Document:

Exhibit 10.4

 

CENTERPOINT PROPERTIES TRUST 2003 OMNIBUS

EMPLOYEE RETENTION AND INCENTIVE PLAN

 

SHARE
OPTION AGREEMENT

 

THIS SHARE OPTION
AGREEMENT (the “Agreement”) is dated as of March
08, 2005 between CenterPoint Properties Trust, a Maryland real estate investment
trust (the “Company”), and John S. Gates, Jr. (the “Optionee”).

 

This Agreement is
made pursuant to, and is governed by, the CenterPoint
Properties Trust 2003 Omnibus Employee Retention and Incentive Plan
(the “2003 Plan”).  Capitalized terms not
otherwise defined herein shall have the meanings set forth in the 2003 Plan or
in the Optionee’s Employment Agreement, where indicated.  The purpose of this Agreement is to establish
a written agreement evidencing an option granted in accordance with the terms
of the 2003 Plan.  In this Agreement, “shares”
means the Company’s Common Shares or other securities resulting from an
adjustment under Sections 1.5 and 6.2 of the 2003 Plan.

 

The parties agree
as follows:

 

1.                                      Grant
of Option.  The Company hereby grants
to the Optionee an option (the “Option”) to purchase 302,680 shares under the terms and conditions hereof.

 

2.                                      Term.  This Option shall terminate at the close of
business on the day before the tenth anniversary of the date of this Agreement.

 

3.                                      Price.   The
price of each share purchased by exercise of the Option is $$44.99.

 

4.                                      Partial
Exercise.  The Option, to the extent
exercisable under this agreement and the 2003 Plan, may be exercised in whole
or in part provided that the Option may not be exercised for less than 100
shares in any single transaction unless such exercise pertains to the entire
number of shares then covered by the Option.

 

5.                                      Exercise
Period.

 

(a)                                  Except
as otherwise provided in the 2003 Plan or in this Agreement, the Option shall become
exercisable as follows:

 

	
  Time Period

  	
   

  	
  Exercisable

  
	
  Prior to the
  first anniversary of the date of this Agreement

  	
   

  	
  None

  
	
  After the
  first anniversary of the date of this Agreement

  	
   

  	
  One Fifth

  
	
  After the
  second anniversary of the date of this Agreement

  	
   

  	
  Two Fifths

  
	
  After the
  third anniversary of the date of this Agreement

  	
   

  	
  Three Fifths

  
	
  After the
  fourth anniversary of the date of this Agreement

  	
   

  	
  Four fifths

  
	
  After the
  fifth anniversary of the date of this Agreement

  	
   

  	
  All

  

 

 

(b)                                 Notwithstanding
any provision in the Agreement or the 2003 Plan to the contrary and in
accordance with Section 7(d) of the Optionee’s Employment Agreement, this
Option shall fully vest on the Optionee’s Termination Date, as defined in
Section 2 of the Optionee’s Employment Agreement.

 

6.                                      Method
of Exercise.  The Option shall be
exercised by written notice by Optionee to the Company specifying the number of
shares that such person elects to purchase, accompanied by full payment, in
cash or current funds, for such shares.

 

7.                                      ISO
Treatment.  It is intended that the
Option shall qualify as an “incentive share option” as described in Section 422
of the Internal Revenue Code of 1986, as amended within the limitations
outlined in Section 2.5 of the 2003 Plan.

 

8.                                      Rights
of the Shareholder.  No person,
estate, or other entity will have the rights of a shareholder with respect to
shares subject to the Option until a certificate or certificates for these
shares have been delivered to the person exercising the Option.

 

9.                                      Rights
of the Company.  This Agreement does
not affect the Company’s right to take any corporate action, including its
right to recapitalize, reorganize or consolidate, issue bonds, notes or shares,
including preferred stock or options therefore, to dissolve or liquidate, or to
sell or transfer any part of its assets or business.

 

10.                               Taxes.  The Company may pay or withhold the amount of
any tax attributable to any shares deliverable under this Agreement, and the
Company may defer making delivery until it is indemnified to its satisfaction
for that tax.

 

11.                               Compliance
with Laws.  The option is
exercisable, and shares can be delivered under this Agreement, only in
compliance with all applicable federal and state laws and regulations,
including without limitation state and federal securities laws, and the rules
of all stock exchanges on which the shares are listed at any time.  The option may not be exercised and shares
may not be issued under this Agreement until the Company has obtained the
consent or approval of every regulatory body, federal or state, having
jurisdiction over such matters as the Committee deems advisable.  Each person or estate that acquired the right
to exercise an Option by bequest or inheritance may be required by the Committee
to furnish reasonable evidence of ownership of the Option as a condition to the
exercise of the Option.  In addition, the
Committee may require such consents and releases of taxing authorities as the
Committee deems advisable.

 

12.                               Share
Legends.  Any certificate issued to
evidence shares issued under the Option shall bear such legends and statements
as the committee deems advisable to assure compliance with all federal and
state laws and regulations.

 

2

 

13.                               No
Right of Employment.  Nothing in this
Agreement shall confer any right on an employee to continue in the employ of
the Company or shall interfere in any way with the right of the Company to
terminate such employee’s employment at any time.

 

14.                               Amendment
of Option.  The Company may alter,
amend, or terminate the Option only with the Optionee’s consent, except for
adjustments expressly provided by this Agreement or the 2003 Plan.

 

15.                               Miscellaneous.  This Agreement is subject to and controlled
by the 2003 Plan.  Any inconsistency between
this Agreement and said 2003 Plan shall be controlled by the 2003 Plan.  This Agreement is the final, complete, and
exclusive expression of the understanding between the parties and supersedes
any prior or contemporaneous agreement or representation, oral or written,
between them.  Modification of this
Agreement or waiver of a condition herein must be written and signed by the
party to be bound.  In the event that any
paragraph or provision of this Agreement shall be held to be illegal or
unenforceable, such paragraph or provision shall be severed from the Agreement
and the entire Agreement shall not fail on account thereof, but shall otherwise
remain in full force and effect.

 

16.                               Notices.  All notices and other communications required
or permitted under this Agreement shall be written, and shall be either
delivered personally or sent by registered or certified first-class mail,
postage prepaid and return receipt requested, or by telex or telecopier,
addressed as follows:  if to the Company,
to the Company’s principal office, and if to the Optionee or his successor, to
the address last furnished by such person to the Company.  Each such notice and communication delivered
personally shall be deemed to have been given when delivered.  Each such notice and communication given by
mail shall be deemed to have been given when it is deposited in the United
States mail in the manner specified herein, and each such notice and
communication given by telex or telecopier shall be deemed to have been given
when it is so transmitted and the appropriate answer back is received.  A party may change its address for the
purpose hereof by giving notice in accordance with the provisions of this
Section 16.

 

IN WITNESS
WHEREOF, each of the Optionee and the Company have executed this Agreement as
of the date first written above.

 

3

 

	
   

  	
  CENTERPOINT
  PROPERTIES TRUST

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
   Rockford O. Kottka

  	
   

  
	
   

  	
   

  	
  Rockford O. Kottka

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
  Chief
  Accounting Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  OPTIONEE

  
	
   

  	
   

  
	
   

  	
   

  	
    /s/  John S. Gates

  	
   

  
	
   

  	
   

  	
  John S. Gates, Jr.

  	
   

  
							

 

4

 

CENTERPOINT PROPERTIES TRUST

2003 OMNIBUS EMPLOYEE RETENTION AND INCENTIVE

PLAN

 

RESTRICTED SHARE AGREEMENT

 

THIS RESTRICTED
SHARE AGREEMENT (the “Agreement”) is dated as March
08, 2005 between CenterPoint Properties Trust, a Maryland real estate
investment trust (the “Company”), and John S. Gates, Jr. (the “Grantee”).

 

This Agreement is
made pursuant to, and is governed by, the CenterPoint Properties
Trust 2003 Omnibus Employee Retention and Incentive Plan (the “2003 Plan”).  Capitalized terms not otherwise defined
herein shall have the meanings set forth in the Plan or in the Grantee’s
Employment Agreement, where indicated. 
The purpose of this Agreement is to establish a written agreement
evidencing a grant of Restricted Shares made in accordance with the terms of
the Plan.  In this Agreement, “Restricted
Shares” means shares granted pursuant to this Agreement or other securities
resulting from an adjustment under Section 1.5 and 6.2 of the 2003 Plan.

 

The parties agree
as follows:

 

17.                               Grant
of Restricted Shares.  The Company
hereby grants to the Grantee 19,683
common shares (the “Shares”) under
the terms and conditions hereof.

 

18.                               Share
Price.  The share price of the Shares
is $44.99.

 

19.                               Performance
Goals.  As defined below in section
5(a).

 

20.                               Time
Goal.  Eight (8) years.

 

21.                               Vesting.   Except as otherwise provided in the 2003
Plan or in this Agreement, the Shares shall become vested as follows:

 

(a)                                  Achievement of Performance Goal.  Shares granted and not previously
vested or forfeited shall vest as detailed below: at the close of business on
the last day of a period commencing at least two years after the date of this
award and:

 

•                                          20% of the shares – At the close of business
on the last day of a period commencing at least two years after the date of
this award and including 60 consecutive trading days such that the average
total shareholder return for such trading days equals or exceeds 30%.

 

 

•                                          20% of the shares – At the close of business
on the last day of a period commencing at least two years after the date of
this award and including 60 consecutive trading days such that the average
total shareholder return for such trading days equals or exceeds 40%.

•                                          20% of the shares – At the close of business
on the last day of a period commencing at least two years after the date of
this award and including 60 consecutive trading days such that the average
total shareholder return for such trading days equals or exceeds 50%.

•                                          20% of the shares – At the close of business
on the last day of a period commencing at least two years after the date of
this award and including 60 consecutive trading days such that the average
total shareholder return for such trading days equals or exceeds 60%.

•                                          20% of the shares – At the close of business
on the last day of a period commencing at least two years after the date of
this award and including 60 consecutive trading days such that the average
total shareholder return for such trading days equals or exceeds 70%.

 

Total shareholder return means, with respect to each award, a fraction
the numerator of which shall be the cumulative share price appreciation (the
difference between (i) the share price of the Company’s common shares on the
date of any determination thereof plus the aggregate amount of cash
distributions per share for the period commencing on the date of this award and
ending on the date of any such determination and (ii) the price of the Shares
on the date of this award) and the denominator of which shall be the price of
the Shares on the date of this award.

 

(b)                                 Time Goal.   Shares not previously vested or forfeited
shall become fully vested at the close of business on the eighth anniversary of
the date of this Agreement.

 

(c)                                  Optionee’s Termination Date.  Notwithstanding any provision in
the Agreement or the 2003 Plan to the contrary and in accordance with Section
7(d) of the Grantee’s Employment Agreement, the Shares granted pursuant to this
Agreement shall fully vest on the Grantee’s Termination Date, as defined in
Section 2 of the Grantee’s Employment Agreement..

 

22.                               Rights
of the Company.  This Agreement does
not affect the Company’s right to take any corporate action, including its
right to recapitalize, reorganize or consolidate, issue bonds, notes or stock,
including preferred stock or options therefore, to dissolve or liquidate, or to
sell or transfer any part of its assets or business.

 

 

23.                               Taxes.  The Company may pay or withhold the
amount of any tax attributable to any Shares deliverable under this Agreement
or dividends payable thereon, and the Company may defer making delivery or
payment until it is indemnified to its satisfaction for that tax.

 

24.                               Compliance
with Laws.  Shares can be delivered
under this Agreement only in compliance with all applicable federal and state
laws and regulations, including without limitation state and federal securities
laws, and the rules of all stock exchanges on which the common shares are
listed at any time.  Shares may not be
issued under this Agreement until the Company has obtained the consent or
approval of every regulatory body having jurisdiction over such matters as the
Company deems advisable.  Each person or
estate that acquired the right to receive shares by bequest or inheritance may
be required by the Company to furnish reasonable evidence of ownership of the
shares as a condition to their issuance.  
In addition, the Company may require such consents and releases of
taxing authorities as the Company deems advisable.

 

25.                               Stock
Legends.  Any certificate issued to
evidence the Shares issued shall bear such legends and statements as the
Company deems advisable to assure compliance with all federal and state laws
and regulations.

 

26.                               No
Right of Employment.  Nothing in this
Agreement shall confer any right on an employee to continue in the employ of
the Company or shall interfere in any way with the right of the Company to
terminate such employee at any time.

 

27.                               Amendment
of Agreement.  The Company may alter,
amend, or terminate this Agreement only with the Grantee’s consent, except for
adjustments expressly provided by this Agreement.

 

28.                               Miscellaneous.  This Agreement is subject to and controlled
by the 2003 Plan.  In the case of any
inconsistency between this Agreement and the 2003 Plan, the terms of the 2003
Plan shall govern.  This Agreement is the
final, complete, and exclusive expression of the understanding between the
parties and supersedes any prior
or contemporaneous agreement or representation, oral or written, between
them.  Modification of this Agreement or
waiver of a condition herein must be written and signed by the party to be
bound.  In the event that any paragraph
or provision of this Agreement shall be held to be illegal or unenforceable, such
paragraph or provision shall be severed from the Agreement and the entire
Agreement shall not fail on account thereof, but shall otherwise remain in full
force and effect.

 

29.                               Notices.  All notices and other communications
required or permitted under this Agreement shall be written, and shall be
either delivered personally or sent by registered or certified first-class
mail, postage prepaid and return receipt requested, or by telex or telecopy,
addressed as follows: if to the Company, to the Company’s principal office,
Attention: Mr. Rockford O. Kottka, and if to the Grantee or his successor, to
the address last furnished by such person to the Company.  Each such notice and communication delivered
personally shall be deemed to have been given when delivered.  Each such

 

 

notice and
communication given by mail shall be deemed to have been given when it is
deposited in the United States mail in the manner specified herein, and each
such notice and communication given by telex or telecopy shall be deemed to
have been given when it is so transmitted and the appropriate confirmation is
received.  A party may change its address
for record purposes by giving notice in accordance with the provisions of this
Section 13.

 

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

 

	
   

  	
  CENTERPOINT
  PROPERTIES TRUST

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
    /s/
   Rockford O. Kottka

  	
   

  
	
   

  	
   

  	
  Rockford O. Kottka

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
  Chief
  Accounting Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GRANTEE

  
	
   

  	
   

  
	
   

  	
     /s/  John S. Gates

  	
   

  
	
   

  	
   Print
  name:  John S. Gates, Jr.

  	
   

  
						

 

 

CENTERPOINT PROPERTIES TRUST

 

STOCK OPTION AGREEMENT

 

THIS STOCK OPTION AGREEMENT (the “Agreement”) is dated as of January 1,
2005 between CenterPoint Properties Trust, a Maryland real estate investment
trust (the “Company”), and John S. Gates, Jr. (the “Optionee”).

 

This Agreement is made pursuant to, and is governed by, the
CenterPoint Properties Trust 2003 Omnibus Employee Retention and Incentive Plan
(the “2003 Plan”). 
Capitalized terms not otherwise defined herein shall have the meanings
set forth in the Plan.  The purpose of
this Agreement is to establish a written agreement evidencing an option granted
in accordance with the terms of the Plan. 
In this Agreement, “shares” means shares of the Company’s Common Stock
or other securities resulting from an adjustment under Article 8 of the Plan.

 

The parties agree as follows:

 

1.                                      Grant
of Option.  The Company hereby grants
to the Optionee an option (the “Option”) to purchase 4,875 shares under the
terms and conditions hereof.

 

2.                                      Term.  The Option
becomes exercisable and terminates in accordance with the schedule set forth in
Section 5 hereof; provided, however, that in the event employment of the
Optionee with the Company or a Subsidiary terminates for any reason, the Option
shall terminate in accordance with the provisions of Section 7.2 of the Plan.

 

3.                                      Price.   The
price of each share purchased by exercise of the Option is $ 44.10.

 

4.                                      Partial
Exercise.  The Option, to the extent
exercisable under Section 5 hereof, may be exercised in whole or in part
provided that the Option may not be exercised for less than 100 shares in any
single transaction unless such exercise pertains tot he entire number of shares
then covered by the Option.

 

5.                                      Exercise
Period.

 

(a)                                  Except
as otherwise provided in the Plan or in this Agreement, the Option shall become
exercisable as follows:

 

	
  Time Period

  	
   

  	
  Exercisable

  
	
  Prior to the
  first anniversary of the date of this Agreement

  	
   

  	
  None

  
	
  After the
  first anniversary of the date of this Agreement

  	
   

  	
  One-fifth

  
	
  After the
  second anniversary of the date of this Agreement

  	
   

  	
  Two-fifths

  
	
  After the
  third anniversary of the date of this Agreement

  	
   

  	
  Three-fifths

  
	
  After the
  fourth anniversary of the date of this Agreement

  	
   

  	
  Four-fifths

  
	
  After the
  fifth anniversary of the date of this Agreement

  	
   

  	
  All

  

 

 

(b)                                 If
it has not previously terminated pursuant to the terms of the Plan or this
Agreement, the Option shall terminate at the close of business on the day
before the tenth anniversary of the date of this Agreement.

 

6.                                      Method of Exercise. 
The Option shall be exercised by written notice by Optionee to the
Company specifying the number of shares that such person elects to purchase,
accompanied by full payment, in cash or current funds, for such shares.

 

7.                                      ISO
Treatment.  It is intended that the
Option shall qualify as an “incentive stock option” as described in Section 422
of the Internal Revenue Code of 1986, as amended.

 

8.                                      Rights
of Stockholder.  No person, estate,
or other entity will have the rights of a stockholder with respect to shares
subject to the Options until a certificate or certificates for these shares
have been delivered to the person exercising the option.

 

9.                                      Rights
of the Company.  This Agreement does
not affect the Company’s right to take any corporate action, including other
changes in its right to recapitalize, reorganize or consolidate, issue bonds,
notes or stock, including preferred stock or options therefore, to dissolve or
liquidate, or to sell or transfer any part of its assets or business.

 

10.                               Changes
in Capitalization.  Upon the
occurrence of an event described in Section 8.1(a) of the Plan, the Committee
shall make the adjustments specified in Section 8.1(b) of the Plan.

 

11.                               Taxes.  The company, if necessary or desirable, may
pay or withhold the amount of any tax attributable to any shares deliverable
under this Agreement, and the company may defer making delivery until it is
indemnified to its satisfaction for that tax.

 

12.                               Compliance
with Laws.  Options are exercisable,
and shares can be delivered under this Agreement, only in compliance with all
applicable federal and state laws and regulations, including without limitation
state and federal securities laws, and the rules of all stock exchanges on
which the Common Stock is listed at any time. 
Options may not be exercised and shares may not be issued under this
Agreement until the Company has obtained the consent or approval of every
regulatory body, federal or state, having jurisdiction over such matters as the
Committee deems advisable.  Each person
or estate that acquired the right to exercise an Option by bequest or
inheritance may be required by the Committee to furnish reasonable evidence of
ownership of the Option as a condition to the exercise of the Option.  In addition, the Committee may require such
consents and releases of taxing authorities as the Committee deems advisable.

 

 

13.                               Stock
Legends.  Any certificate issued to
evidence shares issued under the Option shall bear such legends and statements
as the committee deems advisable to assure compliance with all federal and
state laws and regulations.

 

14.                               Assignability.  The Option shall not be transferable other
than by will or the laws of descent and distribution.  G the Optionee’s lifetime, the Option shall
be exercisable only by the Optionee, except as otherwise provided herein.  The Option shall be transferable, on the
Optionee’s death, to the Optionee’s estate and shall be exercisable, during the
Optionee’s lifetime, by the Optionee’s guardian or legal representative.

 

15.                               No
Right of Employment.  Nothing in this
Agreement shall confer any right on an employee to continue in the employ of
the Company or shall interfere in any way with the right of the Company to
terminate such employee’s employment at any time.

 

16.                               Amendment
of Option.  The Company may alter,
amend, or terminate the Option only with the Optionee’s consent, except for
adjustments expressly provided by this Agreement.

 

17.                               Choice
of Law.  The provisions of Section
9.6 of the Plan, concerning choice of law, shall govern this Agreement.

 

18.                               Miscellaneous.  This Agreement is subject to and controlled
by the Plan.  Any inconsistency between
this Agreement and said Plan shall be controlled by the Plan.  This Agreement is the final, complete, and
exclusive expression of the understanding between the parties and supersedes
any prior or contemporaneous agreement or representation, oral or written,
between them.  Modification of this
Agreement or waiver of a condition herein must be written and signed by the
party to be bound.  In the event that any
paragraph or provision of this Agreement shall be held to be illegal or
unenforceable, such paragraph or provision shall be severed from the Agreement
and the entire Agreement shall not fail on account thereof, but shall otherwise
remain in full force and effect.

 

19.                               Notices.  All notices and other communications required
or permitted under this Agreement shall be written, and shall be either
delivered personally or sent by registered or certified first-class mail,
postage prepaid and return receipt requested, or by telex or telecopier,
addressed as follows:  if to the Company,
to the Company’s principal office, and if to the Optionee or his successor, to
the address last furnished by such person to the Company.  Each such notice and communication delivered
personally shall be deemed to

 

 

have been
given when delivered.  Each such notice
and communication given by mail shall be deemed to have been given when it is
deposited in the United States mail in the manner specified herein, and each
such notice and communication given by telex or telecopier shall be deemed to
have been given when it is so transmitted and the appropriate answer back is
received.  A party may change its address
for the purpose hereof by giving notice in accordance with the provisions of
this Section 19.

 

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

 

	
   

  	
   

  	
  CENTERPOINT
  PROPERTIES TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/
  Rockford O. Kottka

  	
   

  
	
   

  	
   

  	
   Rockford
  O. Kottka

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  Chief
  Accounting Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  30.

  	
   

  	
  GRANTEE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ John S. Gates

  	
   

  
	
   

  	
   

  	
  Printed
  Name: John S. Gates, Jr.

  	
   

  
						

 

 

CENTERPOINT PROPERTIES
TRUST

 

2003 OMNIBUS EMPLOYEE RETENTION AND INCENTIVE PLAN

 

RESTRICTED
SHARE AGREEMENT

 

THIS RESTRICTED SHARE AGREEMENT (the “Agreement”)
is dated as January 1, 2005 between CenterPoint Properties Trust, a Maryland
real estate investment trust (the “Company”), and John S. Gates, Jr. (the “Grantee”).

 

This Agreement
is made pursuant to, and is governed by, the CenterPoint
Properties Trust 2003 Omnibus Employee Retention and Incentive Plan (the “2003 Plan”).  Capitalized terms not otherwise defined
herein shall have the meanings set forth in the Plan.  The purpose of this Agreement is to establish
a written agreement evidencing a grant of Restricted Shares made in accordance
with the terms of the Plan.  In this
Agreement, “Restricted Shares” means shares granted pursuant to this Agreement
or other securities resulting from an adjustment under Section 1.5 and 6.2 of
the 2003 Plan.

 

The parties agree as follows:

 

1.              Grant
of Restricted Shares.  The Company
hereby grants to the Grantee 487 Common Shares (the “Shares”)
under the terms and conditions hereof.

 

2.              Share
Price.  The share price of the Shares
is $ 44.10.

 

3.              Performance Goals.  As
defined below in section 5 (a).

 

4.              Time Goal.  Eight (8)
years.

 

5.              Vesting.   Except as otherwise provided in the 2003
Plan or in this Agreement, the Shares shall become vested as follows:

 

(a)                                  Achievement
of Performance Goal.  Shares granted and not previously vested or
forfeited shall vest as detailed below: at the close of business on the last
day of a period commencing at least two years after the date of this award and:

 

•                  20% of the shares – At the close of business
on the last day of a period commencing at least two years after the date of
this award and including 60 consecutive trading days such that the average
total shareholder return for such trading days equals or exceeds 30%.

•                  20% of the shares – At the close of business
on the last day of a period commencing at least two years after the date of
this award and including 60 consecutive trading days such that the average
total shareholder return for such trading days equals or exceeds 40%.

•                  20% of the shares – At the close of business
on the last day of a period commencing at least two years after the date of
this award and including 60 consecutive trading days

 

 

such that the average total shareholder return for such trading days
equals or exceeds 50%.

•                  20% of the shares – At the close of business
on the last day of a period commencing at least two years after the date of
this award and including 60 consecutive trading days such that the average
total shareholder return for such trading days equals or exceeds 60%.

•                  20% of the shares – At the close of business
on the last day of a period commencing at least two years after the date of
this award and including 60 consecutive trading days such that the average
total shareholder return for such trading days equals or exceeds 70%.

 

Total
shareholder return means, with respect to each award, a fraction the numerator
of which shall be the cumulative share price appreciation (the difference
between (i) the share price of the Company’s common shares on the date of any
determination thereof plus the aggregate amount of cash distributions per share
for the period commencing on the date of this award and ending on the date of
any such determination and (ii) the price of the Shares on the date of this
award) and the denominator of which shall be the price of the Shares on the
date of this award.

 

(b)                                 Change of Control. 
Shares not previously vested or forfeited shall become fully vested upon
a Change of Control as defined in the 2003 Plan.

 

(c)                                  Time Goal.   Shares
not previously vested or forfeited shall become fully vested at the close of
business on the eighth anniversary of the date of this Agreement.

 

6.              Rights
of the Company.  This Agreement does
not affect the Company’s right to take any corporate action, including its right
to recapitalize, reorganize or consolidate, issue bonds, notes or stock,
including preferred stock or options therefore, to dissolve or liquidate, or to
sell or transfer any part of its assets or business.

 

7.              Taxes.  The Company may pay or withhold the amount
of any tax attributable to any Shares deliverable under this Agreement or
dividends payable thereon, and the Company may defer making delivery or payment
until it is indemnified to its satisfaction for that tax.

 

8.              Compliance
with Laws.  Shares can be delivered
under this Agreement only in compliance with all applicable federal and state
laws and regulations, including without limitation state and federal securities
laws, and the rules of all stock exchanges on which the common shares are
listed at any time.  Shares may not be
issued under this Agreement until the Company has obtained the consent or
approval of every regulatory body having jurisdiction over such matters as the
Company deems advisable.  Each person or
estate that acquired the right to receive shares by bequest or inheritance may
be required by the Company to furnish reasonable evidence of ownership of the
shares as a condition to their issuance.  
In addition, the Company may require such consents and releases of
taxing authorities as the Company deems advisable.

 

9.              Stock
Legends.  Any certificate issued to
evidence the Shares issued shall bear such legends and statements as the
Company deems advisable to assure compliance with all federal and state laws
and regulations.

 

10.       No
Right of Employment.  Nothing in this
Agreement shall confer any right on an employee to continue in the employ of
the Company or shall interfere in any way with the right of the Company to
terminate such employee at any time.

 

14

 

11.       Amendment
of Agreement.  The Company may alter,
amend, or terminate this Agreement only with the Grantee’s consent, except for
adjustments expressly provided by this Agreement.

 

12.       Miscellaneous.  This Agreement is subject to and controlled
by the 2003 Plan.  In the case of any
inconsistency between this Agreement and the 2003 Plan, the terms of the 2003
Plan shall govern.  This Agreement is the
final, complete, and exclusive expression of the understanding between the
parties and supersedes any prior or
contemporaneous agreement or representation, oral or written, between
them.  Modification of this Agreement or
waiver of a condition herein must be written and signed by the party to be
bound.  In the event that any paragraph
or provision of this Agreement shall be held to be illegal or unenforceable,
such paragraph or provision shall be severed from the Agreement and the entire
Agreement shall not fail on account thereof, but shall otherwise remain in full
force and effect.

 

13.       Notices.  All notices and other communications
required or permitted under this Agreement shall be written, and shall be
either delivered personally or sent by registered or certified first-class
mail, postage prepaid and return receipt requested, or by telex or telecopy,
addressed as follows: if to the Company, to the Company’s principal office,
Attention: Mr. Rockford O. Kottka, and if to the Grantee or his successor, to
the address last furnished by such person to the Company.  Each such notice and communication delivered
personally shall be deemed to have been given when delivered.  Each such notice and communication given by
mail shall be deemed to have been given when it is deposited in the United
States mail in the manner specified herein, and each such notice and
communication given by telex or telecopy shall be deemed to have been given
when it is so transmitted and the appropriate confirmation is received.  A party may change its address for record
purposes by giving notice in accordance with the provisions of this Section 13.

 

 

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

	
  (a)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)

  
	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  CENTERPOINT
  PROPERTIES TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Rockford O.
  Kottka

  	
   

  
	
   

  	
   

  	
   Rockford
  O. Kottka

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
  Chief Accounting Officer

  	
   

  
					

 

15

 

	
  ()

  	
   

  	
  GRANTEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   /s/
  John S. Gates

  	
   

  
	
   

  	
   

  	
  Print name:
  John S. Gates, Jr.

  

 

16Exhibit
10.51

 

 

 

CREDIT AGREEMENT

 

Dated as of December 21, 2004

 

among

 

HERBALIFE INTERNATIONAL, INC.,

as Borrower,

 

HERBALIFE LTD.,

WH INTERMEDIATE HOLDINGS LTD.,

HBL LTD.,

WH LUXEMBOURG HOLDINGS S.à.R.L.,

HLF LUXEMBOURG HOLDINGS S.à R.L.,

WH CAPITAL CORPORATION,

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

 

THE SUBSIDIARY GUARANTORS PARTY HERETO,

as
Guarantors,

 

THE LENDERS PARTY HERETO,

 

RABOBANK INTERNATIONAL,

as Documentation Agent,

 

MERRILL LYNCH, PIERCE, FENNER & SMITH,
INCORPORATED,

as Syndication Agent,

 

MORGAN STANLEY SENIOR FUNDING, INC.

 

and

 

MERRILL LYNCH, PIERCE, FENNER & SMITH,
INCORPORATED,

as Joint Lead Arrangers and Joint Bookrunners,

 

MORGAN STANLEY SENIOR FUNDING, INC.,

as Administrative Agent

 

and

 

MORGAN STANLEY & CO. INCORPORATED, 

as Collateral Agent

 

 

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I Definitions

  	
   

  
	
  SECTION 1.01.

  	
  Defined Terms

  	
   

  
	
  SECTION 1.02.

  	
  Classification of Loans and Borrowings

  	
   

  
	
  SECTION 1.03.

  	
  Terms Generally

  	
   

  
	
  SECTION 1.04.

  	
  Accounting Terms; GAAP

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II The Credits

  	
   

  
	
  SECTION 2.01.

  	
  Commitments

  	
   

  
	
  SECTION 2.02.

  	
  Loans.

  	
   

  
	
  SECTION 2.03.

  	
  Borrowing
  Procedure

  	
   

  
	
  SECTION 2.04.

  	
  Evidence
  of Debt; Repayment of Loans

  	
   

  
	
  SECTION 2.05.

  	
  Fees.

  	
   

  
	
  SECTION 2.06.

  	
  Interest on Loans.

  	
   

  
	
  SECTION 2.07.

  	
  Termination and Reduction of Commitments.

  	
   

  
	
  SECTION 2.08.

  	
  Interest
  Elections.

  	
   

  
	
  SECTION 2.09.

  	
  Amortization
  of Term Borrowings.

  	
   

  
	
  SECTION 2.10.

  	
  Optional and Mandatory Prepayments of Loans.

  	
   

  
	
  SECTION 2.11.

  	
  Alternate
  Rate of Interest

  	
   

  
	
  SECTION 2.12.

  	
  Increased Costs.

  	
   

  
	
  SECTION 2.13.

  	
  Breakage Payments

  	
   

  
	
  SECTION 2.14.

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

  	
   

  
	
  SECTION 2.15.

  	
  Taxes.

  	
   

  
	
  SECTION 2.16.

  	
  Mitigation
  Obligations; Replacement of Lenders.

  	
   

  
	
  SECTION 2.17.

  	
  Letters
  of Credit.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III Representations and
  Warranties

  	
   

  
	
  SECTION 3.01.

  	
  Organization; Powers

  	
   

  
	
  SECTION 3.02.

  	
  Authorization; Enforceability

  	
   

  
	
  SECTION 3.03.

  	
  Governmental Approvals; No Conflicts

  	
   

  
	
  SECTION 3.04.

  	
  Financial Statements

  	
   

  
	
  SECTION 3.05.

  	
  Properties.

  	
   

  
	
  SECTION 3.06.

  	
  Equity Interests and Subsidiaries; Consent.

  	
   

  
	
  SECTION 3.07.

  	
  Litigation; Compliance with Laws.

  	
   

  
	
  SECTION 3.08.

  	
  Agreements.

  	
   

  
	
  SECTION 3.09.

  	
  Federal Reserve Regulations.

  	
   

  
	
  SECTION 3.10.

  	
  Investment Company Act; Public Utility Holding Company Act

  	
   

  
	
  SECTION 3.11.

  	
  Use of Proceeds

  	
   

  
	
  SECTION 3.12.

  	
  Taxes

  	
   

  
	
  SECTION 3.13.

  	
  No Material Misstatements

  	
   

  
	
  SECTION 3.14.

  	
  Labor Matters

  	
   

  
	
  SECTION 3.15.

  	
  Solvency

  	
   

  
	
  SECTION 3.16.

  	
  Employee Benefit Plans.

  	
   

  
	
  SECTION 3.17.

  	
  Environmental Matters.

  	
   

  
	
  SECTION 3.18.

  	
  Insurance

  	
   

  
	
  SECTION 3.19.

  	
  Security Documents.

  	
   

  
	
  SECTION 3.20.

  	
  Material Adverse Changes

  	
   

  

 

i

 

	
  ARTICLE IV Conditions of Lending

  	
   

  
	
  SECTION 4.01.

  	
  All Credit Extensions

  	
   

  
	
  SECTION 4.02.

  	
  Initial Credit Extension

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V Affirmative Covenants

  	
   

  
	
  SECTION 5.01.

  	
  Financial Statements, Reports, Etc.

  	
   

  
	
  SECTION 5.02.

  	
  Litigation and Other Notices

  	
   

  
	
  SECTION 5.03.

  	
  Existence; Businesses and Properties.

  	
   

  
	
  SECTION 5.04.

  	
  Insurance.

  	
   

  
	
  SECTION 5.05.

  	
  Taxes

  	
   

  
	
  SECTION 5.06.

  	
  Employee Benefits

  	
   

  
	
  SECTION 5.07.

  	
  Maintaining
  Records; Access to Properties and Inspections

  	
   

  
	
  SECTION 5.08.

  	
  Use
  of Proceeds

  	
   

  
	
  SECTION 5.09.

  	
  Compliance with Environmental Laws; Environmental Reports.

  	
   

  
	
  SECTION 5.10.

  	
  Interest Rate Protection

  	
   

  
	
  SECTION 5.11.

  	
  Additional
  Collateral; Additional Guarantors.

  	
   

  
	
  SECTION 5.12.

  	
  Security Interests; Further Assurances.

  	
   

  
	
  SECTION 5.13.

  	
  Know-Your-Customer Rules.

  	
   

  
	
  SECTION 5.14.

  	
  Leasehold Undertakings.

  	
   

  
	
  SECTION 5.15.

  	
  HIL Cash Balances

  	
   

  
	
  SECTION 5.16.

  	
  Post-Closing
  Matters

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI Negative Covenants

  	
   

  
	
  SECTION 6.01.

  	
  Indebtedness

  	
   

  
	
  SECTION 6.02.

  	
  Liens

  	
   

  
	
  SECTION 6.03.

  	
  Investments, Loans and Advances

  	
   

  
	
  SECTION 6.04.

  	
  Mergers, Consolidations, Sales and Purchases of Assets

  	
   

  
	
  SECTION 6.05.

  	
  Dividends

  	
   

  
	
  SECTION 6.06.

  	
  Transactions with Affiliates

  	
   

  
	
  SECTION 6.07.

  	
  Financial Covenants.

  	
   

  
	
  SECTION 6.08.

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

  	
   

  
	
  SECTION 6.09.

  	
  Limitation on Certain Restrictions on Subsidiaries

  	
   

  
	
  SECTION 6.10.

  	
  Limitation on Issuance of Capital Stock

  	
   

  
	
  SECTION 6.11.

  	
  Limitation on Creation of Subsidiaries

  	
   

  
	
  SECTION 6.12.

  	
  Sale and Leaseback Transactions

  	
   

  
	
  SECTION 6.13.

  	
  Holding Companies.

  	
   

  
	
  SECTION 6.14.

  	
  Business.

  	
   

  
	
  SECTION 6.15.

  	
  Limitation on Accounting Changes

  	
   

  
	
  SECTION 6.16.

  	
  Fiscal Year

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII Guarantee

  	
   

  
	
  SECTION 7.01.

  	
  The Guarantee

  	
   

  
	
  SECTION 7.02.

  	
  Obligations Unconditional

  	
   

  
	
  SECTION 7.03.

  	
  Reinstatement

  	
   

  
	
  SECTION 7.04.

  	
  Subrogation; Subordination

  	
   

  
	
  SECTION 7.05.

  	
  Remedies

  	
   

  
	
  SECTION 7.06.

  	
  Instrument for the Payment of Money

  	
   

  
	
  SECTION 7.07.

  	
  General Limitation on Guarantee Obligations

  	
   

  
	
  SECTION 7.08.

  	
  Continuing Guarantee

  	
   

  

 

ii

 

	
  SECTION 7.09.

  	
  Release of Guarantors

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII Events of Default

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX Collateral Account;
  Application of Collateral Proceeds

  	
   

  
	
  SECTION 9.01.

  	
  Collateral Account.

  	
   

  
	
  SECTION 9.02.

  	
  Proceeds of Casualty Events and Collateral
  Dispositions.

  	
   

  
	
  SECTION 9.03.

  	
  Application of Proceeds

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE X The Administrative Agent and
  the Collateral Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI Miscellaneous

  	
   

  
	
  SECTION 11.01.

  	
  Notices

  	
   

  
	
  SECTION 11.02.

  	
  Waivers; Amendment.

  	
   

  
	
  SECTION 11.03.

  	
  Expenses; Indemnity.

  	
   

  
	
  SECTION 11.04.

  	
  Successors and Assigns.

  	
   

  
	
  SECTION 11.05.

  	
  Survival of Agreement

  	
   

  
	
  SECTION 11.06.

  	
  Counterparts; Integration; Effectiveness

  	
   

  
	
  SECTION 11.07.

  	
  Severability

  	
   

  
	
  SECTION 11.08.

  	
  Right of Set-off

  	
   

  
	
  SECTION 11.09.

  	
  Governing Law; Jurisdiction; Consent to
  Service of Process.

  	
   

  
	
  SECTION 11.10.

  	
  WAIVER OF JURY TRIAL

  	
   

  
	
  SECTION 11.11.

  	
  Headings

  	
   

  
	
  SECTION 11.12.

  	
  Confidentiality

  	
   

  
	
  SECTION 11.13.

  	
  Interest Rate Limitation

  	
   

  
	
  SECTION 11.14.

  	
  USA Patriot Act Notice

  	
   

  
	
   

  	
   

  	
   

  
	
  ANNEXES

  	
   

  	
   

  
	
  Annex I

  	
  Amortization Table

  	
   

  
	
  Annex II

  	
  Lenders’ Notice Information and Commitments

  	
   

  
	
  Annex III

  	
  Limitations on Guarantees and Indemnities
  Under Applicable Foreign Laws

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULES

  	
   

  	
   

  
	
  Schedule 1.01(a)

  	
  Deposit Accounts

  	
   

  
	
  Schedule 1.01(b)

  	
  Immaterial Subsidiaries

  	
   

  
	
  Schedule 1.01(e)

  	
  Subsidiary Guarantors

  	
   

  
	
  Schedule 3.03

  	
  Governmental Approvals; Compliance with
  Laws

  	
   

  
	
  Schedule 3.05(b)

  	
  Real Properties

  	
   

  
	
  Schedule 3.06(a)

  	
  Subsidiaries; Non-Guarantor Subsidiaries

  	
   

  
	
  Schedule 3.07

  	
  Litigation

  	
   

  
	
  Schedule 3.08

  	
  Material Agreements

  	
   

  
	
  Schedule 3.18

  	
  Insurance

  	
   

  
	
  Schedule 4.02(g)

  	
  Local Counsel

  	
   

  
	
  Schedule 5.16

  	
  Post-Closing Matters

  	
   

  
	
  Schedule 6.01

  	
  Existing Indebtedness

  	
   

  
	
  Schedule 6.02

  	
  Existing Liens

  	
   

  
	
  Schedule 6.03

  	
  Existing Investments

  	
   

  

 

iii

 

	
  EXHIBITS

  	
   

  	
   

  
	
  Exhibit A

  	
  Form of Administrative Questionnaire

  	
   

  
	
  Exhibit B

  	
  Form of Assignment and Acceptance

  	
   

  
	
  Exhibit C

  	
  Form of Borrowing Request

  	
   

  
	
  Exhibit D

  	
  Form of Interest Election Request

  	
   

  
	
  Exhibit E-1

  	
  Form of Agreement and Estoppel Certificate

  	
   

  
	
  Exhibit E-2

  	
  Form of Landlord Lien Waiver and Access
  Agreement

  	
   

  
	
  Exhibit F

  	
  Form of U.S. Security Agreement

  	
   

  
	
  Exhibit G

  	
  Form of Intercompany Note

  	
   

  
	
  Exhibit H

  	
  Form of Joinder Agreement

  	
   

  
	
  Exhibit I-1

  	
  Form of Perfection Certificate

  	
   

  
	
  Exhibit I-2

  	
  Form of Perfection Certificate Supplement

  	
   

  
	
  Exhibit J-1

  	
  Form of Revolving Note

  	
   

  
	
  Exhibit J-2

  	
  Form of Term Note

  	
   

  
	
  Exhibit K

  	
  Form of Financial Officer’s Compliance
  Certificate

  	
   

  
	
  Exhibit L

  	
  Form of Financial Condition Certificate

  	
   

  
	
  Exhibit M

  	
  Form of Letter of Credit Request

  	
   

  
	
  Exhibit N

  	
  Form of Cost Sharing Agreement

  	
   

  
	
  Exhibit O

  	
  Form of License Agreement

  	
   

  
	
  Exhibit P

  	
  Form of
  Trademark License Agreement

  	
   

  

 

iv

 

CREDIT AGREEMENT

 

This CREDIT
AGREEMENT (as amended, restated, supplemented or otherwise modified from time
to time, this “Agreement”), dated
as of December 21, 2004, is among HERBALIFE INTERNATIONAL, INC., a Nevada
corporation (“Borrower”);
HERBALIFE LTD., a Cayman Islands exempted company with limited liability (“Holdings”); WH INTERMEDIATE HOLDINGS
LTD., a Cayman Islands exempted company with limited liability and a direct,
wholly-owned subsidiary of Holdings (“Parent”);
HBL LTD., a Cayman Islands exempted company with limited liability and a
direct, wholly-owned subsidiary of Parent ( “Cayman
III”); WH LUXEMBOURG HOLDINGS S.à.R.L., a Luxembourg
corporation and a direct, wholly-owned subsidiary of Parent (“Luxembourg Holdings”); HLF LUXEMBOURG
HOLDINGS, S.à.R.L., a Luxembourg corporation and a direct, wholly-owned
subsidiary of Luxembourg Holdings (“New Lux”);
WH CAPITAL CORPORATION, a Nevada corporation and a direct, wholly-owned
subsidiary of New Lux (“WH Capital”);
WH LUXEMBOURG INTERMEDIATE HOLDINGS S.à.R.L., a Luxembourg corporation and a
direct, wholly-owned subsidiary of WH Capital (“Luxembourg Intermediate Holdings”); EACH OF THE SUBSIDIARY
GUARANTORS LISTED ON THE SIGNATURE PAGES HERETO OR FROM TIME TO TIME BECOMING A
PARTY HERETO BY EXECUTION OF A JOINDER AGREEMENT (together with Holdings,
Parent, Cayman III, Luxembourg Holdings, New Lux, WH Capital, Luxembourg
Intermediate Holdings and each other Subsidiary Guarantor from time to time
executing a Guarantee (defined herein) as required hereunder, the “Guarantors”); THE LENDERS PARTY HERETO;
MORGAN STANLEY SENIOR FUNDING, INC. and MERRILL LYNCH, PIERCE, FENNER &
SMITH, INCORPORATED, as joint lead arrangers and joint bookrunners (in such
capacity, the “Arrangers”);
RABOBANK INTERNATIONAL, as Documentation Agent (in such capacity, the “Documentation Agent”); MERRILL LYNCH,
PIERCE, FENNER & SMITH, INCORPORATED, as Syndication Agent (in such
capacity, the “Syndication Agent”);
MORGAN STANLEY SENIOR FUNDING, INC., as administrative agent for the Lenders
(in such capacity, the “Administrative Agent”);
MORGAN STANLEY & CO. INCORPORATED, as collateral agent for the Secured
Parties (defined herein) (in such capacity, the “Collateral Agent”); and RABOBANK INTERNATIONAL, as Issuing
Bank.

 

WITNESSETH:

 

WHEREAS,
Borrower has requested that the Lenders extend certain credit facilities to
Borrower hereunder, the proceeds of which will used, together with the proceeds
to be received by Holdings, in connection with an initial public offering of
its common stock, pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the “IPO”) to (a)
repay all outstanding obligations under that certain Amended and Restated
Credit Agreement dated as of March 8, 2004 (as amended, amended and restated,
supplemented or otherwise modified as of the date hereof, the “Existing Credit Agreement”) among Borrower, the guarantors
party thereto, the lenders party thereto, Rabobank International, as
documentation agent, General Electric Capital Corporation, as syndication
agent, UBS Securities LLC, as arranger, and UBS AG, Stamford Branch, as
administrative agent and collateral agent (the “Refinancing”);
(b) fund a distribution to the pre-IPO equity holders of Holdings (the “Distribution”); (c) redeem (i) up
to all of the Senior Subordinated Notes (as defined herein) and (ii) 40% of the
Holdings Senior Notes (as defined herein) (collectively, the “Redemption” and, together with
the IPO, the Refinancing, the Distribution and all other transactions
contemplated hereby and in connection therewith, the “Transactions”); (d) repay the related fees and expenses
incurred in connection with the Transactions (collectively “Transaction Costs”); and (e) use for
ongoing working capital and general corporate purposes of Borrower and its
Subsidiaries, all subject to the terms and conditions contained herein;

 

1

 

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

 

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

 

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

 

ARTICLE I

 

Definitions

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Administrative Services Agreement” means
that certain Administrative Services Agreement dated as of October 1, 2003
between Herbalife International Luxembourg S.à.R.L. and Herbalife International
of America, Inc., as the same may be amended from time to time in accordance
with the provisions hereof.

 

2

 

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

 

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

 

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

 

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

 

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

 

“Applicable
Commitment Fee Percentage” means, for any day (i) for the first two
full quarters after the Closing Date an amount per
annum equal to 0.50% and (ii) for the period after the first two
full quarters, the Applicable Commitment Fee Percentage shall be determined by
reference to the Debt Rating and the Applicable Commitment Fee Percentage set
forth below; provided, in the
event of a split rating, the higher of such Debt Ratings shall be used to
determine the Applicable Commitment Fee Percentage, except that, if there is a
two tier difference in the Debt Ratings, the Debt Rating one notch higher than
the lower of the two Debt Ratings shall be used to determine the Applicable
Commitment Fee Percentage.

 

	
  Senior Credit

  Facilities Rating

  Moody’s/S&P

  	
   

  	
  Applicable Commitment

  Fee Percentage

  	
   

  
	
  $Ba1/BB+

  	
   

  	
  0.375

  	
  %

  
	
  <Ba1/BB+

  	
   

  	
  0.50

  	
  %

  

 

“Applicable Margin”
means (i) for the first two full quarters after the Closing Date (A)(I) 2.00%
in the case of Revolving Loans maintained as Eurodollar Loans and (II) 1.00% in
the case of Revolving Loans maintained as ABR Loans and (B)(I) 2.25% in the
case of Term Loans maintained as Eurodollar Loans and (II) 1.25% in the case of
Term Loans maintained as ABR Loans and (ii) for the period after the first two
full quarters, the Applicable Margin shall be determined by reference to the
Debt Rating and the Applicable Percentage set forth below; provided, in the event of a split rating,
the higher of such Debt Ratings shall be used to determine

 

3

 

the Applicable Margin, except that, if there is a two
tier difference in the Debt Ratings, the Debt Rating one notch higher than the
lower of the two Debt Ratings shall be used to determine the Applicable Margin.

 

	
  Senior Credit

  Facilities Rating

  Moody’s/S&P

  	
   

  	
  Applicable Percentage

  (Term Loans)

  	
   

  
	
   

  	
   

  	
  Eurodollar

  	
   

  	
  ABR

  	
   

  
	
  $Ba1/BB+

  	
   

  	
  2.00

  	
  %

  	
  1.00

  	
  %

  
	
  <Ba1/BB+

  	
   

  	
  2.25

  	
  %

  	
  1.25

  	
  %

  

 

	
  Senior Credit

  Facilities Rating

  Moody’s/S&P

  	
   

  	
  Applicable Percentage

  (Revolving Loans)

  	
   

  
	
   

  	
   

  	
  Eurodollar

  	
   

  	
  ABR

  	
   

  
	
  $Ba1/BB+

  	
   

  	
  1.75

  	
  %

  	
  0.75

  	
  %

  
	
  <Ba1/BB+

  	
   

  	
  2.00

  	
  %

  	
  1.00

  	
  %

  

 

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

 

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

 

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

 

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

 

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

 

“Base Rate” means, for any day, a rate per
annum that is from time to time published in the “Money Rates” section of
the Wall Street Journal as being the “Prime Rate” (or, if more than one rate is
published as the Prime Rate, then the highest of such rates).  The Base Rate will change as of the date of
publication in the Wall Street Journal of a Base Rate that is different from
that published on the preceding Business Day. 
In the event that The Wall Street Journal

 

4

 

shall, for any
reason, fail or cease to publish the Base Rate, Administrative Agent shall
choose a reasonably comparable index or source to use as the basis for the Base
Rate.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Cash Equivalent” means, as to any
person:  (a) securities issued or
directly, unconditionally and fully guaranteed or insured by the United States
or any agency or instrumentality thereof (provided
that, the full faith and credit of the United States is pledged in support
thereof) having maturities of not more than one year from the date of
acquisition by such person; (b) time deposits and certificates of deposit of
any Lender or any commercial bank having, or that is the principal banking
subsidiary of a bank holding company organized under the laws of the United
States, any state thereof or the District of Columbia having, capital and surplus aggregating in excess of $500
million with maturities of not more than one year from the date of acquisition
by such person; (c) repurchase obligations with a term of not more than 30 days
for underlying securities of the types described in clause (a) above
entered into with any bank meeting the qualifications specified in clause
(b) above; (d) commercial paper issued by any person incorporated in the
United States rated at least A-2 or the equivalent thereof by S&P or at
least P-2 or the equivalent thereof by Moody’s, and in each case maturing not
more than one year after the date of acquisition by such person; (e)
investments in money market or mutual funds substantially all of whose assets
are comprised of securities of the types described in clauses (a)
through (d) above; (f) demand deposit accounts (including the deposit
accounts identified on

 

5

 

Schedule 1.01(a)) maintained in the
ordinary course of business; (g) investments
in tax-exempt obligations of any state of the United States of America, or any
municipality of any such state, in each case rated “AA” or better by S&P, “Aa2” or better by Moody’s or an equivalent rating by any other credit
rating agency of recognized national standing, provided
that, such obligations mature within six months from the date of acquisition
thereof; and (h) investments in mutual funds or variable rate notes that
invest in tax exempt obligations of the types described in clause (g)
above.

 

“Casualty Event” means, with respect to any
property (including Real Property) of any person, any loss of title with
respect to such property or any loss of or damage to or destruction of, or any
condemnation or other taking (including by any Governmental Authority) of, such
property for which such person or any of its subsidiaries receives insurance
proceeds or proceeds of a condemnation award or other compensation.  “Casualty
Event” includes any taking of all or any part of any Real Property
of any person or any part thereof, in or by condemnation or other eminent
domain proceedings pursuant to any law, or by reason of the temporary
requisition of the use or occupancy of all or any part of any Real Property of
any person or any part thereof by any Governmental Authority, civil or
military.

 

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

 

A “Change in Control” is deemed to have
occurred if:  (a) Holdings at any time
ceases to own, directly or indirectly, 100% of the capital stock of Borrower
and each Guarantor (other than Holdings); (b) the Permitted Holders cease to
own, or to have the power to vote or direct the voting of, Voting Stock
representing at least 25% of the voting power of the total outstanding Voting
Stock; or (c) any “person” or “group” (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act), other than one or more Permitted Holders, is or
becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that for purposes of this clause (c) such person or
group is deemed to have “beneficial ownership” of all securities that any such
person or group has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of
Voting Stock representing more than 35% of the voting power of the total
outstanding Voting Stock; (d) a Change of Control (as defined in the Holdings
Senior Note Agreement) or a “change of control” or similar event, however
denominated shall occur under and as defined under any other indenture or
Material Agreement to which Borrower or any Subsidiary is a party; or (e)
during any period of two consecutive years, individuals who at the beginning of
such period constituted the Board of Directors of Holdings (together with any
new directors whose election to such Board of Directors or whose nomination for
election by the stockholders of Holdings was approved by a vote of at least a
majority of the directors of Holdings then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Board of Directors of Holdings.

 

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

 

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

 

6

 

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

 

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

 

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

 

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

 

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

 

“Commercial Letter of Credit” means any
letter of credit or similar instrument issued for the account of Borrower for
the benefit of Borrower or any of its Subsidiaries, for the purpose of
providing the primary payment mechanism in connection with the purchase of any
materials, goods or services by Borrower or any of its Subsidiaries in the
ordinary course of business of Borrower or such Subsidiaries.

 

“Commitment” means, with respect to any
Lender, such Lender’s Revolving Commitment.

 

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

 

“Commitment Letter” means the Commitment
Letter, dated November 5, 2004, among Herbalife International, Inc.,
Morgan Stanley Senior Funding, Inc. and Merrill Lynch, Pierce, Fenner &
Smith, Incorporated, as amended.

 

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

 

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

 

“Consolidated Companies” means Holdings and
its Consolidated Subsidiaries.

 

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

 

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

 

“Consolidated EBITDA” means, with respect to
any person for any period, Consolidated Net Income for such period, adjusted,
in each case only to the extent (and in the same proportion) deducted in
determining Consolidated Net Income, without duplication, by (x) adding thereto
(i) Consolidated Interest Expense, (ii) provision for taxes based on income,
(iii)

 

7

 

depreciation, (iv) amortization (including amortization of deferred
fees and the accretion of original issue discount), (v) all other noncash items
subtracted in determining Consolidated Net Income (including any noncash
compensation charge arising from any grant of stock, stock options or other
equity-based awards of such person or any of its Subsidiaries and noncash
losses or charges related to impairment of goodwill and other intangible assets
and excluding any noncash charge that results in an accrual of a reserve for
cash charges in any future period) for such period, (vi) nonrecurring expenses
and charges, (vii)  aggregate cash
payments made in respect of the Tax Indemnity not to exceed $15 million for any
fiscal year and (viii) Transactions Costs; and (y) subtracting therefrom the
aggregate amount of all noncash items, determined on a consolidated basis, to
the extent such items were added in determining Consolidated Net Income for
such period.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

8

 

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

 

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

 

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

 

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

 

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

 

“Cost Sharing Agreement” means that certain
Cost Sharing Agreement to be entered into between Borrower and HIL Swiss,
substantially in the form of Exhibit N, as the same may be amended from
time to time in accordance with the provisions hereof.

 

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

 

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

 

9

 

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

 

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

 

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

 

“Disqualified Capital Stock” means any
Equity Interest that, by its terms (or by the terms of any security into which
it is convertible or for which it is exchangeable), or upon the happening of
any event, (a) matures (excluding any maturity as the result of an optional
redemption by the issuer thereof) or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or is redeemable at the option of the
holder thereof, in whole or in part, on or prior to the first anniversary of
the Term Loan Maturity Date; (b) is convertible into or exchangeable (unless at
the sole option of the issuer thereof) for (i) debt securities, or (ii) any
Equity Interests referred to in clause (a) above, in each case at any
time prior to the first anniversary of the Term Loan Maturity Date; or (c)
contains any repurchase obligation that may come into effect prior to payment
in full of all amounts hereunder.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Environmental Claim” means any written
accusation, allegation, notice of violation, investigation or potential
liability claim, demand, order, directive, cost recovery action or other cause
of action by, or on behalf of, any Governmental Authority or any person for
damages,

 

10

 

injunctive or equitable relief, personal injury (including sickness,
disease or death), Response action costs, tangible or intangible property
damage, natural resource damages, nuisance, pollution, any adverse effect on
the environment caused by any Hazardous Material, or for fines, penalties,
restrictions or modification of operations or equipment, resulting from or
based upon (a) the existence, or the continuation of the existence, of a
Release (including sudden or non-sudden, accidental or non-accidental Releases
of Hazardous Material); (b) exposure to any Hazardous Material; (c) the
presence, use, handling, transportation, storage, treatment or disposal of any
Hazardous Material; or (d) the violation or alleged violation of any
Environmental Law or Environmental Permit.

 

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

 

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

 

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

 

“Equity Issuance” means, without
duplication, any issuance or sale by Holdings or any of its Subsidiaries (other
than (x) by Borrower or any Guarantor to another Guarantor or (y) by a
Subsidiary of Holdings to any Wholly Owned Subsidiary of Holdings) after the Closing
Date of (a) any Equity Interests (including any Equity Interests issued upon
exercise of any warrant or option) or any warrants or options to purchase
Equity Interests, or (b) any other security or instrument representing an
Equity Interest (or the right to obtain any Equity Interest) in the issuing or
selling person; provided, however, that
an Equity Issuance shall not include any such sale or issuance by Holdings of
(i) not more than an aggregate amount of 15.5% of the shares of its Equity
Interests or any warrants or options to purchase its Equity Interests
(including such

 

11

 

Equity Interests issued upon exercise of any warrant or option but
excluding any Disqualified Capital Stock), in each case to directors, officers
or employees of any Company or (ii) its Equity Interests in connection with the
Transactions.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

12

 

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

 

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

 

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

 

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

 

(b)   Losses
from Asset Sales; plus

 

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

 

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

 

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

 

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

 

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

 

(h)   aggregate cash payments made in respect of the Tax Indemnity
not to exceed $15 million in any fiscal year; minus

 

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

 

(j)    gains from Asset Sales.

 

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

 

“Excluded Taxes” means, with respect to the
Administrative Agent, any Lender, the Issuing Bank or any other recipient of
any payment to be made by or on account of any obligation of Borrower
hereunder, (a) foreign, federal, state or local income or franchise taxes
imposed on (or measured by) its net income by the United States of America, or
by the jurisdiction under the laws of which such recipient is doing business,
is organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch profits
taxes imposed by the United States of America and (c) in the case of a Foreign

 

13

 

Lender (other than an assignee pursuant to a request by Borrower under Section 2.16),
any withholding tax that is imposed on amounts payable to such Foreign Lender
at the time such Foreign Lender becomes a party to this Agreement (or
designates a new lending office) or is attributable to such Foreign Lender’s
failure to comply with Section 2.15(e), except to the extent that
such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from Borrower with respect to such withholding tax pursuant to Section 2.15(a).

 

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

 

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

 

“Fee Letter” means the Fee Letter, dated
November 5, 2004, among Herbalife International, Inc., Morgan Stanley
Senior Funding, Inc. and Merrill Lynch, Pierce, Fenner & Smith,
Incorporated, as amended.

 

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

 

 “Financial
Officer” of any person means the chief financial officer, principal
accounting officer, treasurer or controller of such person.

 

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

 

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

 

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

 

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

 

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

 

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

 

14

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“HIL” means Herbalife International
Luxembourg S.à.R.L., a Luxembourg corporation and a direct, wholly-owned
subsidiary of Luxembourg Holdings.

 

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

 

“HIL Swiss
Intercompany Agreements” means, collectively, the Trademark License
Agreement, License Agreement, Cost Sharing Agreement and Administrative Services
Agreement.

 

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

 

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

 

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

 

15

 

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

 

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

 

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

 

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

 

“Indemnified Taxes” means Taxes other than
Excluded Taxes.

 

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

 

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

 

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

 

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

 

16

 

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

 

“Interest Payment Date” means (a) with
respect to any ABR Loan, the last day of each March, June, September and
December to occur during the period that such Loan is outstanding and the
final maturity date of such Loan; and (b) with respect to any Eurodollar Loan,
the last day of the Interest Period applicable to the Borrowing of which such
Loan is a part, and in the case of a Eurodollar Loan with an Interest Period of
more than three-months’ duration, each day prior to the last day of such
Interest Period that occurs at intervals of three-months’ duration after the
first day of such Interest Period.

 

“Interest Period” means, with respect to any
Eurodollar Borrowing, (a) the period commencing on the date of such Borrowing
and ending on the numerically corresponding day in the calendar month that is
one, two, three or six, or if available to all Lenders, 9 or 12 months
thereafter, and (b) in addition to the periods identified in clause (a)
but only for the period commencing on the Closing Date through the earlier of
(i) the date that is 30 days thereafter or (ii) the date upon which Morgan
Stanley Senior Funding, Inc. has determined (and notifies the Borrower) that
the primary syndication of the credit facilities established hereunder (and the
resultant addition of institutions as Lenders) has been completed, the period
commencing on the date of such Borrowing and ending one week thereafter, in
each case, as Borrower may elect; provided that,
(A) if any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless
such next succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the next preceding Business Day;
and (B) any Interest Period that commences on the last Business Day of a
calendar month, or on a day for which there is no numerically corresponding day
in the last calendar month of such Interest Period, shall end on the last
Business Day of the last calendar month of such Interest Period.  For purposes hereof, the date of a Borrowing initially
shall be the date on which such Borrowing is made and thereafter shall be the
effective date of the most recent conversion or continuation of such Borrowing.

 

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

 

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

 

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

 

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

 

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

 

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

 

17

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“LIBOR Rate” means, with respect to any
Eurodollar Borrowing for any Interest Period therefor, the rate per annum
determined by the Administrative Agent to be the arithmetic mean (rounded to
the nearest 1/100th of 1%) of the offered rates for deposits in dollars with a
term

 

18

 

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

 

“License Agreement” means that certain
License Agreement to be entered into between Borrower and HIL Swiss,
substantially in the form of Exhibit O, as the same may be amended from
time to time in accordance with the provisions hereof.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

19

 

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

 

“Material Agreement” means those agreements,
documents or instruments set forth in Schedule 3.08 and any other
agreements, documents or instruments to which Holdings or any of its
Subsidiaries is a party and which the breach thereof by such party or failure
by such party to maintain such agreement, document or instrument in effect
would reasonably be expected to have a Material Adverse Effect.

 

“Material Leased Real Property” means all
right, title and interest in and to any and all parcels of or interests in real
property leased or operated by any person, whether by lease, license or other
means, together with, in each case, all easements, hereditaments and
appurtenances relating thereto, all improvements and appurtenant fixtures and
equipment, all general intangibles and contract rights and other property and
rights incidental to the ownership, lease or operation thereof where a Loan
Party maintains Collateral having a value in excess of $5.0 million.

 

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

 

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

 

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

 

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

 

“Mortgaged Real Property” means each Real
Property, if any, that shall be subject to a Mortgage
delivered after the Closing Date pursuant to Section 5.11.

 

“Multiemployer Plan” means a multiemployer
plan within the meaning of Section 4001(a)(3) of
ERISA (a) to which any Company or any of its ERISA Affiliates is then making or
accruing an obligation to make contributions, (b) to which any Company or any
ERISA Affiliate has within the preceding five plan years made contributions, or
(c) with respect to which any Company or any ERISA Affiliate could incur
liability.

 

“Net Cash Proceeds” means:

 

(a)   with
respect to any Asset Sale, the cash proceeds received by any Loan Party
(including cash proceeds subsequently received (as and when received by any
Loan Party) in respect of noncash consideration initially received) net of (i)
selling expenses (including reasonable brokers’ fees or commissions, legal
fees, transfer and similar taxes

 

20

 

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

 

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

 

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

 

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

 

“New Parent” has the meaning assigned to
such term in Section 6.04(o).

 

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

 

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

 

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

 

“Obligations” means (a) obligations of each
Loan Party from time to time arising under or in respect of the due and
punctual payment of (i) the principal of and premium, if any, and interest
(including interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) on the Loans, when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, (ii) each payment required to be made by each Loan

 

21

 

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

 

“Preliminary Prospectus” means that certain
Preliminary Prospectus, dated December 14, 2004, relating to the IPO.

 

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

 

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

 

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

 

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

 

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

 

“Perfection Certificate” means a certificate
in the form of Exhibit I-1 or any other form approved by the Collateral
Agent, as the same shall be supplemented from time to time by a Perfection
Certificate Supplement.

 

“Perfection Certificate Supplement” means a
certificate supplement in the form of Exhibit I-2 or any other form
approved by the Collateral Agent.

 

“Permitted Acquisitions” means any
acquisition of 100% of the issued and outstanding Equity Interests of, or
assets constituting a business, division or product line of, any other person, provided, that (a) Holdings shall be in
compliance on a pro forma basis
after giving effect to such acquisition, with the requirements of Section 6.07
as of the last measurement date, (b) no Default or Event of Default shall have
occurred and be continuing or result therefrom, (c) the aggregate purchase
price of all such acquisitions shall not exceed $25,000,000 in the aggregate
since the Closing Date, which purchase prices shall be deemed to include the
amount of any Indebtedness

 

22

 

assumed by the Holdings or any of its Subsidiaries in connection
therewith (but excluding any Equity Interests of Holdings issued in connection
therewith) and (d) the provisions of Section 5.11 shall have been
complied with to the satisfaction of the Administrative Agent and the
Collateral Agent.

 

“Permitted Dividends” has the meaning
assigned to such term in Section 6.05(i).

 

“Permitted Holders” means the Sponsors and
their Affiliates.

 

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

 

“Permitted Preferred Stock” means capital
stock of Holdings or Parent issued to Borrower that is not subject to mandatory
redemption, or to mandatory repurchase at the option of the holder thereof, on
any date or upon the existence or occurrence of any fact or circumstance, at
any time prior to the date that is one year after the Term Loan Maturity Date,
and otherwise on terms reasonably acceptable to the Administrative Agent.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

23

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Related Party” means, with respect to any
of the Principals, any person who controls, is controlled by, or is under
common control with such Principal; provided
that, for purposes of this definition only “control” means the beneficial
ownership of more than 80% of the total voting power of a person normally
entitled to vote in the election of directors, managers or trustees, as
applicable, of a person.

 

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

 

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

 

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

 

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

 

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

 

24

 

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

 

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

 

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

 

“Revolving Commitment” means, with respect
to each Lender, the commitment of such Lender to make Revolving Loans hereunder
as set forth on Annex II, or in the Assignment and Acceptance pursuant
to which such Lender assumed its Revolving Commitment, as applicable, as the
same may be (a) reduced from time to time pursuant to Section 2.07
and (b) reduced or increased from time to time pursuant to assignments by
or to such Lender pursuant to Section 11.04.  The amount of each Lender’s Revolving
Commitment is set forth on Annex II, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Revolving Commitment, as
applicable.  The aggregate amount of the
Lenders’ Revolving Commitments as of the Closing Date is $25.0 million.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Security Documents” means the Security
Agreements, the Mortgages, the Perfection Certificate and each other security
document or pledge agreement required by applicable local law to grant a valid,
perfected security interest in any property acquired or developed, and all
instruments of perfection required by this Agreement, any Security Agreement or
any Mortgage

 

25

 

to be filed with respect to the security interests in property and
fixtures created pursuant to any Security Agreement or any Mortgage and any
other document or instrument utilized to pledge as collateral for the
Obligations any property of whatever kind or nature.

 

 “Senior
Subordinated Note Agreement” means that certain Indenture, dated as
of June 27, 2002 (and as in effect on the date hereof), by and among
Borrower, as issuer, the guarantors party thereto and The Bank of New York, as
trustee.

 

“Senior Subordinated Notes” means Borrower’s
$165.0 million 113⁄4% Senior Subordinated Notes due 2010, issued pursuant to the
Senior Subordinated Note Agreement.

 

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

 

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

 

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

 

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

 

“Subsidiary Guarantor” means each Subsidiary
listed on Schedule 1.01(e), each other Subsidiary that is or
becomes a party to this Agreement pursuant to Section 5.11 (but
excluding any Released Guarantor that remains released from its Guarantee in
accordance with Section 7.09 hereof and including each Foreign
Subsidiary that enters into any other Guarantee required by applicable
Requirements of Law).

 

“Syndication Agent” shall have the meaning assigned
to such term in the preamble hereto.

 

26

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Term Loan” means the term loans made by the
Lenders to Borrower on the Closing Date. 
Each Term Loan shall be either an ABR Term Loan or a Eurodollar Term
Loan.

 

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

 

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

 

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

 

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

 

“Title Policy” has the meaning assigned to
such term in Section 5.11(d)(iii).

 

27

 

“Trademark License Agreement” means that
certain Trademark License Agreement to be entered into between Borrower and HIL
Swiss, substantially in the form of Exhibit P, as the same may be
amended from time to time in accordance with the provisions hereof

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

28

 

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

 

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

 

ARTICLE II

 

The Credits

 

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

 

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

 

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

 

29

 

time
outstanding that will not result in such Lender’s Revolving Exposure exceeding
such Lender’s Revolving Commitment.

 

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

 

SECTION 2.02.    Loans.

 

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

 

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

 

(c)   Except
with respect to Loans made pursuant to Section 2.02(f), each Lender
shall make each Loan to be made by it hereunder on the proposed date thereof by
wire transfer of immediately available funds to such account in New York City
as the Administrative Agent may designate not later than 12:00 noon, New York
City time, and the Administrative Agent shall promptly credit the amounts so
received to an account as directed by Borrower in the applicable Borrowing
Request maintained with the Administrative Agent or, if a Borrowing shall not
occur on such date because any condition precedent herein specified shall not
have been met, return the amounts so received to the respective Lenders.

 

(d)   Unless
the Administrative Agent shall have received notice from a Lender prior to the
date of any Borrowing that such Lender will not make available to the
Administrative Agent such Lender’s portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of such Borrowing in
accordance with Section 2.02(c), and the Administrative Agent may,
in reliance upon such assumption, make available to Borrower on such date a
corresponding amount.  If the
Administrative Agent shall have so made funds available, then, to the extent
that such Lender shall not have made such portion available to the
Administrative Agent, such Lender and Borrower severally agree to repay to the
Administrative Agent forthwith on demand such corresponding amount

 

30

 

together
with interest thereon, for each day from the date such amount is made available
to Borrower until the date such amount is repaid to the Administrative Agent at
(i) in the case of Borrower, the interest rate applicable at the time to the
Loans comprising such Borrowing and (ii) in the case of such Lender, a rate
determined by the Administrative Agent to represent its cost of overnight or
short-term funds (which determination shall be conclusive absent manifest
error).  If such Lender shall repay to
the Administrative Agent such corresponding amount, such amount shall
constitute such Lender’s Loan as part of such Borrowing for purposes of this
Agreement.

 

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

 

(f)    If
the Issuing Bank shall not have received from Borrower the payment required to
be made by Section 2.17(e) within the time specified in such
section, the Issuing Bank will promptly notify the Administrative Agent of the
LC Disbursement and the Administrative Agent will promptly notify each Revolving
Lender of such LC Disbursement and its Pro Rata Percentage thereof.  Each Revolving Lender shall pay by wire
transfer of immediately available funds to the Administrative Agent on such
date (or, if such Revolving Lender shall have received such notice later than
12:00 noon, New York City time, on any day, not later than 11:00 a.m., New York
City time, on the immediately following Business Day), an amount equal to such
Lender’s Pro Rata Percentage of such LC Disbursement (it being understood that
such amount shall be deemed to constitute an ABR Revolving Loan of such Lender,
and such payment shall be deemed to have reduced the LC Exposure), and the
Administrative Agent will promptly pay to the Issuing Bank amounts so received
by it from the Revolving Lenders.  The
Administrative Agent will promptly pay to the Issuing Bank any amounts received
by it from Borrower pursuant to Section 2.17(e) prior to the time
that any Revolving Lender makes any payment pursuant to this Section 2.02(f);
any such amounts received by the Administrative Agent thereafter will be
promptly remitted by the Administrative Agent to the Revolving Lenders that
shall have made such payments and to the Issuing Bank, as their interests may
appear.  If any Revolving Lender shall
not have made its Pro Rata Percentage of such LC Disbursement available to the
Administrative Agent as provided
above, such Lender and Borrower severally agree to pay interest on such amount,
for each day from and including the date such amount is required to be paid in
accordance with this Section 2.02(f) to but excluding the date such
amount is paid, to the Administrative Agent for the account of the Issuing Bank
at (i) in the case of Borrower, a rate per annum equal to the interest rate
applicable to Revolving Loans pursuant to Section 2.06(a), and (ii)
in the case of such Lender, for the first such day, the Federal Funds Effective
Rate, and for each day thereafter, the Alternate Base Rate.

 

SECTION 2.03.    Borrowing Procedure.  To request a Revolving Borrowing, Borrower
shall notify the Administrative Agent of such request by telephone (promptly
confirmed by telecopy) or by delivering a duly completed Borrowing Request (a)
in the case of a Eurodollar Borrowing, not later than 2:00 p.m., New York City
time, three Business Days before the date of the proposed Borrowing or (b) in
the case of an ABR Borrowing, not later than 2:00 p.m., New York City time, one
Business Day before the date of the proposed Borrowing; provided
that, any such notice of an ABR Revolving Borrowing to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.17(e)
may be given not later than 11:00 a.m., New York City time, on the date of the
proposed Borrowing.  Each such telephonic
Borrowing

 

31

 

Request shall be irrevocable
and shall be confirmed not later than 3:00 p.m., New York City time, on such
Business Day by hand delivery or telecopy to the Administrative Agent of a
written Borrowing Request substantially in the form of Exhibit C and
signed by Borrower.  Each such telephonic
and written Borrowing Request shall specify the following information in
compliance with Section 2.02:

 

(a)   the
aggregate amount of such Borrowing;

 

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

 

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

 

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

 

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

 

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

 

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

 

(b)   Each
Lender shall maintain in accordance with its usual practice an account or
accounts evidencing the indebtedness of Borrower to such Lender resulting from
each Loan made by such Lender from time to time, including the amounts of
principal and interest payable and paid to such Lender from time to time under
this Agreement.

 

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

 

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

 

32

 

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

 

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

 

SECTION 2.05.    Fees.

 

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

 

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

 

(c)   LC and
Fronting Fees.  Borrower agrees to pay (i) to each Revolving
Lender a participation fee (“LC Participation
Fee”) with respect to its participations in Letters of Credit, which
shall accrue at a rate equal to the Applicable Margin from time to time used to
determine the interest rate on Eurodollar Revolving Loans pursuant to Section 2.06
on the average daily amount of such Lender’s LC Exposure (excluding any portion
thereof attributable to unreimbursed LC Disbursements) during the period from
and including the Closing Date to but excluding the later of the date on which
such Lender’s Revolving Commitment terminates and the date on which such Lender
ceases to have any LC Exposure, and (ii) to the Issuing Bank a fronting fee (“Fronting Fee”), which shall accrue at the
rate of 0.25% per annum on the average daily amount of the LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the Closing Date to but excluding the
later of the date of termination of the Revolving Commitments and the date on
which there ceases to be any LC Exposure, as well as the Issuing Bank’s standard
fees with respect to the issuance, amendment, renewal or extension of any
Letter of Credit or processing of drawings thereunder.  LC Participation Fees and Fronting Fees
accrued through and including the last day of March, June, September and
December of each year shall be payable on the third Business Day following
such last day, commencing on the first such date to occur after the Closing
Date; provided that, all such fees shall be
payable on the

 

33

 

date on which the Revolving Commitments terminate and any
such fees accruing after the date on which the Revolving Commitments terminate
shall be payable on demand.  Any other
fees payable to the Issuing Bank pursuant to this Section 2.05(c)
shall be payable within ten days after demand. 
All LC Participation Fees and Fronting Fees shall be computed on the
basis of a year of 360 days and shall be payable for the actual number of days
elapsed (including the first day but excluding the last day).

 

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

 

SECTION 2.06.    Interest on Loans.

 

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

 

(b)   Subject
to the provisions of Section 2.06(c), the Loans comprising each
Eurodollar Borrowing shall bear interest at a rate per annum equal to the
Adjusted LIBOR Rate for the Interest Period in effect for such Borrowing plus the Applicable Margin in effect from time to time.

 

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

 

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

 

34

 

event of any conversion of any Eurodollar Loan prior to the
end of the current Interest Period therefor, accrued interest on such Loan
shall be payable on the effective date of such conversion.

 

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

 

SECTION 2.07.    Termination and Reduction of
Commitments.

 

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

 

(b)   Borrower
may at any time terminate, or from time to time reduce, the Revolving
Commitments; provided that, (i) each reduction
of the Revolving Commitments shall be in an amount that is an integral multiple
of $500,000 and not less than $1.0 million and (ii) the Revolving Commitments
shall not be terminated or reduced if, after giving effect to any concurrent
prepayment of the Revolving Loans in accordance with Section 2.10(b),
the sum of the Revolving Exposures would exceed the aggregate amount of
Revolving Commitments.

 

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

 

SECTION 2.08.    Interest Elections.

 

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

 

(b)   To
make an election pursuant to this Section 2.08, Borrower shall
notify the Administrative Agent of such election by telephone by the time that
a Borrowing Request would be required under Section 2.03 if
Borrower were requesting a Revolving

 

35

 

Borrowing or Term Borrowing of the Type resulting from such
election to be made on the effective date of such election.  Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery
or telecopy to the Administrative Agent of a written Interest Election Request
substantially in the form of Exhibit D.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

SECTION 2.09.    Amortization of Term
Borrowings.

 

(a)   Borrower
shall pay to the Administrative Agent, for the account of the Term Lenders, on
the dates set forth on Annex I, or if any such date is not a Business
Day, on the next preceding Business Day (each such date being a “Term Loan Repayment

 

36

 

Date”),
a principal amount of the Term Loans (as adjusted from time to time pursuant to
Sections 2.09(b) and 2.10) equal to the amount set forth on Annex
I for such date (less all mandatory and optional prepayments made thereon),
together in each case with accrued and unpaid interest on the principal amount
to be paid to but excluding the date of such payment.

 

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

 

SECTION 2.10.    Optional and Mandatory
Prepayments of Loans.

 

(a)   Optional Prepayments. 
Borrower shall have the right at any time and from time to time to
prepay any Borrowing, in whole or in part, subject to the requirements of this Section 2.10;
provided that, each partial prepayment
shall be in an amount that is an integral multiple of $1,000,000 and, in the
case of any prepayment of the Term Loans, not less than $5.0 million.

 

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

 

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

 

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

 

(ii)       so
long as no Default shall then exist or would arise therefrom, no such
prepayment shall be required to the extent that (A)

 

37

 

Borrower shall have delivered an Officers’
Certificate to the Administrative Agent on or prior to such date stating that
the Net Cash Proceeds of such Asset Sale will be used to purchase replacement
assets or other assets useful in such person’s business within 270 days of such
Asset Sale and setting forth estimates of the proceeds to be so expended, and
(B) all such Net Cash Proceeds in excess of $2.5 million in respect of any
Asset Sale  and $5.0 million in the
aggregate for all Asset Sales in any fiscal year of Borrower shall be held in
the Collateral Account and released therefrom only in accordance with the
provisions of Article IX; provided, however,
that if any portion of such Net Cash Proceeds are not reinvested in accordance
with this clause (ii), such unused portion shall be applied on the last
day of such period as a mandatory prepayment as provided in this Section 2.10(c).

 

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

 

(e)   Equity
Issuance.  Upon any Equity Issuance after the Closing
Date, Borrower shall make prepayments in accordance with Sections 2.10(h)
and (i) in an aggregate principal amount equal to 50% of the Net Cash
Proceeds of such Equity Issuance.

 

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

 

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

 

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

 

(iii)      all
such Net Cash Proceeds in excess of $1.0 million in respect of any Casualty Event
or in the aggregate for all such Casualty

 

38

 

Events shall be held in the Collateral
Account and released therefrom only in accordance with the terms of Article IX;

 

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

 

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

 

(g)   Excess
Cash Flow.  No later than 120 days after the end of
each fiscal year of the Borrower, commencing with the fiscal year ending on
December 31, 2005, the Borrower shall make prepayments in accordance with Section 2.10(i)(ii)
and Section 2.10(j) in an aggregate principal amount equal to 50%
of Excess Cash Flow for the fiscal year then ended; provided, that if the Moody’s Rating is equal to or greater
than Ba1 and the S&P Rating is equal to or greater than BB+, then the
Borrower shall make prepayments in accordance with Section 2.10(i)(ii)
and Section 2.10(j) in an aggregate principal amount equal to 25%
of Excess Cash Flow for the fiscal year then ended; provided, further,
in the event of a split rating, the higher of such Debt Ratings shall be used
to determine the applicable percentage above, except that, if there is a two
tier difference in the Debt Ratings, the Debt Rating one notch higher than the
lower of the two Debt Ratings shall be used to determine the applicable
percentage above.

 

(h)   Redemption
of Holdings Senior Notes.   If Holdings does not redeem Holdings Senior
Notes in an aggregate principal amount at least equal to $110.0 million, within
45 days after the Closing Date, the Borrower shall make prepayments in
accordance with Section 2.10(i) 
and Section 2.10(j), in an aggregate principal amount equal
to $110.0 million less the aggregate principal amount of Holdings Senior
Notes so redeemed.

 

(i)    Application of Prepayments.

 

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

 

39

 

reduce the Revolving Commitments ratably
among the Revolving Lenders by the amount of such prepayment (and Borrower
shall comply with Section 2.10(b)), and (ii) then, to the extent of
any remaining portion of the mandatory prepayment amounts, to further
permanently reduce the Revolving Commitments ratably among the Revolving
Lenders to the full extent thereof.

 

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

 

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

 

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

 

40

 

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

 

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

 

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

 

SECTION 2.12.    Increased Costs.

 

(a)   If
any Change in Law shall:

 

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

 

(ii)       impose
on any Lender or the Issuing Bank or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender or
any Letter of Credit or participation therein;

 

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

 

(b)   If
any Lender or the Issuing Bank determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of
return on such Lender’s or the Issuing Bank’s capital or on the capital of such
Lender’s or the Issuing Bank’s holding company, if any, as a consequence of
this Agreement or the Loans made by, or participations in Letters of Credit
held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a
level below that which such Lender or the Issuing Bank or such Lender’s or the
Issuing Bank’s holding company could have achieved but for such Change in Law
(taking into consideration such Lender’s or the Issuing Bank’s policies and the
policies of such Lender’s or the Issuing Bank’s holding

 

41

 

company with respect to capital adequacy), then from time to
time Borrower will pay to such Lender or the Issuing Bank, as the case may be,
such additional amount or amounts as will compensate such Lender or the Issuing
Bank or such Lender’s or the Issuing Bank’s holding company for any such
reduction suffered.

 

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

 

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

 

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

 

42

 

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

 

(a)   Borrower
shall make each payment required to be made by it hereunder or under any other
Loan Document (whether of principal, interest, fees or reimbursement of LC
Disbursements, or of amounts payable under Section 2.12, 2.13
or 2.15, or otherwise) on or before the time expressly required
hereunder or under such other Loan Document for such payment (or, if no such
time is expressly required, prior to 2:00 p.m., New York City time), on the
date when due, in immediately available funds, without set-off or counterclaim.  Any amounts received after such time on any
date may, in the discretion of the Administrative Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon.  All such payments
shall be made to the Administrative Agent at its offices at 1633 Broadway, 25th
Floor, New York, New York 10036, Attention: James Morgan, except payments to be
made directly to the Issuing Bank as expressly provided herein and except that payments pursuant to Sections
2.12, 2.13, 2.15 and 11.03 shall be made directly to
the persons entitled thereto and payments pursuant to other Loan Documents
shall be made to the persons specified therein. 
The Administrative Agent shall distribute any such payments received by
it for the account of any other person to the appropriate recipient promptly
following receipt thereof.  If any
payment under any Loan Document shall be due on a day that is not a Business
Day, the date for payment shall be extended to the next succeeding Business
Day, and, in the case of any payment accruing interest, interest thereon shall
be payable for the period of such extension. 
All payments under each Loan Document shall be made in dollars.

 

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

 

(c)   If
any Lender shall, by exercising any right of set-off or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Revolving Loans, Term Loans or participations in LC Disbursements resulting
in such Lender receiving payment of a greater proportion of the aggregate
amount of its Revolving Loans, Term Loans and participations in LC
Disbursements and accrued interest thereon than the proportion received by any
other Lender, then the Lender receiving such greater proportion shall purchase
(for cash at face value) participations in the Revolving Loans, Term Loans and
participations in LC Disbursements of the other Lenders to the extent necessary
so that the benefit of all such payments shall be shared by the Lenders ratably
in accordance with the aggregate amount of principal of and accrued interest on
their respective Revolving Loans, Term Loans and participations in LC
Disbursements; provided that, (i) if any such
participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and (ii) the
provisions of this Section 2.14(c) shall not be construed to apply
to any payment made by Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration
for the assignment or

 

43

 

sale of a participation in any of its Loans or participations
in LC Disbursements to any assignee or participant, other than to Borrower or
any Subsidiary or Affiliate thereof (as to which the provisions of this Section 2.14(c)
shall apply).  Borrower consents to the
foregoing and agrees, to the extent it may effectively do so under applicable
law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against Borrower rights of set-off and counterclaim
with respect to such participation as fully as if such Lender were a direct
creditor of Borrower in the amount of such participation.

 

(d)   Unless
the Administrative Agent shall have received notice from Borrower prior to the
date on which any payment is due to the Administrative Agent for the account of
the Lenders or the Issuing Bank hereunder that Borrower will not make such
payment, the Administrative Agent may assume that Borrower has made such
payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders or the Issuing Bank, as the case may be,
the amount due.  In such event, if
Borrower has not in fact made such payment, then each of the Lenders or the
Issuing Bank, as the case may be, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender or Issuing Bank with interest thereon, for each day from and including
the date such amount is distributed to it to but excluding the date of payment
to the Administrative Agent, at the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation.

 

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

 

SECTION 2.15.    Taxes.

 

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

 

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

 

(c)   Borrower
shall indemnify the Administrative Agent, each Lender and the Issuing Bank,
within ten Business Days after written demand therefor, for the full amount of
any Indemnified Taxes or Other Taxes paid by the Administrative Agent, such
Lender

 

44

 

or the Issuing Bank, as the case may be, on or with respect
to any payment by or on account of any obligation of Borrower hereunder or
under any other Loan Document (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section 2.15)
and any penalties, interest and reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental
Authority.  If
in the reasonable opinion of Borrower, any amount has been paid to, by or on
behalf of the Administrative Agent, any Lender or the Issuing Bank (as the case
may be) pursuant to clause (a), (b) or this (c) of this Section 2.15
with respect to Taxes or Other Taxes which are not correctly or legally
asserted, the Administrative Agent, such Lender or the Issuing Bank (as the
case may be) will cooperate with Borrower in seeking to obtain a refund for the
benefit of Borrower of such amount, provided
that, the rendering of any such cooperation by the Administrative Agent, such
Lender, or the Issuing Bank, would not, in the reasonable opinion of the
Administrative Agent, such Lender, or the Issuing Bank, (i) cause the
Administrative Agent, such Lender, or the Issuing Bank, to incur any expense or
liability (which is not otherwise paid in full by Borrower prior to or at the
time that such expense or liability is incurred) or (ii) have any adverse
effect on the Administrative Agent, such Lender, or the Issuing Bank. A certificate as to the amount of such payment or liability,
in detail sufficient to allow the Borrower to verify the computation thereof,
delivered to Borrower by a Lender or the Issuing Bank, or by the Administrative
Agent on its own behalf or on behalf of a Lender or the Issuing Bank, shall be
conclusive absent manifest error.  If the
Administrative Agent, any Lender, or the Issuing Bank receives a written notice
of Tax assessment from any Governmental Authority regarding any Tax in respect
of which indemnification may be required pursuant to this Section 2.15(c),
the Administrative Agent, such Lender, or the Issuing Bank, as the case may be,
shall notify Borrower within 120 days following the receipt of such notice that
such notice has been received; provided,
however, that the failure of the Administrative Agent, such Lender,
or the Issuing Bank to provide such notice shall not relieve Borrower of its
obligation to make any indemnification payment under this Agreement.

 

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

 

(e)   On or before the Closing Date in the case of the
Administrative Agent, any Lender or the Issuing Bank, or on or before the
acceptance of any appointment as the Administrative Agent in the case of a
successor Agent, or on or before the effective date of an Assignment and
Acceptance pursuant to which it became a Lender in the case of an assignee, or
on or prior to the date that any Lender becomes an Issuing Bank pursuant to Section 2.17(i),
and if otherwise reasonably requested from time to time by Borrower or the
Administrative Agent, within 30 days of such request, the Administrative Agent,
each Lender or the Issuing Bank which is not a U.S. Person within the meaning
of Section 7701(a)(30) of the Tax Code shall provide to each of the
Administrative Agent and Borrower two duly completed and signed copies of
Internal Revenue Service Forms W-8BEN, or W-8ECI or successor form(s), as the
case may be, certifying as to such Administrative Agent’s, Lender’s or
Issuing Bank’s
(if applicable) status for purposes of determining exemption from United States
withholding taxes with respect to all payments

 

45

 

to be made to the Administrative Agent, each Lender or the
Issuing Bank under this Agreement.  Until
Borrower and the Administrative Agent have received such forms and indicating
that payments under this Agreement are subject to an exemption from or
reduction of United States withholding tax, Borrower or the Administrative
Agent (if not withheld by Borrower) shall withhold taxes from such payments at
the applicable statutory rate, without any obligation to “gross-up” or make the
Administrative Agent, such Lender or Issuing Bank whole under clause (a)
of this Section.  In the case of an
Administrative Agent, Lender, or Issuing Bank that is subject to a reduction
of, rather than exemption from, United States withholding tax, the obligation
of Borrower to “gross-up” under clause
(a) of this Section shall not apply in respect of the amount of United
States withholding tax that the Administrative Agent, such Lender, or the
Issuing Bank is subject to at the time they become a party to this Agreement (provided, however, that in the case of an assignee
that becomes a Lender pursuant to Section 11.04, the obligation of
Borrower to “gross-up” under clause (a) of this Section, or indemnify for
Indemnified Taxes under clause (c) of this Section, shall apply in
respect of the amount of United States withholding tax that is applicable to
payments made on or after the date upon which the assignee first becomes a
Lender to the same extent that Borrower would have been obligated to “gross-up” under clause
(a) of this Section, or indemnify for Indemnified Taxes under clause (c)
of this Section, had the Administrative Agent, relevant Lender, or the Issuing
Bank, as the case may be, not made such assignment to such assignee).

 

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

 

SECTION 2.16.    Mitigation Obligations;
Replacement of Lenders.

 

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

 

46

 

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

 

SECTION 2.17.    Letters of Credit.

 

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

 

(b)   Notice of Issuance,
Amendment, Renewal, Extension; Certain Conditions.  To request the issuance of a Letter of Credit
(or the amendment, renewal or extension of an outstanding Letter of Credit),
Borrower shall hand deliver or telecopy (or transmit by electronic
communication, if arrangements for doing so have been approved by the Issuing
Bank) to the Issuing Bank and the Administrative Agent (at least three Business
Days in advance of the requested date of issuance, amendment, renewal or
extension, or such shorter period as is acceptable to such respective Issuing
Bank) a duly completed Letter of Credit Request, together with such other
information as shall be necessary to prepare, amend, renew or extend such
Letter of Credit.  If requested by the
Issuing Bank, Borrower also shall submit a letter-of-credit application on the
Issuing Bank’s standard form in connection with any request for a Letter of
Credit.  A Letter of Credit shall be
issued, amended, renewed or extended only if (and upon issuance, amendment,
renewal or extension of each Letter of Credit, Borrower shall be deemed to
represent and warrant that) after giving effect to such issuance, amendment,
renewal or extension, (i) the LC Exposure shall not exceed $10.0 million, (ii)
the total Revolving

 

47

 

Exposures
shall not exceed the total Revolving Commitments, (iii) the stated amount of
each Letter of Credit shall be no less than $500,000, or such lesser amount as
is acceptable to the Issuing Bank, and (iv) each Letter of Credit shall be
denominated in dollars.

 

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

 

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

 

(e)   Reimbursement.  If the Issuing Bank
shall make any LC Disbursement in respect of a Letter of Credit, Borrower shall
reimburse such LC Disbursement by paying to the Issuing Bank an amount equal to
such LC Disbursement not later than 2:00 p.m., New York City time, on the date
that such LC Disbursement is made, if Borrower shall have received notice of
such LC Disbursement prior to 11:00 a.m., New York City time on such date, or,
if such notice has not been received by Borrower prior to such time on such
date, then not later than 2:00 p.m., New York City time, on (i) the Business
Day that Borrower receives such notice, if such notice is received prior to
11:00 a.m., New York City time, on the day of receipt, or (ii) the Business Day
immediately following the day that Borrower receives such notice, if such
notice is not received prior to such time on the day of receipt; provided that, Borrower may, subject to the conditions to
borrowing set forth herein, request in accordance with Section 2.03
that such payment be financed with an ABR Revolving Borrowing in an equivalent
amount and, to the extent so financed, Borrower’s obligation to make such
payment shall be discharged and replaced by the resulting ABR Revolving
Borrowing.  If Borrower fails to make
such payment when due, the Issuing Bank shall notify the Administrative Agent
and the Administrative Agent shall notify each Revolving Lender of the
applicable LC Disbursement, the payment then due from Borrower in respect
thereof and such Lender’s Pro Rata Percentage thereof.

 

48

 

Promptly
following receipt of such notice, each Revolving Lender shall pay to the
Administrative Agent its Pro Rata Percentage of the unreimbursed LC
Disbursement in the same manner as provided
in Section 2.02(f), with respect to Loans made by such Lender, and
the Administrative Agent shall promptly pay to the Issuing Bank the amounts so
received by it from the Revolving Lenders. 
Promptly following receipt by the Administrative Agent of any payment
from Borrower pursuant to this Section 2.17(e), the Administrative
Agent shall, to the extent that Revolving Lenders have made payments pursuant
to this Section 2.17(e) to reimburse the Issuing Bank, distribute
such payment to such Lenders and the Issuing Bank as their interests may
appear.  Any payment made by a Revolving
Lender pursuant to this Section 2.17(e) to reimburse the Issuing
Bank for any LC Disbursement (other than the funding of ABR Revolving Loans as
contemplated above) shall not constitute a Loan and shall not relieve Borrower
of its obligation to reimburse such LC Disbursement.

 

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

 

49

 

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

 

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

 

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

 

(j)    Cash
Collateralization.  If any Event of Default shall occur and be
continuing, on the Business Day that Borrower receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Revolving Lenders with LC Exposure representing greater
than 50% of the total LC Exposure) demanding the deposit of cash collateral
pursuant to this Section 2.17(j),

 

50

 

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

 

ARTICLE III

 

Representations and Warranties

 

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

 

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

 

SECTION 3.02.    Authorization;
Enforceability.  The
Transactions to be entered into by each Loan Party are within such Loan Party’s
powers and have been duly authorized by all necessary action.  This Agreement has been duly executed and
delivered by each Loan Party and constitutes, and each other Loan Document to
which any Loan Party is to be a party, when executed and delivered by such Loan
Party, will constitute, a legal, valid and binding obligation of such Loan
Party, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors’ rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.

 

51

 

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

 

SECTION 3.04.    Financial
Statements.  The historical financial
statements and the notes thereto included in the Preliminary Prospectus present
fairly in all material respects the consolidated financial position, income
statement, cash flows and changes in stockholder’s equity of Holdings and its
Subsidiaries at the respective dates and for the respective periods
indicated.  All financial statements
delivered to the Lenders by the Borrower have been prepared in accordance with
GAAP applied on a consistent basis throughout the periods presented (except as
disclosed therein, and in the case of interim financial statements for the
absence of footnotes and year-end adjustments). 
The unaudited pro forma
financial statements and the notes thereto delivered to the Lenders by the
Borrower have been prepared on a basis consistent with the historical financial
statements of Holdings and its Subsidiaries and give effect to assumptions used
in the preparation thereof on a reasonable basis and in good faith and present
fairly in all material respects the historical and proposed transactions
contemplated by the Preliminary Prospectus.

 

SECTION 3.05.    Properties.

 

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

 

(b)   For
each Loan Party, Schedule 3.05(b) contains a true and complete list
of each parcel of Real Property (i) owned by such Loan Party as of the Closing
Date, including a description of the type of interest therein held by such Loan
Party, and the name of the Loan Party holding such interest or (ii) leased,
subleased or otherwise occupied or utilized by any Loan Party, as lessee or
sublessee, as of the Closing Date, including a description of the type of
interest therein held by such Loan Party, the name of the Loan Party holding
such interest, and whether such lease, sublease or other instrument (each, a “Company Lease”) requires the consent of the
landlord thereunder or

 

52

 

other parties thereto to the Transactions.  Each Company Lease is a legal, valid and
binding agreement, enforceable in accordance with its terms, of the Loan Party
that is a party thereto, and there is no, nor has any Loan Party received
notice of any, default thereunder (or to the knowledge of any Loan Party, any
condition or event that, after notice or a lapse of time or both, would
constitute a default thereunder).  No
Loan Party, and, to the knowledge of each Loan Party, no third party to any
Company Lease, has assigned any Company Lease that is a Material Agreement or
sublet any part of the premises covered thereby or exercised any renewal or
purchase option thereunder.  No penalties
are accrued and unpaid by any Loan Party under any Company Lease that is a
Material Agreement.  True and complete
copies of all Company Leases that are Material Agreements, together with all
modifications, extensions, amendments and assignments thereof have heretofore
been made available to the Administrative Agent.  None of the Loan Parties has granted any
options or rights of first refusal, or rights of first offer to third parties
to purchase or otherwise acquire an interest in any of the Real Property.

 

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

 

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

 

SECTION 3.06.    Equity Interests and Subsidiaries; Consent.

 

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

 

53

 

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

 

SECTION 3.07.    Litigation; Compliance with Laws.

 

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

 

(b)   Except
for matters covered by Section 3.17, no Company or any of its
property is in violation of, nor will the continued operation of their property
as currently conducted violate, any Requirements of Law (including any zoning
or building ordinance, code or approval or any building permits) or any
restrictions of record or agreements affecting the Real Property or is in
default with respect to any judgment, writ, injunction, decree or order of any
Governmental Authority, in each case where such violation or default could
reasonably be expected to result in a Material Adverse Effect.

 

SECTION 3.08.    Agreements.

 

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

 

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

 

(c)   Schedule 3.08
accurately and completely lists all material agreements (other than Leases of
Real Property set forth on Schedule 3.05(b)) to which any Loan
Party is a party that were in effect on the Closing Date in connection with the
operation of the business conducted thereby and Borrower has delivered to the
Administrative Agent complete and correct copies of all such material
agreements, including any amendments, supplements or modifications with respect
thereto.

 

SECTION 3.09.    Federal Reserve Regulations.

 

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

 

54

 

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

 

SECTION 3.10.    Investment Company Act; Public Utility Holding Company Act.  No Company is (a) an “investment company” or
a company “controlled” by an “investment company,” as defined in, or subject to
regulation under, the Investment Company Act of 1940, as amended, or (b) a “holding
company,” an “affiliate” of a “holding company” or a “subsidiary company” of a “holding
company,” as defined in, or subject to regulation under, the Public Utility
Holding Company Act of 1935, as amended.

 

SECTION 3.11.    Use of Proceeds. 
Borrower will use the proceeds of the (a) Term Loans to finance a
portion of the Transactions and the Transaction Costs and (b) Revolving Loans
after the Closing Date for general corporate purposes (it being understood that
no Revolving Loans shall be made on the Closing Date).

 

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

 

SECTION 3.13.    No
Material Misstatements.  None
of any of the written information, report, financial statement, exhibit or
schedule furnished by or on behalf of any Company to any Agent or any
Lender in connection with the negotiation of any Loan Document or included
therein or delivered pursuant thereto (including the Preliminary Prospectus),
taken together with all related information so furnished, contained, contains
or will contain (when delivered) any material misstatement of fact or omitted,
omits or will omit (when delivered) to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were, are or will be made, not misleading as of the date such information is
dated or certified; provided that,
to the extent any such information, report, financial statement, exhibit or
schedule was based upon or constitutes a forecast, projection or pro forma adjustment, each Company
represents only that it acted in good faith and utilized reasonable assumptions
and due care in the preparation of such information, report, financial
statement, exhibit or schedule (it being understood that, with respect to
projected financial information, actual results may vary significantly from
such projected results).

 

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

 

55

 

renegotiation on the part of any union under
any collective bargaining agreement to which any Company is bound.

 

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

 

SECTION 3.16.    Employee Benefit Plans.

 

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

 

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

 

SECTION 3.17.    Environmental Matters.

 

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

 

56

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

SECTION 3.18.    Insurance.  Schedule 3.18
sets forth a true, complete and correct description of all insurance maintained
by each Loan Party as of the Closing Date. 
As of such date, such insurance is in full force and effect and all
premiums have been duly paid.  Each

 

57

 

Company has insurance in such amounts and
covering such risks and liabilities as are in accordance with normal industry
practice.

 

SECTION 3.19.    Security Documents.

 

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

 

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

 

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

 

SECTION 3.20.    Material
Adverse Changes.  Since
December 31, 2003, there has been no change that could reasonably be
expected to result in a Material Adverse Effect.

 

ARTICLE IV

 

Conditions of Lending

 

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

 

58

 

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

 

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

 

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

 

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

 

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

 

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

 

(a)   Loan
Documents.  All legal matters incident to this Agreement,
the Borrowings and extensions of credit hereunder and the other Loan Documents
shall be satisfactory to the Lenders, to the Issuing Bank and to the
Administrative Agent and the Administrative Agent shall have received a duly
executed counterpart of each of the Loan Documents, including, with out
limitation, this Agreement, each Security Agreement and the Perfection
Certificate.

 

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

 

(i)        a
certificate of the Secretary or Assistant Secretary of each Loan Party dated
the Closing Date and certifying (A) that attached thereto is a true and
complete copy of the certificate or articles of incorporation or other
constitutive documents, including all amendments thereto certified as of a recent
date by the Secretary of State (or like official) of the jurisdiction of its
organization (if such document is of a type that may be so certified), (B) that
attached thereto is a true and

 

59

 

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

 

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

 

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

 

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

 

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

 

(i)        The
Administrative Agent shall have received evidence satisfactory to it that
Holdings has received the gross cash proceeds from the IPO and shall have
applied the net proceeds from such issuance in part to consummate the
Refinancing.

 

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

 

(iii)      The
Administrative Agent shall have received evidence satisfactory to it that at
least 87.5% the Senior Subordinated Notes have been redeemed or provision
provided therefor and the covenants of the

 

60

 

Senior
Subordinated Notes shall have been amended in manner satisfactory to the
Adminstrative Agent.

 

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

 

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

 

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

 

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

 

(f)    Financial
Statements; Pro Forma Balance Sheet; Projections.  The Lenders shall
have received, reviewed, and be reasonably satisfied with, (i) the
unaudited consolidated balance sheets and related statements of income,
stockholders’ equity and cash flows of Holdings and its Subsidiaries for each
fiscal quarter of the fiscal year in which the Closing Date occurs ended prior
to 30 days prior to the Closing Date and for the comparable periods of the
preceding fiscal year; (ii) (A) the pro
forma consolidated balance sheets and statements of income for
Holdings and its Subsidiaries, as well as the pro
forma levels of EBITDA and other operating data, for the fiscal year
ended December 31, 2003 and each fiscal quarter of the fiscal year in which
the Closing Date occurs ended prior to 45 days prior to the Closing Date and
for the comparable periods of the preceding fiscal year, after giving effect to
the transactions contemplated hereby, and (B) a statement of Holdings’ pro forma consolidated cash balance as of
the Closing Date certified by Borrower’s chief financial officer as
demonstrating compliance with Section 4.02(d)(vii), after giving
effect to the Transactions; and (iii) final forecasts of the financial
performance of Holdings and its Subsidiaries. 
The forecasts provided to the Lenders and any cost savings shall be
included in such financial statements prepared in accordance with GAAP only to
the extent permitted to be included in pro
forma financial statements set forth in a registration statement
filed with the Securities and Exchange Commission.

 

61

 

(g)   Opinions
of Counsel.  The Administrative Agent shall have received,
on behalf of itself, the other Agents, the Arranger, the Lenders and the
Issuing Bank, (i) a favorable written opinion of Gibson, Dunn & Crutcher
LLP, special counsel for certain of the Loan Parties, and of each other local
counsel listed on Schedule 4.02(g), in each case (A) in form
reasonably acceptable to the Administrative Agent, (B) dated the Closing Date,
(C) addressed to the Agents, the Arranger, the Issuing Bank, and the Lenders
and (D) covering such other matters relating to the Loan Documents and the
Transactions as the Administrative Agent shall reasonably request, and (ii) a
copy of each legal opinion delivered under the other Transaction Documents, if
any, together with reliance letters from the party delivering such opinion
authorizing the Agents, Lenders and the Issuing Bank to rely thereon as if such
opinion were addressed to them.

 

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

 

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

 

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

 

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

 

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

 

(m)  Fees and
Expenses.  The Arrangers, Lenders and Administrative
Agent shall have received all fees and other amounts due and payable on or
prior to the Closing Date, including, to the extent invoiced, reimbursement or
payment of all reasonable out-of-pocket expenses (including the reasonable
legal fees and expenses of Skadden, Arps, Slate, Meagher & Flom LLP,
special counsel to the Administrative Agent and other foreign and local counsel
to the Administrative Agent) required to be reimbursed or paid by Borrower
hereunder or under any other Loan Document.

 

62

 

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

 

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

 

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

 

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

 

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

 

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

 

(vi)      any
documents required to be submitted to the Collateral Agent by the Loan Parties
as may be necessary or desirable to perfect the security interest of the
Collateral Agent pursuant to each Foreign Security Agreement; and

 

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

 

63

 

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

 

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

 

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

 

(r)    Environmental.  The Lenders shall be
reasonably satisfied that there are no material liabilities in respect of the
Real Property of Holdings and its Subsidiaries.

 

ARTICLE V

 

Affirmative Covenants

 

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

 

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

 

(a)   Annual
Reports.  Within 90 days after the end of each fiscal
year (commencing with fiscal year 2004), (i) the consolidated balance sheet of
Holdings as of the end of such fiscal year and related consolidated statements
of income, cash flows and stockholders’ equity for such fiscal year, and notes
thereto (including a note with a balance sheet and statements of income and
cash flows separating out the Loan Parties (other than Holdings) from the
Non-Guarantor Subsidiaries), all prepared in accordance with Regulation S-X
under the Securities Act and in a manner acceptable to the Securities and
Exchange Commission and accompanied by an opinion of KPMG LLP or other
independent public accountants of recognized national standing satisfactory to
the Administrative Agent (which opinion shall not be qualified as to scope or
contain any going concern or other qualification), stating that such financial
statements fairly present, in all material respects, the consolidated financial
condition, results of operations, cash flows and changes in stockholders’
equity of the Consolidated Companies as of the end of and for such fiscal year
in accordance with GAAP; (ii) a management report in a customary form setting
forth, on a consolidated basis, the financial condition, results of operations
and cash flows as of the end of and for such fiscal year, as compared to the
Companies’ financial condition, results of operations and cash flows as of the
end of and

 

64

 

for the previous fiscal year and its budgeted results of
operations and cash flows (including notes separating out the financial
condition, results of operations and cash flows of the Loan Parties from the
financial condition, results of operations and cash flows of the Non-Guarantor
Subsidiaries), and (iii) a management’s discussion and analysis of the
financial condition and results of operations for such fiscal year, as compared
to the previous fiscal year;

 

(b)   Quarterly
Reports.  Within 45 days after the end of each of the
first three fiscal quarters of each fiscal year, (i) the consolidated balance
sheet of Holdings as of the end of such fiscal quarter and related consolidated
statements of income and cash flows for such fiscal quarter and for the then
elapsed portion of the fiscal year, in comparative form with the consolidated
statements of income and cash flows for the comparable periods in the previous
fiscal year, and notes thereto (including a note with a balance sheet and
statements of income and cash flows separating out the Loan Parties from the
Non-Guarantor Subsidiaries), all prepared in accordance with Regulation S-X
under the Securities Act and in a manner acceptable to the Securities and
Exchange Commission and accompanied by a certificate of a Financial Officer
stating that such financial statements fairly present, in all material
respects, the consolidated financial condition, results of operations and cash
flows of the Consolidated Companies as of the date and for the periods
specified in accordance with GAAP and on a basis consistent with the audited
financial statements referred to in Section 5.01(a), subject to
normal year-end audit adjustments and the absence of footnotes; (ii) a
management report in a customary form setting forth, on a consolidated basis,
the financial condition, results of operations and cash flows as of the end of
and for such fiscal quarter and for the then elapsed portion of the fiscal
year, as compared to the Companies’ financial condition, results of operations
and cash flows as of the end of such fiscal quarter and for the comparable
periods in the previous fiscal year and its budgeted results of operations and
cash flows (including notes separating out the financial condition, results of
operations and cash flows of the Loan Parties from the financial condition,
results of operations and cash flows of the Non-Guarantor Subsidiaries); and
(iii) a management’s discussion and analysis of the financial condition and
results of operations for such fiscal quarter and the then elapsed portion of
the fiscal year, as compared to the comparable periods in the previous fiscal
year;

 

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

 

65

 

(d)   Financial
Officer’s Certificate Regarding Collateral.  Concurrently with
any delivery of financial statements under Sections 5.01(a), a
Perfection Certificate Supplement;

 

(e)   Public
Reports.  Promptly after the same become publicly
available, copies of all periodic and other reports, proxy statements and other
materials filed by any Company with the Securities and Exchange Commission, or
any Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed to holders
of its Indebtedness pursuant to the terms of the documentation governing such
Indebtedness (or any trustee, agent or other representative therefor), as the
case may be;

 

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

 

(g)   Budgets.  No later than 60
days after the first day of each fiscal year of Holdings, an annual budget in
form reasonably satisfactory to the Administrative Agent (including budgeted
statements of income by each of Borrower’s business units and sources and uses
of cash and balance sheets) prepared by Holdings for (i) each fiscal month of
such fiscal year prepared in detail and (ii) each of the five years
immediately following such fiscal year prepared in summary form, in each case,
of Holdings and its Subsidiaries for each fiscal month of such fiscal year
prepared in detail with appropriate presentation and discussion of the
principal assumptions upon which such budgets are based, accompanied by the
statement of a Financial Officer of each of Holdings and Borrower to the effect
that the budget is a reasonable estimate for the period covered thereby (it
being understood that actual results may vary significantly from any such
projected or forecasted results);

 

(h)   Annual
Meetings with Lenders.  Within 120 days after the close of each
fiscal year of Borrower (commencing with fiscal year 2004), each of Holdings and Borrower shall, at the request of the Administrative
Agent or Required Lenders, hold a meeting (at a mutually agreeable location and
time and at the expense of the participating Lenders (other than with respect
to the cost of the location of such meeting, which shall be paid by Borrower))
with all Lenders who choose to attend such meeting at which meeting shall be
reviewed the financial results of the previous fiscal year and the financial
condition of the Companies and the budgets presented for the current fiscal
year of the Companies;

 

(i)    Notices in Connection with the Holdings Senior Note
Documents.  Promptly
following the delivery or receipt by any Loan Party of any written notice or
communication pursuant to or in connection with any Holdings Senior Note
Document, a copy of such notice or communication; and

 

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

 

66

 

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

 

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

 

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

 

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

 

(d)   the
occurrence of a Casualty Event in excess of $1,000,000 and will ensure that the
Net Cash Proceeds of any such event (whether in the form of insurance proceeds,
condemnation awards or otherwise) are applied in accordance with the applicable
provisions of this Agreement and the Security Documents; and

 

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

 

SECTION 5.03.    Existence; Businesses and Properties.

 

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

 

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

 

67

 

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

 

SECTION 5.04.    Insurance.

 

(a)   Keep
its insurable property adequately insured at all times by financially sound and
reputable insurers; maintain such other insurance, to such extent and against
such risks, including fire and other risks insured against by extended
coverage, as is customary with companies in the same or similar businesses
operating in the same or similar locations, including public liability
insurance against claims for personal injury or death or property damage
occurring upon, in, about or in connection with the use of any property owned,
occupied or controlled by it, to the extent obtainable on commercially
reasonable terms; and maintain such other insurance as may be required by law;
and, with respect to any Mortgaged Property, otherwise maintain all insurance
coverage required under the applicable Mortgage, such policies to be in such
form and amounts and having such coverage as may be reasonably satisfactory to
the Collateral Agent and the Lenders.

 

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

 

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

 

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

 

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

 

SECTION 5.05.    Taxes.  Pay and discharge promptly when due all Taxes
before the same shall become delinquent or in default, as well as all lawful
claims for labor, materials and supplies or otherwise that, if unpaid, might
give rise to a Lien (other than a Permitted Lien) upon such properties or any
part thereof; provided, however, that such
payment and discharge shall not be required with respect to any such Taxes, as
well as all lawful claims for labor, materials and

 

68

 

supplies or otherwise, so long as the
validity or amount thereof shall be contested in good faith by appropriate
proceedings and the applicable Company shall have set aside on its books
adequate reserves with respect thereto in accordance with GAAP and such
proceeding (or orders entered in connection with such proceedings) operate to
prevent the forfeiture or sale of the property or assets subject to any such
Lien and suspend collection of the contested Tax and enforcement of a Lien and,
in the case of Collateral, the applicable Company shall have otherwise complied
with the provisions of the applicable Security Document in connection with such
nonpayment.

 

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

 

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

 

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

 

SECTION 5.09.    Compliance with Environmental Laws; Environmental Reports.

 

(a)   Comply
and cause all lessees and other persons occupying Real Property, to the extent
owned, operated or otherwise controlled by any Company, to comply, in all
material respects with all Environmental Laws and Environmental Permits
applicable to its operations and property and obtain and renew all material
Environmental Permits applicable to its operations and property and conduct any
Response in accordance with Environmental Laws; provided,
however, that no Company shall be required to undertake

 

69

 

any Response to the extent that its obligation to do so is
being contested in good faith and by proper proceedings and appropriate
reserves are being maintained with respect to such circumstances in accordance
with GAAP.

 

(b)   If
a Default caused by reason of a breach of Section 3.17 or 5.09(a)
shall have occurred and be continuing for more than 20 days without the
Companies commencing activities reasonably likely to cure such Default, at the
written request of the Required Lenders through the Administrative Agent,
provide to the Lenders within 45 days after such request, at the expense of
Borrower, an environmental site assessment report regarding the matters that
are the subject of such default, including where appropriate, any soil and/or
groundwater sampling prepared by an environmental consulting firm and in form
and substance reasonably acceptable to the Administrative Agent and indicating
the presence or absence of Hazardous Materials and the estimated cost of any
compliance or Response to address them in connection with such Default.

 

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

 

SECTION 5.11.    Additional Collateral; Additional Guarantors.

 

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

 

70

 

(b)   To the extent the
Administrative Agent (after consultation with Borrower) determines that any of
the following is commercially reasonable (taking into account the expense
(including taxes) of obtaining the same, the ability of Borrower or the
relevant Subsidiary to obtain any necessary approvals or consents required to
be obtained under applicable law in connection therewith, and the effectiveness
and enforceability thereof under applicable law), with respect to any person
that becomes, after the Closing Date, a Wholly Owned Subsidiary directly owned
by a Loan Party (a “New Wholly Owned
Subsidiary”), promptly, and in any event no later than 60 days after
each such person becomes a New Wholly Owned Subsidiary, cause such Subsidiary
(i) to become a Guarantor and deliver to the Collateral Agent the certificates
representing the Equity Interests of such Subsidiary (provided, that, in no event shall the
stock of any such Subsidiary be required to be pledged if such pledge is
illegal under applicable law and no reasonable alternative structure can be
devised having substantially the same effect as such pledge that would not be
illegal under applicable law), together with undated stock powers executed and
delivered in blank by a duly authorized officer of such Subsidiary’s parent, as
the case may be, and all Intercompany Notes owing from such Subsidiary to any
Loan Party; and (ii) (A) to execute a Joinder Agreement or such comparable
documentation, in form and substance reasonably satisfactory to the
Administrative Agent, and (B) to take all actions reasonably necessary or
advisable to cause the Lien created by each Security Agreement to be duly
perfected to the extent required by such agreement in accordance with all
applicable Requirements of Law, including the filing of financing statements in
such jurisdictions as may be reasonably requested by the Collateral Agent (provided, that any such Subsidiary shall
not be required to comply with clause (ii)(A) and (B) above if
satisfying such requirements is illegal under applicable law and no reasonable
alternative structure can be devised having substantially the same effect as
such pledge that would not be illegal under applicable law).

 

(c)   Notwithstanding
anything to the contrary contained herein, in
the case of any (x) New Wholly Owned Subsidiary that has not previously become
(and, if so, does not remain) a Guarantor or (y) other Non-Guarantor Subsidiary
directly owned by a Loan Party, 66% of the Equity Interests of any such
Subsidiary (and 100% of the Equity Interests of any Domesticated Foreign
Subsidiary) (exclusive, however, of Herbalife China LLC,  Herbalife Del Ecuador, S.A., Herbalife
International Products, N.V. or any Immaterial Subsidiary) shall be subject to
a Lien or be required to be pledged under the applicable Loan Document (except to the
extent the Administrative Agent, after consultation with Borrower, determines
that such Lien or pledge is not commercially reasonable (taking into account
the expense, including taxes, of obtaining the same, the ability of Borrower or
such Subsidiary to obtain any necessary approvals or consents required to be
obtained under applicable law in connection therewith, and the effectiveness
and enforceability thereof under applicable law)).

 

(d)   Upon
the written request of the Administrative Agent (provided, that,
except as otherwise provided in Section 5.12, the Administrative
Agent shall not make such written request if (after consultation with Borrower)
it determines that any of the following is not commercially feasible (taking
into account the expense of obtaining the same and the effectiveness and
enforceability thereof under applicable law)), each Loan Party will promptly grant to the
Collateral Agent, within 60 days of such request, security interests and
Mortgages in such owned Real Property of such Loan Party located in the United
States as is acquired by such Loan Party after the Closing Date by Borrower or
such Subsidiary and that is used for warehouse, manufacturing, distribution, or
laboratory purposes, has a value as determined in good faith by the
Administrative Agent in excess

 

71

 

of $5.0 million or
is otherwise material to the business operations of Borrower or such
Subsidiary, as additional security for the Secured Obligations (unless the
subject property is already mortgaged to a third party to the extent permitted
by Section 6.02).  Such
Mortgages shall be granted pursuant to documentation reasonably satisfactory in
form and substance to the Collateral Agent and shall constitute valid and
enforceable perfected Liens subject only to Permitted Liens and such other
Liens reasonably acceptable to the Collateral Agent.  The Mortgages or instruments related thereto
shall be duly recorded or filed in such manner and in such places as are
required by law to establish, perfect, preserve and protect the Liens in favor
of the Collateral Agent required to be granted pursuant to the Mortgages and
all taxes, fees and other charges payable in connection therewith shall be paid
in full.  Such Loan Party shall otherwise
take such actions and execute and/or deliver to the Collateral Agent such documents
as the Administrative Agent shall require to confirm the validity, perfection
and priority of the Lien of any existing Mortgage or new Mortgage against such
after-acquired Real Property within 60 days of the written request of the
Collateral Agent, including a survey and local counsel opinion (in form and
substance reasonably satisfactory to the Collateral Agent) and all of the
following items in respect of such Mortgage:

 

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

 

(ii)       with
respect to each Mortgage, a policy (or commitment to issue a policy) of title insurance
insuring (or committing to insure) the Lien of such Mortgage as a valid first
mortgage Lien on the Real Property and fixtures described therein in an amount
equal to the fair market value of such Real Property which policies (or
commitments) (each, a “Title Policy”)
shall (A) be issued by the Title Company, (B) to the extent necessary, include
such reinsurance arrangements (with provisions for direct access, if necessary)
as shall be reasonably acceptable to the Collateral Agent, (C) contain a “tie-in”
or “cluster” endorsement (if available under applicable law) (i.e., policies
that insure against losses regardless of location or allocated value of the
insured property up to a stated maximum coverage amount), (D) have been
supplemented by such endorsements (or where such endorsements are not
available, opinions of special counsel, architects or other professionals
reasonably acceptable to the Collateral Agent to the extent that such opinions
can be obtained at a cost that is reasonable with respect to the value of the
Real Property subject to such Mortgage) as shall be requested reasonably by the
Collateral Agent, to the extent such endorsements are available in the
applicable jurisdiction (including endorsements on matters relating to usury,
first loss, last dollar, zoning,

 

72

 

contiguity,
revolving credit, doing business, non-imputation, public road access, survey,
variable rate, environmental lien and so-called comprehensive coverage over
covenants and restrictions), and (E) contain no exceptions to title other than
exceptions for the Permitted Liens applicable to such Mortgaged Real Property
and otherwise acceptable to the Collateral Agent;

 

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

 

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

 

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

 

SECTION 5.12.    Security
Interests; Further Assurances.Each Loan Party shall, at its own cost
and expense, take any and all actions necessary to defend title to the
Collateral against all persons and to defend the security interest of the
Collateral Agent in the Collateral and the priority thereof against any Lien
not expressly permitted pursuant to Section 6.02.  Promptly, upon the reasonable request of the
Administrative Agent, any Lender or the Collateral Agent, at Borrower’s
expense, execute, acknowledge and deliver, or cause the execution,
acknowledgment and delivery of, and thereafter register, file or record, or
cause to be registered, filed or recorded, in an appropriate governmental
office, any document or instrument supplemental to or confirmatory of the
Security Documents or otherwise deemed by Administrative Agent or the
Collateral Agent reasonably necessary or desirable for the continued validity,
perfection and priority of the Liens on the Collateral covered thereby superior
and prior to the rights of all third persons other than the holders of
Permitted Liens and subject to other Liens except as permitted by the Security
Documents, or obtain any consents, including landlord or similar Lien waivers
and consents, as may be necessary or appropriate in connection therewith, to
the extent contemplated hereby.  Deliver
or cause to be delivered to the Administrative Agent and the Collateral Agent
from time to time such other documentation, consents, authorizations, approvals
and orders in form and substance reasonably satisfactory to the Administrative
Agent and the Collateral Agent as the Administrative Agent or the Collateral
Agent shall deem necessary to perfect or maintain the Liens on the Collateral
pursuant to the Security Documents.  Upon
the exercise by the Administrative Agent or the Collateral Agent of any power,
right, privilege or remedy pursuant to any Loan Document that requires any consent,
approval, registration, qualification or authorization of any Governmental
Authority or any other person, execute and

 

73

 

deliver and/or obtain all applications, certifications,
instruments and other documents and papers that the Administrative Agent or the
Collateral Agent may be so required to obtain. 
Notwithstanding anything to the contrary contained herein, if an Event of
Default has occurred and is continuing, the Administrative Agent and the
Collateral Agent shall have the right to require any Loan Party to execute and
deliver documentation, consents, authorizations, approvals and orders in form
and substance reasonably satisfactory to the Administrative Agent and the
Collateral Agent as the Administrative Agent or the Collateral Agent shall deem
necessary to grant to the Collateral Agent, for its benefit and for the benefit
of the other Secured Parties, a valid and perfected Lien subject to no Liens
other than Permitted Liens on such assets and properties not otherwise required
hereunder, except to the extent such requirements are illegal under applicable
law, and no reasonable alternative structure can be devised having
substantially the same effect as such actions that would not be illegal under
applicable law.  If the Administrative
Agent, the Collateral Agent or the Required Lenders determine that they are
required by law or regulation to have appraisals prepared in respect of the
Real Property of any Loan Party constituting Collateral, Borrower shall provide
to the Administrative Agent appraisals that satisfy the applicable requirements
of the Real Estate Appraisal Reform Amendments of FIRREA and are in form and substance
satisfactory to the Administrative Agent and the Collateral Agent.

 

SECTION 5.13.    Know-Your-Customer
Rules.

 

If :

 

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

 

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

 

(iii)      a
proposed assignment or transfer by a Lender of any of its rights and
obligations under this Agreement to a party that is not a Lender prior to such
assignment or transfer, obliges the Administrative Agent or any Lender (or, in
the case of paragraph (iii) above, any prospective new Lender) to comply with “know
your customer” or similar identification procedures in circumstances where the
necessary information is not already available to it, each Loan Party shall
promptly upon the request of the Administrative Agent or any Lender supply, or
procure the supply of, such documentation and other evidence as is reasonably
requested by the Administrative Agent (for itself or on behalf of any Lender)
or any Lender (for itself or, in the case of the event described in paragraph
(iii) above, on behalf of any prospective new Lender) in order for the
Administrative Agent, such Lender or, in the case of the event described in
paragraph (iii) above, any prospective new Lender to carry out and be satisfied
it has complied with all necessary “know your customer” or other similar checks
under all applicable laws and regulations pursuant to the transactions
contemplated in the Loan Documents.

 

74

 

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

 

SECTION 5.14.    Leasehold Undertakings.

 

At
any time following a fiscal quarter in which Consolidated EBITDA for the four
fiscal quarters then ended was less than $125,000,000 and thereafter until
Consolidated EBITDA for any four fiscal quarters period was greater than
$125,000,000 then, within 60 days of the written request of the Collateral
Agent, each Loan Party shall use its best efforts to deliver to the Collateral
Agent:

 

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

 

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

 

(c)   with
respect to each Mortgage, a Title Policy shall (i) be issued by the Title
Company, (ii) to the extent necessary, include such reinsurance arrangements
(with provisions for direct access, if necessary) as shall be reasonably
acceptable to the Collateral Agent, (iii) contain a “tie-in” or “cluster”
endorsement (if available under applicable law) (i.e., policies that insure
against losses regardless of location or allocated value of the insured
property up to a stated maximum coverage amount), (iv) have been supplemented
by such endorsements (or where such endorsements are not available, opinions of
special counsel, architects or other professionals reasonably acceptable to the
Collateral Agent to the extent that such opinions can be obtained at a cost
that is reasonable with respect to the value of the Material Leased Real
Property subject to such Mortgage) as shall be requested by the Collateral
Agent, to the extent such endorsements are available in the applicable
jurisdiction (including endorsements on matters relating to usury, first loss,
last dollar, zoning, contiguity, revolving credit, doing business,
non-imputation, public road access, survey, variable rate, environmental lien
and so-called comprehensive coverage over covenants and restrictions), and (v)
contain no exceptions

 

75

 

to title
other than exceptions for the Permitted Liens applicable to such Material
Leased Real Property and otherwise acceptable to the Collateral Agent;

 

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

 

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

 

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

 

(g)   with
respect to each Material Leased Real Property for which a Mortgage is obtained
in accordance with clause (a), Borrower and each Subsidiary shall have made all
notification, registrations and filings, to the extent required by, and in
accordance with, all Governmental Real Property Disclosure Requirements
applicable to such Material Leased Real Property, including the use of forms provided
by state or local agencies, where such forms exist, whether to Borrower or to
or with the state or local agency; and

 

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

 

SECTION 5.15.    HIL Cash
Balances.  Commencing March 31, 2005 and
thereafter, HIL shall maintain cash balances on its balance sheet in an amount
that is at anytime in excess of the amount of HIL’s trade payables at such
time.

 

SECTION 5.16.    Post-Closing Matters.  Execute and deliver the documents and
complete the tasks set forth on Schedule 5.16, in each case within
the time limits specified on such schedule or as such time as may be
extended by the Collateral Agent in its sole discretion.

 

76

 

ARTICLE VI

 

Negative Covenants

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(g)   (i)  Indebtedness (other than as described in clauses
(iii) and (iv) below) actually outstanding on the Closing Date and
listed on Schedule 6.01, provided, that, any such scheduled Indebtedness
that constitutes intercompany Indebtedness (A) owing to a Loan Party by a Loan
Party must be subordinated to the Obligations of the Loan Parties in accordance
with a subordination agreement in form and substance reasonably satisfactory to
the Administrative Agent, and (B) shall not be repaid, prepaid, refinanced

 

77

 

or renewed unless the repayment, prepayment, refinancing or
renewal thereof is treated as an Investment and permitted under Section 6.03;
(ii) refinancings or renewals thereof, provided, that, (A) any such refinancing
Indebtedness is in an aggregate principal amount not greater than the aggregate
principal amount of the Indebtedness being renewed or refinanced, plus the amount of any premiums required to be paid thereon
and fees and expenses associated therewith, (B) such refinancing Indebtedness
has a later or equal final maturity and longer or equal weighted average life
than the Indebtedness being renewed or refinanced and (C) the covenants, events
of default subordination and other provisions thereof (including any guarantees
thereof) shall be, in the aggregate, not materially less favorable to the
Lenders than those contained in the Indebtedness being renewed or refinanced;
(iii) the Holdings Senior Notes (including any notes issued in exchange therefor
in accordance with any registration rights agreement entered into in connection
with the issuance of the Holdings Senior Notes); and (iv) Senior Subordinated
Notes outstanding after giving effect to the Transactions;

 

(h)   so
long as no Default exists or would result therefrom, Indebtedness of the
Borrower in respect of the Tax Indemnity, so long as the Borrower is not
obligated to make payments in excess of $15 million in any fiscal year;

 

(i)    other Indebtedness of Borrower and its Subsidiaries not to
exceed $25.0 million in aggregate principal amount at any time outstanding; and

 

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

 

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

 

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

 

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

 

(b)   Liens
in respect of property of Borrower and its Subsidiaries imposed by law that
were incurred in the ordinary course of business and do not secure Indebtedness
for borrowed money, such as carriers’, warehousemen’s, materialmen’s, landlords’,
workmen’s, suppliers’, repairmen’s and mechanics’ Liens and other similar Liens
arising in the ordinary course of business (i) for amounts not yet overdue or
(ii) for amounts that are overdue and that are being contested in good faith by
appropriate proceedings, so long as (A) adequate reserves have been established
in accordance with GAAP, and (B)

 

78

 

in the case
of any such Lien that has or may become a Lien against any of the Collateral,
such Lien and the contest thereof shall satisfy the Contested Collateral Lien
Conditions;

 

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

 

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

 

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

 

(f)    Liens
arising out of conditional sale, title retention, consignment or similar
arrangements for the sale of goods entered into by Borrower and its
Subsidiaries in the ordinary course of business in accordance with the past
practices of Borrower and its Subsidiaries;

 

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

 

79

 

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

 

(i)    Liens
on assets of a person (and its Subsidiaries) existing at the time such person
is acquired or merged with or into or consolidated with Borrower or any of its
Subsidiaries (and not created in anticipation or contemplation thereof); provided that, such Liens do not extend to
assets not subject to such Liens at the time of acquisition (other than
improvements thereon) and are no more favorable to the lien holders than the
existing Lien;

 

(j)    Liens
pursuant to the Security Documents;

 

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

 

(l)    Licenses
of Intellectual Property (i) granted by Holdings and its Subsidiaries in the
ordinary course of business and not interfering in any material respect with
the ordinary conduct of the business of Holdings and its Subsidiaries and (ii)
licenses contemplated by the HIL Swiss Intercompany Agreements;

 

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

 

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

 

(o)   Liens
on assets not constituting Collateral and securing Indebtedness permitted under
Section 6.01(h) in an amount not to exceed $5.0 million at any one
time;

 

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

 

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

 

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

 

80

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(k)   the
Loan Parties may make Investments in other persons, including Non-Guarantor
Subsidiaries; provided that, (i) after giving pro forma effect to each such
Investment, the aggregate amount of all such Investments made by all Loan
Parties on and after the Closing Date pursuant to this Section 6.03(k)
that are outstanding at any time does not exceed $25.0 million (excluding any
amounts invested in any Non-Guarantor

 

81

 

Subsidiary that subsequently becomes a Guarantor (effective
only upon such person becoming a Guarantor and only for so long as such person
remains a Guarantor)) and (ii) if such Investment is in the form of an
intercompany loan, such loan shall be (A) evidenced by an Intercompany Note and
(B) pledged (and delivered) by the Loan Party that is the lender of such
intercompany loan as Collateral pursuant to the applicable Security Agreement;

 

(l)    the
Loan Parties may make Investments in Non-Guarantor Subsidiaries in the form of
intercompany loans to such Non-Guarantor Subsidiaries for the purposes of
enabling such Non-Guarantor Subsidiaries to comply with statutory obligations
imposed by Governmental Authorities; provided that, each such intercompany loan
shall be evidenced by an Intercompany Note and shall be pledged (and delivered)
by the Loan Party that is the lender of such intercompany loan as Collateral
pursuant to the applicable Security Agreement; provided,
further that after giving pro forma effect to each such Investment,
the aggregate amount of all such Investments made by all Loan Parties on and
after the Closing Date pursuant to this Section 6.03(l) that are
outstanding at any time does not exceed $10.0 million (excluding any amounts
invested in any Non-Guarantor Subsidiary that subsequently becomes a Guarantor
(effective only upon such person becoming a Guarantor and only for so long as
such person remains a Guarantor));

 

(m)  Investments
by the Loan Parties in Non-Guarantor Subsidiaries; provided, that, (i) such Investments are contemporaneously
or within five Business Days remitted to the Loan Parties, (ii) such
Investments are made to facilitate repatriation of monies to the United States,
and (iii) the aggregate amount of all such Investments made under this Section 6.03(m)
outstanding at any one time shall not exceed $5.0 million;

 

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

 

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

 

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

 

(q)   Holdings
or Parent may issue Permitted Preferred Stock, and Borrower may purchase
Permitted Preferred Stock, so long as (i) after giving effect to any such
purchase on a pro forma basis, no
Default or Event of Default exists or would result therefrom, (ii) if such
Permitted Preferred Stock is issued by Parent, all proceeds thereof are used by
Parent to pay cash Dividends to Holdings
in compliance with Section 6.05 and (iii) all proceeds of the
issuance of such Permitted Preferred Stock or of such Dividends are used by
Holdings to pay, or provide for the payment of, regularly scheduled payments of
stated interest (and any applicable withholding tax gross-up or other tax
indemnity payments in respect thereof) on the Holdings Senior Notes pursuant to
the terms of the Holdings Senior Note Documents as in effect on the Closing
Date, to the extent such purchase of Permitted Preferred Stock by Borrower
and/or payment of Dividends by Parent, as the case may be, is permitted under
Section 4.09(a) of the Senior Subordinated Note Agreement (if such
agreement is still in effect), so long as, until such time as the proceeds of
the issuance of such Permitted Preferred Stock are applied to the payment of
such regularly scheduled payments of stated interest, the Collateral Agent
shall have a valid and perfected Lien on and security interest in such proceeds
in accordance with Section 5.11 and Section 5.12; and

 

(r)    Permitted
Acquisitions.

 

82

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

83

 

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

 

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

 

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

 

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

 

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

 

(o)   Luxembourg
Intermediate Holdings may create a Subsidiary (“New Parent”) and convey, sell, transfer or assign all of its
assets to New Parent and immediately thereafter liquidate or merge with and
into its parent, WH Capital with WH Capital being the surviving entity; provided, that, concurrently with the
organization of New Parent (but in any event within five Business Days thereof,
but in all cases before the consummation of the transactions contemplated in
the preceding clause (i)) New Parent shall immediately (A) become a Guarantor, (B) execute and
deliver a joinder agreement, in form and substance satisfactory to the
Administrative Agent, whereby New Parent shall grant a security interests in
substantially all of its properties and assets, subject to no Liens (other than
Permitted Liens), (C) to take all actions requested by the Collateral Agent
that the Collateral Agent deems necessary or advisable to cause the Lien
created by each Security Document to be duly perfected to the extent required
by such agreement in accordance with all applicable Requirements of Law,
including the filing of financing statements in such jurisdictions as may be
requested by the Collateral Agent, (D) upon receipt thereof, deliver to the
Collateral Agent stock certificates in respect of the Equity Interest in the
Borrower that it holds, together with undated stock powers executed and
delivered in blank by a duly authorized officer of New Parent and (E) deliver
to the Administrative Agent all such documents, agreements and instruments,
including, without limitation, resolutions, good standing certificates and
legal opinions, all in form and substance satisfactory to the Administrative
Agent and (ii) WH Capital shall (A) deliver to the Collateral Agent the
certificates representing the Equity Interests of New Parent, together with
undated stock powers executed and delivered in blank by a duly authorized
officer of WH Capital, (B) execute
and deliver to the Collateral Agent such amendments or supplements to the
relevant Security Documents or such other documents as the Collateral Agent
shall deem necessary or advisable to grant to the Collateral Agent, for its
benefit and for the benefit of the other Secured Parties, a security interest
on such properties or assets, subject to no Liens other than Permitted Liens,
(C) take all actions necessary to cause such Lien to be duly perfected to the
extent required by such Security Document in accordance with all applicable
Requirements of Law, including the filing of financing statements in such
jurisdictions as may be requested by the Collateral Agent and (D) deliver to the
Administrative Agent all such documents, agreements and instruments, including,
without limitation, resolutions, good standing certificates and legal opinions,
all in form and substance satisfactory to the Administrative Agent; and

 

84

 

(p)   Any
sales or conveyances contemplated by the HIL Swiss Intercompany Agreements.

 

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

 

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

 

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

 

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

 

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

 

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

 

85

 

(e)   so
long as, after giving effect to any such cash Dividend on a pro forma basis, no Default or Event of Default
exists or would result therefrom, then Borrower and each Guarantor may pay cash
Dividends for the purpose of enabling Holdings to pay (so long as all proceeds
thereof are used by Holdings to pay) regularly scheduled payments of stated
interest (and any applicable withholding tax gross-up payments or other tax
indemnity payments in respect thereof) on the Holdings Senior Notes (pursuant
to the terms of the Holdings Senior Note Documents as in effect on the Closing
Date), so long as, until such time as the amount of cash Dividends made by
Borrower pursuant to this Section 6.05(d) are applied to the
payment of such regularly scheduled payments of stated interest, the Collateral
Agent shall have a valid and perfected Lien on and security interest in such
proceeds in accordance with Sections 5.11 and 5.12;

 

(f)    Parent
may pay cash Dividends to Holdings
in an amount equal to the proceeds from issuances of Permitted Preferred Stock
to Borrower in compliance with Section 6.03(q);

 

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

 

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

 

(i)    so
long as no Default exists or would result therefrom, (i) Holdings may pay cash
Dividends in an aggregate amount not to exceed $20,000,000 per fiscal year
(commencing in fiscal year 2005) (“Permitted
Dividends”),  provided, that the amount of
Permitted Dividends may be increased by 25% of the Consolidated Net Income for
the prior fiscal year (commencing with fiscal year 2005), if the Leverage Ratio
of Holdings for the four fiscal quarters of such fiscal year is less than or
equal to 2.00:1.00 and (ii) the Subsidiaries of Holdings may pay cash Dividends
in an aggregate amount equal to the amount of Permitted Dividends that Holdings
declares under clause (i) per fiscal year (commencing in fiscal year
2005) in order for Holdings to be able to make such Permitted Dividends so long
as Holdings uses such Permitted Dividends as contemplated under clause (i);
provided, further, that to the extent that the
Permitted Dividends made by Holdings and its Subsidiaries is less than the
amount permitted to be made in such fiscal year, the amount of such difference
may be carried forward and used to make Permitted Dividends in the next
succeeding fiscal year;

 

(j)    so
long as no Default exists or would result therefrom, Holdings may pay cash
Dividends to its shareholders in an amount equal to $109.3 million plus
the aggregate gross proceeds realized from the exercise of any over-allotment
option in connection with the IPO; and

 

(k)   Borrower
and its direct and indirect parent companies may pay cash Dividends to their
respective parent companies (and such parent companies may pay cash Dividends)
to the extent of U.S. federal and state income and other tax obligations of WH

 

86

 

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

 

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

 

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

 

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

 

(c)   assets sales permitted by Section 6.04;

 

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

 

(e)   the transactions contemplated by the HIL Swiss Intercompany Agreements
may be effected; and

 

(f)    the Transactions may be effected.

 

SECTION 6.07.    Financial Covenants.

 

(a)   Maximum Leverage Ratio.  Permit the Leverage Ratio of Holdings, as of
the last day of the fiscal quarter of Holdings ending on March 31, 2005 and
every fiscal quarter thereafter, to exceed 2.50:1.00.

 

(b)   Minimum Interest Coverage Ratio.  Permit the Consolidated Interest Coverage
Ratio of Holdings, as of the last day of the fiscal quarter of Holdings ending
on March 31, 2005 and every fiscal quarter thereafter, to be less than
4.00:1.00.

 

(c)   Limitation on Capital Expenditures.  (i) Make
or commit to make any Capital Expenditures, other than Capital Expenditures
made or committed to be made by Holdings and its Consolidated Subsidiaries (A)
in fiscal year 2005 which in the aggregate do not exceed $55.0 million, (B) in
fiscal year 2006 which in the aggregate do not exceed $45.0 million or (C) in
each fiscal year of Holdings thereafter which in the aggregate do not exceed
$40.0 million or (D) for purposes of the build out and tenant improvements for
the new leasehold interests contemplated by Section 6.01(e), in an
aggregate amount not to exceed $25.0 million. 
(ii) Notwithstanding anything to the contrary contained in clause
(i) above, to the extent that the Capital Expenditures made by Holdings and
its Consolidated Subsidiaries in any period set forth in clause (i)
above are less than the amount permitted to be made in such period (without
giving effect to any additional amount available as a result of this clause
(ii)), the amount of such difference may be

 

87

 

carried forward
and used to make Capital Expenditures in the next succeeding fiscal year of
Holdings.

 

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

 

(a)   Amend
or modify, or permit the amendment or modification of, any provision of any
existing Indebtedness in respect of the Holdings Senior Note Documents and the
Holdings Senior Notes or other Indebtedness of greater than $5.0 million
aggregate principal amount, or make any payment consistent with an amendment
thereof or change thereto, if the effect of such amendment or modification
would be either to (i) increase the interest rate applicable thereto, (ii)
change (to earlier dates) any dates upon which payments of principal or
interest are due thereon, (iii) change any event of default or condition to an
event of default with respect thereto (other than to eliminate any such event
of default or increase any grace period related thereto), (iv) change the
redemption, prepayment or defeasance provisions thereof, change the
subordination provisions thereof (or of any guaranty thereof), (v) change any
collateral therefor (other than to release such collateral), (vi) or if the
effect of such amendment or change, together with all other amendments or
changes made, is to increase materially the obligations of the obligor thereunder
or to confer any additional rights on the holders of such Indebtedness (or
trustee or other representative on their behalf), or (vii) otherwise cause the
restrictive covenants governing such Indebtedness to be more restrictive, taken
as a whole, than the restrictive covenants set forth herein;

 

(b)   Except
as set forth in Section 5.16, make (or give any notice in respect
thereof) any voluntary or optional payment or prepayment on or redemption or
acquisition for value of, or any prepayment or redemption as a result of any
asset sale, change of control or similar event of, any Indebtedness outstanding
under the Holdings Senior Notes;

 

(c)   Amend
or modify, or permit the amendment or modification of, any provision of any
agreement comprising a HIL Swiss Intercompany Agreement if the effect of such
amendment or modification would be to (i) decrease the amounts payable
thereunder by HIL to Borrower, (ii) cause the sale, assignment or other
conveyance of an interest in the assets of the parties thereto, other than as
contemplated by such agreements on the Closing Date or (iii) result in the
Borrower forbearing from exercising any rights with respect to the terms or
provisions contained therein;

 

(d)   Amend
or modify, or permit the amendment or modification of, any provision of any
agreement comprising a Material Agreement (other than any Material Agreement
referred to in clause (a) and clause (b)) if the effect of such amendment or
modification would be to result in (i) the reduction of any rights a Loan Party
may have thereunder or (ii) a Loan Party forbearing from exercising any rights
with respect to the terms or provisions contained therein;

 

(e)   In
respect of all the Companies other than the Borrower, amend, modify or change
its articles of incorporation or other constitutive documents or bylaws in any
manner that would limit or restrict its ability to guaranty the Obligations or
to satisfy its obligations in respect of such guaranty, or, in the case of any
Subsidiary of the Borrower, restrict its ability to make distributions or
otherwise transfer assets to the Borrower; and

 

88

 

(f)    In
respect of the Borrower, amend, modify or change its articles of incorporation
or other constitutive documents (including by the filing or modification of any
certificate of designation) or bylaws, or any agreement entered into by it,
with respect to its capital stock (including any shareholders’ agreement), or
enter into any new agreement with respect to its capital stock, other than any
amendments, modifications, agreements or changes pursuant to this clause (f)
or any such new agreements pursuant to this clause (f) that do not in
any way adversely and materially affect the interests of the Lenders.

 

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

 

SECTION 6.10.    Limitation on Issuance of Capital
Stock.  Holdings will
not permit any Subsidiary to issue any Equity Interest (including by way of
sales of treasury stock) or any options or warrants to purchase, or securities
convertible into, Equity Interests, except (i) for stock splits, stock
dividends and additional Equity Interest issuances that do not decrease the
percentage ownership of any Subsidiary in any class of the Equity Interest of
such Subsidiary; (ii) Subsidiaries of Holdings formed after the Closing Date
pursuant to Section 6.11 may issue Equity Interests to Holdings or
the Subsidiary of Holdings that is to own such stock; (iii) Borrower may issue
common stock that is Qualified Capital Stock to a Guarantor (so long as the
Collateral Agent has a valid and perfected Lien on and security interest in
such Qualified Capital Stock); (iv) only to the extent required in accordance
with applicable law, any Foreign Subsidiary may issue directors’ qualifying
shares; and (v) in connection with a transaction permitted under Section 6.04.  All Equity Interests (other than capital stock
issued by Holdings) issued in accordance with this Section 6.10
shall, to the extent required by Section 5.12 or the applicable
Security Agreement, be delivered to the Collateral Agent for pledge pursuant to
the applicable Security Agreement.

 

SECTION 6.11.    Limitation on Creation of Subsidiaries.  Establish, create or acquire any additional
Subsidiaries without the prior written consent of the Required Lenders; provided,
that, Holdings or any of its Subsidiaries may establish or create one or more
Wholly Owned Subsidiaries without such consent so long as (except to the extent
any of the following is

 

89

 

expressly exempted, not required or otherwise
limited pursuant to Section 5.11(b), but subject, in any event, to
the requirements of Section 5.11(c)):  (a) 100% of the Equity Interest of any new
Subsidiary is upon the creation or establishment of any such new Subsidiary
pledged and delivered to the Collateral Agent for the benefit of the Secured
Parties under the applicable Security Agreement; and (b) upon the creation or
establishment of any such new Subsidiary, such Subsidiary becomes a party to
the applicable Security Documents and shall become a Guarantor hereunder and
execute a Joinder Agreement and other applicable Loan Documents all in
accordance with Section 5.11(b).

 

SECTION 6.12.    Sale and Leaseback Transactions.  Enter into any arrangement, directly or
indirectly, with any person whereby it shall sell or transfer any property,
real or personal, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property or other
property that it intends to use for substantially the same purpose or purposes
as the property being sold or transferred, except such transactions among Loan
Parties, unless (i) the sale of such property is permitted by Section 6.04
and (ii) any Liens arising in connection with its use of such property are
permitted by Section 6.02.

 

SECTION 6.13.    Holding Companies.Notwithstanding anything
to the contrary contained in this Agreement, with respect to the Holding
Companies, (i) incur, directly or indirectly, any Indebtedness other than the
Obligations under the Loan Documents to which any such Company is a party, the
Holdings Senior Notes and any intercompany Indebtedness between Holding
Companies permitted hereunder or incurred in connection with the payments
required to consummate the Transactions, (ii) create or suffer to exist any
Lien upon any property or assets now owned or hereafter acquired by such
Company other than the Liens created under the Security Documents to which such
Company is a party, (iii) engage in any business or own any assets other than
holding the Equity Interest of such Company’s direct Subsidiaries, claims
against another Company, proceeds received in connection with the Transactions,
and activities reasonably related to each of the foregoing; (iv) consolidate
with or merge with or into, or convey, transfer (except in connection with the
Transactions) or lease all or any portion of its assets to, any person other
than a Loan Party or (iv) sell or otherwise dispose of any Equity Interest of
any of such Company’s Subsidiaries other than to Loan Party.

 

SECTION 6.14.    Business.

 

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

 

SECTION 6.15.    Limitation on Accounting Changes.  Make or permit any change in accounting
policies or reporting practices without the consent of the Required Lenders,
which consent shall not be unreasonably withheld, except changes that, in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect or are required by GAAP.

 

SECTION 6.16.    Fiscal Year.  Change its fiscal year-end to a date other
than December 31.

 

90

 

ARTICLE VII

 

Guarantee

 

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

 

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

 

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

 

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

 

(iii)      the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be amended in any
respect, or any right under the Loan Documents or any other agreement or
instrument referred to herein or therein shall be amended or waived in any
respect or any other guarantee of any of the Guaranteed

 

91

 

Obligations
or any security therefor shall be released or exchanged in whole or in part or
otherwise dealt with;

 

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

 

(v)       the release of any other Guarantor.

 

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

 

For purposes
of this paragraph only, references to the “principal” include each Loan Party
and references to the “creditor” include each Secured Party.  In accordance with Section 2856 of the
California Civil Code, each Guarantor waives all rights and defenses (i)
available to such Guarantor by reason of Sections 2787 through 2855, 2899, and
3433 of the California Civil Code, including all rights or defenses such
Guarantor may have by reason of protection afforded to the principal with
respect to any of the Guaranteed Obligations, or to any other guarantor of any
of the Guaranteed Obligations with respect to any of such guarantor’s
obligations under its guarantee, in either case in accordance with the
antideficiency or other laws of the State of California limiting or discharging
the principal’s Indebtedness or such other guarantor’s obligations, including
Sections 580a, 580b, 580d and 726 of the California Code of Civil Procedure;
and (ii) arising out of an election of remedies by the creditor, even though
such election, such as a nonjudicial foreclosure with respect to security for
any Guaranteed Obligation (or any obligation of any other guarantor of any of
the Guaranteed Obligations), has destroyed such Guarantor’s right of
subrogation and reimbursement against the principal (or such other guarantor)
by the operation of Section 580d of the California Code of Civil Procedure
or otherwise.  No other provision of this
Guarantee shall be construed as limiting the generality of any of the covenants
and waivers set forth in this paragraph. 
As provided below, this Agreement shall be governed by, and shall be
construed and enforced in accordance with the laws of the

 

92

 

State of New York.  This paragraph is included solely out of an
abundance of caution, and shall not be construed to mean that any of the
above-referenced provisions of California law are in any way applicable to this
Agreement or to any of the Guaranteed Obligations.

 

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

 

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

 

SECTION 7.05.    Remedies.  The Guarantors jointly and severally (except
to the extent otherwise limited in accordance with applicable Requirements of
Law as described in Annex III attached hereto) agree that, as between
the Guarantors and the Lenders, the obligations of Borrower under this
Agreement and the Notes, if any, may be declared to be forthwith due and
payable as provided in Article VIII
(and shall be deemed to have become automatically due and payable in the
circumstances provided in said Article VIII)
for purposes of Section 7.01, notwithstanding any stay, injunction
or other prohibition preventing such declaration (or such obligations from
becoming automatically due and payable) as against Borrower and that, in the
event of such declaration (or such obligations being deemed to have become
automatically due and payable), such obligations (whether or not due and
payable by Borrower) shall forthwith become due and payable by the Guarantors
for purposes of Section 7.01.

 

93

 

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

 

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

 

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

 

SECTION 7.09.    Release of Guarantors. If at any time after the Closing Date
and in connection with the Guarantee of any Loan Party in this Article VII
(i) subject to the requirements of Section 5.11(c), in the case of
a Foreign Subsidiary, the
Administrative Agent (after consultation with Borrower) determines that in the
case of any existing Guarantor, it would not be commercially reasonable for
such Guarantor to remain a Guarantor (taking into account the expense
(including taxes), the ability of Borrower or such Guarantor to obtain any necessary
approvals or consents required to be obtained under applicable law (but have
not been previously obtained) in connection therewith, and the effectiveness
and enforceability thereof under applicable law) or (ii) such Guarantee
becomes illegal under applicable law and such Loan Party delivers to the
Administrative Agent, the Lenders and the Collateral Agent a legal opinion from
its counsel to such effect, and no reasonable alternative structure can be
devised having substantially the same effect as the issuance of a Guarantee
that would not be illegal under applicable law, then, so long as such Guarantor has been
released or is contemporaneously released under any other guaranty such
Guarantor may be a party to, in case of each of the immediately preceding clauses
(i) and (ii), the Collateral Agent shall (at the expense of
Borrower) take all action necessary to release its security interest in that
portion of the Security Agreement Collateral owned by such Guarantor (provided, however,
that 65% of the Equity Interests of such Guarantor (and 100% of the Equity
Interests of any Domesticated Foreign Subsidiary) shall not be released from
the Security Agreement Collateral)), and such Guarantor shall be released from
its obligations in respect of the Guarantees in this Article VII
(such Guarantor being hereinafter referred to as a “Released Guarantor,” so long as it continues to be a
Non-Guarantor Subsidiary), which release from such Guarantees, in the case of
an event described in the immediately preceding clause (i), shall become
effective as of the closing of the last day of the taxable year that
immediately precedes the date that the Administrative Agent makes a
determination described in such clause (i); provided that, such Released Guarantor shall continue to be
subject to Section 5.11(b).

 

94

 

ARTICLE VIII

 

Events of Default

 

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

 

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

 

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

 

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

 

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

 

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

 

(f)    any
Company (other than any Immaterial Subsidiary) shall (i) fail to pay any
principal or interest, regardless of amount, due in respect of any Indebtedness
(other than the Obligations) when and as the same shall become due and payable
(after all applicable grace periods have expired); or (ii) fail to observe or
perform any other term, covenant, condition or agreement contained in any
agreement or instrument evidencing or governing any such Indebtedness if the
effect of any failure referred to in this clause (ii) is to cause, or to
permit the holder or holders of such Indebtedness or a trustee on its or their
behalf (with or without the giving of notice, the lapse of time or both) to
cause, such Indebtedness to become due prior to its stated maturity; provided that, it shall not constitute an Event of Default
pursuant to this paragraph (f) unless the aggregate amount of all such
Indebtedness referred to in clauses (i) and (ii) exceeds $5.0
million at any one time;

 

95

 

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

 

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

 

(i)    one
or more judgments for the payment of money in an aggregate amount in excess of
$5.0 million (to the extent not covered by insurance as to which the insurer
does not dispute coverage thereof) shall be rendered against any Company or any
combination thereof and the same shall remain undischarged for a period of 30
consecutive days during which execution shall not be effectively stayed, or any
action shall be legally taken by a judgment creditor to levy upon assets or
properties of any Company to enforce any such judgment;

 

(j)    an
ERISA Event occurs, an event of noncompliance with respect to any Foreign Plan
occurs or, if the present value of the accrued benefit liabilities (whether or
not vested) under any Foreign Plan that is funded, determined as of the end of
the most recently ended fiscal year of the respective Loan Party on the basis
of actuarial assumptions proper under applicable foreign law, exceeds the
current value of the assets of such Foreign Plan by more than $1.0 million,
that in the opinion of the Required Lenders, when taken together with all other
such ERISA Events, noncompliance and underfunding, could reasonably be expected
to result in liability to any Company or its ERISA Affiliates in an aggregate
amount exceeding $1.0 million;

 

(k)   any
security interests and Liens on an asset or assets of the Loan Parties whose
fair market value in the aggregate is greater than $100,000, purported to be
created by any Security Document shall cease to be in full force and effect, or
shall cease to give the Collateral Agent, for the benefit of the Secured
Parties, the Liens, rights, powers and privileges purported to be created and
granted under such Security Documents (including a perfected first priority
security interest in and Lien on all of the Collateral thereunder (except as
otherwise expressly provided in
such Security Documents)) in favor of the

 

96

 

Collateral Agent, or shall be asserted by Holdings, Borrower
or any other Loan Party not to be a valid, perfected, first priority (except as
otherwise expressly provided in
this Agreement or such Security Document) security interest in or Lien on the
Collateral covered thereby;

 

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

 

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

 

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

 

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

 

ARTICLE IX

 

Collateral Account; Application of Collateral
Proceeds

 

SECTION 9.01.    Collateral Account.

 

(a)   The
Collateral Agent is hereby authorized to establish and maintain at its office
at 1633 Broadway, 25th Floor, New York, New York 10036, Attention:
Erma

 

97

 

Dell’Aquila, in the name of the Collateral Agent and pursuant
to a Control Agreement, a restricted deposit account designated “Collateral
Account.”  Each Loan Party shall deposit
into the Collateral Account from time to time (i) the cash proceeds of any of
the Collateral (including pursuant to any disposition thereof) to the extent
contemplated herein or in any other Loan Document, (ii) the cash proceeds of
any Casualty Event with respect to Collateral to the extent contemplated herein
or in any other Loan Document, and (iii) any cash such Loan Party is required
to pledge as additional collateral security hereunder pursuant to the Loan
Documents.

 

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

 

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

 

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

 

98

 

SECTION 9.02.    Proceeds of Casualty Events and Collateral
Dispositions.

 

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

 

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

 

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

 

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

 

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

 

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

 

99

 

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

 

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

 

ARTICLE X

 

The Administrative Agent and the Collateral
Agent

 

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

 

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

 

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

 

100

 

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

 

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

 

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

 

Each Lender
acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. 
Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not

 

101

 

taking action under or based upon this Agreement, any other Loan
Document or related agreement or any document furnished hereunder or
thereunder.

 

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

 

ARTICLE XI

 

Miscellaneous

 

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

 

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

 

	
   

  	
  Herbalife International, Inc.

  1800 Century Park East

  Los Angeles, California  90067

  Attention: William D. Lowe

  Phone:  (310) 410-9600

  Telecopy No.:  (310) 557-3913;

  
	
   

  	
   

  
	
   

  	
  With courtesy copies to each of:

  
	
   

  	
   

  
	
   

  	
  Whitney & Co., LLC

  177 Broad Street

  Stamford, Connecticut  06901

  Attention:  Kevin J. Curley

  Phone:  (203) 973-1400

  Telecopy No.:  (203) 973-1422;

  
	
   

  	
   

  
	
   

  	
  Golden Gate Private Equity, Inc.

  One Embarcadero Center, Suite 3300

  San Francisco, California  94111

  Attention:  Jesse Rogers

  Phone:  (415) 627-4500

  Telecopy No.:  (415) 627-4501;

  

 

102

 

	
   

  	
  Gibson, Dunn
  & Crutcher LLP

  333 South Grand Avenue

  Los Angeles, California 90071

  Attention:  Brian D. Kilb, Esq.

  Phone:  (213) 229-7236

  Telecopy No.:  (213) 229-7520;

  

 

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

 

	
   

  	
  Morgan
  Stanley Senior Funding, Inc.

  1633 Broadway

  25th Floor

  New York, New York  10036

  Attention: James Morgan

  Phone:  (212) 537-1470

  Telecopy No.:  (212) 507-3562; and

  Attention:
  Erma Dell’Aquila

  Phone:  (212) 537-1532

  Telecopy No.:  (212) 507-3544; and

  

 

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

 

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

 

SECTION 11.02.                    Waivers;
Amendment.

 

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

 

103

 

(b)         Neither
this Agreement nor any other Loan Document nor any provision hereof or thereof
may be waived, amended or modified except, in the case of this Agreement,
pursuant to an agreement or agreements in writing entered into by Borrower and
the Required Lenders or, in the case of any other Loan Document, pursuant to an
agreement or agreements in writing entered into by the Administrative Agent and
the Loan Party or Loan Parties that are parties thereto, in each case with the
written consent of the Required Lenders; provided
that, no such agreement shall (i) increase the Commitment of any Lender without
the written consent of such Lender; (ii) reduce the principal amount of any
Loan or LC Disbursement or reduce the rate of interest thereon, or reduce any
Fees payable hereunder, without the written consent of each Lender affected
thereby (except in connection with any waiver of the applicability of any
post-default increase in interest rates); (iii) postpone the maturity of any
Loan, or any scheduled date of payment of or installment otherwise due on the
principal amount of any Term Loan under Section 2.09, or the
required date of reimbursement of any LC Disbursement, or any date for the
payment of any interest or fees payable hereunder, or reduce the amount of,
waive or excuse any such payment, or postpone the scheduled date of expiration
of any Commitment or postpone the scheduled date of expiration of any Letter of
Credit beyond the Revolving Maturity Date, without the written consent of each
Lender affected thereby; (iv) change Section 2.14(b) or (c)
in a manner that would alter the pro rata
sharing of payments or set-offs required thereby without the written consent of
each Lender; (v) change the percentage set forth in the definition of “Required
Lenders” or any other provision of any Loan Document (including this Section 11.02(b))
specifying the number or percentage of Lenders (or Lenders of any Class)
required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder without the written consent of
each Lender (or each Lender of such Class, as the case may be); (vi) except as
otherwise expressly permitted under this Agreement, (A) release Holdings,
Parent, Cayman III, any of the LuxCos and WH Capital from their respective
Guarantees or limit its liability in respect of such Guarantee or (B) release
all or substantially all of the Subsidiary Guarantors from their Guarantees, or
limit the liability of all or substantially all of the Subsidiary Guarantors in
respect of their Guarantees, in each case without the written consent of each
Lender; (vii) release all or substantially all of the Collateral from the Liens
of the Security Documents or alter the relative priorities of the Obligations
entitled to the Liens of the Security Documents (except in connection with
securing additional Obligations equally and ratably with the other
Obligations), in each case without the written consent of each Lender; or
(viii) change any provisions of any Loan Document in a manner that by its terms
adversely affects the rights in respect of payments due to Lenders holding
Loans of any Class differently than those holding Loans of any other Class
without the written consent of Lenders holding a majority in interest of the
outstanding Loans and unused Commitments of each affected Class; provided further that, (1) no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent, the Collateral Agent, or the Issuing Bank without the
prior written consent of the Administrative Agent, the Collateral Agent, or the
Issuing Bank, as the case may be; and (2) any waiver, amendment or modification
of this Agreement that by its terms affects the rights or duties under this
Agreement of the Revolving Lenders (but not the Term Lenders) or the Term
Lenders (but not the Revolving Lenders) may be effected by an agreement or
agreements in writing entered into by Borrower and the requisite percentage in
interest of the affected Class of Lenders that would be required to consent
thereto under this Section 11.02(b) if such Class of Lenders were
the only Class of Lenders hereunder at the time.  Notwithstanding the foregoing, any provision
of this Agreement may be amended by an agreement in writing entered into by
Borrower, the Required Lenders and the

 

104

 

Administrative Agent (and, if its rights or obligations are
affected thereby, the Issuing Bank) if (x) by the terms of such agreement the
Commitment of each Lender not consenting to the amendment provided for therein shall terminate
upon the effectiveness of such amendment and (y) at the time such amendment
becomes effective, each Lender not consenting thereto receives payment in full
of the principal of and interest accrued on each Loan made by it and all other
amounts owing to it or accrued for its account under this Agreement.

 

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

 

SECTION 11.03.                    Expenses; Indemnity.

 

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

 

(b)         Except to
the extent otherwise limited in accordance with applicable Requirements of Law
as described in Annex III attached hereto, the Loan Parties agree, jointly
and severally, to indemnify the Agents, the Arranger, each Lender, and the
Issuing Bank, each Affiliate of any of the foregoing persons, and each of their
respective directors, officers, trustees, employees and agents (each such
person being called an “Indemnitee”)
against, and to hold each Indemnitee harmless from, all reasonable
out-of-pocket costs and any and all losses, claims, damages, liabilities and
related expenses, including reasonable counsel fees, charges and disbursements,
incurred by or asserted against any Indemnitee arising out of, in any way
connected with, or as a result of (i) any actual or proposed use of the
proceeds of the Loans or issuances of Letters of Credit; (ii) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto; or (iii) any actual or
alleged presence or Release

 

105

 

or threatened Release of Hazardous Materials, on, under or
from any property owned, leased or operated by any Company, or any
Environmental Claim related in any way to any Company; provided that, such indemnity shall not,
as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the bad
faith, gross negligence or willful misconduct of such Indemnitee.

 

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

 

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

 

SECTION 11.04.                    Successors and Assigns.

 

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

 

(b)         Any Lender
may assign to one or more assignees (other than Holdings or any of its
Affiliates or Subsidiaries) all or a portion of its rights and obligations
under this Agreement (including all or a portion of its Commitment and the
Loans at the time owing to it); provided
that, (i) except in the case of an assignment to a Lender, an Affiliate of a
Lender or a Lender Affiliate, each of Borrower and the Administrative Agent
(and, in the case of an assignment of all or a portion of a Revolving
Commitment or any Lender’s obligations in respect of its LC Exposure, the
Issuing Bank) must give their prior written

 

106

 

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

 

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

 

(d)         Upon its
receipt of a duly completed Assignment and Acceptance executed by an assigning
Lender and an assignee, the assignee’s completed Administrative Questionnaire
(unless the assignee shall already be a Lender hereunder) and any written
consent to such assignment required by Section 11.04(b), the
Administrative Agent shall

 

107

 

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

 

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

 

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

 

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

 

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

 

108

 

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

 

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

 

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

 

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

 

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

 

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

 

109

 

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

 

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

 

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

 

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

 

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

 

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

 

110

 

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

 

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

 

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

 

[signature
pages follow]

 

111

 

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

 

	
   

  	
  HERBALIFE INTERNATIONAL, INC.,

  
	
   

  	
  a Nevada corporation, as Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brett R. Chapman

  	
   

  
	
   

  	
   

  	
  Name:  BRETT R. CHAPMAN

  
	
   

  	
   

  	
  Title: General Counsel & Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WH CAPITAL CORPORATION,

  
	
   

  	
  a Nevada corporation, as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brett R. Chapman

  	
   

  
	
   

  	
   

  	
  Name: Brett R. Chapman

  
	
   

  	
   

  	
  Title: Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HERBALIFE INTERNATIONAL OF AMERICA, INC.,

  
	
   

  	
  a Nevada corporation, as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brett R. Chapman

  	
   

  
	
   

  	
   

  	
  Name: Brett R. Chapman

  
	
   

  	
   

  	
  Title: General Counsel & Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HERBALIFE INTERNATIONAL OF EUROPE, INC.,

  
	
   

  	
  a California corporation, as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brett R. Chapman

  	
   

  
	
   

  	
   

  	
  Name: Brett R. Chapman

  
	
   

  	
   

  	
  Title: Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HERBALIFE INTERNATIONAL COMMUNICATIONS,
  INC.,

  
	
   

  	
  a California corporation, as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brett R. Chapman

  	
   

  
	
   

  	
   

  	
  Name: Brett R. Chapman

  
	
   

  	
   

  	
  Title: 
  Secretary

  

 

 

	
   

  	
  HERBALIFE INTERNATIONAL DISTRIBUTION, INC.,

  
	
   

  	
  a California corporation, as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brett R. Chapman

  	
   

  
	
   

  	
   

  	
  Name: 
  BRETT R. CHAPMAN

  
	
   

  	
   

  	
  Title:  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HERBALIFE TAIWAN, INC.,

  
	
   

  	
  a California corporation, as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brett R. Chapman

  	
   

  
	
   

  	
   

  	
  Name: Brett R. Chapman

  
	
   

  	
   

  	
  Title: Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HERBALIFE INTERNATIONAL (THAILAND), LTD.,

  
	
   

  	
  a California corporation, as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brett R. Chapman

  	
   

  
	
   

  	
   

  	
  Name: Brett R. Chapman

  
	
   

  	
   

  	
  Title: Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HERBALIFE INTERNATIONAL DO BRASIL LTDA.,

  
	
   

  	
  a corporation dually organized in Brazil
  and Delaware,

  
	
   

  	
  as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brett R. Chapman

  	
   

  
	
   

  	
   

  	
  Name: Brett R. Chapman

  
	
   

  	
   

  	
  Title: Secretary

  

 

 

	
   

  	
  HERBALIFE LTD.,

  
	
   

  	
  a Cayman Islands exempted company with
  limited liability,

  
	
   

  	
  as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brett R. Chapman

  	
   

  
	
   

  	
   

  	
  Name: 
  BRETT R. CHAPMAN

  
	
   

  	
   

  	
  Title: General Counsel & Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WH INTERMEDIATE HOLDINGS LTD.,

  
	
   

  	
  a Cayman Islands exempted company with
  limited liability,

  
	
   

  	
  as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brett R. Chapman

  	
   

  
	
   

  	
   

  	
  Name: Brett R. Chapman

  
	
   

  	
   

  	
  Title: General Counsel & Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HBL LTD.,

  
	
   

  	
  a Cayman Islands exempted company with
  limited liability,

  
	
   

  	
  as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brett R. Chapman

  	
   

  
	
   

  	
   

  	
  Name: Brett R. Chapman

  
	
   

  	
   

  	
  Title: Secretary

  

 

 

	
   

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

  
	
   

  	
  a Luxembourg corporation, as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Christophe Thomann

  	
   

  
	
   

  	
   

  	
  Name: 
  Christophe Thomann

  
	
   

  	
   

  	
  Title: Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HLF LUXEMBOURG HOLDINGS S.à R.L.,

  
	
   

  	
  a Luxembourg corporation, as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Christophe Thomann

  	
   

  
	
   

  	
   

  	
  Name: Christophe Thomann

  
	
   

  	
   

  	
  Title: Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

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

  
	
   

  	
  a Luxembourg corporation, as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Christophe Thomann

  	
   

  
	
   

  	
   

  	
  Name: Christophe Thomann

  
	
   

  	
   

  	
  Title: Manager

  

 

 

	
   

  	
  HERBALIFE INTERNATIONAL OF ISRAEL (1990)
  LTD.,

  
	
   

  	
  an Israeli corporation, as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brett R. Chapman

  	
   

  
	
   

  	
   

  	
  Name: 
  BRETT R. CHAPMAN

  
	
   

  	
   

  	
  Title: Authorized Signatory

  

 

 

	
   

  	
  HERBALIFE INTERNATIONAL FINLAND OY,

  
	
   

  	
  a Finnish corporation, as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brett R. Chapman

  	
   

  
	
   

  	
   

  	
  Name: 
  BRETT R. CHAPMAN

  
	
   

  	
   

  	
  Title: Authorized Signatory

  

 

 

	
   

  	
  MORGAN STANLEY SENIOR FUNDING, INC.,

  
	
   

  	
  as Administrative Agent, Joint Lead
  Arranger, Joint

  
	
   

  	
  Bookrunner and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eugene F. Martin

  	
   

  
	
   

  	
   

  	
  Name: 
  Eugene F. Martin

  
	
   

  	
   

  	
  Title: 
  Vice President

  
	
   

  	
   

  	
  Morgan Stanley Senior Funding Inc

  
	
   

  	
   

  	
   

  
	
   

  	
  MORGAN STANLEY & CO. INCORPORATED,

  
	
   

  	
  as Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eugene F. Martin

  	
   

  
	
   

  	
   

  	
  Name: 
  Eugene F. Martin

  
	
   

  	
   

  	
  Title: 
  Managing Director

  
	
   

  	
   

  	
  Morgan Stanley, Inc

  

 

 

	
   

  	
  MERRILL LYNCH, PIERCE, FENNER &

  
	
   

  	
  SMITH, INCORPORATED,

  
	
   

  	
  as Joint Lead Arranger, Joint Bookrunner
  and

  
	
   

  	
  Syndication Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bill Gates

  	
   

  
	
   

  	
   

  	
  Name: Bill Gates

  
	
   

  	
   

  	
  Title: Authorized Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MERRILL LYNCH CAPITAL CORPORATION,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bill Gates

  	
   

  
	
   

  	
   

  	
  Name: Bill Gates

  
	
   

  	
   

  	
  Title: Authorized Signatory

  

 

 

	
   

  	
  COÖPERATIEVE CENTRALE RAIFFEISEN-

  
	
   

  	
  BOERENLEENBANK B.A.,

  
	
   

  	
  “RABOBANK INTERNATIONAL”,

  
	
   

  	
  NEW YORK BRANCH, as Documentation

  
	
   

  	
  Agent, as Issuing Bank and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J David Thomas

  	
   

  
	
   

  	
   

  	
  Name: J David Thomas

  
	
   

  	
   

  	
  Title: Executive Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Rebecca O. Morrow

  	
   

  
	
   

  	
   

  	
  Name: Rebecca O. Morrow

  
	
   

  	
   

  	
  Title: Executive Director

  

 

 

	
   

  	
  BANK OF AMERICA, N.A.,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin J. Trieber

  	
   

  
	
   

  	
   

  	
  Name: Kevin J. Trieber

  
	
   

  	
   

  	
  Title: Senior Vice President

  

 

 

	
   

  	
  UNION BANK OF CALIFORNIA,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David J. Stassel

  	
   

  
	
   

  	
   

  	
  Name:  David J. Stassel

  
	
   

  	
   

  	
  Title:  V.P.

  

 

 

Annex I

 

Amortization
Table

 

	
  Date

  	
   

  	
  Term Loan Amount

  	
   

  
	
  March 31,
  2005

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  June 30,
  2005

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  September 30,
  2005

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  December 31,
  2005

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  March 31,
  2006

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  June 30,
  2006

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  September 30,
  2006

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  December 31,
  2006

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  March 31,
  2007

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  June 30,
  2007

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  September 30,
  2007

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  December 31,
  2007

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  March 31,
  2008

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  June 30,
  2008

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  September 30,
  2008

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  December 31,
  2008

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  March 31,
  2009

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  June 30,
  2009

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  September 30,
  2009

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  December 31,
  2009

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  March 31,
  2010

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  June 30,
  2010

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  September 30,
  2010

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  December 21,
  2010

  	
   

  	
  $

  	
  188,500,000

  	
   

  

 

1

 

Annex II

 

Lenders’ Notice Information and Commitments

 

	
  Lender

  	
   

  	
  Revolving Commitment

  	
   

  	
  Term Loan Commitment

  	
   

  
	
  Morgan
  Stanley Senior Funding, Inc.

  	
   

  	
  $

  	
  5,000,000

  	
   

  	
  $

  	
  97,000,000

  	
   

  
	
  Merrill
  Lynch Capital Corporation

  	
   

  	
  $

  	
  5,000,000

  	
   

  	
  $

  	
  97,000,000

  	
   

  
	
  Rabobank
  International

  	
   

  	
  $

  	
  5,000,000

  	
   

  	
  $

  	
  6,000,000

  	
   

  
	
  Bank of
  America, N.A.

  	
   

  	
  $

  	
  5,000,000

  	
   

  	
  —

  	
   

  
	
  Union Bank
  of California

  	
   

  	
  $

  	
  5,000,000

  	
   

  	
  —

  	
   

  
	
  Total

  	
   

  	
  $

  	
  25,000,000

  	
   

  	
  $

  	
  200,000,000

  	
   

  

 

	
  Morgan Stanley Senior Funding, Inc.

   

  Morgan
  Stanley Senior Funding, Inc.

  1633 Broadway

  25th Floor

  New York, New York  10036

  Attention: James Morgan

  Phone: (212) 537-1470

  Telecopy No.: (212) 507-3562; and

  Attention: Erma Dell’Aquila

  Phone: (212) 537-1532

  Telecopy No.: (212) 507-3544

   

  	
  Merrill Lynch Capital Corporation

   

  Merrill
  Lynch Capital Corporation

  4 World
  Financial Center

  16th Floor

  New York, NY
  10080

  Attention:
  Nancy Meadows

  Phone: (212) 449-2879

  Telecopy No.: (212) 738-1186; and

   

  Merrill
  Lynch Bank USA

  Attention:
  Document Compliance Specialist

  15 West South
  Temple, 3rd FL

  Salt Lake
  City, UT 84101

  Phone: 
  (801) 526-8300

  Telecopy No.: (801) 531-7470

  
	
   

  	
   

  
	
  Rabobank International

   

  Rabobank International

  13355 Noel Rd.

  Suite 1000

  Dallas, Texas 75240

  Attention: David Thomas

  Phone: (972) 419-5266

  Telecopy No.: (972) 419-6315

   

   

  	
  Bank of America, N.A.

   

  Bank of America, N.A.

  333 South Hope Street, Suite 1300

  Los Angeles, CA 90071

  Attention: Kevin J. Trieber

  Phone: (213) 621-7169

  Telecopy No.: (213) 621-3611; and

   

  Bank of America, N.A.

  333 S. Beaudry Avenue

  Los Angeles, CA 90017

  Attention: Linda Escamilla

  Phone: (213) 345-7748

  Telecopy No.: (213) 345-6081

  

 

1

 

	
  Union Bank of California, N.A.

   

  Union Bank of California, N.A.

  445 South Figueroa Street, 18th Floor

  Los Angeles, CA 90071

  Attention:David Stassel

  Tel: 
  (213) 236-5273

  Telecopy No.:  (213) 236-7636; and

   

  Union Bank of California, N.A.

  601 Potrero Grande Dr., 2nd Floor

  Monterey Park, CA  91755

  Attention: Ruby Gonzales

  Tel: (323) 720-2870

  Telecopy No.: (323) 724-6198

  	
   

  

 

2

 

Annex III

 

Limitations
on Guarantees and Indemnities  Under Applicable Foreign Laws

 

Limitations on the Guarantee of Herbalife
International of Israel (1990) Ltd. (“Herbalife Israel”)

 

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

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

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

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

5.             Any
stamp duty payable in connection with the Agreement, if any, will be payable by
the Borrower.

 

Limitations on the Guarantee of Herbalife
International of Finland OY

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

 

Limitations on the Guarantee Herbalife
International Do Brasil Ltda.

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

 

Limitations on the Guarantee Herbalife
International (Thailand) Ltd.

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

 

1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00084-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00084-of-00352.parquet"}]]