaining such
refund, provided, however, that the Borrower agrees to promptly
return the amount of such refund to such Secured Party to the extent that such
Secured Party is required to repay such refund to the IRS or any other tax
authority.

 

SECTION 4.7.  Payments, Computations, etc.  Unless otherwise expressly provided, all
payments by or on behalf of the Borrower pursuant to this Agreement, the Notes,
each Letter of Credit or any other Loan Document shall be made by the Borrower
to the Administrative Agent for the pro  rata account of the
Lenders entitled to receive such payment. 
All such payments required to be made to the Administrative Agent shall
be made, without setoff, deduction or counterclaim, not later than 12:00 noon,
New York time, on the date due, in same day or immediately available funds, to
such account as the Administrative Agent shall specify from time to time by
notice to the Borrower.  Funds received
after that time shall be deemed to have been received by the Administrative
Agent on the next succeeding Business Day. 
The Administrative Agent shall promptly remit in same day funds to each
Lender its share, if any, of such payments received by the Administrative Agent
for the account of such Lender.  All
interest and fees shall be computed on the basis of the actual number of days
(including the first day but excluding the last day) occurring during the
period for which such interest or fee is payable over a year comprised of 360
days (or, in the case of interest on a Base Rate Loan, 365 days or, if
appropriate, 366 days).  Whenever any
payment to be made shall otherwise be due on a day which is not a Business Day,
such payment shall (except as otherwise required by clause (c) of
the definition of the term “Interest Period”) be made on the next succeeding
Business Day and such extension of time shall be included in computing interest
and fees, if any, in connection with such payment.

 

51

 

 

SECTION 4.8.  Sharing of Payments.  If any Lender shall obtain any payment or other
recovery (whether voluntary, involuntary, by application of setoff or
otherwise) on account of any Loan or Reimbursement Obligation (other than
pursuant to the terms of Sections 4.3, 4.4 and 4.5) in
excess of its pro  rata share of payments then or therewith
obtained by all Lenders entitled thereto, such Lender shall purchase from the
other Lenders such participation in Credit Extensions made by them as shall be
necessary to cause such purchasing Lender to share the excess payment or other
recovery ratably with each of them; provided, however, that if
all or any portion of the excess payment or other recovery is thereafter
recovered from such purchasing Lender, the purchase shall be rescinded and each
Lender which has sold a participation to the purchasing Lender shall repay to
the purchasing Lender the purchase price to the ratable extent of such recovery
together with an amount equal to such selling Lender’s ratable share (according
to the proportion of

 

(a)                                  the
amount of such selling Lender’s required repayment to the purchasing Lender

 

to

 

(b)                                 the
total amount so recovered from the purchasing Lender)

 

of any interest or other
amount paid or payable by the purchasing Lender in respect of the total amount
so recovered.  Each Borrower agrees that
any Lender so purchasing a participation from another Lender pursuant to this
Section may, to the fullest extent permitted by law, exercise all its
rights of payment (including pursuant to Section 4.9) with respect
to such participation as fully as if such Lender were the direct creditor of
the Borrower in the amount of such participation.  If under any applicable bankruptcy, insolvency or other similar
law, any Lender receives a secured claim in lieu of a setoff to which this
Section applies, such Lender shall, to the extent practicable, exercise
its rights in respect of such secured claim in a manner consistent with the
rights of the Lenders entitled under this Section to share in the benefits
of any recovery on such secured claim.

 

SECTION 4.9.  Setoff.  Each Lender shall, upon the occurrence of any Default described
in clauses (a) through (d) of Section 9.1.9 or, with
the consent of the Required Lenders, upon the occurrence of any other Event of
Default, have the right to appropriate and apply to the payment of the
Obligations owing to it (whether or not then due), and (as security for such
Obligations) each Borrower hereby grants to each Lender a continuing security
interest in, any and all balances, credits, deposits, accounts or moneys of the
Borrower then or thereafter maintained with or otherwise held by such Lender; provided,
however, that any such appropriation and application shall be subject to
the provisions of Section 4.8. 
Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such setoff and application made by such Lender;
provided, however, that the failure to give such notice shall not
affect the validity of such setoff and application.  The rights of each Lender under this Section are in addition
to other rights and remedies (including other rights of setoff under applicable
law or otherwise) which such Lender may have.

 

SECTION 4.10.  Mitigation.  Each Lender agrees that if it makes any demand for payment under Sections
4.3, 4.4, 4.5, or 4.6, or if any adoption or change of
the type described in

 

52

 

Section 4.1
shall occur with respect to it, it will use reasonable efforts (consistent with
its internal policy and legal and regulatory restrictions and so long as such
efforts would not be disadvantageous to it, as determined in its sole
discretion) to designate a different lending office if the making of such a
designation would reduce or obviate the need for the Borrower to make payments
under Sections 4.3, 4.4, 4.5, or 4.6, or would
eliminate or reduce the effect of any adoption or change described in Section 4.1.

 

ARTICLE V

CONDITIONS TO EFFECTIVENESS AND TO FUTURE CREDIT EXTENSIONS

 

SECTION 5.1.  Conditions Precedent to the Effectiveness
of this Agreement and Making of Credit Extensions.  The conditions to effectiveness of this
Agreement and the obligations of the Lenders to make Loans under this Agreement
shall be subject to the prior or concurrent satisfaction of each of the
conditions set forth in this Article.

 

SECTION 5.1.1.  Resolutions, etc.  The Administrative Agent shall have received
from the Borrower and SP1 a certificate, dated the Effective Date, of its
Secretary or Assistant Secretary (or Authorized Officer serving a similar
function, in the case of other than a corporation) as to:

 

(a)                                  resolutions
of the Borrower’s and SP1’s Board of Directors (or other similar governing
body) then in full force and effect authorizing, as applicable, the execution,
delivery and performance of this Agreement, the Notes and each other Loan
Document to be executed by the Borrower and SP1, as applicable; and

 

(b)                                 the
incumbency and signatures of the Borrower’s and SP1’s Authorized Officers
authorized to execute and deliver this Agreement and each other Loan Document
to be executed by the Borrower and SP1, as applicable;

 

upon which certificate
each Lender may conclusively rely until each such Lender shall have received a
further certificate of the Borrower canceling or amending the prior
certificate.

 

SECTION 5.1.2.  Effective Date Certificate.  The Administrative Agent shall have received
a certificate substantially in the form of Exhibit F hereto, dated the
Effective Date and duly executed and delivered by the chief executive,
financial or accounting (or equivalent) Authorized Officer of the Borrower.

 

SECTION 5.1.3.  Delivery of Notes.  The Administrative Agent shall have
received, for the account of each Lender that has requested a Note, if any,
such Lender’s Note, duly executed and delivered by an Authorized Officer of the
Borrower.

 

SECTION 5.1.4.  Affirmation and Consent.  The Administrative Agent shall have received
an affirmation and consent, dated as of the Effective Date and duly executed by
an Authorized Officer of each Guarantor, in form and substance satisfactory to
the Administrative Agent.

 

53

 

SECTION 5.1.5.  Opinions of Counsel.  The Administrative Agent shall have received
opinions, dated the Effective Date and addressed to the Administrative Agent
and all Lenders, from:

 

(a)                                  Simpson
Thacher & Bartlett LLP, special New York counsel to the Borrower, SP1 and
each other Obligor, in form and substance satisfactory to the Administrative
Agent; and

 

(b)                                 Hunton
& Williams, special Virginia counsel to the Borrower, in form and substance
satisfactory to the Administrative Agent.

 

SECTION 5.1.6.  Required Approvals.  The Administrative Agent shall be satisfied
that all material governmental and third party approvals necessary or advisable
in connection with the financing contemplated hereby and the continuing
operations of the Borrower and its Subsidiaries have been duly obtained and are
in full force and effect, and that all applicable waiting periods have expired
without any action being taken or threatened by any competent authority which
would restrain, prevent or otherwise impose adverse conditions on the financing
hereof.

 

SECTION 5.1.7.  Litigation; Proceedings.  The Administrative Agent shall be satisfied
that there does not exist any restraining order, injunction or other pending or
threatened litigation, proceedings or investigations which (i) contests any
aspect of any of the transactions contemplated by any Loan Documents or (ii)
could reasonably be expected to have a material adverse effect on any of the
consolidated business, financial conditions or results of operations of the
Borrower and its Subsidiaries, taken as a whole.

 

SECTION 5.1.8.  Subsidiary Guaranty Supplement.  The Administrative Agent shall have received
a supplement to the Subsidiary Guaranty, dated as of the Effective Date,
executed and delivered by SP1.

 

SECTION 5.2.  All Credit Extensions.  The obligation of each Lender and the Issuer
to make any Credit Extension (but subject to clauses (b) and (c)
of Section 2.3.2) shall be subject to the satisfaction of each of
the conditions precedent set forth in this Section 5.2.

 

SECTION 5.2.1.  Compliance with Warranties, No Default,
etc.  Both before and after giving
effect to any Credit Extension the following statements shall be true and
correct:

 

(a)                                  the
representations and warranties set forth in Article VI and in each
other Loan Document shall, in each case, be true and correct in all material
respects with the same effect as if then made (unless stated to relate solely
to an earlier date, in which case such representations and warranties shall be
true and correct in all material respects as of such earlier date);

 

(b)                                 no
material adverse development shall have occurred in any litigation, action,
proceeding, labor controversy, arbitration or governmental investigation
disclosed pursuant to Section 6.7;

 

54

 

(c)                                  the
sum of (x) the aggregate outstanding principal amount of all Revolving
Loans and Swing Line Loans and (y) all Letter of Credit Outstandings does
not exceed the Revolving Loan Commitment Amount; and

 

(d)                                 no
Default shall have then occurred and be continuing.

 

SECTION 5.2.2.  Credit Extension Request.  The Administrative Agent shall have
received a Borrowing Request, if Loans (other than Swing Line Loans) are
being requested, or an Issuance Request, if a Letter of Credit is being issued
or extended.  Each of the delivery of a
Borrowing Request or an Issuance Request and the acceptance by the Borrower of
the proceeds of such Credit Extension shall constitute a representation and
warranty by the Borrower that on the date of such Credit Extension (both
immediately before and after giving effect to such Credit Extension and the
application of the proceeds thereof) the statements made in Section 5.2.1
are true and correct.

 

SECTION 5.2.3.  Satisfactory Legal Form.  All documents executed or submitted pursuant
hereto by or on behalf of the Borrower or any of its Subsidiaries or any other
Obligors shall be reasonably satisfactory in form and substance to the Administrative
Agent and its counsel; the Administrative Agent and its counsel shall have
received all information, as the Administrative Agent or its counsel may
reasonably request.

 

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

 

In order to induce the
Lenders, the Issuer and the Administrative Agent to enter into this Agreement,
continue the Existing Letters of Credit as Letters of Credit hereunder and to
make Credit Extensions hereunder, the Borrower represents and warrants unto the
Administrative Agent, the Issuer and each Lender as set forth in this Article VI.

 

SECTION 6.1.  Organization, etc.  The Borrower and each of
its Subsidiaries (a) is a corporation validly organized and existing
and in good standing under the laws of the jurisdiction of its incorporation,
is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction where the nature of its business requires such
qualification, except to the extent that the failure to qualify would not
reasonably be expected to result in a Material Adverse Effect, and (b) has
full power and authority and holds all requisite governmental licenses, permits
and other approvals to (x) enter into and perform its Obligations under
this Agreement, the Notes and each other Loan Document to which it is a party
and (y) own and hold under lease its property and to conduct its business
substantially as currently conducted by it except, in the case of this clause (b)(y),
where the failure could not reasonably be expected to result in a Material
Adverse Effect.

 

SECTION 6.2.  Due Authorization, Non-Contravention,
etc.  The execution, delivery and
performance by the Borrower of this Agreement, the Notes and each other Loan
Document executed or to be executed by it, and the execution, delivery and
performance by each other Obligor of each Loan Document executed or to be
executed by it and the Borrower are within

 

55

 

each such Obligor’s
corporate powers, have been duly authorized by all necessary corporate action,
and do not

 

(a)                                  contravene
any such Obligor’s Organic Documents;

 

(b)                                 contravene
any contractual restriction, law or governmental regulation or court decree or
order binding on or affecting any such Obligor, where such contravention, individually
or in the aggregate, could reasonably be expected to have a Material Adverse
Effect; or

 

(c)                                  result
in, or require the creation or imposition of, any Lien on any of the Obligor’s
properties, except pursuant to the terms of a Loan Document.

 

SECTION 6.3.  Government Approval, Regulation, etc.  No authorization or approval or other action
by, and no notice to or filing with, any governmental authority or regulatory
body or other Person, is required for the due execution, delivery or
performance by any Obligor of this Agreement, the Notes or any other Loan
Document to which it is a party, except as have been duly obtained or made and
are in full force and effect or those which the failure to obtain or make could
not reasonably be expected to have a Material Adverse Effect.  Neither the Borrower nor any of its
Subsidiaries is an “investment company” within the meaning of the Investment
Company Act of 1940, as amended, or a “holding company”, or a “subsidiary company”
of a “holding company”, or an “affiliate” of a “holding company” or of a
“subsidiary company” of a “holding company”, within the meaning of the Public
Utility Holding Company Act of 1935, as amended.

 

SECTION 6.4.  Validity, etc.  This Agreement constitutes, and the
Notes and each other Loan Document executed by any Obligor will, on the due
execution and delivery thereof, constitute, the legal, valid and binding
obligations of such Obligor enforceable in accordance with their respective
terms; in each case with respect to this Section 6.4 subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors’ rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.

 

SECTION 6.5.  [INTENTIONALLY OMITTED]

 

SECTION 6.6.  No Material Adverse Change.  Since December 28, 2002, there has been
no material adverse change in the financial condition, operations, assets,
business or properties of the Borrower and its Subsidiaries, taken as a whole.

 

SECTION 6.7.  Litigation, Labor Controversies, etc.  There is no pending or, to the
knowledge of the Borrower, threatened litigation, action, proceeding, labor
controversy arbitration or governmental investigation affecting any Obligor, or
any of their respective properties, businesses, assets or revenues, which
(a) could reasonably be expected to result in a Material Adverse Effect,
or (b) purports to affect the legality, validity or enforceability of  the issuance of the Senior Subordinated
Notes, this Agreement, the Notes or any other Loan Document, except as
disclosed in Item 6.7 (“Litigation”) of the Disclosure Schedule.

 

56

 

SECTION 6.8.  Subsidiaries.  The Borrower has no Subsidiaries, except
those Subsidiaries

 

(a)                                  which
are identified in Item 6.8 (“Existing Subsidiaries”) of the Disclosure
Schedule; or

 

(b)                                 which
are permitted to have been acquired in accordance with Section 7.2.5
or 7.2.8.

 

SECTION 6.9.  Ownership of Properties.  The Borrower and each of its
Subsidiaries own good title to all of their properties and assets (other than
insignificant properties and assets), real and personal, tangible and
intangible, of any nature whatsoever (including patents, trademarks, trade
names, service marks and copyrights), free and clear of all Liens or material
claims (including material infringement claims with respect to patents,
trademarks, copyrights and the like) except as permitted pursuant to Section 7.2.3.

 

SECTION 6.10.  Taxes.  The Borrower and each of its Subsidiaries has filed all Federal,
State, foreign and other material tax returns and reports required by law to
have been filed by it and has paid all taxes and governmental charges thereby
shown to be owing, except any such taxes or charges which are being contested
in good faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books.

 

SECTION 6.11.  Pension and Welfare Plans.  No Pension Plan has been terminated that has
resulted in a liability to the Borrower of more than $5,000,000, and no
contribution failure has occurred with respect to any Pension Plan sufficient
to give rise to a Lien under section 302(f) of ERISA in excess of
$5,000,000.  No condition exists or
event or transaction has occurred with respect to any Pension Plan which could
reasonably be expected to result in the incurrence by the Borrower of any
material liability, fine or penalty other than such condition, event or
transaction which would not reasonably be expected to have a Material Adverse
Effect.  Except as disclosed in Item 6.11
(“Employee Benefit Plans”) of the Disclosure Schedule, since the date of
the last financial statement of the Borrower, the Borrower has not materially
increased any contingent liability with respect to any post-retirement benefit
under a Welfare Plan, other than liability for continuation coverage described
in Part 6 of Subtitle B of Title I of ERISA.

 

SECTION 6.12.  Environmental Warranties.  Except as set forth in Item 6.12
(“Environmental Matters”) of the Disclosure Schedule or as,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect:

 

(a)                                  all
facilities and property (including underlying groundwater) owned or leased by
the Borrower or any of its Subsidiaries have been, and continue to be, owned or
leased by the Borrower and its Subsidiaries in compliance with all
Environmental Laws;

 

(b)                                 there
have been no past, and there are no pending or threatened

 

(i)                                     written
claims, complaints, notices or requests for information received by the
Borrower or any of its Subsidiaries with respect to any alleged violation of
any Environmental Law, or

 

57

 

(ii)                                  written
complaints, notices or inquiries to the Borrower or any of its Subsidiaries
regarding potential liability under any Environmental Law;

 

(c)                                  to
the best knowledge of the Borrower, there have been no Releases of Hazardous
Materials at, on or under any property now or previously owned or leased by the
Borrower or any of its Subsidiaries;

 

(d)                                 the
Borrower and its Subsidiaries have been issued and are in compliance with all
permits, certificates, approvals, licenses and other authorizations relating to
environmental matters and necessary or desirable for their businesses;

 

(e)                                  no
property now or previously owned or leased by the Borrower or any of its
Subsidiaries is listed or, to the knowledge of the Borrower or any of its
Subsidiaries, proposed for listing (with respect to owned property only) on the
National Priorities List pursuant to CERCLA, on the CERCLIS or on any similar
state list of sites requiring investigation or clean-up;

 

(f)                                    to
the best knowledge of the Borrower, there are no underground storage tanks,
active or abandoned, including petroleum storage tanks, on or under any
property now or previously owned or leased by the Borrower or any of its
Subsidiaries;

 

(g)                                 the
Borrower and its Subsidiaries have not directly transported or directly
arranged for the transportation of any Hazardous Material to any location (i)
which is listed or to the knowledge of the Borrower or any of its Subsidiaries,
proposed for listing on the National Priorities List pursuant to CERCLA, on the
CERCLIS or on any similar state list, or (ii) which is the subject of federal,
state or local enforcement actions or other investigations;

 

(h)                                 to
the best knowledge of the Borrower, there are no polychlorinated biphenyls or
friable asbestos present in a manner or condition at any property now or
previously owned or leased by the Borrower or any of its Subsidiaries; and

 

(i)                                     to
the best knowledge of the Borrower, no conditions exist at, on or under any
property now or previously owned or leased by the Borrower or any of its
Subsidiaries which, with the passage of time, or the giving of notice or both,
would give rise to liability under any Environmental Law.

 

SECTION 6.13.  Regulations U and X.  No Obligor is engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock, and no
proceeds of any Credit Extensions will be used to purchase or carry margin
stock or otherwise for a purpose which violates, or would be inconsistent with,
F.R.S. Board Regulation U or Regulation X.  Terms for which meanings are provided in F.R.S. Board
Regulation U or Regulation X or any regulations substituted therefor, as
from time to time in effect, are used in this Section with such meanings.

 

SECTION 6.14.  Accuracy of Information.  All material factual information concerning
the financial condition, operations or prospects of the Borrower and its
Subsidiaries heretofore or contemporaneously furnished by or on behalf of the
Borrower in writing to the Administrative

 

58

 

Agent, the Issuer or any
Lender for purposes of or in connection with this Agreement or any transaction
contemplated hereby is, and all other such factual information hereafter
furnished by or on behalf of the Borrower to the Administrative Agent, the
Issuer or any Lender will be, true and accurate in every material respect on
the date as of which such information is dated or certified and such
information is not, or shall not be, as the case may be, incomplete by omitting
to state any material fact necessary to make such information not misleading.

 

Any term or provision of this Section to the contrary
notwithstanding, insofar as any of the factual information described above
includes assumptions, estimates, projections or opinions, no representation or
warranty is made herein with respect thereto; provided, however,
that to the extent any such assumptions, estimates, projections or opinions are
based on factual matters, the Borrower has reviewed such factual matters and
nothing has come to its attention in the context of such review which would
lead it to believe that such factual matters were not or are not true and
correct in all material respects or that such factual matters omit to state any
material fact necessary to make such assumptions, estimates, projections or
opinions not misleading in any material respect.

 

SECTION 6.15.  Seniority of Obligations, etc.  The Borrower has the power and authority to
incur the Subordinated Debt as provided for under the Senior Subordinated Note
Indenture or any other indenture applicable thereto and has duly authorized,
executed and delivered the Senior Subordinated Note Indenture and such other
indentures applicable thereto.  The
Borrower has issued, pursuant to due authorization, the Senior Subordinated
Notes under the Senior Subordinated Note Indenture and any other Subordinated
Debt under the indenture applicable thereto. 
The Senior Subordinated Note Indenture and each other indenture applicable
to any other Subordinated Debt constitutes the legal, valid and binding
obligations of the Borrower enforceable against the Borrower in accordance with
its respective terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors’ rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.  The subordination provisions of the Senior Subordinated Notes and
any other Subordinated Debt and contained in the Senior Subordinated Note
Indenture and any other indenture applicable to any other Subordinated Debt are
enforceable against the holders of the Senior Subordinated Notes and any other
Subordinated Debt by the holder of any Senior Debt (or similar term referring
to the Obligations, as applicable) in the Senior Subordinated Note Indenture
and such other Indenture, which has not effectively waived the benefits
thereof.  All monetary Obligations,
including those to pay principal of and interest (including post-petition
interest, whether or not permitted as a claim) on the Loans and Reimbursement
Obligations, and fees and expenses in connection therewith, constitute “Senior
Debt” (or similar term referring to the Obligations, as applicable) in the
Senior Subordinated Note Indenture and any other indenture applicable to any
other Subordinated Debt, and all such Obligations are entitled to the benefits
of the subordination created by the Senior Subordinated Note Indenture and any
other indenture applicable to any other Subordinated Debt.  The Borrower acknowledges that the
Administrative Agent and each Lender is entering into this Agreement, and is
extending its Commitments, in reliance upon the subordination provisions of (or
to be contained in) the Senior Subordinated Note Indenture, the Senior
Subordinated Notes and this Section.

 

59

 

SECTION 6.16.  Solvency.  The incurrence of the Credit Extensions hereunder, the incurrence
by the Borrower of the Indebtedness represented by the Notes and the execution
and delivery of the Guaranties by the Obligors parties thereto, will not
involve or result in any fraudulent transfer or fraudulent conveyance under the
provisions of Section 548 of the Bankruptcy Code (11 U.S.C. §101 et
seq., as from time to time hereafter amended, and any successor or
similar statute) or any applicable state law respecting fraudulent transfers or
fraudulent conveyances.  The Borrower
and each of its Subsidiaries is Solvent.

 

ARTICLE VII

COVENANTS

 

SECTION 7.1.  Affirmative Covenants.  The Borrower agrees with the Administrative
Agent, the Issuer and each Lender that, until all Commitments have terminated,
all Letters of Credit have terminated or expired and all Obligations have been
paid and performed in full, the Borrower will perform its obligations set forth
below.

 

SECTION 7.1.1.  Financial Information, Reports, Notices,
etc.  The Borrower will furnish to
each Lender, the Issuer and the Administrative Agent copies of the following
financial statements, reports, notices and information:

 

(a)                                  as
soon as available and in any event within 60 days after the end of each
Fiscal Quarter of each Fiscal Year of the Borrower (or, if the Borrower is
required to file such information on a Form 10-Q with the Securities and
Exchange Commission, promptly following such filing), a consolidated balance
sheet of the Borrower and its Subsidiaries as of the end of such Fiscal
Quarter, together with the related consolidated statement of earnings and cash
flow for such Fiscal Quarter and for the period commencing at the end of the
previous Fiscal Year and ending with the end of such Fiscal Quarter (it being
understood that the foregoing requirement may be satisfied by delivery of the
Borrower’s report to the Securities and Exchange Commission on Form 10-Q),
certified by the chief financial Authorized Officer of the Borrower;

 

(b)                                 as
soon as available and in any event within 120 days after the end of each
Fiscal Year of the Borrower (or, if the Borrower is required to file such
information on a Form 10-K with the Securities and Exchange Commission,
promptly following such filing), a copy of the annual audit report for such
Fiscal Year for the Borrower and its Subsidiaries, including therein a
consolidated balance sheet for the Borrower and its Subsidiaries as of the end
of such Fiscal Year, together with the related consolidated statement of
earnings and cash flow of the Borrower and its Subsidiaries for such Fiscal
Year (it being understood that the foregoing requirement may be satisfied by
delivery of the Borrower’s report to the Securities and Exchange Commission on
Form 10-K), in each case certified (without any Impermissible Qualification) by
PricewaterhouseCoopers LLP or another “Big Four” firm, together with a
certificate from such accountants to the effect that, in making the examination
necessary for the signing of such annual report by such accountants, they have
not become aware of any Default that has occurred and is

 

60

 

continuing, or, if they have become aware of such Default, describing
such Default and the steps, if any, being taken to cure it;

 

(c)                                  together
with the delivery of the financial information required pursuant to clauses
(a) and (b), a Compliance Certificate, in substantially the form of Exhibit E,
executed by the chief financial Authorized Officer of the Borrower, showing (in
reasonable detail and with appropriate calculations and computations in all
respects satisfactory to the Administrative Agent) compliance with the
financial covenants set forth in Section 7.2.4;

 

(d)                                 as
soon as possible and in any event within three Business Days after obtaining
knowledge of the occurrence of each Default, a statement of the chief financial
Authorized Officer of the Borrower setting forth details of such Default and
the action which the Borrower has taken and proposes to take with respect
thereto;

 

(e)                                  as
soon as possible and in any event within five Business Days after (x) the
occurrence of any material adverse development with respect to any litigation,
action, proceeding, or labor controversy described in Section 6.7
and the action which the Borrower has taken and proposes to take with respect
thereto or (y) the commencement of any labor controversy, litigation,
action, proceeding of the type described in Section 6.7, notice
thereof and of the action which the Borrower has taken and proposes to take
with respect thereto;

 

(f)                                    promptly
after the sending or filing thereof, copies of all reports and registration
statements which the Borrower or any of its Subsidiaries files with the
Securities and Exchange Commission or any national securities exchange or any
foreign equivalent;

 

(g)                                 as
soon as practicable after the chief financial officer or the chief executive
officer of the Borrower or a member of the Borrower’s Controlled Group becomes
aware of (i) formal steps in writing to terminate any Pension Plan or
(ii) the occurrence of any event with respect to a Pension Plan which, in
the case of (i) or (ii), could reasonably be expected to result in a
contribution to such Pension Plan by (or a liability to) the Borrower or a
member of the Borrower’s Controlled Group in excess of $5,000,000,
(iii) the failure to make a required contribution to any Pension Plan if
such failure is sufficient to give rise to a Lien under section 302(f) of
ERISA, (iv) the taking of any action with respect to a Pension Plan which
could reasonably be expected to result in the requirement that the Borrower
furnish a bond to the PBGC or such Pension Plan or (v) any material
increase in the contingent liability of the Borrower with respect to any
post-retirement Welfare Plan benefit, notice thereof and copies of all
documentation relating thereto;

 

(h)                                 promptly
following the delivery or receipt, as the case may be, of any material written
notice or communication pursuant to or in connection with the Senior
Subordinated Note Indenture or any of the Senior Subordinated Notes, a copy of
such notice or communication; and

 

61

 

(i)                                     such
other information respecting the condition or operations, financial or
otherwise, of the Borrower or any of its Subsidiaries as any Lender or the
Issuer may from time to time reasonably request.

 

SECTION 7.1.2.  Compliance with Laws, etc.  The Borrower will, and will cause each of
its Subsidiaries to, comply in all material respects with all applicable laws,
rules, regulations and orders, such compliance to include:

 

(a)                                  the
maintenance and preservation of its corporate existence and qualification as a
foreign corporation, except where the failure to so qualify could not
reasonably be expected to have a Material Adverse Effect; and

 

(b)                                 the
payment, before the same become delinquent, of all material taxes, assessments
and governmental charges imposed upon it or upon its property except to the
extent being contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set aside on its
books.

 

SECTION 7.1.3.  Maintenance of Properties.  The Borrower will, and will cause each of
its Subsidiaries to, maintain, preserve, protect and keep its properties (other
than insignificant properties) in good repair, working order and condition
(ordinary wear and tear excepted), and make necessary and proper repairs,
renewals and replacements so that its business carried on in connection
therewith may be properly conducted at all times unless the Borrower determines
in good faith that the continued maintenance of any of its properties is no
longer economically desirable.

 

SECTION 7.1.4.  Insurance.  The Borrower will, and will cause each of its Subsidiaries to,

 

(a)                                  maintain
insurance on its property with financially sound and reputable insurance
companies against loss and damage in at least the amounts (and with only those
deductibles) customarily maintained, and against such risks as are typically
insured against in the same general area, by Persons of comparable size engaged
in the same or similar business as the Borrower and its Subsidiaries; and

 

(b)                                 maintain
all worker’s compensation, employer’s liability insurance or similar insurance
as may be required under the laws of any state or jurisdiction in which it may
be engaged in business.

 

Without limiting the
foregoing, all insurance policies required pursuant to this Section shall
(i) name the Administrative Agent on behalf of Secured Parties as
mortgagee (in the case of property insurance) or additional insured (in the
case of liability insurance), as applicable, and provide that no cancellation
or modification of the policies will be made without thirty days’ prior written
notice to the Administrative Agent and (ii) be in addition to any
requirements to maintain specific types of insurance contained in the other
Loan Documents.

 

SECTION 7.1.5.  Books and Records.  The Borrower will, and will cause each of
its Subsidiaries to, keep books and records which accurately reflect in all
material respects all of its business affairs and transactions and permit the
Administrative Agent, the Issuer and each

 

62

 

Lender or any of
their respective representatives, at reasonable times and intervals, and upon
reasonable notice, to visit all of its offices, to discuss its financial
matters with its officers and independent public accountant (and the Borrower
hereby authorizes such independent public accountant to discuss the Borrower’s
financial matters with the Issuer and each Lender or its representatives
whether or not any representative of the Borrower is present) and to examine,
and photocopy extracts from, any of its books or other corporate records.

 

SECTION 7.1.6.  Environmental Covenant.  The Borrower will, and will cause each of
its Subsidiaries to,

 

(a)                                  use
and operate all of its facilities and properties in compliance with all
Environmental Laws, keep all necessary permits, approvals, certificates,
licenses and other authorizations relating to environmental matters in effect
and remain in compliance therewith, and handle all Hazardous Materials in
compliance with all applicable Environmental Laws, in each case except where
the failure to comply with the terms of this clause could not reasonably be
expected to have a Material Adverse Effect;

 

(b)                                 promptly
notify the Administrative Agent and provide copies of all written claims,
complaints, notices or inquiries relating to the condition of its facilities
and properties or compliance with Environmental Laws which relate to
environmental matters which would have, or would reasonably be expected to
have, a Material Adverse Effect, and promptly cure and have dismissed with
prejudice any material actions and proceedings relating to compliance with
Environmental Laws, except to the extent being diligently contested in good
faith by appropriate proceedings and for which adequate reserves in accordance
with GAAP have been set aside on their books; and

 

(c)                                  provide
such information and certifications which the Administrative Agent may
reasonably request from time to time to evidence compliance with this Section 7.1.6.

 

SECTION 7.1.7.  Future Subsidiaries.  Upon any Person becoming a Subsidiary of the
Borrower, or upon the Borrower or any of its Subsidiaries acquiring additional
Capital Securities of any existing Subsidiary, the Borrower shall notify the
Administrative Agent of such acquisition, and

 

(a)                                  the
Borrower shall promptly cause such Subsidiary to execute and deliver to the
Administrative Agent, with counterparts for each Lender, (i) if such Subsidiary
is a U.S. Subsidiary or a U.K. Subsidiary, a supplement to the Subsidiary
Guaranty or, if such Subsidiary is an Australian Subsidiary, a supplement to
the Australian Guaranty, (ii) if such a Subsidiary is a U.S. Subsidiary, a
supplement to the WWI Security Agreement or, if such Subsidiary is an
Australian Subsidiary, a supplement to the Australian Security Agreement or if
such Subsidiary is a U.K. Subsidiary, a security agreement substantially in the
form of the U.K. Security Agreement and (iii) if such Subsidiary is a U.S.
Subsidiary, a U.K. Subsidiary or an Australian Subsidiary and owns any real
property having a value as determined in good faith by the Administrative Agent
in excess of $2,000,000, a Mortgage, together with acknowledgment copies of
Uniform Commercial Code financing statements (form UCC-1) executed and
delivered by the Subsidiary

 

63

 

naming the Subsidiary as the debtor and the Administrative Agent as the
secured party, or other similar instruments or documents, filed under the
Uniform Commercial Code and any other applicable recording statutes, in the
case of real property, of all jurisdictions as may be necessary or, in the
opinion of the Administrative Agent, desirable to perfect the security interest
of the Administrative Agent pursuant to the applicable Security Agreement or a
Mortgage, as the case may be; and

 

(b)                                 the
Borrower shall promptly deliver, or cause to be delivered, to the
Administrative Agent under a supplement to the WWI Pledge Agreement (or, if
such Subsidiary is an Australian Subsidiary, a supplement to the Australian
Pledge Agreement or if such Subsidiary is a U.K. Subsidiary, a pledge agreement
substantially in the form of the U.K. Pledge Agreement), certificates (if any)
representing all of the issued and outstanding shares of Capital Securities of
such Subsidiary (to the extent required to be delivered pursuant to the
applicable Pledge Agreement) owned by the Borrower or any of its Subsidiaries,
as the case may be, along with undated stock powers for such certificates,
executed in blank, or, if any securities subject thereto are uncertificated
securities, confirmation and evidence satisfactory to the Administrative Agent
that appropriate book entries have been made in the relevant books or records
of a financial intermediary or the issuer of such securities, as the case may
be, under applicable law resulting in the perfection of the security interest
granted in favor of the Administrative Agent pursuant to the terms of the
applicable Pledge Agreement; provided, that notwithstanding anything to
the contrary herein or in any Loan Document, in no event shall more than 65% of
the Capital Securities of any non-Guarantor Subsidiary be required to be
pledged and in no event shall non-Guarantor Subsidiaries (other than SP1) be
required to pledge Capital Securities of its Subsidiaries, together, in each
case, with such opinions, in form and substance and from counsel satisfactory
to the Administrative Agent, as the Administrative Agent may reasonably
require.

 

SECTION 7.1.8.  Future Leased Property and Future
Acquisitions of Real Property.

 

(a)                                  Prior
to entering into any new lease of real property or renewing any existing lease
of real property, the Borrower shall, and shall cause each of its U.S.
Subsidiaries and each of the other Guarantor’s to, use its (and their) best
efforts (which shall not require the expenditure of cash or the making of any
material concessions under the relevant lease) to deliver to the Administrative
Agent a Waiver executed by the lessor of any real property that is to be leased
by the Borrower or any of its U.S. Subsidiaries or any of the other Guarantors
for a term in excess of one year in any state which by statute grants such
lessor a “landlord’s” (or similar) Lien which is superior to the Administrative
Agent’s, to the extent the value of any personal property of the Borrower or
its U.S. Subsidiaries or any of the other Guarantors to be held at such leased
property exceeds (or it is anticipated that the value of such personal property
will, at any point in time during the term of such leasehold term, exceed)
$5,000,000.

 

(b)                                 In
the event that the Borrower or any of its U.S. Subsidiaries or any of the other
Guarantors shall acquire any real property having a value as determined in good
faith by the Administrative Agent in excess of $2,000,000, the Borrower or the
applicable

 

64

 

Subsidiary shall, promptly after such acquisition, execute a Mortgage
and provide the Administrative Agent with

 

(i)                                     evidence
of the completion (or satisfactory arrangements for the completion) of all
recordings and filings of such Mortgage as may be necessary or, in the
reasonable opinion of the Administrative Agent, desirable effectively to create
a valid, perfected first priority Lien, subject to Liens permitted by Section 7.2.3,
against the properties purported to be covered thereby;

 

(ii)                                  mortgagee’s
title insurance policies in favor of the Administrative Agent and the Lenders in
amounts and in form and substance and issued by insurers, reasonably
satisfactory to the Administrative Agent, with respect to the property
purported to be covered by such Mortgage, insuring that title to such property
is marketable and that the interests created by the Mortgage constitute valid
first Liens thereon free and clear of all defects and encumbrances other than
as approved by the Administrative Agent, and such policies shall also include a
revolving credit endorsement and such other endorsements as the Administrative
Agent shall request and shall be accompanied by evidence of the payment in full
of all premiums thereon; and

 

(iii)                               such other approvals,
opinions, or documents as the Administrative Agent may reasonably request.

 

SECTION 7.1.9.  Use of Proceeds, etc.  The proceeds of the Credit Extensions shall
be applied by the Borrower as follows:

 

(a)                                  the
proceeds of the Term B Loans and Revolving Loans shall be applied by the
Borrower (i) to fund the Current Refinancing and (ii) to finance the payment
of the fees and expenses related to the Current Refinancing; and

 

(b)                                 the
proceeds of all other Revolving Loans, Swing Line Loans and any Term Loans
incurred pursuant to Section 2.1.6, and the issuance of Letters of
Credit from time to time, shall be used for working capital and general
corporate purposes of the Borrower and its U.S. Subsidiaries including the
redemption or repurchase of Senior Subordinated Notes.

 

SECTION 7.2.  Negative Covenants.  The Borrower agrees with the Administrative
Agent, the Issuer and each Lender that, until all Commitments have terminated,
all Letters of Credit have terminated or expired and all Obligations have been
paid and performed in full, the Borrower will perform the obligations set forth
in this Section 7.2.

 

SECTION 7.2.1.  Business Activities.  The Borrower will not, and will not permit
any of its Subsidiaries to, engage in any business activity, except business
activities of the type in which the Borrower and its Subsidiaries are engaged
on the Effective Date and such activities as may be incidental, similar or
related thereto.

 

65

 

SECTION 7.2.2.  Indebtedness.  The Borrower will not, and will not permit
any of its Subsidiaries to, create, incur, assume or suffer to exist or
otherwise become or be liable in respect of any Indebtedness, other than,
without duplication, the following:

 

(a)                                  Indebtedness
in respect of the Credit Extensions and other Obligations;

 

(b)                                 [INTENTIONALLY
OMITTED];

 

(c)                                  Indebtedness
identified in Item 7.2.2(c) (“Ongoing Indebtedness”) of the
Disclosure Schedule, and any Refinancing Indebtedness;

 

(d)                                 to
the extent not prohibited in whole or in part by the terms of the Senior
Subordinated Note Indenture, Indebtedness incurred by the Borrower or any of
its Subsidiaries (other than SP1) (i) (x) to any Person providing financing for
the acquisition of any assets permitted to be acquired pursuant to Section 7.2.8
to finance its acquisition of such assets and (y) in respect of
Capitalized Lease Liabilities (but only to the extent otherwise permitted by Section 7.2.7)
in an aggregate amount for clauses (x) and (y) not to exceed
$5,000,000 at any time and (ii) from time to time for general corporate
purposes in a maximum aggregate amount of all Indebtedness incurred pursuant to
this clause (ii) not at any time to exceed $15,000,000 less the
then aggregate outstanding Indebtedness of Subsidiaries which are not
Guarantors permitted under clause (f)(iii)
below;

 

(e)                                  Hedging
Obligations of the Borrower or any of its Subsidiaries;

 

(f)                                    intercompany
Indebtedness of the Borrower owing to any of its Subsidiaries or any Subsidiary
of the Borrower (other than SP1 or the Designated Subsidiary) owing to the
Borrower or any other Subsidiary of the Borrower or of the Borrower to any
Subsidiary of the Borrower, which Indebtedness

 

(i)                                     if
between Guarantors shall be evidenced by one or more promissory notes in form
and substance satisfactory to the Administrative Agent which have been duly
executed and delivered to (and endorsed to the order of) the Administrative
Agent in pledge pursuant to a supplement to the applicable Pledge Agreement;

 

(ii)                                  if
between Guarantors (other than Indebtedness incurred by the Borrower) shall,
except in the case of Indebtedness of the Borrower owing to any of its
Subsidiaries, not be forgiven or otherwise discharged for any consideration
other than payment in cash in the currency in which such Indebtedness was
loaned or advanced unless the Administrative Agent otherwise consents; and

 

(iii)                               owing by Subsidiaries
which are not Guarantors to Guarantors shall not exceed $15,000,000 in the
aggregate at any time outstanding;

 

(g)                                 unsecured
Subordinated Debt of the Borrower in an initial aggregate outstanding principal
amount not to exceed the sum of $200,000,000;

 

66

 

(h)                                 Indebtedness
of Non-Guarantor Subsidiaries to Guarantors to the extent permitted as
Investments under clause (h) of Section 7.2.5;

 

(i)                                     each
Subordinated Guaranty;

 

(j)                                     (i)
guarantees by the Borrower or any Guarantor of any Indebtedness of the Borrower
or any Guarantor and (ii) guarantees by any Subsidiary that is not a Guarantor
of any Indebtedness of any other Subsidiary that is not a Guarantor and (iii)
guarantees by the Borrower or any Guarantor of any unsecured Indebtedness of
any Subsidiary that is not a Guarantor incurred pursuant to clause (d)(ii) of this Section; provided,
that in each case, the Indebtedness being guaranteed is otherwise permitted by
this Section; and

 

(k)                                  Indebtedness
incurred or assumed in connection with a Franchise Acquisition in an amount not
to exceed $30,000,000 per Franchise Acquisition;

 

provided,
however, that no Indebtedness otherwise permitted by clause (d), (f)
(as such clause relates to Loans made by the Borrower to its Subsidiaries) or (g)
may be incurred if, after giving effect to the incurrence thereof, any Default
shall have occurred and be continuing.

 

SECTION 7.2.3.  Liens.  The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any of
its property, revenues or assets, whether now owned or hereafter acquired,
except:

 

(a)                                  Liens
securing payment of the Obligations, granted pursuant to any Loan Document;

 

(b)                                 [INTENTIONALLY
OMITTED];

 

(c)                                  Liens
to secure payment of Indebtedness of the type permitted and described in clause (c)
of Section 7.2.2;

 

(d)                                 Liens
granted by the Borrower or any of its Subsidiaries (other than SP1) to secure
payment of Indebtedness of the type permitted and described in (x) clause (d)(i)
of Section 7.2.2; provided, that the obligations secured
thereby do not exceed in the aggregate $5,000,000 at any time outstanding and
(y) clause (d)(ii) of Section 7.2.2 owed by
Subsidiaries which are not Guarantors to non-Affiliates; provided that
the obligations secured thereby do not exceed $7,500,000 in the aggregate at
any one time outstanding;

 

(e)                                  Liens
for taxes, assessments or other governmental charges or levies, including Liens
pursuant to Section 107(l) of CERCLA or other similar law, not at the time
delinquent or thereafter payable without penalty or being contested in good
faith by appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on its books;

 

(f)                                    Liens
of carriers, warehousemen, mechanics, repairmen, materialmen and landlords or
other like liens incurred by the Borrower or any of its Subsidiaries (other
than SP1) in the ordinary course of business for sums not overdue for a period
of more

 

67

 

than 30 days or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books;

 

(g)                                 Liens
incurred by the Borrower or any of its Subsidiaries (other than SP1) in the
ordinary course of business in connection with workmen’s compensation,
unemployment insurance or other forms of governmental insurance or benefits, or
to secure performance of tenders, statutory obligations, insurance obligations,
leases and contracts (other than for borrowed money) entered into in the
ordinary course of business or to secure obligations on surety or appeal bonds;

 

(h)                                 judgment
Liens in existence less than 30 days after the entry thereof or with
respect to which execution has been stayed or the payment of which is covered
in full by a bond or (subject to a customary deductible) by insurance
maintained with responsible insurance companies;

 

(i)                                     Liens
with respect to recorded minor imperfections of title and easements,
rights-of-way, restrictions, reservations, permits, servitudes and other
similar encumbrances on real property and fixtures which do not materially
detract from the value or materially impair the use by the Borrower or any such
Subsidiary in the ordinary course of their business of the property subject
thereto;

 

(j)                                     leases
or subleases granted by the Borrower or any of its Subsidiaries (other than
SP1) to any other Person in the ordinary course of business; and

 

(k)                                  Liens
in the nature of trustees’ Liens granted pursuant to any indenture governing
any Indebtedness permitted by Section 7.2.2, in each case in favor
of the trustee under such indenture and securing only obligations to pay
compensation to such trustee, to reimburse its expenses and to indemnify it
under the terms thereof.

 

SECTION 7.2.4.  Financial
Condition.

 

(a)                                  Net
Debt to EBITDA Ratio.  The Borrower
will not permit the Net Debt to EBITDA Ratio as of the end of any Fiscal
Quarter to be greater than 3.00 to 1.00.

 

(b)                                 Interest
Coverage Ratio.  The Borrower will
not permit the Interest Coverage Ratio as of the end of any Fiscal Quarter to
be less than 3.00 to 1.00.

 

SECTION 7.2.5.  Investments.  The Borrower will not, and will not permit
any of its Subsidiaries to, make, incur, assume or suffer to exist any
Investment in any other Person, except:

 

(a)                                  Investments
existing on the date hereof and identified in Item 7.2.5(a) (“Ongoing
Investments”) of the Disclosure Schedule;

 

(b)                                 Cash
Equivalent Investments;

 

68

 

(c)                                  without
duplication, Investments permitted as Indebtedness pursuant to Section 7.2.2;

 

(d)                                 without
duplication, Investments permitted as Capital Expenditures pursuant to Section 7.2.7;

 

(e)                                  Investments
by the Borrower in any of its Subsidiaries which have executed Guaranties, or
by any such Subsidiary (other than SP1) in any of its Subsidiaries, by way of
contributions to capital;

 

(f)                                    Investments
made by the Borrower or any of its Subsidiaries (other than SP1), solely with
proceeds which have been contributed, directly or indirectly, to such
Subsidiary as cash equity from holders of the Borrower’s common stock for the
purpose of making an Investment identified in a notice to the Administrative
Agent on or prior to the date that such capital contribution is made;

 

(g)                                 Investments
by the Borrower or any of its Subsidiaries (other than SP1) to the extent the
consideration received pursuant to clause (b)(i) of Section 7.2.9
is not all cash;

 

(h)                                 Investments
by the Borrower or any of its Subsidiaries in Weight Watchers Sweden AB
Vikt-Vaktarna and Weight Watchers Suomi Oy to the extent that such Investments
are for the purpose of acquiring any Capital Securities of such Subsidiaries
not owned by the Borrower and its Subsidiaries on the Effective Date, in an
aggregate amount not to exceed $10,000,000;

 

(i)                                     other
Investments (not constituting Capital Expenditures attributable to the
expenditure of Base Amounts) made by the Borrower or any of the Guarantors
(other than SP1) in an aggregate amount not to exceed $30,000,000;

 

(j)                                     other
Investments made by any Non-Guarantor Subsidiary in another Non-Guarantor
Subsidiary;

 

(k)                                  other
Investments made by the Borrower or any Subsidiary in Qualified Assets, to the
extent permitted under clause (b) of Section 3.1.1;

 

(l)                                     Investments
made by the Borrower in the Designated Subsidiary in an aggregate amount not to
exceed $1,500,000;

 

(m)                               Investments
permitted under Section 7.2.6; and

 

(n)                                 Investments
by the Borrower or any Subsidiary constituting Permitted Acquisitions;

 

provided,
however, that

 

(i)                                     any
Investment which when made complies with the requirements of the definition of
the term “Cash Equivalent Investment” may continue to be

 

69

 

held notwithstanding that such Investment if made thereafter would not
comply with such requirements;

 

(ii)                                  the
Investments permitted above shall only be permitted to be made to the extent
not prohibited in whole or in part by the terms of the Senior Subordinated Note
Indenture or any other Subordinated Debt;

 

(iii)                               no Investment otherwise
permitted by clause (e), (f), (g) or (i) shall be
permitted to be made if, immediately before or after giving effect thereto, any
Default shall have occurred and be continuing; and

 

(iv)                              except
as permitted under clause (a) above, no more than $2,000,000 of
Investments may be made in the Designated Subsidiary unless the Designated
Subsidiary shall have taken the actions set forth in Section 7.1.7.

 

SECTION 7.2.6.  Restricted Payments, etc.  On and at all times after the Effective
Date,

 

(a)                                  subject
to clause (b)(ii), the Borrower will not declare, pay or make any
dividend or distribution (in cash, property or obligations) on any shares of
any class of Capital Securities (now or hereafter outstanding) of the Borrower
or on any warrants, options or other rights with respect to any shares of any
class of Capital Securities (now or hereafter outstanding) of the Borrower
(other than dividends or distributions payable in its common stock or warrants
to purchase its common stock or splits or reclassifications of its stock into
additional or other shares of its common stock) or apply, or permit any of its
Subsidiaries to apply, any of its funds, property or assets to the purchase, redemption,
sinking fund or other retirement of, or agree or permit any of its Subsidiaries
to purchase or redeem, any shares of any class of Capital Securities (now or
hereafter outstanding) of the Borrower, or warrants, options or other rights
with respect to any shares of any class of Capital Securities (now or hereafter
outstanding) of the Borrower (collectively, “Restricted Payments”); provided,
that:

 

(i)                                     the
Borrower may make Restricted Payments of dividends on the Borrower’s Capital
Securities or to repurchase the Borrower’s Capital Securities in an amount up
to $20,000,000 plus 66.67% of Net Income from December 2, 2001, so long as
(i) both before and after giving effect to such Restricted Payment no Default
has occurred and is continuing and (ii) the Borrower shall have at least
$30,000,000 of unused Revolving Loan Commitments; and

 

(ii)                                  the
Borrower may repurchase its stock held by employees constituting management, in
an amount not to exceed $5,000,000 in any Fiscal Year and an aggregate amount
of $20,000,000 (amounts unused in any Fiscal Year may be used in the
immediately succeeding Fiscal Year);

 

(b)                                 the
Borrower will not, and will not permit any of its Subsidiaries to

 

(i)                                     make
any payment or prepayment of principal of, or interest on, any Subordinated
Debt other than (A) in the case of interest only, on the stated, scheduled date
for such payment of interest set forth in the applicable

 

70

 

Subordinated Debt or in the indenture governing such Subordinated Debt,
(B) as permitted by clause (b)(ii) or (C) which would violate the
terms of this Agreement or the subordination provisions of the indenture
governing such Subordinated Debt; or

 

(ii)                                  make
any payment or prepayment of principal of, or interest on, redeem, purchase or
defease, any of the Senior Subordinated Notes unless no Default has occurred
and is continuing or would result therefrom; and

 

(c)                                  the
Borrower will not, and will not permit any Subsidiary to, make any deposit for
any of the foregoing purposes (except in connection with any permitted
expenditure described in clauses (a)
and (b) above).

 

SECTION 7.2.7.  Capital Expenditures, etc.  The Borrower will not, and will not permit
any of its Subsidiaries to, make or commit to make Capital Expenditures (other
than (w) Permitted Acquisitions, (x) investments under (1) clause (j) of
Section 7.2.5 and (2) clause (i) of Section 7.2.5
to the extent, in the case of this clause (2), that the aggregate amount
of such investments does not exceed $30,000,000 (it being understood that
Capital Expenditures may be made pursuant to this clause (x) whether or
not constituting “Investments”, but shall be treated as such for the purposes
of said Sections), (y) nonrecurring restructuring costs and Weighco Acquisition
related expenses and (z) proceeds of capital contributions used for Capital
Expenditures in any Fiscal Year by the Borrower and its Subsidiaries (other
than SP1), except, to the extent not prohibited in whole or in part by the
terms of the Senior Subordinated Note Indenture, Capital Expenditures which do
not aggregate in excess of the amount set forth below opposite such Fiscal
Year:

 

	
  Fiscal Year

  	
   

  	
  Maximum
  Capital

  Expenditures

  
	
  2004

  	
   

  	
  $

  	
  20,000,000

  
	
  2005

  	
   

  	
  $

  	
  22,000,000

  
	
  2006

  	
   

  	
  $

  	
  24,000,000

  
	
  2007

  	
   

  	
  $

  	
  26,000,000

  
	
  2008

  	
   

  	
  $

  	
  28,000,000

  
	
  2009

  	
   

  	
  $

  	
  30,000,000

  
	
  2010 and thereafter

  	
   

  	
  $

  	
  32,000,000

  

 

provided,
however, that (i) to the extent the amount of Capital Expenditures
permitted to be made in any Fiscal Year pursuant to the table set forth above
without giving effect to this clause (i) (the “Base Amount”)
exceeds the aggregate amount of Capital Expenditures actually made during such
Fiscal Year, such excess amount may be carried forward to (but only to) the
next succeeding Fiscal Year (any such amount to be certified by the Borrower to
the Administrative Agent in the Compliance Certificate delivered for the last
Fiscal Quarter of such Fiscal Year, and any such amount carried forward to a
succeeding Fiscal Year shall be deemed to

 

71

 

be used prior to the
Borrower and its Subsidiaries using the Base Amount for such succeeding Fiscal
Year, without giving effect to such carry-forward).

 

SECTION 7.2.8.  Consolidation, Merger, etc.  The Borrower will not, and will not permit any
of its Subsidiaries to, liquidate or dissolve, consolidate with, or merge into
or with, any other corporation, or purchase or otherwise acquire all or
substantially all of the assets of any Person (or of any division thereof)
except

 

(a)                                  any
such Subsidiary (other than SP1) may liquidate or dissolve voluntarily into,
and may merge with and into, the Borrower (so long as the Borrower is the
surviving corporation of such combination or merger) or any other Subsidiary
(other than SP1), and the assets or stock of any Subsidiary may be purchased or
otherwise acquired by the Borrower or any other Subsidiary (other than SP1); provided,
that notwithstanding the above, (i) a Subsidiary may only liquidate or
dissolve into, or merge with and into, another Subsidiary of the Borrower
(other than SP1) if, after giving effect to such combination or merger, the
Borrower continues to own (directly or indirectly), and the Administrative
Agent continues to have pledged to it pursuant to a supplement to the WWI
Pledge Agreement, a percentage of the issued and outstanding shares of Capital
Securities (on a fully diluted basis) of the Subsidiary surviving such
combination or merger that is equal to or in excess of the percentage of the
issued and outstanding shares of Capital Securities (on a fully diluted basis)
of the Subsidiary that does not survive such combination or merger that was
(immediately prior to the combination or merger) owned by the Borrower or
pledged to the Administrative Agent and (ii) if such Subsidiary is a Guarantor
the surviving corporation must be a Guarantor;

 

(b)                                 so
long as no Default has occurred and is continuing or would occur after giving
effect thereto, the Borrower or any of its Subsidiaries (other than SP1) may
make Investments permitted under Section 7.2.5 (including any
Permitted Acquisition); and

 

(c)                                  a
Subsidiary may merge with another Person in a transaction permitted by clause (b)
of Section 7.2.9.

 

SECTION 7.2.9.  Asset Dispositions, etc.  Subject to the definition of Change of
Control, the Borrower will not, and will not permit any of its Subsidiaries to,
Dispose of all or any part of its assets, whether now owned or hereafter
acquired (including accounts receivable and Capital Securities of Subsidiaries)
to any Person, unless

 

(a)                                  such
Disposition is made by the Borrower or any of its Subsidiaries (other than SP1)
and is (i) in the ordinary course of its business (and does not constitute a
Disposition of all or a substantial part of the Borrower or such Subsidiary’s
assets) or is of obsolete or worn out property or (ii) permitted by clause
(a) or (b) of Section 7.2.8;

 

(b)                                 (i)
such Disposition (other than of Capital Securities) is made by the Borrower or
any of its Subsidiaries (other than SP1) and is for fair market value and the
consideration consists of no less than 75% in cash, (ii) the Net Disposition
Proceeds received from such Disposition, together with the Net Disposition
Proceeds of all other assets sold, transferred, leased, contributed or conveyed
pursuant to this clause (b) since

 

72

 

the Effective Date, does not exceed (individually or in the aggregate)
$20,000,000 over the term of this Agreement and (iii) the Net Disposition
Proceeds generated from such Disposition not theretofore reinvested in
Qualified Assets in accordance with clause (b) of Section 3.1.1
(with the amount permitted to be so reinvested in Qualified Assets in any event
not to exceed $7,500,000 over the term of this Agreement) is applied as Net
Disposition Proceeds to prepay the Loans pursuant to the terms of clause (b)
of Section 3.1.1 and Section 3.1.2; or

 

(c)                                  such
Disposition is made pursuant to a Local Management Plan.

 

SECTION 7.2.10.  Modification of
Certain Agreements.

 

(a)                                  The
Borrower will not, and will not permit any of its Subsidiaries to, consent to
any amendment, supplement, amendment and restatement, waiver or other
modification of any of the terms or provisions contained in, or applicable to,
the Recapitalization Agreement or any schedules, exhibits or agreements related
thereto, in each case which would adversely affect the rights or remedies of
the Lenders, or the Borrower’s or any Subsidiary’s ability to perform hereunder
or under any Loan Document.

 

(b)                                 Except
as otherwise permitted pursuant to the terms of this Agreement, without the
prior written consent of the Required Lenders, the Borrower will not consent to
any amendment, supplement or other modification of any of the terms or
provisions contained in, or applicable to, any Subordinated Debt (including the
Senior Subordinated Note Indenture or any of the Senior Subordinated Notes), or
any guarantees delivered in connection with any Subordinated Debt (including
any Subordinated Guaranty) (collectively, the “Restricted Agreements”),
or make any payment in order to obtain an amendment thereof or change thereto,
if the effect of such amendment, supplement, modification or change is to (i)
increase the principal amount of, or increase the interest rate on, or add or
increase any fee with respect to such Subordinated Debt or any such Restricted
Agreement, advance any dates upon which payments of principal or interest are
due thereon or change any of the covenants with respect thereto in a manner
which is more restrictive to the Borrower or any of its Subsidiaries or (ii)
change any event of default or condition to an event of default with respect
thereto, change the redemption, prepayment or defeasance provisions thereof,
change the subordination provisions thereof, or change any collateral therefor
(other than to release such collateral), if (in the case of this clause (b)(ii)),
the effect of such amendment or change, individually or together with all other
amendments or changes made, is to increase the obligations of the obligor
thereunder or to confer any additional rights on the holders of such
Subordinated Debt, or any such Restricted Agreement (or a trustee or other
representative on their behalf).

 

SECTION 7.2.11.  Transactions with Affiliates.  The Borrower will not, and will not permit
any of its Subsidiaries to, enter into, or cause, suffer or permit to exist any
arrangement or contract with any of their other Affiliates (other than any
Obligor)

 

73

 

(a)                                  unless
(i) such arrangement or contract is fair and equitable to the Borrower or
such Subsidiary and is an arrangement or contract of the kind which would be
entered into by a prudent Person in the position of the Borrower or such
Subsidiary with a Person which is not one of their Affiliates; and (ii) if
such arrangement or contract involves an amount in excess of $5,000,000, the
terms of such arrangement or contract are set forth in writing and a majority
of directors of the Borrower have determined in good faith that the criteria
set forth in clause (i) are
satisfied and have approved such arrangement or contract as evidenced by
appropriate resolutions of the board of directors of the Borrower or the
relevant Subsidiary; or (iii) such arrangement is set forth on Item 7.2.11
of the Disclosure Schedule; and

 

(b)                                 except
that, so long as no Default or Event of Default has occurred and is continuing
or would be caused thereby, the Borrower and its Subsidiaries may pay
(i) annual management, consulting, monitoring and advisory fees to The
Invus Group, Ltd. in an aggregate total amount in any Fiscal Year not to exceed
the greater of (x) $1,000,000 and (y) 1.0% of EBITDA for the relevant
period, and any related out-of-pocket expenses and (ii) fees to The Invus
Group, Ltd. and its Affiliates in connection with any acquisition or
divestiture transaction entered into by the Borrower or any Subsidiary; provided,
however, that the aggregate amount of fees paid to The Invus Group, Ltd.
and its Affiliates in respect of any acquisition or divestiture transaction
shall not exceed 1% of the total amount of such transaction.

 

SECTION 7.2.12.  Negative Pledges, Restrictive Agreements,
etc.  The Borrower will not, and
will not permit any of its Subsidiaries to, enter into any agreement (excluding
(i) any restrictions existing under the Loan Documents or, in the case of clauses (a)(i)
and (b), any other agreements in effect on the date hereof, (ii) in
the case of clauses (a)(i) and (b), any restrictions with
respect to a Subsidiary imposed pursuant to an agreement which has been entered
into in connection with the sale or disposition of all or substantially all of
the Capital Securities or assets of such Subsidiary pursuant to a transaction
otherwise permitted hereby, (iii) in the case of clause (a),
restrictions in respect of Indebtedness secured by Liens permitted by Section 7.2.3,
but only to the extent such restrictions apply to the assets encumbered
thereby, (iv) in the case of clause (a), restrictions under the
Senior Subordinated Note Indenture or (v) any restrictions existing under
any agreement that amends, refinances or replaces any agreement containing the
restrictions referred to in clause (i), (ii) or (iii)
above; provided, that the terms and conditions of any such agreement
referred to in clause (i), (ii) or (iii) are not
materially less favorable to the Lenders or materially more restrictive to any
Obligor a party thereto than those under the agreement so amended, refinanced
or replaced) prohibiting

 

(a)                                  the
(i) creation or assumption of any Lien upon its properties, revenues or
assets, whether now owned or hereafter acquired, or (ii) ability of the
Borrower or any other Obligor to amend or otherwise modify this Agreement or
any other Loan Document; or

 

(b)                                 the
ability of any Subsidiary to make any payments, directly or indirectly, to the
Borrower by way of dividends, advances, repayments of loans or advances,
reimbursements of management and other intercompany charges, expenses and
accruals or other returns on investments, or any other agreement or arrangement
which restricts

 

74

 

the ability of any such Subsidiary to make any payment, directly or
indirectly, to the Borrower.

 

SECTION 7.2.13.  Stock of Subsidiaries.  The Borrower will not (other than in
connection with a Permitted Acquisition or an Investment), and will not permit
any of its Subsidiaries to issue any Capital Securities (whether for value or
otherwise) to any Person other than the Borrower or another Wholly-owned
Subsidiary of the Borrower except in connection with a Local Management Plan; provided,
that, WW Australia shall at all times be the record and beneficial direct owner
of all of the issued and outstanding Capital Securities of SP1.

 

SECTION 7.2.14.  Sale and Leaseback.  The Borrower will not, and will not permit
any of its Subsidiaries to, enter into any agreement or arrangement with any
other Person providing for the leasing by the Borrower or any of its
Subsidiaries of real or personal property which has been or is to be sold or
transferred by the Borrower or any of its Subsidiaries to such other Person or
to any other Person to whom funds have been or are to be advanced by such
Person on the security of such property or rental obligations of the Borrower
or any of its Subsidiaries.

 

SECTION 7.2.15.  Fiscal Year.  The Borrower will not and will not permit any of its Subsidiaries
to change its Fiscal Year.

 

SECTION 7.2.16.  Designation of Senior Indebtedness.  The Borrower will not designate any
Indebtedness as “Designated Senior Indebtedness” pursuant to clause (1) of the
definition of such term in the Senior Subordinated Note Indenture.

 

ARTICLE VIII

[INTENTIONALLY OMITTED]

 

ARTICLE IX

EVENTS OF DEFAULT

 

SECTION 9.1.  Listing of Events of Default.  Each of the following events or occurrences
described in this Section 9.1 shall constitute an “Event of
Default”.

 

SECTION 9.1.1.  Non-Payment of Obligations.  The Borrower shall default in the payment or
prepayment of any Reimbursement Obligation (including pursuant to Sections 2.6
and 2.6.2) on the applicable Disbursement Due Date or any deposit of
cash for collateral purposes on the date required pursuant to Section 2.6.4
or any principal of any Loan when due, or any Obligor (including the Borrower
and SP1) shall default (and such default shall continue unremedied for a period
of three Business Days) in the payment when due of any interest or commitment
fee or of any other monetary Obligation.

 

SECTION 9.1.2.  Breach of Warranty.  Any representation or warranty of the
Borrower or any other Obligor made or deemed to be made hereunder or in any
other Loan Document executed by it or any other writing or certificate
furnished by or on behalf of the Borrower or any

 

75

 

other Obligor to
the Administrative Agent, the Issuer or any Lender for the purposes of or in
connection with this Agreement or any such other Loan Document (including any
certificates delivered pursuant to Article V) is or shall be
incorrect when made in any material respect.

 

SECTION 9.1.3.  Non-Performance of Certain Covenants and
Obligations.  Any Borrower shall
default in the due performance and observance of any of its obligations under Section 7.1.9
or Section 7.2.

 

SECTION 9.1.4.  Non-Performance of Other Covenants and
Obligations.  Any Obligor shall
default in the due performance and observance of any other agreement contained
herein or in any other Loan Document executed by it, and such default shall
continue unremedied for a period of 30 days after notice thereof shall have
been given to the Borrower by the Administrative Agent at the direction of the
Required Lenders.

 

SECTION 9.1.5.  Default on Other Indebtedness.  A default shall occur (i) in the payment
when due (subject to any applicable grace period), whether by acceleration or
otherwise, of any Indebtedness, other than Indebtedness described in Section 9.1.1,
of the Borrower or any of its Subsidiaries or any other Obligor having a
principal amount, individually or in the aggregate, in excess of $1,000,000, or
(ii) a default shall occur in the performance or observance of any obligation
or condition with respect to such Indebtedness having a principal amount,
individually or in the aggregate, in excess of $5,000,000 if the effect of such
default is to accelerate the maturity of any such Indebtedness or such default
shall continue unremedied for any applicable period of time sufficient to
permit the holder or holders of such Indebtedness, or any trustee or agent for
such holders, to cause such Indebtedness to become due and payable prior to its
expressed maturity.

 

SECTION 9.1.6.  Judgments.  Any judgment or order for the payment of money in excess of
$1,000,000 (not covered by insurance from a responsible insurance company that
is not denying its liability with respect thereto) shall be rendered against
the Borrower or any of its Subsidiaries or any other Obligor and remain unpaid
and either

 

(a)                                  enforcement
proceedings shall have been commenced by any creditor upon such judgment or
order; or

 

(b)                                 there
shall be any period of 60 consecutive days during which a stay of enforcement
of such judgment or order, by reason of a pending appeal or otherwise, shall
not be in effect.

 

SECTION 9.1.7.  Pension Plans.  Any of the following events shall occur with
respect to any Pension Plan:

 

(a)                                  the
termination of any Pension Plan if, as a result of such termination, the
Borrower or any Subsidiary would be required to make a contribution to such
Pension Plan, or would reasonably expect to incur a liability or obligation to
such Pension Plan, in excess of $5,000,000; or

 

(b)                                 a
contribution failure occurs with respect to any Pension Plan sufficient to give
rise to a Lien under section 302(f) of ERISA in an amount in excess of
$5,000,000.

 

76

 

SECTION 9.1.8.  Change in Control.  Any Change in Control shall occur.

 

SECTION 9.1.9.  Bankruptcy, Insolvency, etc.  The Borrower or any of its Subsidiaries
(other than any Immaterial Subsidiary or the Designated Subsidiary) or any
other Obligor shall

 

(a)                                  become
insolvent or generally fail to pay, or admit in writing its inability or
unwillingness to pay, debts as they become due;

 

(b)                                 apply
for, consent to, or acquiesce in, the appointment of a trustee, receiver,
sequestrator or other custodian for the Borrower or any of its Subsidiaries or
any other Obligor or any property of any thereof, or make a general assignment
for the benefit of creditors;

 

(c)                                  in
the absence of such application, consent or acquiescence, permit or suffer to
exist the appointment of a trustee, receiver, sequestrator or other custodian
for the Borrower or any of its Subsidiaries or any other Obligor or for a
substantial part of the property of any thereof, and such trustee, receiver,
sequestrator or other custodian shall not be discharged within 60 days, provided
that the Borrower or each Subsidiary and each other Obligor hereby expressly
authorizes the Administrative Agent, the Issuer and each Lender to appear in
any court conducting any relevant proceeding during such 60-day period to
preserve, protect and defend their rights under the Loan Documents;

 

(d)                                 permit
or suffer to exist the commencement of any bankruptcy, reorganization, debt
arrangement or other case or proceeding under any bankruptcy or insolvency law,
or any dissolution, winding up or liquidation proceeding, in respect of the
Borrower or any of its Subsidiaries or any other Obligor, and, if any such case
or proceeding is not commenced by the Borrower or such Subsidiary or such other
Obligor, such case or proceeding shall be consented to or acquiesced in by the
Borrower or such Subsidiary or such other Obligor or shall result in the entry
of an order for relief or shall remain for 60 days undismissed, provided
that the Borrower, each Subsidiary and each other Obligor hereby expressly authorizes
the Administrative Agent, the Issuer and each Lender to appear in any court
conducting any such case or proceeding during such 60-day period to preserve,
protect and defend their rights under the Loan Documents; or

 

(e)                                  take
any action (corporate or otherwise) authorizing, or in furtherance of, any of
the foregoing.

 

SECTION 9.1.10.  Impairment of Security, etc.  Any Loan Document, or any Lien granted
thereunder, shall (except in accordance with its terms), in whole or in part,
terminate, cease to be in full force and effect or cease to be the legally
valid, binding and enforceable obligation of any Obligor party thereto; the
Borrower or any other Obligor shall, directly or indirectly, contest in any
manner the effectiveness, validity, binding nature or enforceability thereof;
or any Lien securing any Obligation shall, in whole or in part, cease to be a
perfected first priority Lien, subject only to those exceptions expressly
permitted by such Loan Document, except to the extent any event referred to above
(a) results from the failure of the Administrative Agent to maintain possession
of certificates representing securities pledged under the WWI Pledge Agreement
or to file continuation statements under the Uniform Commercial Code of any

 

77

 

applicable
jurisdiction or (b) is covered by a lender’s title insurance policy and the
relevant insurer promptly after the occurrence thereof shall have acknowledged
in writing that the same is covered by such title insurance policy.

 

SECTION 9.1.11.  Subordinated Debt.  The subordination provisions relating to any
Subordinated Debt (the “Subordination Provisions”) shall fail to be
enforceable by the Lenders (which have not effectively waived the benefits
thereof) in accordance with the terms thereof, or the principal or interest on
any Loan, Reimbursement Obligation or other monetary Obligations shall fail to
constitute Senior Debt, or the same (or any other similar term) used to define
the monetary Obligations.

 

SECTION 9.1.12.  Redemption.  Any holder of any Subordinated Debt shall file an action seeking
the rescission thereof or damages or injunctive relief relating thereto; or any
event shall occur which, under the terms of any agreement or indenture relating
to Subordinated Debt, shall require the Borrower or any of its Subsidiaries to
purchase, redeem or otherwise acquire or offer to purchase, redeem or otherwise
acquire all or any portion of the principal amount of the Subordinated Debt
(other than as provided under Section 7.2.6); or the Borrower or
any of its Subsidiaries shall for any other reason purchase, redeem or
otherwise acquire or offer to purchase, redeem or otherwise acquire, or make
any other payments in respect of the principal amount of any such Subordinated
Debt (other than as provided under Section 7.2.6).

 

SECTION 9.2.  Action if Bankruptcy, etc.  If any Event of Default described in clauses (a)
through (d) of Section 9.1.9 shall occur with respect to the
Borrower, any Subsidiary or any other Obligor, the Commitments (if not
theretofore terminated) shall automatically terminate and the outstanding
principal amount of all outstanding Loans and all other Obligations shall
automatically be and become immediately due and payable, without notice or demand.

 

SECTION 9.3.  Action if Other Event of Default.  If any Event of Default (other than any
Event of Default described in clauses (a) through (d) of Section 9.1.9
with respect to the Borrower or any Subsidiary or any other Obligor) shall
occur for any reason, whether voluntary or involuntary, and be continuing, the
Administrative Agent, upon the direction of the Required Lenders, shall by
notice to the Borrower declare all or any portion of the outstanding principal
amount of the Loans and other Obligations to be due and payable, require the
Borrower to provide cash collateral to be deposited with the Administrative
Agent in an amount equal to the Stated Amount of all issued Letters of Credit
and/or declare the Commitments (if not theretofore terminated) to be
terminated, whereupon the full unpaid amount of such Loans and other
Obligations which shall be so declared due and payable shall be and become
immediately due and payable, without further notice, demand or presentment, the
Borrower shall deposit with the Administrative Agent cash collateral in an
amount equal to the Stated Amount of all issued Letters of Credit and/or, as
the case may be, the Commitments shall terminate.

 

78

 

ARTICLE X

THE AGENTS

 

SECTION 10.1.  Actions.  Each Lender hereby appoints Scotia Capital as its Administrative
Agent and as a Lead Agent and Book Manager under and for purposes of this
Agreement, the Notes and each other Loan Document.  Each Lender authorizes the Administrative Agent to act on behalf
of such Lender under this Agreement, the Notes, and each other Loan Document
and, in the absence of other written instructions from the Required Lenders
received from time to time by the Administrative Agent (with respect to which
the Administrative Agent agrees that it will comply, except as otherwise
provided in this Section or as otherwise advised by counsel), to exercise
such powers hereunder and thereunder as are specifically delegated to or
required of the Administrative Agent by the terms hereof and thereof, together
with such powers as may be reasonably incidental thereto.  Each Lender hereby appoints CSFB as the
Syndication Agent and as a Lead Agent and Book Manager.  Each Lender hereby indemnifies (which
indemnity shall survive any termination of this Agreement) each Agent, ratably
in accordance with their respective Term Loans outstanding and Commitments (or,
if no Term Loans or Commitments are at the time outstanding and in effect, then
ratably in accordance with the principal amount of Term Loans and their
respective Commitments as in effect in each case on the date of the termination
of this Agreement), from and against any and all liabilities, obligations,
losses, damages, claims, costs or expenses of any kind or nature whatsoever
which may at any time be imposed on, incurred by, or asserted against, the
Agents in any way relating to or arising out of this Agreement, the Notes and
any other Loan Document, including reasonable attorneys’ fees, and as to which
any Agent is not reimbursed by the Borrower or any other Obligor (and without
limiting the obligation of the Borrower or any other Obligor to do so); provided,
however, that no Lender shall be liable for the payment of any portion
of such liabilities, obligations, losses, damages, claims, costs or expenses
which are determined by a court of competent jurisdiction in a final proceeding
to have resulted solely from an Agent’s gross negligence or willful
misconduct.  The Agents shall not be
required to take any action hereunder, under the Notes or under any other Loan
Document, or to prosecute or defend any suit in respect of this Agreement, the
Notes or any other Loan Document, unless it is indemnified hereunder to its
satisfaction.  If any indemnity in favor
of the Agents shall be or become, in any Agent’s determination, inadequate, any
Agent may call for additional indemnification from the Lenders and cease to do
the acts indemnified against hereunder until such additional indemnity is
given.  Notwithstanding the foregoing,
the Lead Arrangers and Book Managers shall have no duties, obligations or
liabilities under any Loan Document.

 

SECTION 10.2.  Funding Reliance, etc.  Unless the Administrative Agent shall have
been notified by telephone, confirmed in writing, by any Lender by 5:00 p.m.,
New York time, on the day prior to a Borrowing that such Lender will not make
available the amount  which would
constitute its Percentage of such Borrowing on the date specified therefor, the
Administrative Agent may assume that such Lender has made such amount available
to the Administrative Agent and, in reliance upon such assumption, make
available to the Borrower a corresponding amount.  If and to the extent that such Lender shall not have made such
amount available to the Administrative Agent, such Lender severally agrees and
the Borrower agrees to repay the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
the Administrative Agent made such amount

 

79

 

available to the
Borrower to the date such amount is repaid to the Administrative Agent, at the
interest rate applicable at the time to Loans comprising such Borrowing (in the
case of the Borrower) and (in the case of a Lender), at the Federal Funds Rate
(for the first two Business Days after which such amount has not been repaid,
and thereafter at the interest rate applicable to Loans comprising such
Borrowing.

 

SECTION 10.3.  Exculpation.  Neither any Agent nor any of their
respective directors, officers, employees or agents shall be liable to any
Lender for any action taken or omitted to be taken by it under this Agreement
or any other Loan Document, or in connection herewith or therewith, except for
its own willful misconduct or gross negligence, nor responsible for any
recitals or warranties herein or therein, nor for the effectiveness,
enforceability, validity or due execution of this Agreement or any other Loan
Document, nor for the creation, perfection or priority of any Liens purported
to be created by any of the Loan Documents, or the validity, genuineness,
enforceability, existence, value or sufficiency of any collateral security, nor
to make any inquiry respecting the performance by the Borrower of its obligations
hereunder or under any other Loan Document. 
Any such inquiry which may be made by any Agent shall not obligate it to
make any further inquiry or to take any action.  The Agents shall be entitled to rely upon advice of counsel
concerning legal matters and upon any notice, consent, certificate, statement
or writing which the Agents believe to be genuine and to have been presented by
a proper Person.

 

SECTION 10.4.  Successor.  The Syndication Agent may resign as such upon one Business Day’s
notice to the Borrower and the Administrative Agent.  The Administrative Agent may resign as such at any time upon at
least 30 days prior notice to the Borrower and all Lenders.  If the Administrative Agent at any time
shall resign, the Required Lenders may, with the prior consent of the Borrower
(which consent shall not be unreasonably withheld), appoint another Lender as a
successor Administrative Agent which shall thereupon become the Administrative
Agent hereunder.  If no successor
Administrative Agent shall have been so appointed by the Required Lenders, and
shall have accepted such appointment, within 30 days after the retiring
Administrative Agent’s giving notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be one of the Lenders or a commercial banking
institution organized under the laws of the U.S. (or any State thereof) or a
U.S. branch or agency of a commercial banking institution, and having a
combined capital and surplus of at least $250,000,000; 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 in 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
for above.  Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall be entitled to receive from
the retiring Administrative Agent such documents of transfer and assignment as
such successor Administrative Agent may reasonably request, and shall thereupon
succeed to and become vested with all rights, powers, privileges and duties of
the retiring Administrative Agent, and the retiring Administrative Agent shall
be discharged from its duties and obligations under this Agreement.  After any retiring Administrative Agent’s
resignation hereunder as the Administrative Agent, the provisions of

 

80

 

(a)                                  this
Article X shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was the Administrative Agent under this
Agreement; and

 

(b)                                 Section 11.3
and Section 11.4 shall continue to inure to its benefit.

 

SECTION 10.5.  Credit Extensions by each Agent.  Each Agent shall have the same rights and
powers with respect to (x) the Credit Extensions made by it or any of its
Affiliates, and (y) the Notes held by it or any of its Affiliates as any
other Lender and may exercise the same as if it were not an Agent.  Each Agent and its respective Affiliates may
accept deposits from, lend money to, and generally engage in any kind of
business with the Borrower or any Subsidiary or Affiliate of the Borrower, as
if such Agent were not an Agent hereunder.

 

SECTION 10.6.  Credit Decisions.  Each Lender acknowledges that it has,
independently of each Agent and each other Lender, and based on such Lender’s
review of the financial information of the Borrower, this Agreement, the other
Loan Documents (the terms and provisions of which being satisfactory to such
Lender) and such other documents, information and investigations as such Lender
has deemed appropriate, made its own credit decision to extend its
Commitments.  Each Lender also
acknowledges that it will, independently of each Agent and each other Lender,
and based on such other documents, information and investigations as it shall
deem appropriate at any time, continue to make its own credit decisions as to
exercising or not exercising from time to time any rights and privileges
available to it under this Agreement or any other Loan Document.

 

SECTION 10.7.  Copies, etc.  The Administrative Agent shall give prompt
notice to each Lender of each notice or request required or permitted to be
given to the Administrative Agent by the Borrower pursuant to the terms of this
Agreement (unless concurrently delivered to the Lenders by the Borrower).  The Administrative Agent will distribute to
each Lender each document or instrument received for its account and copies of all
other communications received by the Administrative Agent from the Borrower for
distribution to the Lenders by the Administrative Agent in accordance with the
terms of this Agreement.

 

SECTION 10.8.  Reliance by the Administrative Agent.  The Administrative Agent shall be entitled
to rely upon any certification, notice or other communication (including any
thereof by telephone, telecopy, telegram or cable) believed by it to be genuine
and correct and to have been signed or sent by or on behalf of the proper
Person, and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Administrative Agent.  As to any matters not expressly provided for
by this Agreement or any other Loan Document, the Administrative Agent shall in
all cases be fully protected in acting, or in refraining from acting, hereunder
or thereunder in accordance with instructions given by the Required Lenders or
all of the Lenders as is required in such circumstance, and such instructions
of such Lenders and any action taken or failure to act pursuant thereto shall
be binding on all of the Lenders.  For
purposes of applying amounts in accordance with this Section, the
Administrative Agent shall be entitled to rely upon any Secured Party that has
entered into a Rate Protection Agreement with any Obligor for a determination
(which such Secured Party agrees to provide or cause to be provided upon
request of the Administrative Agent) of the outstanding Secured Obligations
owed to such Secured Party under any Rate Protection Agreement.  Unless it has actual knowledge evidenced by
way of written notice from any such Secured Party and the Borrower to

 

81

 

the contrary, the
Administrative Agent, in acting hereunder and under each other Loan Document,
shall be entitled to assume that no Rate Protection Agreements or Obligations
in respect thereof are in existence or outstanding between any Secured Party
and any Obligor.

 

SECTION 10.9.  Defaults.  The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of a Default unless the Administrative Agent has
received notice from a Lender or the Borrower specifying such Default and
stating that such notice is a “Notice of Default”.  In the event that the Administrative Agent receives such a notice
of the occurrence of a Default, the Administrative Agent shall give prompt
notice thereof to the Lenders.  The
Administrative Agent shall (subject to Section 11.1) take such
action with respect to such Default as shall be directed by the Required
Lenders; provided, that unless and until the Administrative Agent
shall have received such directions, the Administrative Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default as it shall deem advisable in the best interest of the
Lenders except to the extent that this Agreement expressly requires that such
action be taken, or not be taken, only with the consent or upon the authorization
of the Required Lenders or all Lenders.

 

ARTICLE XI

MISCELLANEOUS PROVISIONS

 

SECTION 11.1.  Waivers, Amendments, etc.  The provisions of this Agreement and of each
other Loan Document may from time to time be amended, modified or waived, if
such amendment, modification or waiver is in writing and consented to by the
Borrower and the Required Lenders; provided, however, that no
such amendment, modification or waiver shall:

 

(a)                                  modify
this Section 11.1 without the consent of all Lenders;

 

(b)                                 increase
the aggregate amount of any Lender’s Percentage of any Commitment Amount,
increase the aggregate amount of any Loans to be made by a Lender pursuant to
its Commitments, extend the Revolving Commitment Termination Date of Credit
Extensions made (or participated in) by a Lender or reduce any fees described
in Article III payable to any Lender without the consent of such
Lender;

 

(c)                                  extend
the final Stated Maturity Date for any Lender’s Loan, or reduce the principal
amount of or rate of interest on any Lender’s Loan or extend the date on which
scheduled payments of principal, or payments of interest or fees are payable in
respect of any Lender’s Loans, in each case, without the consent of such Lender
(it being understood and agreed, however, that any vote to rescind any
acceleration made pursuant to Section 9.2 and Section 9.3
of amounts owing with respect to the Loans and other Obligations shall only
require the vote of the Required Lenders);

 

(d)                                 reduce
the percentage set forth in the definition of “Required Lenders” or any
requirement hereunder that any particular action be taken by all Lenders
without the consent of all Lenders;

 

82

 

(e)                                  increase
the Stated Amount of any Letter of Credit or extend the Stated Expiry Date of
any Letter of Credit to a date which is subsequent to the Revolving Loan
Commitment Termination Date, in each case, unless consented to by the Issuer of
such Letter of Credit;

 

(f)                                    except
as otherwise expressly provided in this Agreement or another Loan Document,
release (i) any Guarantor from its obligations under a Guaranty other than in
connection with a Disposition of all or substantially all of the Capital
Securities of such Guarantor in a transaction permitted by Section 7.2.9
as in effect from time to time or (ii) all or substantially all of the
collateral under the Loan Documents, in either case without the consent of all
Lenders;

 

(g)                                 change
any of the terms of clause (c) of Section 2.1.4 or Section 2.3.2
without the consent of the Swing Line Lender; or

 

(h)                                 affect
adversely the interests, rights or obligations of the Administrative Agent (in
its capacity as the Administrative Agent), the Syndication Agent (in its
capacity as the Syndication Agent) or any Issuer (in its capacity as Issuer),
unless consented to by the Administrative Agent, the Syndication Agent or such
Issuer, as the case may be.

 

No failure or delay on
the part of the Administrative Agent, the Syndication Agent, any Issuer or any
Lender in exercising any power or right under this Agreement or any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power or right preclude any other or further exercise
thereof or the exercise of any other power or right.  No notice to or demand on the Borrower or any other Obligor in
any case shall entitle it to any notice or demand in similar or other
circumstances.  No waiver or approval by
the Administrative Agent, the Syndication Agent, any Issuer or any Lender under
this Agreement or any other Loan Document shall, except as may be otherwise
stated in such waiver or approval, be applicable to subsequent
transactions.  No waiver or approval
hereunder shall require any similar or dissimilar waiver or approval thereafter
to be granted hereunder.

 

SECTION 11.2.  Notices.  All notices and other communications provided to any party hereto
under this Agreement or any other Loan Document shall be in writing or by
facsimile and addressed, delivered or transmitted to such party at its address
or facsimile number set forth on Schedule III hereto or set forth
in the Lender Assignment Agreement or at such other address or facsimile number
as may be designated by such party in a notice to the other parties.  Any notice, if mailed and properly addressed
with postage prepaid or if properly addressed and sent by pre-paid courier
service, shall be deemed given when received; any notice, if transmitted by
facsimile, shall be deemed given when transmitted (telephonic confirmation in
the case of facsimile).

 

SECTION 11.3.  Payment of Costs and Expenses.  The Borrower agrees to pay on demand all
reasonable expenses of the Administrative Agent (including the reasonable fees
and out-of-pocket expenses of Mayer, Brown, Rowe & Maw LLP, special New
York counsel to the Administrative Agent and of local counsel, if any, who may
be retained by counsel to the Administrative Agent) in connection with:

 

83

 

(a)                                  the
syndication by the Agents of the Loans, the negotiation, preparation, execution
and delivery of this Agreement and of each other Loan Document, including
schedules and exhibits, and any amendments, waivers, consents, supplements or
other modifications to this Agreement or any other Loan Document as may from
time to time hereafter be required, whether or not the transactions
contemplated hereby are consummated;

 

(b)                                 the
filing, recording, refiling or rerecording of each Mortgage, each Pledge
Agreement and each Security Agreement and/or any Uniform Commercial Code financing
statements or other instruments relating thereto and all amendments,
supplements and modifications to any thereof and any and all other documents or
instruments of further assurance required to be filed or recorded or refiled or
rerecorded by the terms hereof or of such Mortgage, Pledge Agreement or
Security Agreement; and

 

(c)                                  the
preparation and review of the form of any document or instrument relevant to
this Agreement or any other Loan Document.

 

The Borrower further
agrees to pay, and to save each Agent, the Issuer and the Lenders harmless from
all liability for, any stamp or other similar taxes which may be payable in
connection with the execution or delivery of this Agreement, the Credit
Extensions made hereunder, or the issuance of the Notes and Letters of Credit
or any other Loan Documents.  The
Borrower also agrees to reimburse the Administrative Agent, the Issuer and each
Lender upon demand for all reasonable out-of-pocket expenses (including attorneys’
fees and legal expenses) incurred by the Administrative Agent, the Issuer or
such Lender in connection with (x) the negotiation of any restructuring or
“work-out”, whether or not consummated, of any Obligations and (y) the
enforcement of any Obligations.

 

SECTION 11.4.  Indemnification.  In consideration of the execution and
delivery of this Agreement by each Lender and the extension of the Commitments,
the Borrower hereby indemnifies, exonerates and holds the Administrative Agent,
the Syndication Agent, the Issuer and each Lender and each of their respective
Affiliates, and each of their respective partners, officers, directors,
employees and agents, and each other Person controlling any of the foregoing
within the meaning of either Section 15 of the Securities Act of 1933, as
amended, or Section 20 of the Securities Exchange Act of 1934, as amended
(collectively, the “Indemnified Parties”), free and harmless from and
against any and all actions, causes of action, suits, losses, costs,
liabilities and damages, and expenses actually incurred in connection therewith
(irrespective of whether any such Indemnified Party is a party to the action
for which indemnification hereunder is sought), including reasonable attorneys’
fees and disbursements (collectively, the “Indemnified Liabilities”),
incurred by the Indemnified Parties or any of them as a result of, or arising
out of, or relating to

 

(a)                                  any
transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of any Credit Extension;

 

(b)                                 the
entering into and performance of this Agreement and any other Loan Document by
any of the Indemnified Parties (including any action brought by or on

 

84

 

behalf of the Borrower as the result of any determination by the Required
Lenders pursuant to Article V not to make any Credit Extension);

 

(c)                                  any
investigation, litigation or proceeding related to any acquisition or proposed
acquisition by the Borrower or any of its Subsidiaries of all or any portion of
the stock or assets of any Person, whether or not the Administrative Agent, the
Syndication Agent, the Issuer or such Lender is party thereto;

 

(d)                                 any
investigation, litigation or proceeding related to any environmental cleanup,
audit, compliance or other matter relating to the protection of the environment
or the Release by the Borrower or any of its Subsidiaries of any Hazardous
Material;

 

(e)                                  the
presence on or under, or the escape, seepage, leakage, spillage, discharge,
emission, discharging or releases from, any real property owned or operated by
the Borrower or any Subsidiary thereof of any Hazardous Material present on or
under such property in a manner giving rise to liability at or prior to the
time the Borrower or such Subsidiary owned or operated such property (including
any losses, liabilities, damages, injuries, costs, expenses or claims asserted
or arising under any Environmental Law), regardless of whether caused by, or
within the control of, the Borrower or such Subsidiary; or

 

(f)                                    each
Lender’s Environmental Liability (the indemnification herein shall survive
repayment of the Notes and any transfer of the property of the Borrower or any
of its Subsidiaries by foreclosure or by a deed in lieu of foreclosure for any
Lender’s Environmental Liability, regardless of whether caused by, or within
the control of, the Borrower or such Subsidiary);

 

except for any such
Indemnified Liabilities arising for the account of a particular Indemnified
Party by reason of the relevant Indemnified Party’s gross negligence or willful
misconduct.  The Borrower and its
permitted successors and assigns hereby waive, release and agree not to make
any claim, or bring any cost recovery action against, the Administrative Agent,
the Syndication Agent, the Issuer or any Lender under CERCLA or any state
equivalent, or any similar law now existing or hereafter enacted, except to the
extent arising out of the gross negligence or willful misconduct of any
Indemnified Party.  It is expressly
understood and agreed that to the extent that any of such Persons is strictly
liable under any Environmental Laws, the Borrower’s obligation to such Person
under this indemnity shall likewise be without regard to fault on the part of
the Borrower with respect to the violation or condition which results in liability
of such Person.  If and to the extent
that the foregoing undertaking may be unenforceable for any reason, the
Borrower hereby agrees to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law.

 

SECTION 11.5.  Survival.  The obligations of the Borrower under Sections 4.3, 4.4,
4.5, 4.6, 11.3 and 11.4, and the obligations of the
Lenders under Sections 4.8 and 10.1, shall in each case survive
any termination of this Agreement, the payment in full of all Obligations, the
termination or expiration of all Letters of Credit and the termination of all
Commitments.  The representations and
warranties made by the Borrower and each other Obligor in this Agreement

 

85

 

and in each other
Loan Document shall survive the execution and delivery of this Agreement and
each such other Loan Document.

 

SECTION 11.6.  Severability.  Any provision of this Agreement or any other
Loan Document which is prohibited or unenforceable in any jurisdiction shall,
as to such provision and such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or such Loan Document or affecting the validity or
enforceability of such provision in any other jurisdiction.

 

SECTION 11.7.  Headings.  The various headings of this Agreement and of each other Loan
Document are inserted for convenience only and shall not affect the meaning or
interpretation of this Agreement or such other Loan Document or any provisions
hereof or thereof.

 

SECTION 11.8.  Execution in Counterparts; Effectiveness.  This Agreement may be executed by the
parties hereto in several counterparts each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.  This Agreement shall become
effective when counterparts hereof executed on behalf of the Borrower, the
Agents and each Lender (or notice thereof satisfactory to the Administrative
Agent), shall have been received by the Administrative Agent.

 

SECTION 11.9.  Governing Law; Entire Agreement.  THIS AGREEMENT, THE NOTES AND EACH OTHER
LOAN DOCUMENT (OTHER THAN THE LETTERS OF CREDIT, TO THE EXTENT SPECIFIED BELOW
AND EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN A LOAN DOCUMENT), INCLUDING
PROVISIONS WITH RESPECT TO INTEREST, LOAN CHARGES AND COMMITMENT FEES, SHALL
EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF
THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND
5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).  EACH LETTER OF CREDIT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER
OF CREDIT, OR IF NO LAWS OR RULES ARE DESIGNATED, THE INTERNATIONAL STANDBY
PRACTICES (ISP98—INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NUMBER 590 (THE
“ISP RULES”)) AND, AS TO MATTERS NOT GOVERNED BY THE ISP RULES, THE
INTERNAL LAWS OF THE STATE OF NEW YORK. 
This Agreement and the other Loan Documents constitute the entire
understanding among the parties hereto with respect to the subject matter
hereof and thereof and supersede any prior agreements, written or oral, with
respect thereto.

 

SECTION 11.10.  Successors and Assigns.  This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that:

 

(a)                                  the
Borrower may not assign or transfer its rights or obligations hereunder without
the prior written consent of the Administrative Agent and all Lenders; and

 

86

 

(b)                                 the
rights of sale, assignment and transfer of the Lenders are subject to Section 11.11.

 

SECTION 11.11.  Sale and Transfer of Loans and Notes;
Participations in Loans and Notes. 
Each Lender may assign, or sell participations in, its Loans, Letters of
Credit and Commitments to one or more other Persons, on a non pro  rata
basis, in accordance with this Section 11.11.

 

SECTION 11.11.1.  Assignments.  Any Lender,

 

(a)                                  with
the written consents of the Borrower and the Administrative Agent (which
consents shall not be unreasonably delayed or withheld and which consent, in
the case of the Borrower, shall be deemed to have been given in the absence of
a written notice delivered by the Borrower to the Administrative Agent, on or
before the fifth Business Day after receipt by the Borrower of such Lender’s
request for such consent), may at any time assign and delegate to one or more
commercial banks or other financial institutions; and

 

(b)                                 with
notice to the Borrower and the Administrative Agent, but without the consent of
the Borrower or the Administrative Agent, may assign and delegate to any of its
Affiliates, Related Fund or to any other Lender,

 

(each Person described in
either of the foregoing clauses as being the Person to whom such assignment and
delegation is to be made, being hereinafter referred to as an “Assignee
Lender”), all or any fraction of such Lender’s total Loans, participations
in Letters of Credit and Letter of Credit Outstandings with respect thereto and
Commitments in a minimum aggregate amount of $1,000,000 or the then remaining
amount of a Lender’s type of Loan or Commitment; provided, however,
that (i) with respect to assignments of Revolving Loans, the assigning Lender
must assign a pro  rata portion of each of its Revolving Loan
Commitments, Revolving Loans and interest in Letters of Credit Outstandings,
(ii) the Administrative Agent, in its own discretion, or by instruction from
the Issuer, may refuse acceptance of an assignment of Revolving Loans and
Revolving Loan Commitments to a Person not satisfying long-term certificate of
deposit ratings published by S&P or Moody’s, of at least BBB- or Baa3, respectively,
or (unless otherwise agreed to by the Issuer), if such assignment would,
pursuant to any applicable laws, rules or regulations, be binding on the
Issuer, result in a reduced rate of return to the Issuer or require the Issuer
to set aside capital in an amount that is greater than that which is required
to be set aside for other Lenders participating in the Letters of Credit, and
(iii) such minimum assignment amounts shall not apply to assignments among
Lenders, their Affiliates and Related Funds; provided, further,
that any such Assignee Lender will comply, if applicable, with the provisions
contained in Section 4.6 and the Borrower, each other Obligor and
the Administrative Agent shall be entitled to continue to deal solely and
directly with such Lender in connection with the interests so assigned and
delegated to an Assignee Lender until

 

(i)                                     written
notice of such assignment and delegation, together with payment instructions,
addresses and related information with respect to such Assignee Lender, shall
have been given to the Borrower and the Administrative Agent by such Lender and
such Assignee Lender;

 

87

 

(ii)                                  such
Lender and such Assignee Lender shall have executed and delivered to the
Borrower and the Administrative Agent a Lender Assignment Agreement, accepted
by the Administrative Agent; and

 

(iii)                               the processing fees
described below shall have been paid.

 

From and after the date
that the Administrative Agent accepts such Lender Assignment Agreement and
records the information contained therein in the Register pursuant to
Section 11.11.3, (x) the Assignee Lender thereunder shall be deemed
automatically to have become a party hereto and to the extent that rights and
obligations hereunder have been assigned and delegated to such Assignee Lender
in connection with such Lender Assignment Agreement shall have the rights and
obligations of a Lender hereunder and under the other Loan Documents, and
(y) the assignor Lender, to the extent that rights and obligations
hereunder have been assigned and delegated by it in connection with such Lender
Assignment Agreement, shall be released from its obligations hereunder and
under the other Loan Documents.  Within
ten Business Days after its receipt of notice that the Administrative Agent has
received an executed Lender Assignment Agreement, the Borrower shall execute
and deliver to the Administrative Agent (for delivery to the relevant Assignee
Lender), to the extent required by the Assignee Lender, new Notes evidencing
such Assignee Lender’s assigned Loans and Commitments and, if the assignor
Lender has retained Loans and Commitments hereunder, replacement Notes in the
principal amount of the Loans and Commitments, as the case may be, retained by
the assignor Lender hereunder (such Notes to be in exchange for, but not in
payment of, those Notes, then held by such assignor Lender).  Each such Note shall be dated the date of
the predecessor Notes.  The assignor
Lender shall mark the predecessor Notes “exchanged” and deliver them to the
Borrower.  Accrued interest on that part
of the predecessor Notes evidenced by the new Notes and accrued fees, shall be
paid as provided in the Lender Assignment Agreement.  Accrued interest on that part of the predecessor Notes evidenced
by the replacement Notes shall be paid to the assignor Lender.  Accrued interest and accrued fees shall be
paid at the same time or times provided in the predecessor Notes and in this
Agreement.  Such assignor Lender or such
Assignee Lender must also pay a processing fee to the Administrative Agent upon
delivery of any Lender Assignment Agreement, in the amount of $3,500, unless
such assignment and delegation is by a Lender to its Affiliate or if such
assignment and delegation is by a Lender to the Federal Reserve Bank or other
creditor, as provided below; provided however that for purposes of
paying such processing fee, same-day assignments to Affiliates and/or Related
Funds of a Lender shall be treated as a single assignment.  Any attempted assignment and delegation not
made in accordance with this Section 11.11.1 shall be null and
void.

 

Notwithstanding any other
term of this Section 11.11.1, the agreement of the Swing Line
Lender to provide the Swing Line Loan Commitment shall not impair or otherwise
restrict in any manner the ability of the Swing Line Lender to make any
assignment of its Loans or Commitments, it being understood and agreed that the
Swing Line Lender may terminate its Swing Line Loan Commitment, to the extent
such Swing Line Commitment would exceed its Revolving Loan Commitment after
giving effect to such assignment, in connection with the making of any
assignment.  Nothing contained in this Section 11.11.1
shall restrict or prohibit any Lender from pledging its rights (but not its
obligations to make Loans) under this Agreement and/or its Loans and/or its
Notes hereunder to a Federal Reserve Bank (or in the case of a Lender which is
a fund, to the trustee of, or other Eligible Institution affiliated with,  such fund for the

 

88

 

benefit of its investors)
or other creditor in support of borrowings made by such Lender from such
Federal Reserve Bank or other creditor.

 

In the event that S&P
or Moody’s shall, after the date that any Lender with a Commitment to make
Revolving Loans or participate in Letters of Credit or Swing Line Loans becomes
a Lender, downgrade the long-term certificate of deposit rating or long-term
senior unsecured debt rating of such Lender, and the resulting rating shall be
below BBB- or Baa3, then each of the Issuer and (if different) the Swing Line
Lender shall have the right, but not the obligation, upon notice to such Lender
and the Administrative Agent, to replace such Lender with an Assignee Lender in
accordance with and subject to the restrictions contained in this Section, and
such Lender hereby agrees to transfer and assign without recourse (in
accordance with and subject to the restrictions contained in this Section) all
its interests, rights and obligations in respect of its Revolving Loan
Commitment under this Agreement to such Assignee Lender; provided, however,
that (i) no such assignment shall conflict with any law, rule and
regulation or order of any governmental authority and (ii) such Assignee
Lender shall pay to such Lender in immediately available funds on the date of
such assignment the principal of and interest and fees (if any) accrued to the
date of payment on the Loans made, and Letters of Credit participated in, by
such Lender hereunder and all other amounts accrued for such Lender’s account
or owed to it hereunder.

 

SECTION 11.11.2.  Participations.

 

(a)                                  Any
Lender may at any time sell to one or more commercial banks or other
Persons (each of such commercial banks and other Persons being herein called a
“Participant”) participating interests in any of the Loans, Commitments,
or other interests of such Lender hereunder; provided, however,
that

 

(i)                                     no
participation contemplated in this Section shall relieve such Lender from
its Commitments or its other obligations hereunder or under any other Loan
Document;

 

(ii)                                  such
Lender shall remain solely responsible for the performance of its Commitments
and such other obligations;

 

(iii)                               each Borrower and each
other Obligor and the Administrative Agent shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement and each of the other Loan Documents;

 

(iv)                              no
Participant, unless such Participant is an Affiliate of such Lender, or Related
Fund or is itself a Lender, shall be entitled to require such Lender to take or
refrain from taking any action hereunder or under any other Loan Document,
except that such Lender may agree with any Participant that such Lender will
not, without such Participant’s consent, take any action of the type described
in clause (a), (b), (f) or, to the extent requiring the
consent of each Lender, clause (c) of Section 11.1; and

 

89

 

(v)                                 the
Borrower shall not be required to pay any amount under this Agreement that is
greater than the amount which it would have been required to pay had no
participating interest been sold.

 

The Borrower acknowledges
and agrees, subject to clause (v) above, that each Participant, for
purposes of Sections 4.3, 4.4, 4.5, 4.6, 4.8,
4.9, 11.3 and 11.4, shall be considered a Lender.  Each Participant shall only be indemnified
for increased costs pursuant to Section 4.3, 4.5 or 4.6
if and to the extent that the Lender which sold such participating interest to
such Participant concurrently is entitled to make, and does make, a claim on
the Borrower for such increased costs. 
Any Lender that sells a participating interest in any Loan, Commitment
or other interest to a Participant under this Section shall indemnify and
hold harmless each Borrower and the Administrative Agent from and against any
taxes, penalties, interest or other costs or losses (including reasonable
attorneys’ fees and expenses) incurred or payable by the Borrower or the
Administrative Agent as a result of the failure of the Borrower or the
Administrative Agent to comply with its obligations to deduct or withhold any
taxes from any payments made pursuant to this Agreement to such Lender or the
Administrative Agent, as the case may be, which taxes would not have been
incurred or payable if such Participant had been a Non-U.S. Lender that was
entitled to deliver to the Borrower, the Administrative Agent or such Lender,
and did in fact so deliver, a duly completed and valid Form 1001 or 4224 (or
applicable successor form) entitling such Participant to receive payments under
this Agreement without deduction or withholding of any United States federal
taxes.

 

SECTION 11.11.3.  Register.  The Borrower hereby designates the Administrative Agent to serve
as the Borrower’s agent, and the Administrative Agent hereby accepts such
designation, solely for the purpose of this Section, to maintain a register
(the “Register”) on which the Administrative Agent will record each
Lender’s Commitment, the Loans made by each Lender and the Notes evidencing
such Loans, and each repayment in respect of the principal amount of the Loans
of each Lender and annexed to which the Administrative Agent shall retain a
copy of each Lender Assignment Agreement delivered to the Administrative Agent
pursuant to this Section.  Failure to
make any recordation, or any error in such recordation, shall not affect the
Borrower’s or any other Obligor’s Obligations in respect of such Loans or Notes.  The entries in the Register shall be conclusive,
in the absence of manifest error, and the Borrower, the Administrative Agent
and the Lenders shall treat each Person in whose name a Loan and related Note
is registered as the owner thereof for all purposes of this Agreement,
notwithstanding notice or any provision herein to the contrary.  A Lender’s Commitment and the Loans made
pursuant thereto and the Notes evidencing such Loans may be assigned or
otherwise transferred in whole or in part only by registration of such
assignment or transfer in the Register. 
Any assignment or transfer of a Lender’s Commitment or the Loans or the
Notes evidencing such Loans made pursuant thereto shall be registered in the
Register only upon delivery to the Administrative Agent of a Lender Assignment
Agreement duly executed by the assignor thereof.  No assignment or transfer of a Lender’s Commitment or Loans or
the Notes evidencing such Loans  shall
be effective unless such assignment or transfer shall have been recorded in the
Register by the Administrative Agent as provided in this Section.  No Lender Assignment Agreement shall be
effective until recorded in the Register. 
Upon its receipt of a Lender Assignment Agreement duly executed by the
assigning Lender, the Assignee Lender and any other Person whose consent or
acknowledgement is required pursuant to Section 11.11.1, the

 

90

 

Administrative
Agent shall promptly (i) accept such Lender Assignment Agreement and (ii)
record the information contained therein in the Register.

 

SECTION 11.12.  Other Transactions.  Nothing contained herein shall preclude the
Administrative Agent, the Issuer or any other Lender from engaging in any
transaction, in addition to those contemplated by this Agreement or any other
Loan Document, the Borrower or any of its Affiliates in which the Borrower or
such Affiliate is not restricted hereby from engaging with any other Person.

 

SECTION 11.13.  Forum Selection and Consent to
Jurisdiction.  ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, THE
SYNDICATION AGENT, THE LENDERS, ANY ISSUER OR THE BORROWER IN CONNECTION
HEREWITH OR THEREWITH SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS
OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT ANY
SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT THE ADMINISTRATIVE AGENT’S OPTION, IN THE COURTS OF ANY
JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.  THE BORROWER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE
WITHIN OR WITHOUT THE STATE OF NEW YORK AT THE ADDRESS FOR NOTICES
SPECIFIED IN SECTION 11.2. 
THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE
TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.  TO THE EXTENT THAT
THE BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, THE BORROWER HEREBY IRREVOCABLY WAIVES TO THE FULLEST
EXTENT PERMITTED BY LAW SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.

 

SECTION 11.14.  Waiver of Jury Trial.  THE ADMINISTRATIVE AGENT, THE SYNDICATION
AGENT, EACH LENDER, EACH ISSUER AND THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHTS IT
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, THE SYNDICATION AGENT, SUCH
LENDER, SUCH ISSUER OR THE BORROWER IN

 

91

 

CONNECTION
HEREWITH OR THEREWITH.  THE BORROWER
ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION
FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO
WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
ADMINISTRATIVE AGENT, THE SYNDICATION AGENT, EACH LENDER AND EACH ISSUER
ENTERING INTO THIS AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.

 

SECTION 11.15.  Confidentiality.  The Lenders shall hold all non-public
information obtained pursuant to or in connection with this Agreement or
obtained by such Lender based on a review of the books and records of the
Borrower or any of its Subsidiaries in accordance with their customary
procedures for handling confidential information of this nature, but may make
disclosure to any of their examiners, Affiliates, outside auditors, counsel and
other professional advisors or to any direct or indirect contractual
counterparty in swap agreements or such contractual counterparty’s professional
advisor (so long as such contractual counterparty or professional advisor to
such contractual counterparty agrees to be bound by the provisions of this
Section) in connection with this Agreement or as reasonably required by any
potential bona  fide transferee, participant or assignee, or in
connection with the exercise of remedies under a Loan Document, or as requested
by any governmental agency or representative thereof or pursuant to legal
process or to any quasi-regulatory authority (including the National
Association of Insurance Commissioners); provided, however, that

 

(a)                                  unless
specifically prohibited by applicable law or court order, each Lender shall
notify the Borrower of any request by any governmental agency or representative
thereof (other than any such request in connection with an examination of the
financial condition of such Lender by such governmental agency) for disclosure
of any such non-public information prior to disclosure of such information;

 

(b)                                 prior
to any such disclosure pursuant to this Section 11.15, each Lender
shall require any such potential transferee, participant and assignee receiving
a disclosure of non-public information to agree in writing

 

(i)                                     to
be bound by this Section 11.15; and

 

(ii)                                  to
require such Person to require any other Person to whom such Person discloses
such non-public information to be similarly bound by this Section 11.15;
and

 

(c)                                  except
as may be required by an order of a court of competent jurisdiction and to the
extent set forth therein, no Lender shall be obligated or required to return
any materials furnished by the Borrower or any Subsidiary.

 

Notwithstanding the foregoing paragraphs of this Section, any party to
this Agreement (and each Affiliate, director, officer, employee, agent or
representative of the foregoing or such Affiliate) may disclose to any and all
persons, without limitation of any kind, the tax treatment and tax structure of
the transactions contemplated herein and all materials of any kind (including
opinions or other tax analyses) that are provided to such party relating to
such tax treatment or

 

92

 

tax structure.  The
foregoing language is not intended to waive any confidentiality obligations
otherwise applicable under this Agreement except with respect to the
information and materials specifically referenced in the preceding sentence.  This authorization does not extend to
disclosure of any other information, including (a) the identity of participants
or potential participants in the transactions contemplated herein, (b) the
existence or status of any negotiations, or (c) any financial, business, legal
or personal information of or regarding a party or its affiliates, or of or
regarding any participants or potential participants in the transactions
contemplated herein (or any of their respective affiliates), in each case to
the extent such other information is not related to the tax treatment or tax
structure of the transactions contemplated herein.

 

SECTION 11.16.  Judgment Currency.  If, for the purpose of obtaining judgment in
any court, it is necessary to convert a sum due hereunder, under any Note or
under any other Loan Document in another currency into U.S. Dollars or into a
Foreign Currency, as the case may be, the parties hereto agree, to the fullest
extent that they may effectively do so, that the rate of exchange used shall be
that at which, in accordance with normal banking procedures, the applicable
Secured Party could purchase such other currency with U.S. Dollars or with such
Foreign Currency, as the case may be, in New York City, at the close of
business on the Business Day immediately preceding the day on which final
judgment is given, together with any premiums and costs of exchange payable in
connection with such purchase.

 

SECTION 11.17.  Release of
Security Interests.

 

(a)                                  Notwithstanding
anything to the contrary contained herein or in any other Loan Document, the
Administrative Agent is hereby irrevocably authorized by each Lender (without
requirement of notice to or consent of any Lender except as expressly required
by Section 11.1) to take any action requested by the Borrower
having the effect of releasing any collateral or guarantee obligations (i) to
the extent necessary to permit consummation of any transaction expressly
permitted by any Loan Document or that has been consented to in accordance with
Section 11.1 or (ii) under the circumstances described in paragraph
(b) below.

 

(b)                                 At
such time as the Loans, the Reimbursement Obligations and the other obligations
under the Loan Documents shall have been paid in full, the Commitments have
been terminated and no letters of Credit shall be outstanding, the collateral
shall be released from the Liens created by the Security Agreements, and the
Security Agreements and all obligations (other than those expressly stated to
survive such termination) of the Administrative Agent and each Obligor under
the Security Agreements shall terminate, all without delivery of any instrument
or performance of any act by any Person.

 

93

 

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

 

	
   

  	
  WEIGHT WATCHERS INTERNATIONAL,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE
  BANK OF NOVA SCOTIA, as

  Administrative Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CREDIT
  SUISSE FIRST BOSTON, acting through

  its Cayman Islands Branch, as Syndication Agent

  and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDERS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [INSERT
  NAME OF LENDER]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
							

 

94

 

SCHEDULE I

 

DISCLOSURE SCHEDULE

 

	
  ITEM 5.1.9  Lien Search
  Jurisdictions

  	
   

  
	
   

  	
   

  
	
  ITEM 6.1  Good Standing.

  	
   

  
	
   

  	
   

  
	
  ITEM 6.7  Litigation.

  	
   

  
	
   

  	
   

  
	
  Description of
  Proceeding

  	
   

  	
  Action or Claim
  Sought

  
	
   

  	
   

  	
   

  
	
  ITEM 6.8  Existing
  Subsidiaries.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ITEM 6.11  Employee
  Benefit Plans.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ITEM 6.12  Environmental
  Matters.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ITEM 7.2.2(c)  Ongoing
  Indebtedness.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Creditor

  	
   

  	
  Outstanding
  Principal Amount

  
	
   

  	
   

  	
   

  
	
  ITEM 7.2.5(a)  Ongoing
  Investments.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ITEM 7.2.11 Affiliate
  Transactions.

  	
   

  	
   

  
				

 

I-1

 

SCHEDULE II

 

COMMITMENTS AND
PERCENTAGES

 

II-1

 

SCHEDULE III

 

NOTICE INFORMATION,

DOMESTIC OFFICES AND LIBOR OFFICES

 

 

[On File with the Administrative Agent]

 

III-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00063-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00063-of-00352.parquet"}]]