Document:

Exhibit 10.3

 

 

Mr. W. Hunt

Hexcel Composites Limited

Duxford

Cambridge

CB2 4QB

 

April 3, 2008

 

Dear Bill,

 

Your Pension benefits

 

The purpose of this
letter is to modify your existing pension promise from Hexcel Composites
Limited (the “Company”) as set out in the letter dated 21 January 1999 and
executed by S C Forsyth, Director, I J Krakower, Director, and John J Lee,
Chairman and CEO.  Except as modified
below, your pension promise and your life assurance and ill-health retirement
benefits as set forth in that letter are unchanged.  The following provisions are modified as
follows:

 

The Hexcel Composites Limited
Pension Scheme (the “Scheme”)

 

Benefits payable to you
under the Scheme are now payable in accordance with the tax regime introduced
by Finance Act 2004.

 

Benefits in excess of Scheme
benefits

 

As stated in the letter
dated 21 January 1999, the balance of the benefits payable will be paid
directly by the Company.  The Company
will therefore provide you with regular monthly payments.

 

It is agreed that you may
in the future, at your discretion, elect to convert the unpaid benefits payable
by the Company to a lump sum.  The amount
of the lump sum for any and all future pension payments due to you and your
spouse, will be calculated by an actuary appointed by the Company, using the
same assumptions that are used for disclosure of the Scheme under US GAAP
accounting principles, (currently Financial Accounting Standard (FAS) No.87 as
amended by FAS Nos 132® and 158), or any such other accounting principles that
are used to prepare the Company’s financial statements. The date selected for
determining the assumptions will be the most recent measurement date i.e. the
last Company year-end prior to the lump sum being paid or a subsequent
remeasurement date. The lump sum will be reduced by tax payments requested to
be withheld.  You and your wife will be
asked to sign an appropriate irrevocable election form.  You will receive the lump sum payment six
months after your election, and you must be alive at the time of payment.  For the avoidance of doubt, should you die
before payment of the lump sum, it will not then be payable to your wife or
estate. However, a spouse’s pension would be payable, in accordance with the
letter to you dated 21 January 1999. Your spouse will not have the option
to convert the benefits to a lump sum.

 

This letter is executed
as a deed poll with the intention of allowing your wife to benefit from the
promises made in this letter.

 

1

 

Except as stated above,
the letter to you dated 21 January 1999 is unmodified.

 

Yours sincerely,

 

 

	
  /s/ Wayne Pensky

  	
   

  	
  /s/ Ira Krakower

  
	
  Wayne Pensky, Director

  	
   

  	
  Ira Krakower, Director

  

 

Executed as a deed poll
for and on behalf of Hexcel Composites Limited

 

Countersigned by W Hunt
to confirm his acceptance that this letter modifies the letter of 21 January 1999
executed by S C Forsyth, Director, I J Krakower, Director, and John J Lee,
Chairman and CEO.

 

 

	
  /s/ W Hunt

  	
   

  

 

W HuntExhibit 10.4

 

Modification to Supplemental
Pension Arrangement between

Hexcel Composites Limited and William Hunt

 

Mr. William
Hunt, President of Hexcel, who works and resides in the United Kingdom,
participates in Hexcel’s qualified UK pension plan and began receiving the
qualified portion of his pension as of February 2008, the month following
the month in which he reached age 65.  Mr. Hunt
also has a supplemental pension designed to provide, when combined with his
benefits under the qualified pension plan, a total pension Mr. Hunt would
receive if there were no limitation on the pension amount that could be accrued
under the qualified pension plan.  Hexcel
agreed to commence payment of Mr. Hunt’s supplemental pension from February 2008
as well, instead of from his retirement.  The supplemental pension
provides Mr. Hunt with a monthly payment of approximately $11,905.Exhibit 10.1

 

EXECUTION COPY

 

 

$625,000,000

AMENDED AND RESTATED CREDIT AGREEMENT

 

Dated
as of July 25, 2008

 

among

 

NBTY,
INC.,

as the Borrower,

 

The
Several Lenders from Time 

to Time Parties Hereto,

 

JPMORGAN
CHASE BANK, N.A.

as Administrative Agent and Collateral Agent,

 

BANK OF AMERICA, N.A.

CITIBANK, N.A.

HSBC BANK USA, NATIONAL ASSOCIATION

and

WACHOVIA BANK, NATIONAL ASSOCIATION

as Co-Syndication Agents

 

 

J.P.
MORGAN SECURITIES INC.,

as Sole Bookrunner and Sole Arranger

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 1. DEFINITIONS

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.1.

  	
  Defined Terms

  	
  2

  
	
  1.2.

  	
  Other Definitional
  Provisions

  	
  22

  
	
   

  	
   

  	
   

  
	
  SECTION 2. AMOUNT AND TERMS OF COMMITMENTS

  	
  23

  
	
   

  	
   

  	
   

  
	
  2.1.

  	
  Revolving Commitments.

  	
  23

  
	
  2.2.

  	
  Procedure for Revolving
  Credit Borrowing

  	
  23

  
	
  2.3.

  	
  Repayment of Revolving
  Credit Loans

  	
  24

  
	
  2.4.

  	
  Termination, Reduction,
  Increase and Extension of Revolving Credit Commitments

  	
  24

  
	
  2.5.

  	
  Term Commitments

  	
  26

  
	
  2.6.

  	
  Procedure for Term Loan
  Borrowing.

  	
  26

  
	
  2.7.

  	
  Repayment of Term Loans.

  	
  27

  
	
  2.8.

  	
  Swing Line Commitment

  	
  27

  
	
   

  	
   

  	
   

  
	
  SECTION 3. LETTERS OF CREDIT

  	
  29

  
	
   

  	
   

  	
   

  
	
  3.1.

  	
  Letters of Credit

  	
  29

  
	
  3.2.

  	
  Procedure for Issuance of
  Letters of Credit

  	
  30

  
	
  3.3.

  	
  Participating Interests

  	
  31

  
	
  3.4.

  	
  Payments

  	
  31

  
	
  3.5.

  	
  Further Assurances

  	
  32

  
	
  3.6.

  	
  Obligations Absolute

  	
  32

  
	
  3.7.

  	
  Letter of Credit
  Application

  	
  32

  
	
  3.8.

  	
  Purpose of Letters of
  Credit

  	
  33

  
	
   

  	
   

  	
   

  
	
  SECTION 4. GENERAL PROVISIONS

  	
  33

  
	
   

  	
   

  	
   

  
	
  4.1.

  	
  Interest Rates and Payment
  Dates

  	
  33

  
	
  4.2.

  	
  Conversion and
  Continuation Options

  	
  34

  
	
  4.3.

  	
  Minimum Amounts of
  Tranches

  	
  35

  
	
  4.4.

  	
  Optional and Mandatory
  Prepayments

  	
  35

  
	
  4.5.

  	
  Commitment Fees; Other
  Fees

  	
  36

  
	
  4.6.

  	
  Computation of Interest
  and Fees

  	
  37

  
	
  4.7.

  	
  Inability to Determine
  Interest Rate

  	
  37

  
	
  4.8.

  	
  Pro Rata Treatment and
  Payments

  	
  38

  
	
  4.9.

  	
  Illegality

  	
  40

  
	
  4.10.

  	
  Increased Costs

  	
  40

  
	
  4.11.

  	
  Indemnity

  	
  42

  

 

i

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  4.12.

  	
  Taxes

  	
  42

  
	
  4.13.

  	
  Use of Proceeds

  	
  45

  
	
  4.14.

  	
  Change in Lending Office;
  Replacement of Lender

  	
  45

  
	
  4.15.

  	
  Break Funding Payments

  	
  45

  
	
  4.16.

  	
  Evidence of Debt

  	
  46

  
	
   

  	
   

  	
   

  
	
  SECTION 5. REPRESENTATIONS AND WARRANTIES

  	
  47

  
	
   

  	
   

  	
   

  
	
  5.1.

  	
  Financial Condition;
  Accuracy of Public Information

  	
  47

  
	
  5.2.

  	
  No Change

  	
  48

  
	
  5.3.

  	
  Corporate Existence;
  Compliance with Law

  	
  48

  
	
  5.4.

  	
  Corporate Power;
  Authorization; Enforceable Obligations

  	
  48

  
	
  5.5.

  	
  No Legal Bar

  	
  48

  
	
  5.6.

  	
  No Material Litigation

  	
  49

  
	
  5.7.

  	
  No Default

  	
  49

  
	
  5.8.

  	
  Ownership of Property;
  Liens

  	
  49

  
	
  5.9.

  	
  Intellectual Property

  	
  49

  
	
  5.10.

  	
  Taxes

  	
  50

  
	
  5.11.

  	
  Federal Regulations

  	
  50

  
	
  5.12.

  	
  ERISA

  	
  50

  
	
  5.13.

  	
  Investment Company Act;
  Other Regulations

  	
  51

  
	
  5.14.

  	
  Subsidiaries

  	
  51

  
	
  5.15.

  	
  Environmental Matters

  	
  51

  
	
  5.16.

  	
  Solvency

  	
  52

  
	
  5.17.

  	
  Security Documents

  	
  52

  
	
  5.18.

  	
  Insurance

  	
  52

  
	
  5.19.

  	
  Affiliate Transactions

  	
  52

  
	
  5.20.

  	
  Accuracy of Information

  	
  52

  
	
  5.21.

  	
  OFAC.

  	
  53

  
	
   

  	
   

  	
   

  
	
  SECTION 6. CONDITIONS PRECEDENT

  	
  53

  
	
   

  	
   

  	
   

  
	
  6.1.

  	
  Conditions to Effective
  Date

  	
  53

  
	
  6.2.

  	
  Conditions to Each
  Extension of Credit

  	
  57

  
	
   

  	
   

  	
   

  
	
  SECTION 7. AFFIRMATIVE COVENANTS

  	
  57

  
	
   

  	
   

  	
   

  
	
  7.1.

  	
  Financial Statements

  	
  57

  
	
  7.2.

  	
  Certificates; Other
  Information

  	
  58

  
	
  7.3.

  	
  Payment of Obligations

  	
  59

  
	
  7.4.

  	
  Maintenance of Existence

  	
  59

  
	
  7.5.

  	
  Maintenance of Property;
  Insurance

  	
  59

  
	
  7.6.

  	
  Inspection of Property;
  Books and Records; Discussions

  	
  60

  
	
  7.7.

  	
  Notices

  	
  60

  
	
  7.8.

  	
  Environmental Laws

  	
  60

  

 

ii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  7.9.

  	
  Additional Subsidiaries;
  Additional Collateral

  	
  61

  
	
   

  	
   

  	
   

  
	
  SECTION 8. NEGATIVE COVENANTS

  	
  62

  
	
   

  	
   

  	
   

  
	
  8.1.

  	
  Financial Condition
  Covenants

  	
  62

  
	
  8.2.

  	
  Limitation on Indebtedness

  	
  63

  
	
  8.3.

  	
  Limitation on Liens

  	
  64

  
	
  8.4.

  	
  Limitation on Guarantee
  Obligations

  	
  66

  
	
  8.5.

  	
  Limitation on Fundamental
  Changes

  	
  66

  
	
  8.6.

  	
  Limitation on Sale of
  Assets

  	
  67

  
	
  8.7.

  	
  Limitation on Dividends
  and Other Restricted Payments

  	
  67

  
	
  8.8.

  	
  Limitation on Capital
  Expenditures

  	
  68

  
	
  8.9.

  	
  Limitation on Investments,
  Loans and Advances

  	
  68

  
	
  8.10.

  	
  Limitation on Optional
  Payments and Modifications of Debt Instruments

  	
  69

  
	
  8.11.

  	
  Limitation on Transactions
  with Affiliates

  	
  70

  
	
  8.12.

  	
  Limitation on Sales and
  Leasebacks

  	
  70

  
	
  8.13.

  	
  Limitation on Changes in
  Fiscal Year

  	
  70

  
	
  8.14.

  	
  Limitation on Negative
  Pledge Clauses

  	
  70

  
	
  8.15.

  	
  Limitation on Lines of
  Business

  	
  71

  
	
  8.16.

  	
  Hedging Agreements

  	
  71

  
	
   

  	
   

  	
   

  
	
  SECTION 9. EVENTS OF DEFAULT

  	
  71

  
	
   

  	
   

  	
   

  
	
  SECTION 10. THE AGENTS AND THE ARRANGER

  	
  74

  
	
   

  	
   

  	
   

  
	
  10.1.

  	
  Appointment

  	
  74

  
	
  10.2.

  	
  Delegation of Duties

  	
  75

  
	
  10.3.

  	
  Exculpatory Provisions

  	
  75

  
	
  10.4.

  	
  Reliance by Agents

  	
  75

  
	
  10.5.

  	
  Notice of Default

  	
  76

  
	
  10.6.

  	
  Non-Reliance on Agents and
  Other Lenders

  	
  76

  
	
  10.7.

  	
  Indemnification

  	
  77

  
	
  10.8.

  	
  Agent in Its Individual
  Capacity

  	
  77

  
	
  10.9.

  	
  Successor Agents

  	
  77

  
	
  10.10.

  	
  Issuing Lender

  	
  78

  
	
   

  	
   

  	
   

  
	
  SECTION 11. MISCELLANEOUS

  	
  78

  
	
   

  	
   

  	
   

  
	
  11.1.

  	
  Amendments and Waivers

  	
  78

  
	
  11.2.

  	
  Notices

  	
  79

  
	
  11.3.

  	
  No Waiver; Cumulative
  Remedies

  	
  81

  
	
  11.4.

  	
  Survival

  	
  81

  
	
  11.5.

  	
  Payment of Expenses and
  Taxes

  	
  81

  
	
  11.6.

  	
  Successors and Assigns;
  Participation and Assignments

  	
  82

  

 

iii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  11.7.

  	
  Adjustments; Set-off

  	
  86

  
	
  11.8.

  	
  Counterparts

  	
  86

  
	
  11.9.

  	
  Severability

  	
  86

  
	
  11.10.

  	
  Integration

  	
  86

  
	
  11.11.

  	
  GOVERNING LAW

  	
  87

  
	
  11.12.

  	
  Submission to
  Jurisdiction; Waivers

  	
  87

  
	
  11.13.

  	
  Acknowledgements

  	
  87

  
	
  11.14.

  	
  WAIVERS OF
  JURY TRIAL

  	
  88

  
	
  11.15.

  	
  Confidentiality

  	
  88

  
	
  11.16.

  	
  Designation of Senior
  Indebtedness

  	
  88

  
	
  11.17.

  	
  USA PATRIOT ACT

  	
  88

  
	
   

  	
   

  	
   

  
	
  SCHEDULES:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  I

  	
  Commitments; Addresses

  	
   

  
	
  II

  	
  Domestic Subsidiaries;
  Foreign Subsidiaries

  	
   

  
	
  III

  	
  Existing Letters of Credit

  	
   

  
	
  5.8

  	
  Real Property Owned and
  Leased

  	
   

  
	
  5.10

  	
  Tax Filings and Payments

  	
   

  
	
  5.18

  	
  Insurance

  	
   

  
	
  7.10

  	
  Accounts

  	
   

  
	
  8.2

  	
  Existing Indebtedness

  	
   

  
	
  8.3

  	
  Existing
  Liens

  	
   

  
	
  8.4

  	
  Existing Guarantee
  Obligations

  	
   

  
	
  8.9(e)

  	
  Existing Investments

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBITS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  A-1

  	
  Form of Term Loan
  Note

  	
   

  
	
  A-2

  	
  Form of Revolving
  Credit Note

  	
   

  
	
  A-3

  	
  Form of Swing Line
  Note

  	
   

  
	
  B

  	
  Form of Guarantee and
  Collateral Agreement

  	
   

  
	
  C

  	
  Form of Assignment
  and Acceptance

  	
   

  
	
  D

  	
  Form of Swing Line
  Loan Participation Certificate

  	
   

  
	
  E-1

  	
  Form of Opinion of
  Milbank, Tweed, Hadley & McCloy LLP

  	
   

  
	
  E-2

  	
  Form of Opinion of
  Irene Fisher, General Counsel to the Borrower

  	
   

  
	
  F

  	
  Form of Effective
  Date Certificate

  	
   

  
	
  G

  	
  Form of
  Administrative Questionnaire

  	
   

  
	
  H

  	
  Form of Revolving
  Increase Supplement

  	
   

  
	
  I

  	
  Form of U.S. Tax
  Compliance Certificate

  	
   

  
				

 

iv

 

AMENDED AND RESTATED CREDIT AGREEMENT, dated as of July 25,
2008 (this “Credit Agreement”), among NBTY, INC., a Delaware corporation
(the “Borrower”), the several banks and other financial institutions
from time to time parties hereto as lenders (the “Lenders”), JPMORGAN
CHASE BANK, N.A., a national banking association organized and existing under
the laws of the United States of America, as administrative agent and
collateral agent for the Lenders hereunder (in such capacities, the “Administrative
Agent” and the “Collateral Agent,” respectively), and BANK OF
AMERICA, CITIBANK, N.A., HSBC BANK USA, NATIONAL ASSOCIATION, and WACHOVIA
BANK, NATIONAL ASSOCIATION, as co-syndication agents for the Lenders hereunder
(in such capacity, each a “Co-Syndication Agent”, and collectively, with
the Administrative Agent and the Collateral Agent, the “Agents”).

 

W  I  T  N  E  S  S  E
T  H :

 

WHEREAS, the Borrower is party to that certain
Credit Agreement dated as of November 3, 2006, as amended from time to
time to the date hereof, among the Borrower, the several lenders from time to
time party thereto, JPMorgan Chase Bank, N.A., as administrative agent and
collateral agent and Bank of America, N.A., BNP Paribas, Citibank, N.A. and
HSBC Bank USA, National Association, as co-syndication agents (the “Existing
Credit Agreement”);

 

WHEREAS, the Borrower entered into an Amended and
Restated Asset Purchase Agreement, dated as of June 9, 2008 (the “Leiner
Acquisition Agreement”), pursuant to which NBTY Acquisition, LLC, a
wholly-owned subsidiary of the Borrower, has acquired substantially all of the
assets (the “Transaction”) of Leiner Health Products, Inc., Leiner
Health Services Corp. and Leiner Health Products, LLC (collectively, “Leiner”)
for approximately $371,000,000 (subject to adjustment based on working capital
and cure costs as set forth in the Leiner Acquisition Agreement) plus the assumption
of certain liabilities;

 

WHEREAS, the Borrower has initially financed the
Transaction and the related fees and expenses with a combination of cash on
hand and borrowings under the Existing Credit Agreement;

 

WHEREAS, the Borrower has requested that the Lenders
agree to amend and restate the Existing Credit Agreement to, among other
things, provide for a $300,000,000 term loan facility and to amend certain
other provisions of the Existing Credit Agreement, (x) for the purpose of
repaying borrowings outstanding under the Existing Credit Agreement on the Effective
Date (the “Refinancing”) and paying any fees, commissions and expenses
in connection therewith, (y) for working capital and other general
corporate purposes of the Borrower and its Subsidiaries and (z) for any
Acquisitions consummated after the Effective Date;

 

WHEREAS, the Lenders are willing to so amend and
restate the Existing Credit Agreement in its entirety;

 

 

NOW, THEREFORE, in consideration of the premises and
the mutual covenants herein set forth, the parties hereto agree that the
Existing Credit Agreement is hereby amended and restated as of the Effective
Date to read in its entirety as follows:

 

SECTION 1.  DEFINITIONS

 

1.1.          Defined
Terms.  As used in this Agreement,
the following terms shall have the following meanings:

 

“ABR Loans”: 
Loans the rate of interest applicable to which is based upon the Alternate
Base Rate.

 

“Acquisition”:  any transaction or series of related
transactions by which the Borrower or any of its Subsidiaries (a) acquires
any going business or all or substantially all of the assets of any Person,
whether through purchase of assets, merger or otherwise or (b) directly or
indirectly acquires (in one transaction or in a series of related transactions)
at least (i) a majority (in number of votes) of the Capital Stock having
ordinary voting power for the election of directors (or other managers) of any
Person or (ii) a majority of the ownership interests in any Person.

 

“Administrative Agent”:  as defined in the preamble hereto, and shall
include any successor appointed in accordance with subsection 10.9.

 

“Administrative Questionnaire”:  an administrative questionnaire substantially
in the form attached hereto as Exhibit G.

 

“Affiliate”: 
of any Person, (a) any other Person (other than a wholly owned Subsidiary
of such Person) which, directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person or (b) any other Person
who is a director or officer of (i) such Person, (ii) any Subsidiary
of such Person or (iii) any Person described in clause (a) above.  For purposes of this definition, a Person
shall be deemed to be “controlled by” such other Person if such other Person
possesses, directly or indirectly, power either to (A) vote 10% or more of
the securities having ordinary voting power for the election of directors of
such first Person or (B) direct or cause the direction of the management
and policies of such first Person whether by contract or otherwise.

 

“Agents”: 
as defined in the preamble hereto.

 

“Aggregate Available Revolving Credit Commitments”:  as at any date of determination with respect
to all Revolving Lenders, the Available Revolving Credit Commitments of all
Revolving Lenders on such date.

 

“Aggregate Loans”:  on any date, the sum of the Aggregate
Revolving Credit Commitments (or if the Revolving Credit Commitments have
terminated or expired at such time, 

 

2

 

the Aggregate Revolving
Credit Outstanding of all Revolving Lenders) and the aggregate Term Loans
outstanding (or, before the Effective Date, the Term Commitments) of all Term
Lenders.

 

“Aggregate Revolving Credit Commitments”:  the aggregate amount of the Revolving Credit
Commitments of all the Revolving Lenders.

 

“Aggregate Revolving Credit Outstanding”:  as at any date of determination with respect
to any Revolving Lender, the sum of (a) the aggregate unpaid principal
amount of such Lender’s Revolving Credit Loans on such date and (b) such
Lender’s Revolving Credit Commitment Percentage of the aggregate Letter of
Credit Obligations and Swing Line Loans on such date.

 

“Agreement”: 
this Amended and Restated Credit Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.

 

“Alternate Base Rate”:  for any day, a rate per  annum
equal to the greater of (a) the Prime Rate in effect on such day and (b) the
Federal Funds Effective Rate in effect on such day plus 1⁄2 of 1%.  Any change in the Alternate Base Rate due to
a change in the Prime Rate or the Federal Funds Effective Rate shall be effective
from and including the effective date of such change in the Prime Rate or the
Federal Funds Effective Rate, respectively.

 

“Applicable Margin”:  the rate per  annum set forth
under the relevant column heading below based on the ratio of Consolidated Indebtedness
to Consolidated EBITDA, as most recently determined in accordance with
subsection 7.2(b), for any fiscal quarter of the Borrower:

 

	
  Relevant Ratio

  of

  Consolidated

  Indebtedness to

  Consolidated

  EBITDA

  	
   

  	
  Applicable

  Margin for

  Eurodollar

  Term Loans

  	
   

  	
  Applicable

  Margin for

  ABR Term

  Loans

  	
   

  	
  Applicable

  Margin for

  Eurodollar

  Revolving

  Credit Loans

  	
   

  	
  Applicable

  Margin for

  ABR

  Revolving

  Credit Loans

  	
   

  	
  Commitment

  Fee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than or equal to 2.0x

  	
   

  	
  2.75

  	
  %

  	
  1.75

  	
  %

  	
  2.25

  	
  %

  	
  1.25

  	
  %

  	
  0.375

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Less than 2.0x but greater than or equal to 1.5x

  	
   

  	
  2.50

  	
  %

  	
  1.50

  	
  %

  	
  2.00

  	
  %

  	
  1.00

  	
  %

  	
  0.375

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Less than 1.5x but greater than or equal to 1.0x

  	
   

  	
  2.25

  	
  %

  	
  1.25

  	
  %

  	
  1.75

  	
  %

  	
  0.75

  	
  %

  	
  0.25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Less than 1.0x

  	
   

  	
  2.00

  	
  %

  	
  1.00

  	
  %

  	
  1.50

  	
  %

  	
  0.50

  	
  %

  	
  0.20

  	
  %

  

 

3

 

Up to and including the date of delivery of
financial statements and related compliance certificate of the Borrower for the
second full fiscal quarter ending after the Effective Date in accordance with
subsection 7.1, (i) the Applicable Margin for Term Loans shall be 2.50% per
annum for Eurodollar Loans and 1.50% per  annum for ABR
Loans, (ii) the Applicable Margin for Revolving Credit Loans shall be 2.0%
per  annum for Eurodollar Loans and 1.0% per  annum
for ABR Loans and (iii) the commitment fee shall be 0.375% per  annum.

 

If and in the event the financial statements
required to be delivered pursuant to subsection 7.1(a) or 7.1(b), as
applicable, and the related compliance certificate required to be delivered
pursuant to subsection 7.2(b), are delivered on or prior to the date when due
(or, in the case of the fourth quarterly period of each fiscal year of the
Borrower, if financial statements which satisfy the requirements of, and are
delivered within the time period specified in, subsection 7.1(b) and a related
compliance certificate which satisfies the requirements of, and is delivered
within the time period specified in, subsection 7.2(b), with respect to any
such quarterly period are so delivered within such time periods), then the
Applicable Margin for Term Loans and Revolving Credit Loans during the period
that commences five  (5) Business
Days after the date upon which such financial statements were due to be
delivered shall be the Applicable Margin as set forth in the relevant column
heading above which corresponds with the compliance certificate calculations
delivered pursuant to subsection 7.2 (b); provided, however, that
in the event that the financial statements delivered pursuant to subsection 7.1(a) or
7.1(b), as applicable, and the related compliance certificate required to be
delivered pursuant to subsection 7.2(b), are not delivered when due, then:

 

(a)           if
such financial statements and certificate are delivered after the date such financial
statements and certificate were required to be delivered (without giving effect
to any applicable cure period) and the Applicable Margin increases from that
previously in effect as a result of the delivery of such financial statements,
then the Applicable Margin during the period from the date upon which such financial
statements were required to be delivered (without giving effect to any
applicable cure period) until the date upon which they actually are delivered
shall, except as otherwise provided in clause (c) below, be the Applicable
Margin as so increased;

 

(b)           if
such financial statements and certificate are delivered after the date such financial
statements and certificate were required to be delivered and the Applicable
Margin decreases from that previously in effect as a result of the delivery of
such financial statements, then such decrease in the Applicable Margin shall
not become applicable until the date upon which such financial statements and
certificate actually are delivered; and

 

(c)           if
such financial statements and certificate are not delivered prior to the
expiration of the applicable cure period, then, effective upon such expiration,
for the period from the date upon which such financial statements and
certificate were required to 

 

4

 

be delivered (after the expiration of the applicable cure period) until
five (5) Business Days following the date upon which they actually are
delivered, the Applicable Margin in respect of Term Loans and Revolving Credit
Loans shall be the highest margins set forth on the preceding table and the
commitment fee shall be 0.375% per  annum (it being understood
that the foregoing shall not limit the rights of the Agents and the Lenders set
forth in Section 9).

 

“Approved Fund”: as defined in subsection
11.6(b).

 

“Arranger”: 
J.P. Morgan Securities Inc.

 

“Asset Sale”: 
any Disposition of property or series of related Dispositions of
property (excluding any such Disposition permitted by clause (a), (b) or (c) of
subsection 8.6 and by subsection 8.12) that yields gross proceeds to the
Borrower or any of its Subsidiaries (valued at the initial principal amount
thereof in the case of non-cash proceeds consisting of notes or other debt
securities and valued at fair market value in the case of other non-cash
proceeds) in excess of $2,500,000.

 

“Assignee”: 
as defined in subsection 11.6(b)(iii).

 

“Assignment and Acceptance”:  an assignment and acceptance agreement substantially
in the form attached hereto as Exhibit C.

 

“Available Revolving Credit Commitment”:  as at any date of determination with respect
to any Revolving Lender, an amount equal to the excess, if any, of (a) the
amount of such Lender’s Revolving Credit Commitment in effect on such date over
(b) the Aggregate Revolving Credit Outstanding of such Lender on such date.

 

“Benefited Lender”:  as defined in subsection 11.7(a).

 

“Board”: 
the Board of Governors of the Federal Reserve System of the United
States of America (or any successor thereto).

 

“Borrower”: 
as defined in the preamble hereto.

 

“Borrowing Date”:  any Business Day specified in a notice
pursuant to subsection 2.2, 2.6, 2.8 or 3.2 as a date on which the Borrower
requests the Lenders to make Loans hereunder or issue a Letter of Credit.

 

“Business”: 
as defined in subsection 5.15(b).

 

“Business Day”:  (a) for all purposes other than as covered
by clause (b) below, a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
close and (b) with respect to all notices and determinations 

 

5

 

in connection with, and
payments of principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (a) and which is also a London Banking
Day.

 

“Capital Expenditures”:  direct or indirect (by way of the acquisition
of securities of a Person or the expenditure of cash or the incurrence of Indebtedness)
expenditures (other than expenditures in connection with Acquisitions permitted
hereunder) in respect of the purchase or other acquisition of fixed or capital
assets.

 

“Capital Stock”:  any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a corporation)
(collectively, “Underlying Equity Interests”), and any and all warrants
or options to purchase any of the foregoing. 
For purposes of subsections 4.4(b) and 8.7 hereof, the term “Capital
Stock” shall exclude options and warrants issued pursuant to employee stock
option plans and Underlying Equity Interests issued upon the exercise thereof.

 

“Cash Equivalents”:  (a) securities with maturities of one
year or less from the date of acquisition issued or fully guaranteed or insured
by the United States Government or any agency thereof, (b) certificates of
deposit and eurodollar time deposits with maturities of one year or less from
the date of acquisition and overnight bank deposits of any Lender or of any
commercial bank having capital and surplus in excess of $500,000,000, (c) repurchase
obligations of any Lender or of any commercial bank satisfying the requirements
of clause (b) of this definition, having a term of not more than 30 days
with respect to securities issued or fully guaranteed or insured by the United
States Government, (d) commercial paper of a domestic issuer rated at
least A-2 by S&P or P-2 by Moody’s, (e) securities with maturities of
one year or less from the date of acquisition issued or fully guaranteed by any
state, commonwealth or territory of the United States, by any political
subdivision or taxing authority of any such state, commonwealth or territory or
by any foreign government, the securities of which state, commonwealth,
territory, political subdivision, taxing authority or foreign government (as
the case may be) are rated at least A by S&P or A by Moody’s (or the
equivalent rating by either such rating agency for such type of securities), (f) securities
with maturities of one year or less from the date of acquisition backed by standby
letters of credit issued by any commercial bank satisfying the requirements of
clause (b) of this definition or (g) shares of money market mutual or
similar funds which invest exclusively in assets satisfying the requirements of
clauses (a) through (f) of this definition.

 

“Class”: 
the classification of loans as Term Loans, Revolving Credit Loans or
Swing Line Loans, each of which categories shall be deemed to be a “Class” of
Loans.

 

“Code”: 
the Internal Revenue Code of 1986, as amended from time to time.

 

“Collateral Agent”:  as defined in the preamble hereto, and shall
include any successor appointed in accordance with subsection 10.9.

 

“Commercial Letters of Credit”:  as defined in subsection 3.1(ii).

 

6

 

“Commitments”:  the collective reference to the Term
Commitments, the Revolving Credit Commitments and the Swing Line Commitment.

 

“Consolidated EBITDA”:  for any period of four consecutive fiscal
quarters, the sum of (i) Trailing Consolidated Net Income for such period
excluding the aggregate amount of all non-cash losses reducing Consolidated Net
Income (excluding any non-cash losses that results in an accrual of a reserve
for cash charges in any future period and the reversal thereof) for such period,
(ii) Trailing Consolidated Interest Expense for such period and (iii) the
Trailing amount of taxes, depreciation and amortization deducted from earnings
in determining such Consolidated Net Income.

 

“Consolidated Indebtedness”:  at a particular date, all Indebtedness of the
Borrower and its Subsidiaries, determined on a consolidated basis.

 

“Consolidated Interest Coverage Ratio”:  for any period of four consecutive fiscal
quarters, the ratio of (i) Consolidated EBITDA to (ii) Trailing
Consolidated Interest Expense.

 

“Consolidated Interest Expense”:  for any fiscal period, the amount which
would, in conformity with GAAP, be set forth opposite the caption “interest
expense” (or any like caption) on a consolidated income statement of the
Borrower and its Subsidiaries for such period.

 

“Consolidated Net Income”:  for any fiscal period, the consolidated net
income (or deficit) of the Borrower and its Subsidiaries for such period (taken
as a cumulative whole), determined on a consolidated basis in accordance with
GAAP; provided that any non-cash extraordinary gains and losses in
accordance with GAAP shall be excluded in determining Consolidated Net Income.

 

“Consolidated Senior Indebtedness”:  all Indebtedness of the Borrower which is not
by its terms expressly subordinated to the Loans under this Agreement on
subordination terms no less favorable to the Lenders than those applicable to
the Subordinated Debt.

 

“Continuing Directors”:  the directors of the Borrower on the Original
Closing Date and each other director, if such other director’s nomination for
election to the Board of Directors of the Borrower is recommended by a majority
of the then Continuing Directors.

 

“Contractual Obligation”:  as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or undertaking
to which such Person is a party or by which it or any of its property is bound.

 

“Co-Syndication Agent”:  as defined in the preamble hereto, and shall
include any successor appointed in accordance with subsection 10.9.

 

7

 

“Default”: 
any of the events specified in Section 9, whether or not any requirement
for the giving of notice, the lapse of time, or both, or any other condition,
has been satisfied.

 

“Disposition”:  with respect to any property, any sale,
lease, sale and leaseback, assignment, conveyance, transfer or other
disposition thereof.

 

“Dollars,” “U.S. Dollars” and “$”:  dollars in lawful currency of the United
States of America.

 

“Domestic Subsidiary”:  any Subsidiary other than a Foreign Subsidiary.

 

“Effective Date”:  the date on which the conditions precedent
set forth in Section 6.1 shall have been satisfied.

 

“Environmental Laws”:  the common law and all laws, regulations,
codes, ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, the preservation or reclamation of
natural resources, the management, Release or threatened Release of any
Hazardous Materials or to health and safety matters.

 

“ERISA”: 
the Employee Retirement Income Security Act of 1974, as amended from
time to time.

 

“ERISA Affiliate”:  any trade or business (whether or not
incorporated) that, together with the Borrower or any of its Subsidiaries, is
treated as a single employer under Section 414(b) or (c) of the
Code or, solely for purposes of Section 302 of ERISA and Section 412
of the Code, is treated as a single employer under Section 414 of the
Code.

 

“ERISA Event”:  (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); (b) with respect to any Plan, failure to satisfy the minimum
funding standard (as defined in Section 412 of the Code or Section 302
of ERISA), whether or not waived, (c) the failure to make by its due date
a required installment under Section 412(m) of the Code (or Section 430(j) of
the Code, as amended by the Pension Protection Act of 2006) with respect to any
Plan or the failure to make any required contribution to a Multiemployer Plan; (d) the
filing pursuant to Section 412of the Code or of an application for a
waiver of the minimum funding standard with respect to any Plan; (e) the
incurrence by the Borrower or any of its ERISA Affiliates of any liability
under Title IV of ERISA with respect to the termination of any Plan; (f) the
receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator
of any notice relating to an intention to terminate any Plan or Plans or to appoint
a trustee to administer any Plan; (g) the incurrence by the Borrower or
any of its ERISA Affiliates of any liability with respect to the withdrawal or
partial withdrawal from any Plan or Multiemployer Plan; (h) the receipt by
the Borrower or any ERISA Affiliate of any notice, or the receipt by any 

 

8

 

Multiemployer Plan from the
Borrower or any ERISA Affiliate 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; or (i) the making of any amendment to any Plan which could
result in the imposition of a lien or the posting of a bond or other security.

 

“Eurodollar Loans”:  Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.

 

“Eurodollar Rate”:  with respect to a Eurodollar Loan for the
relevant Interest Period, an interest rate per  annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate
for such Interest Period multiplied by (b) the Statutory Reserve Rate.

 

“Event of Default”:  any of the events specified in Section 9,
provided that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.

 

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

 

“Excluded Taxes”:  with respect to the Administrative Agent, any
Lender, the Issuing Lender or any other recipient of any payment to be made by
or on account of any obligation of the Borrower hereunder, (a) any Taxes
imposed by any jurisdiction other than the United States (or any taxing
authority thereof or therein), any jurisdiction in which the Borrower conducts
business or claims an interest deduction with respect to this Agreement or any
other taxing jurisdiction from or through which payments hereunder are made, (b) income
or franchise taxes imposed on (or measured by) its net income or net profits by
the United States of America, or by the jurisdiction under the laws of which
such recipient is organized, in which such recipient conducts business (other
than a business that is deemed to arise solely as a result of entering into
this Agreement, receipt of payments hereunder or enforcement of its rights hereunder))
or in which its principal office is located or, in the case of any Lender, in
which its applicable lending office is located, (c) any branch profits
taxes imposed by the United States of America or any similar tax imposed by any
other jurisdiction in which the Borrower is located and (d) in the case of
a Foreign Lender (other than an assignee pursuant to a request by the Borrower
under subsection 4.14(b)), 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 subsection 4.12(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 the Borrower with respect to such withholding tax
pursuant to subsection 4.12(a).

 

“Existing Credit Agreement”:  as defined in the recitals hereto.

 

9

 

“Existing Guarantee and Collateral Agreement”:  the guarantee and collateral agreement,
executed and delivered by the Borrower and each of its Domestic Subsidiaries as
of November 3, 2006, as amended.

 

“Existing Letters of Credit”:  each letter of credit listed on Schedule
III hereto.

 

“Existing Notes”:  the Borrower’s 7-1/8% Senior Subordinated
Notes due 2015.

 

“Existing Notes Indenture”:  as defined in subsection 6.1(p).

 

“Extension of Credit”:  as to any Lender, the making of a Loan by
such Lender and, with respect to any Lender, the issuance of any Letter of
Credit.

 

“Federal Funds Effective Rate”:  for any day, the weighted average (rounded upwards,
if necessary, to the next 1/100 of 1%) 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 (rounded upwards, if necessary, to the next
1/100 of 1%) of the quotations for such day for such transactions received by
the Administrative Agent from three Federal funds brokers of recognized
standing selected by it.

 

“Fee Property”:  as defined in subsection 5.8.

 

“Financial Covenants”: the financial
covenants set forth in subsection 8.1.

 

“Financial Officer”: with respect to any
Person, the chief financial officer, principal accounting officer, treasurer,
controller or senior vice president, finance of such Person.

 

“Financing Lease”:  (a) any lease of property, real or
personal, the obligations under which are capitalized on a consolidated balance
sheet of the Borrower and its Subsidiaries and (b) any other such lease to
the extent that the then present value of the minimum rental commitment thereunder
should, in accordance with GAAP, be capitalized on a balance sheet of the
lessee.

 

“Foreign Plan”:  any employee benefit plan, program, policy,
arrangement or agreement maintained or contributed to by, or entered into with,
Borrower or any Subsidiary with respect to employees employed outside the United
States.

 

“Foreign Lender”:  any Lender that is organized under the laws
of a jurisdiction other than that in which the Borrower is located.  For purposes of this definition, the United
States of America, each State thereof and the District of Columbia shall be
deemed to constitute a single jurisdiction.

 

10

 

“Foreign Subsidiary”:  as to any Person, any Subsidiary of such
Person which is organized under the laws of any jurisdiction outside of the
country of the jurisdiction of organization of such Person.

 

“GAAP”: 
generally accepted accounting principles in the United States of America
in effect from time to time.

 

“Gel-Cap Facility”:  the soft gelatin capsule manufacturing
facility located at Cartwright Loop Industrial Park, Church Street, Bayport,
New York.

 

“Governmental Authority”:  any nation or government, any state, province
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.

 

“Guarantee and Collateral Agreement”:  the Amended and Restated Guarantee and
Collateral Agreement, substantially in the form attached hereto as Exhibit B,
executed and delivered by the Borrower and each of its Domestic Subsidiaries,
as the same may be amended, supplemented or otherwise modified, amending and
restating in its entirety the Existing Guarantee and Collateral Agreement.

 

 “Guarantee
Obligation”:  as to any Person, any
obligation of such Person guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the “primary
obligations”) of any other Person (the “primary obligor”) in any
manner, whether directly or indirectly, including, without limitation, 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 owner of any such primary obligation against loss in respect
thereof; provided, however, that the term Guarantee Obligation
shall not include endorsements of instruments for deposit or collection in the
ordinary course of business.  The amount
of any Guarantee Obligation shall be deemed to be an amount equal to the value
as of any date of determination of the stated or determinable amount of the
primary obligation in respect of which such Guarantee Obligation is made
(unless such Guarantee Obligation shall be expressly limited to a lesser
amount, in which case such lesser amount shall apply) or, if not stated or
determinable, the value as of any date of determination of the maximum
reasonably anticipated liability in respect thereof as determined by such
Person in good faith.

 

“Hazardous Materials”:  any solid wastes, toxic or hazardous
substances, materials or wastes, defined, listed, classified or regulated as
such in or under any Environmental Laws, including, without limitation,
asbestos, petroleum or petroleum products (including gasoline, crude oil or any
fraction thereof), polychlorinated biphenyls, and urea-formaldehyde insulation,

 

11

 

and any other substance the
presence of which may give rise to liability under any Environmental Law.

 

“Hedge Agreement”:  any interest rate protection agreement,
interest rate swap or other interest rate hedge arrangement, or currency swap
or other currency hedge arrangement (other than any interest rate cap or other
similar agreement or arrangement pursuant to which the Borrower has no credit
exposure), to or under which the Borrower or any of its Subsidiaries is a party
or a beneficiary.

 

“Hedge Agreement Obligation”:  any obligation of the Borrower under any one
or more Hedge Agreements to make payments to the counterparties thereunder upon
the occurrence of a termination event or similar event thereunder.

 

“Holland & Barrett”:  Holland & Barrett Holdings Limited.

 

“Indebtedness”:  of a Person, at a particular date, the sum
(without duplication) at such date of (a) indebtedness for borrowed money
or for the deferred purchase price of property or services in respect of which
such Person is liable as obligor (other than current trade liabilities incurred
in the ordinary course of business and payable in accordance with customary
practices of such Person), (b) indebtedness secured by any Lien on any
property or asset owned or held by such Person regardless of whether the
indebtedness secured thereby shall have been assumed by or is a primary
liability of such Person, (c) obligations of such Person under Financing
Leases, (d) the face amount of all letters of credit issued for the
account of or upon the application of such Person and, without duplication, the
unreimbursed amount of all drafts drawn thereunder and (e) obligations (in
the nature of principal or interest) of such Person in respect of acceptances
or similar obligations issued or created for the account of such Person.

 

“Indemnified Taxes”:  Taxes other than Excluded Taxes.

 

“Intellectual Property”:  as defined in subsection 5.9.

 

“Interest Payment Date”:  (a) as to any ABR Loan, the last day of
each March, June, September and December to occur while such Loan is
outstanding, (b) as to any Eurodollar Loan having an Interest Period of
three months or less, the last day of such Interest Period and (c) as to
any Eurodollar Loan having an Interest Period longer than three months, (i) each
day which is three months after the first day of such Interest Period and (ii) the
last day of such Interest Period.

 

“Interest Period”:  with respect to any Eurodollar Loan:

 

(a)           initially,
the period commencing on the borrowing or conversion date, as the case may be,
with respect to such Eurodollar Loan and ending one, two, three or six months
(or nine or twelve months, if available to all Lenders) thereafter, as selected
by 

 

12

 

the Borrower in its notice of borrowing or notice of conversion, as the
case may be, given with respect thereto; and

 

(b)           thereafter,
each period commencing on the last day of the next preceding Interest Period
applicable to such Eurodollar Loan and ending one, two, three or six months (or
nine or twelve months, if acceptable to all Lenders) thereafter, as selected by
the Borrower by irrevocable notice to the Administrative Agent not less than
three Business Days prior to the last day of the then current Interest Period
with respect thereto;

 

provided that all of
the foregoing provisions relating to Interest Periods are subject to the following:

 

(i)            if
any Interest Period pertaining to a Eurodollar Loan would otherwise end on a day
that is not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be to carry
such Interest Period into another calendar month, in which event such Interest
Period shall end on the immediately preceding Business Day;

 

(ii)           any
Interest Period applicable to a Eurodollar Loan that would otherwise extend
beyond the date final payment is due on such Loan shall end on such date of
final payment; and

 

(iii)          any
Interest Period pertaining to a Eurodollar Loan that begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month.

 

“Issuing Lender”:  JPMorgan Chase or any of its Affiliates, in
its capacity as issuer of the Letters of Credit, and any other Lender which the
Borrower, the Administrative Agent and the Majority Lenders shall have
approved, in its capacity as issuer of the Letters of Credit.

 

“JPMorgan Chase”:  JPMorgan Chase Bank, N.A.

 

“Leased Property”:  as defined in subsection 5.8.

 

“Legal Requirement”:  as to (a) any Person, any law, treaty, rule or
regulation or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject, and (b) any
property, any law, treaty, rule, regulation, requirement, judgment, decree or determination
of any Governmental Authority applicable to or binding upon such property or to
which such property is subject.

 

“Leiner”: 
as defined in the preamble hereto.

 

13

 

“Leiner Business”:  substantially all of the assets of Leiner, as
set forth in the Leiner Acquisition Agreement.

 

“Leiner Acquisition Agreement”:  as defined in the preamble hereto.

 

“Lenders”: 
as defined in the preamble hereto.

 

“Letter of Credit Applications”:  (a) in the case of Standby Letters of
Credit, a letter of credit application for a Standby Letter of Credit on the
standard form of the applicable Issuing Lender for standby letters of credit,
and (b) in the case of Commercial Letters of Credit, a letter of credit
application for a Commercial Letter of Credit on the standard form of the
applicable Issuing Lender for commercial letters of credit.

 

“Letter of Credit Obligations”:  at any particular time, all liabilities of
the Borrower with respect to Letters of Credit, whether or not any such
liability is contingent, including (without duplication) the sum of (a) the
aggregate undrawn face amount of all Letters of Credit then outstanding plus (b) the
aggregate amount of all unpaid Reimbursement Obligations at such time.

 

“Letters of Credit”:  as defined in subsection 3.1(ii).

 

“LIBO Rate”: 
with respect to any Eurodollar Loan for any Interest Period, the rate
appearing on the Reuters Screen LIBOR01 Page (or on any successor or
substitute page of such Service, or any successor to or substitute for
such Service, providing rate quotations comparable to those currently provided
on such page of such Service, as determined by the Administrative Agent
from time to time for purposes of providing quotations of interest rates applicable
to Dollar deposits in the London interbank market) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period, as the rate for Dollar deposits with a maturity comparable to such Interest
Period.  In the event that such rate is
not available at such time for any reason, then the “LIBO Rate” with respect to
such Eurodollar Loan for such Interest Period shall be the rate at which Dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period
are offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of
such Interest Period.

 

“Lien”: 
any mortgage, pledge, hypothecation, assignment, deposit arrangement
(other than a bank or similar deposit account), encumbrance, lien (statutory or
other), or preference, priority or other security interest or similar preferential
arrangement of any kind or nature whatsoever (including, without limitation,
any conditional sale or other title retention agreement, any Financing Lease
having substantially the same economic effect as any of the foregoing, the
filing of any financing statement under the Uniform Commercial Code or
comparable law of any jurisdiction in respect of any of the foregoing, and, in
the case of securities, a third party’s right to purchase such securities).

 

14

 

“Loan Documents”:  the collective reference to this Agreement,
any Notes, any Revolving Increase Supplements, the Security Documents and any
documents or instruments evidencing or governing the Security Documents.

 

“Loan Parties”:  the collective reference to the Borrower and
each guarantor or grantor party to any Security Document.

 

“Loans”: 
the collective reference to the Term Loans, the Revolving Credit Loans
and the Swing Line Loans.

 

“London Banking Day”:  any day on which banks in London are open for
general banking business, including dealings in foreign currency and exchange.

 

“Majority Lenders”:  at any time, Lenders, the Total Loan
Percentages of which aggregate more than 50%.

 

 “Material
Adverse Effect”:  a material adverse
change in the business, assets, operations, properties, condition (financial or
otherwise), contingent liabilities (including as to products, and whether such
liabilities have been or yet may be asserted), prospects or material agreements
of the Borrower and its Subsidiaries (including the Leiner Business), taken as
a whole.

 

“Material Environmental Amount”:  $2,500,000 for a single occurrence and
$10,000,000 in the aggregate at any time outstanding.

 

“Material Foreign Subsidiary”:  any Foreign Subsidiary accounting for 5% or
more of the assets or revenues (computed for the most recent fiscal year) of
the Borrower and its consolidated Subsidiaries, taken as a whole.

 

“Moody’s”: 
Moody’s Investors Service, Inc. or any successor thereto.

 

“Multiemployer Plan”:  a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.

 

“Net Cash Proceeds”:  (a) in connection with any Asset Sale or
any Recovery Event, the proceeds thereof in the form of cash and Cash
Equivalents (including any such proceeds received by way of deferred payment of
principal pursuant to a note or installment receivable or purchase price
adjustment receivable or otherwise, but only as and when received), net of
attorneys’ fees, accountants’ fees, investment banking fees, amounts required
to be applied to the repayment of Indebtedness secured by a Lien expressly
permitted hereunder on any asset that is the subject of such Asset Sale or
Recovery Event (other than any Lien pursuant to a Security Document) and other
reasonable fees and expenses actually incurred in connection therewith and net
of taxes paid or reasonably estimated to be payable as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing
arrangements) and (b) in connection

 

15

 

with any issuance or sale of
Capital Stock or any incurrence of Indebtedness, the cash proceeds received
from such issuance or incurrence, net of attorneys’ fees, investment banking
fees, accountants’ fees, underwriting discounts and commissions and other
reasonable fees and expenses actually incurred in connection therewith.

 

“Notes”: 
the collective reference to the Term Loan Notes, the Revolving Credit
Notes and the Swing Line Notes.

 

“Obligations”:  collectively, the unpaid principal of and
interest on the Loans, the Reimbursement Obligations and all other obligations
and liabilities of the Borrower to any Agent, the Issuing Lender and the
Lenders under or in connection with this Agreement, the other Loan Documents
and any Hedge Agreement with any Lender or any Affiliate of a Lender (including
in each case, without limitation, interest accruing at the then applicable rate
provided in this Agreement or any other applicable Loan Document or Hedge
Agreement after the maturity of the Loans and interest accruing at the then
applicable rate provided in this Agreement or any other applicable Loan
Document or Hedge Agreement after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding, relating
to the Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding), whether direct or indirect, absolute
or contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with, this Agreement, the Notes, the
Letters of Credit, the Letter of Credit Applications, the other Loan Documents
or any Hedge Agreement with a Lender or any Affiliate of a Lender or any other
document made, delivered or given in connection therewith, in each case whether
on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without limitation, all
fees and disbursements of counsel to the Agents or to the Lenders).

 

“Original Closing Date”:  November 3, 2006.

 

“Other Taxes”:  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 hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement.

 

“Participant Register”:  as defined in subsection 11.6(c).

 

“Participants”:  as defined in subsection 11.6(c).

 

“Participating Interest”:  with respect to any Letter of Credit (a) in
the case of the Issuing Lender, its interest in such Letter of Credit and any
Letter of Credit Application relating thereto after giving effect to the
granting of any participating interests therein pursuant hereto and (b) in
the case of each Participating Lender, its undivided participating interest in
such Letter of Credit and any Letter of Credit Application relating thereto.

 

16

 

“Participating Lender”:  any Revolving Lender (other than the Issuing
Lender) with respect to its Participating Interest in a Letter of Credit.

 

“Patriot Act”:  as defined in subsection 11.17.

 

“PBGC”: 
the Pension Benefit Guaranty Corporation established pursuant to Subtitle
A of Title IV of ERISA or any successor thereto.

 

 “Person”:  an individual, partnership, corporation,
business trust, joint stock company, limited liability company, trust,
unincorporated association, joint venture, Governmental Authority or other
entity of whatever nature.

 

“Plan”: 
any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the
Code or Section 302 of ERISA, and in respect of which the Borrower, any of
its Subsidiaries or any ERISA Affiliate is (or, if such plan were terminated,
would under Section 4069 of ERISA be deemed to be) an “employer” as defined
in Section 3(5) of ERISA.

 

“Pledged Stock”:  as defined in the Guarantee and Collateral
Agreement or any other Security Document.

 

“Pledgee”: 
as defined in subsection 11.15.

 

“Prime Rate”: 
the rate of interest per  annum publicly announced from
time to time by JPMorgan Chase as its prime rate in effect at its principal
office in New York City; each change in the Prime Rate shall be effective from
and including the date such change is publicly announced as being effective.

 

“Pro Forma Balance Sheet”:  as defined in subsection 5.1(b).

 

“Properties”: 
as defined in subsection 5.15(a).

 

“Recovery Event”:  any settlement of or payment in respect of
any property or casualty insurance claim or any condemnation proceeding
relating to any asset of the Borrower or any of its Subsidiaries.

 

“Refinancing”: as defined in the recitals
hereto.

 

“Refinancing Indebtedness”:  Indebtedness that refinances, renews,
extends, replaces, defeases or refunds, in whole or in part, any Indebtedness
of the Borrower or any of its Subsidiaries; provided that

 

(i)            other than in the case of Refinancing Indebtedness
refinancing the Existing Notes or any Refinancing Indebtedness in respect thereof
(the aggregate amount of which Refinancing Indebtedness (whether in respect of
the Existing Notes or any Refinancing

 

17

 

Indebtedness in respect thereof) will not be limited
by this Agreement), 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 reasonable fees and expenses associated
therewith;

 

(ii)           in the case of Refinancing Indebtedness refinancing the
Existing Notes or any Refinancing Indebtedness in respect thereof, the
subordination terms applicable to such Refinancing Indebtedness are in all
material respects substantially identical to, or less favorable to the holders
of such Refinancing Indebtedness than, those applicable to the Existing Notes (provided
that this provision shall not apply to any secured Indebtedness incurred
pursuant to the proviso in subsection 8.10(a) and such Indebtedness shall
be deemed “Refinancing Indebtedness” for all purposes hereunder);

 

(iii)          any such Refinancing Indebtedness has a later or equal
final maturity and longer or equal weighted average life than the Indebtedness
being renewed or refinanced.

 

“Refunded Swing Line Loans”:  as defined in subsection 2.8(b).

 

“Register”: 
as defined in subsection 11.6(b).

 

“Reimbursement Obligation”:  the obligation of the Borrower to reimburse
the Issuing Lender in accordance with the terms of this Agreement and the
related Letter of Credit Application for any payment made by the Issuing Lender
under any Letter of Credit.

 

“Reinvestment Deferred Amount”:  with respect to any Reinvestment Event, the
aggregate Net Cash Proceeds received by the Borrower and any of its
Subsidiaries in connection therewith that are not applied to prepay the Term
Loans pursuant to Section 4.4(d) as a result of the delivery of a
Reinvestment Notice.

 

“Reinvestment Event”:  any Asset Sale or Recovery Event in respect
of which the Borrower has delivered a Reinvestment Notice.

 

“Reinvestment Notice”:  a written notice executed by a Responsible
Officer of the Borrower stating that the Borrower (directly or indirectly
through a Subsidiary) intends and expects to use all or a specified portion of
the Net Cash Proceeds of an Asset Sale or Recovery Event to acquire or repair
assets useful in its business.

 

“Reinvestment Prepayment Amount”:  with respect to any Reinvestment Event, the
Reinvestment Deferred Amount relating thereto less any amount expended prior to
the relevant Reinvestment Prepayment Date to acquire or repair assets useful in
the Borrower’s business.

 

“Reinvestment Prepayment Date”:  with respect to any Reinvestment Event, the
earlier of (a) the date occurring twelve months after such Reinvestment
Event and (b) the date on 

 

18

 

which the Borrower shall
have determined not to, or shall have otherwise ceased to, acquire or repair
assets useful in the Borrower’s business with all or any portion of the
relevant Reinvestment Deferred Amount.

 

“Related Parties”:  with respect to any specified Person, such
Person’s Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person’s Affiliates.

 

“Release”: 
any spilling, leaking, pumping, pouring, emitting, emptying, discharging,
escaping, leaking, dumping, disposing, spreading, depositing or dispersing of
any Hazardous Materials in, unto or onto the environment.

 

 “Requirement
of Law”:  as to (a) any Person,
the certificate of incorporation and by-laws or the partnership or limited
partnership agreement or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person
or any of its property is subject, and (b) any property, any law, treaty,
rule, regulation, requirement, judgment, decree or determination of any
Governmental Authority applicable to or binding upon such property or to which
such property is subject, including, without limitation, any Environmental
Laws.

 

“Responsible Officer”:  with respect to any Loan Party, the chief executive
officer, the president, any Financial Officer, any vice president, the
treasurer or the assistant treasurer of such Loan Party.

 

“Restricted Payments”:  as defined in subsection 8.7.

 

“Revolving Credit Commitment”:  as to any Revolving Lender at any time, its obligation
to make Revolving Credit Loans, issue or participate in Letters of Credit
issued for the account of the Borrower and/or make or participate in Swing Line
Loans to the Borrower in an aggregate amount not to exceed at any time outstanding
the amount set forth opposite such Lender’s name in Schedule I
hereto under the heading “Revolving Credit Commitment,” or the amount set forth
in the initial Revolving Increase Supplement executed and delivered by such
Lender, the Borrower and the Administrative Agent, as such amount may be
changed from time to time pursuant to subsection 2.4 and the other applicable
provisions hereof.

 

“Revolving Credit Commitment Percentage”:  as to any Revolving Lender at any time, the
percentage which such Lender’s Revolving Credit Commitment then constitutes of
the Aggregate Revolving Credit Commitments (or, if the Revolving Credit
Commitments have terminated or expired at such time, the percentage which (a) the
Aggregate Revolving Credit Outstanding of such Lender at such time then
constitutes of (b) the Aggregate Revolving Credit Outstanding of all
Lenders at such time).

 

19

 

“Revolving Credit Commitment Period”:  the period from and including the Original
Closing Date to but not including the Revolving Credit Termination Date, or
such earlier date on which the Revolving Credit Commitments shall terminate as
provided herein.

 

“Revolving Credit Loan”:  as defined in subsection 2.1(a).

 

“Revolving Credit Note”:  as defined in subsection 4.16(d).

 

“Revolving Credit Termination Date”:  November 3, 2011.

 

“Revolving Increase Supplement”: means an
increase supplement in substantially the form of Exhibit H.

 

“Revolving Lender”:  each Lender that has a Revolving Credit
Commitment or that holds Revolving Credit Loans.

 

 “S&P”:  Standard & Poor’s Ratings Group or
any successor thereto.

 

“Security Documents”:  the collective reference to the Guarantee and
Collateral Agreement and each other pledge agreement, security document or similar
agreement that may be delivered to the Administrative Agent as collateral security
for any or all of the Obligations, in each case as amended, supplemented or
otherwise modified from time to time.

 

“Solvent”: 
with respect to any Person on a particular date, that on such date, (a) the
fair value of the property of such Person is greater than the total amount of
liabilities, including, without limitation, contingent liabilities, of such
Person, (b) the present fair salable value of the assets of such Person is
not less than the amount that will be required to pay the probable liability of
such Person on its debts as they become absolute and mature, (c) such
Person does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person’s ability to pay as such debts and liabilities
mature, (d) such Person is not engaged in business or a transaction, and
is not about to engage in business or a transaction, for which such Person’s
property would constitute an unreasonably small amount of capital and (e) such
Person is able to pay its debts as they become due and payable.

 

“Standby Letters of Credit”:  as defined in subsection 3.1(i).

 

“Statutory Reserve Rate”:  a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Eurodollar Rate, for eurocurrency funding (currently referred to
as “Eurocurrency Liabilities” in Regulation D of the Board).  Such reserve percentages shall include those
imposed pursuant to such Regulation D. 
Eurodollar Loans shall be deemed to constitute eurocurrency funding and
to be subject to such reserve requirements without benefit of or 

 

20

 

credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation.  The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.

 

“Subordinated Debt”:  $190,000,000 in aggregate principal amount of
Existing Notes.

 

“Subsidiary”: 
as to any Person, a corporation, partnership or other entity of which
shares of stock or other ownership interests having ordinary voting power
(other than stock or such other ownership interests having such power only by
reason of the happening of a contingency) to elect a majority of the board of
directors or other managers of such corporation, partnership or other entity
are at the time owned, or the management of which is otherwise controlled,
directly or indirectly, through one or more intermediaries, or both, by such
Person (exclusive of any Affiliate in which such Person has a minority
ownership interest).  Unless otherwise
qualified, all references to a “Subsidiary” or to “Subsidiaries” in this
Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.

 

“Swing Line Commitment”:  the Swing Line Lender’s obligation to make
Swing Line Loans pursuant to subsection 2.8.

 

“Swing Line Lender”:  JPMorgan Chase, in its capacity as lender of
the Swing Line Loans.

 

“Swing Line Loan Participation Certificate”:  a certificate in substantially the form
attached hereto as Exhibit D, as the same may be amended,
supplemented or otherwise modified from time to time.

 

“Swing Line Loans”:  as defined in subsection 2.8(a).

 

“Swing Line Note”:  as defined in subsection 4.16(d).

 

“Taxes”: 
any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

 

“Term Commitment”:  as to any Term Lender, the obligation of such
Lender to make a Term Loan to the Borrower in an aggregate amount not to exceed
at any time outstanding the amount set forth opposite such Lender’s name in Schedule I
hereto under the heading “Term Commitment”.

 

 “Term Lenders”:  each Lender that has a Term Commitment or
that holds a Term Loan.

 

“Term Loans”: 
as defined in subsection 2.5.

 

“Term Loan Maturity Date”:  July 25, 2013.

 

21

 

“Term Loan Note”:  as defined in subsection 4.16(d).

 

“Term Loan Percentage”:  as to any Term Lender at any time, the
percentage which such Lender’s Term Commitment then constitutes of the
aggregate Term Commitments (or, at any time after the Effective Date, the
percentage which the aggregate principal amount of such Lender’s Term Loans
then outstanding constitutes of the aggregate principal amount of the Term
Loans then outstanding).

 

“Total Loan Percentage”: as to any
Lender, the percentage which the sum of such Lender’s Term Commitments (or at
any time after the Effective Date, such Lender’s Term Loans then outstanding)
and Revolving Credit Commitments (or, if the Revolving Credit Commitments have
terminated or expired at such time, such Lender’s Aggregate Revolving Credit Outstanding)
then in effect constitutes of the Aggregate Loans.

 

 “Trailing”:  with respect to the determination of any
financial results for any period, the applicable financial result for the four
fiscal quarters ended on such date.

 

“Transaction”:  as defined in the preamble hereto.

 

“Tranche”:  the collective reference to Eurodollar Loans
the then current Interest Periods with respect to which begin on the same date
and end on the same later date (whether or not such Loans shall originally have
been made on the same day).

 

“Transferee”:  as defined in subsection 11.15.

 

“Type”:  as to any Loan, its nature as an ABR Loan or
a Eurodollar Loan.

 

“Withdrawal Liability”:  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.

 

1.2.          Other Definitional Provisions.

 

(a)           Unless otherwise specified therein,
all terms defined in this Agreement shall have the defined meanings when used
in the Notes, the other Loan Documents or any certificate or other document
made or delivered pursuant hereto.

 

(b)           As used herein and in the Notes and
any other Loan Document, and any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms relating to the Borrower
and its Subsidiaries not defined in subsection 1.1 and accounting terms partly
defined in subsection 1.1, to the extent not defined, shall have the respective
meanings given to them under GAAP; provided that, if the Borrower
notifies the Administrative Agent that the Borrower requests an amendment to
any provision hereof to eliminate the effect of any change occurring after the
date hereof in GAAP or in the application thereof on the operation of 

 

22

 

such provision (or if the Administrative
Agent notifies the Borrower that the Majority Lenders request an amendment to
any provision hereof for such purpose), regardless of whether any such notice
is given before or after such change in GAAP or in the application thereof,
then such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance herewith.

 

(c)           The words “hereof,” “herein” and “hereunder”
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
Section, subsection, Schedule and Exhibit references are to this Agreement
unless otherwise specified.

 

(d)           The meanings given to terms defined
herein shall be equally applicable to both the singular and plural forms of
such terms.

 

SECTION 2.  AMOUNT AND TERMS
OF COMMITMENTS

 

2.1.          Revolving
Commitments.

 

(a)           Subject to the terms and conditions
hereof, each Revolving Lender severally agrees to make revolving credit loans
(each, a “Revolving Credit Loan”) in U.S. Dollars to the Borrower from
time to time during the Revolving Credit Commitment Period so long as after
giving effect thereto (i) the Available Revolving Credit Commitment of
each Lender with a Revolving Credit Commitment is greater than or equal to zero
and (ii) the Aggregate Revolving Credit Outstanding of all Lenders does
not exceed the Aggregate Revolving Credit Commitments.  During the Revolving Credit Commitment Period
the Borrower may use the Revolving Credit Commitments by borrowing, prepaying
the Revolving Credit Loans in whole or in part, and reborrowing, all in
accordance with the terms and conditions hereof.

 

(b)           The Revolving Credit Loans may from
time to time be (i) Eurodollar Loans, (ii) ABR Loans or (iii) a
combination thereof, as determined by the Borrower and notified to the
Administrative Agent in accordance with subsections 2.2 and 4.2, provided
that no Revolving Credit Loan shall be made as a Eurodollar Loan after the day
that is one month prior to the Revolving Credit Termination Date.

 

2.2.          Procedure for Revolving Credit Borrowing.  The Borrower may borrow under the Revolving
Credit Commitments during the Revolving Credit Commitment Period on any
Business Day, provided that the Borrower shall give the Administrative
Agent irrevocable notice (which notice must be received by the Administrative
Agent prior to 11:00 A.M., (New York City time) at least (a) three
Business Days prior to the requested Borrowing Date, if all or any part of the
requested Revolving Credit Loans are to be initially Eurodollar Loans, or (b) one
Business Day prior to the requested Borrowing Date, otherwise), specifying in
each case (i) the 

 

23

 

amount to be
borrowed, (ii) the requested Borrowing Date, (iii) whether the
borrowing is to be of Eurodollar Loans, ABR Loans or a combination thereof and (iv) if
the borrowing is to be entirely or partly of Eurodollar Loans, the amount of
such Type of Loan and the length of the initial Interest Periods therefor.  Each borrowing under the Revolving Credit Commitments
shall be in an amount equal to (A) in the case of ABR Loans, $1,000,000 or
a whole multiple of $1,000,000 in excess thereof (or, if the then Aggregate
Available Revolving Credit Commitments are less than $1,000,000, such lesser
amount) and (B) in the case of Eurodollar Loans, $5,000,000 or a whole
multiple of $5,000,000 in excess thereof. 
Upon receipt of any such notice from the Borrower, the Administrative
Agent shall promptly notify each Revolving Lender thereof not later than 9:00 A.M.,
New York City time, on the requested Borrowing Date.  Not later than 12:00 Noon, New York City
time, on each requested Borrowing Date each Revolving Lender shall make an
amount equal to its Revolving Credit Commitment Percentage of the principal
amount of the Revolving Credit Loans requested to be made on such Borrowing
Date available to the Administrative Agent at its office specified in
subsection 11.2 in U.S. Dollars and in immediately available funds.  The Administrative Agent shall on such date
credit the account of the Borrower on the books of such office with the
aggregate of the amounts made available to the Administrative Agent by the
Lenders and in like funds as received by the Administrative Agent.

 

2.3.          Repayment of Revolving Credit Loans.

 

 The Borrower hereby unconditionally promises
to pay to the Administrative Agent for the account of each Revolving Lender the
then unpaid principal amount of each Revolving Credit Loan of such Lender
(whether made before or after the termination or expiration of the Revolving
Credit Commitments) on the Revolving Credit Termination Date and on such other
dates and in such other amounts as may be required from time to time pursuant
to this Agreement.  The Borrower hereby
further agrees to pay interest on the unpaid principal amount of the Revolving
Credit Loans from time to time outstanding until payment thereof in full at the
rates per annum, and on the dates, set forth in subsection 4.1.

 

2.4.          Termination, Reduction, Increase
and Extension of Revolving Credit Commitments.

 

(a)           The Borrower shall have the right,
upon not less than three Business Days’ notice to the Administrative Agent
(which shall promptly notify each Lender thereof), to terminate the Revolving
Credit Commitments or, from time to time, to reduce the amount of the Revolving
Credit Commitments; provided that no such termination or reduction shall
be permitted if, after giving effect thereto and to any prepayments of the Revolving
Credit Loans made on the effective date thereof, the Available Revolving Credit
Commitment of any Lender would not be greater than or equal to zero.  Any such permitted reduction shall be in an
amount equal to $2,500,000 or a whole multiple of $1,000,000 in excess thereof
and shall reduce permanently the Revolving Credit Commitments then in effect.

 

(b)           The Borrower may at any time and from
time to time, at its sole cost, expense and effort, request any one or more of
the Lenders, an Affiliate of a Lender or an Approved

 

24

 

Fund of a Lender to increase its Revolving
Credit Commitment or to provide a new Revolving Credit Commitment, as the case
may be (the decision to be within the sole and absolute discretion of such
Lender, Affiliate or Approved Fund), or any other Person reasonably satisfactory
to the Administrative Agent and each Issuing Lender to provide a new Revolving
Credit Commitment, by submitting a Revolving Increase Supplement duly executed
by the Borrower and each such Lender, Affiliate, Approved Fund or other Person,
as the case may be, to the Administrative Agent.  If such Revolving Increase Supplement is in
all respects reasonably satisfactory to the Administrative Agent, the
Administrative Agent shall execute such Revolving Increase Supplement and deliver
a copy thereof to the Borrower and each such Lender, Affiliate, Approved Fund
or other Person, as the case may be. 
Upon execution and delivery of such Revolving Increase Supplement by the
Administrative Agent, (i) in the case of each such Lender, such Lender’s
Revolving Credit Commitment shall be increased to the amount set forth in such
Revolving Increase Supplement, (ii) in the case of each such Affiliate, Approved
Fund or other Person, such Affiliate, Approved Fund or other Person shall
thereupon become a party hereto and shall for all purposes of the Loan
Documents be deemed a “Lender” having a Revolving Credit Commitment as set
forth in such Revolving Increase Supplement, and (iii) in each case, the
Revolving Credit Commitment of such Lender, Affiliate, Approved Fund or such
other Person, as the case may be, shall be as set forth in the applicable
Revolving Increase Supplement; provided, however, that:

 

I.                                         immediately
after giving effect thereto, the sum of all increases in the aggregate
Revolving Credit Commitments shall not exceed $150,000,000;

 

II.                                     each such increase
shall be in an amount not less than $25,000,000 or such amount plus an integral
multiple of $5,000,000;

 

III.                                 the Revolving Credit
Commitments shall not be increased on more than three occasions;

 

IV.                                 if Revolving Credit
Loans would be outstanding immediately after giving effect to each such
increase, then simultaneously with such increase (1) each such Lender,
each such Affiliate, Approved Fund or other Person and each other Lender shall
be deemed to have entered into a master assignment and acceptance agreement, in
form and substance substantially similar to Exhibit C, pursuant to
which each such other Lender shall have assigned to each such Lender and each
such Affiliate, Approved Fund or other Person a portion of its Revolving Credit
Loans necessary to reflect proportionately the Revolving Credit Commitments as
adjusted in accordance with this subsection (b), and (2) in
connection with such assignment, each such Lender and each such Affiliate,
Approved Fund or other Person shall pay to the Administrative Agent, for the
account of the other Lenders, such amount as shall be necessary to appropriately
reflect the assignment to it of Revolving Credit Loans, and in connection with
such master assignment each such other Lender may treat the assignment of 

 

25

 

Eurodollar Loans as a prepayment of such
Eurodollar Loans for purposes of Section 4.15;

 

V.                                   each such Affiliate,
Approved Fund or other Person shall have delivered to the Administrative Agent
and the Borrower all forms, if any, that are required to be delivered by such
Affiliate, Approved Fund or other Person pursuant to Section 4.12; and

 

VI.                               the Borrower shall have
delivered to the Administrative Agent for further distribution to each Lender a
certificate of a Financial Officer demonstrating compliance on a pro forma
basis with the Financial Covenants through the Revolving Credit Termination
Date and the Administrative Agent shall have received such customary certificates,
legal opinions and other items as it shall reasonably request in connection
with such increase.

 

(c)           Each Revolving Lender may at any time
and from time to time, at the request of the Borrower and subject to the
approval of the Administrative Agent (such approval not to be unreasonably
withheld), extend the Revolving Credit Termination Date with respect to its
Revolving Credit Commitment.  The
Borrower shall give written notice to the Administrative Agent of any such
extension request of the Revolving Credit Commitments.  The Administrative Agent shall promptly
notify each Revolving Lender of any such request made by the Borrower, and each
Revolving Lender shall in turn, in its sole discretion, not later than 10
Business Days after such notice, notify the Borrower and the Administrative
Agent in writing as to whether such Revolving Lender will consent to such
extension.  Upon the consent of such
Revolving Lender and the Administrative Agent to extend the Revolving Credit
Termination Date with respect to such Revolving Lender’s Revolving Credit
Commitment, such Revolving Lender’s Revolving Credit Commitment shall be so
extended, and the Borrower, the Administrative Agent and such Revolving Lender
shall execute such documentation satisfactory to the Administrative Agent
necessary to reflect such extension of such Revolving Lender’s Revolving Credit
Commitment.

 

2.5.          Term Commitments.  Subject to the terms and conditions hereof,
each Term Lender severally agrees to make term loans (each, a “Term Loan”)
to the Borrower on the Effective Date in an amount not to exceed the amount of
the Term Commitment of such Lender.  The
Term Loans may from time to time be Eurodollar Loans or ABR Loans, as
determined by the Borrower and notified to the Administrative Agent in
accordance with subsections 2.6 and 4.2.

 

2.6.          Procedure for
Term Loan Borrowing.  The Borrower
shall give the Administrative Agent irrevocable notice (which notice must be
received by the Administrative Agent prior to 11:00 A.M., New York City
time, one Business Day prior to the anticipated Effective Date) requesting that
the Term Lenders make the Term Loans on the Effective Date and specifying the
amount to be borrowed.  The Term Loans
made on the Effective Date shall initially be ABR Loans.  Upon receipt of such notice the
Administrative Agent shall promptly notify each Term Lender thereof.  Not later than 12:00 Noon, New York City
time, on the Effective

 

26

 

Date each Term
Lender shall make available to the Administrative Agent at its office specified
in subsection 11.2 an amount in U.S. Dollars in immediately available funds
equal to the Term Loan or Term Loans to be made by such Lender.  The Administrative Agent shall credit the account
of the Borrower on the books of such office of the Administrative Agent with
the aggregate of the amounts made available to the Administrative Agent by the
Term Lenders in U.S. Dollars in immediately available funds.

 

2.7.          Repayment of Term
Loans.  The Borrower shall repay all
Term Loans made to it in quarterly installments on the dates set forth below,
in each case in an amount equal to the percentage of the initial aggregate
principal amount of the Term Loans made to the Borrower set forth opposite such
date (with each Term Lender to receive its Term Loan Percentage of each such
installment):

 

	
  December 31, 2008

  	
   

  	
  2.5

  	
  %

  
	
  March 31, 2009

  	
   

  	
  2.5

  	
  %

  
	
  June 30, 2009

  	
   

  	
  2.5

  	
  %

  
	
  September 30, 2009

  	
   

  	
  2.5

  	
  %

  
	
  December 31, 2009

  	
   

  	
  2.5

  	
  %

  
	
  March 31, 2010

  	
   

  	
  2.5

  	
  %

  
	
  June 30, 2010

  	
   

  	
  2.5

  	
  %

  
	
  September 30, 2010

  	
   

  	
  5

  	
  %

  
	
  December 31, 2010

  	
   

  	
  5

  	
  %

  
	
  March 31, 2011

  	
   

  	
  5

  	
  %

  
	
  June 30, 2011

  	
   

  	
  5

  	
  %

  
	
  September 30, 2011

  	
   

  	
  7.5

  	
  %

  
	
  December 31, 2011

  	
   

  	
  7.5

  	
  %

  
	
  March 31, 2012

  	
   

  	
  7.5

  	
  %

  
	
  June 30, 2012

  	
   

  	
  7.5

  	
  %

  
	
  September 30, 2012

  	
   

  	
  7.5

  	
  %

  
	
  December 31, 2012

  	
   

  	
  7.5

  	
  %

  
	
  March 31, 2013

  	
   

  	
  7.5

  	
  %

  
	
  June 30, 2013

  	
   

  	
  7.5

  	
  %

  
	
  Term Loan Maturity Date

  	
   

  	
  2.5

  	
  %

  

 

2.8.          Swing Line
Commitment.

 

(a)           Subject to the terms and conditions
hereof, the Swing Line Lender agrees to make swing line loans (individually, a “Swing
Line Loan”; collectively, the “Swing Line Loans”) to the Borrower
from time to time during the Revolving Credit Commitment Period in an aggregate
principal amount at any one time outstanding not to exceed $20,000,000; provided
that the Swing Line Lender shall not make any Swing Line Loan if, after giving
effect thereto, the sum of the Swing Line Loans, the Revolving Credit Loans and
the Letter of Credit Obligations

 

27

 

(in each case after giving effect to the
Loans requested to be made and the Letters of Credit requested to be issued on
such date) exceeds the Aggregate Revolving Credit Commitments.  During the Revolving Credit Commitment
Period, the Borrower may use the Swing Line Commitment by borrowing, prepaying
the Swing Line Loans in whole or in part, and reborrowing, all in accordance
with the terms and conditions hereof. 
All Swing Line Loans shall be made as ABR Loans and shall not be
entitled to be converted into Eurodollar Loans. 
The Borrower shall give the Swing Line Lender irrevocable notice (which
notice must be received by the Swing Line Lender prior to 12:00 Noon, New York
City time) on the requested Borrowing Date specifying the amount of the
requested Swing Line Loan which shall be in a minimum amount of $100,000 or a
whole multiple of $100,000 in excess thereof. 
The proceeds of the Swing Line Loan will be made available by the Swing
Line Lender to the Borrower at the Houston office of the Swing Line Lender set
forth in subsection 11.2, or at such other address the Swing Line Lender shall
designate in writing to the Borrower from time to time in accordance with subsection
11.2, by 3:00 P.M., New York City time, on the Borrowing Date by crediting
the account of the Borrower at such office with such proceeds.  The Borrower may at any time and from time to
time prepay the Swing Line Loans, in whole or in part, without premium or
penalty, by notifying the Swing Line Lender prior to 12:00 Noon, New York City
time, on any Business Day of the date and amount of prepayment.  If any such notice is given, the amount
specified in such notice shall be due and payable on the date specified
therein.  Partial prepayments shall be in
an aggregate principal amount of $100,000 or a whole multiple of $100,000 in
excess thereof.

 

(b)           The Swing Line Lender, at any time in
its sole and absolute discretion, may, on behalf of the Borrower (which hereby
irrevocably directs the Swing Line Lender to act on its behalf) request each
Revolving Lender, including the Swing Line Lender, to make a Revolving Credit
Loan which is an ABR Loan in an amount equal to such Lender’s Revolving Credit
Commitment Percentage of the amount of the Swing Line Loans outstanding on the
date such notice is given (the “Refunded Swing Line Loans”).  Unless any of the events described in
paragraph (h) of Section 9 shall have occurred with respect to the
Borrower (in which event the procedures of paragraph (d) of this
subsection 2.8 shall apply), each Revolving Lender shall make the proceeds of
such Revolving Credit Loan available to the Administrative Agent for the
account of the Swing Line Lender at the office of the Administrative Agent
specified in subsection 11.2 prior to 12:00 Noon (New York City time) in funds
immediately available on the Business Day next succeeding the date such notice
is given.  The proceeds of such Revolving
Credit Loans shall be immediately applied to repay the Refunded Swing Line
Loans.  Effective on the day such Revolving
Credit Loans are made, the portion of the Swing Line Loans so paid shall no
longer be outstanding as Swing Line Loans, shall no longer be due under any
Swing Line Note and shall be due as the respective Revolving Credit Loans made
by the Revolving Lenders in accordance with their respective Revolving Credit
Commitment Percentages.  The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of the Swing Line Lender the then unpaid principal amount of each Swing
Line Loan of the Swing Line Lender on the Revolving Credit Termination Date (to
the extent such Swing Line Loan has not previously been repaid in full with the
proceeds of Revolving Credit Loans).

 

28

 

(c)           Notwithstanding anything herein to
the contrary, the Swing Line Lender shall not be obligated to make any Swing
Line Loans if the conditions set forth in subsection 6.2 have not been
satisfied in respect thereof.

 

(d)           If prior to the making of a Revolving
Credit Loan pursuant to paragraph (b) of this subsection 2.8 one of the
events described in paragraph (h) of Section 9 shall have occurred
and be continuing with respect to the Borrower, each Revolving Lender with a
Revolving Credit Commitment will, on the date such Revolving Credit Loan was to
have been made pursuant to the notice in this subsection 2.8, purchase an undivided
participating interest in the Refunded Swing Line Loans in an amount equal to (i) its
Revolving Credit Commitment Percentage times (ii) the Refunded Swing Line
Loans.  Each Revolving Lender will
immediately transfer to the Swing Line Lender, in immediately available funds,
the amount of its participation, and upon receipt thereof the Swing Line Lender
will deliver to such Lender a Swing Line Loan Participation Certificate dated
the date of receipt of such funds and in such amount.

 

(e)           Whenever, at any time after any
Revolving Lender has purchased a participating interest in a Swing Line Loan,
the Swing Line Lender receives any payment on account thereof, the Swing Line
Lender will distribute to such Lender its participating interest in such amount
(appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Lender’s participating interest was
outstanding and funded); provided, however, that in the event
that such payment received by the Swing Line Lender is required to be returned,
such Lender will return to the Swing Line Lender any portion thereof previously
distributed by the Swing Line Lender to it.

 

(f)            Each Revolving Lender’s obligation
to make the Loans referred to in subsection 2.8(b) and to purchase
participating interests pursuant to subsection 2.8(d) shall be absolute,
irrevocable and unconditional and shall not be affected by any circumstance,
including, without limitation, (i) any set-off, counterclaim, recoupment,
defense or other right which such Lender or the Borrower may have against the
Swing Line Lender, the Borrower or any other Person for any reason whatsoever, (ii) the
occurrence or continuance of a Default or an Event of Default; (iii) any
adverse change in the condition (financial or otherwise) of the Borrower or any
other Loan Party; (iv) any breach of this Agreement or any other Loan
Document by the Borrower or any of its Subsidiaries or any other Lender; or (v) any
other circumstance, happening or event whatsoever, whether or not similar to
any of the foregoing.

 

SECTION 3.  LETTERS OF
CREDIT

 

3.1.          Letters of Credit. 
Subject to the terms and conditions of this Agreement, the Issuing
Lender agrees, on behalf of the Revolving Lenders, and in reliance on the
agreement of the Revolving Lenders set forth in subsection 3.3, to issue for
the account of the Borrower letters of credit in an aggregate face amount,
together with any unpaid Reimbursement Obligations, not to exceed $25,000,000
at any time outstanding, as follows:

 

29

 

(i)            standby
letters of credit (collectively, the “Standby Letters of Credit”) in a
form reasonably satisfactory to the Issuing Lender and in favor of such
beneficiaries as the Borrower shall specify from time to time (which shall be
reasonably satisfactory to the Issuing Lender); and

 

(ii)           commercial
letters of credit in the form of the Issuing Lender’s standard commercial
letters of credit (“Commercial Letters of Credit”) in favor of sellers
of goods or services to the Borrower or its Subsidiaries (the Standby Letters
of Credit and Commercial Letters of Credit being referred to collectively as
the “Letters of Credit”, it being understood that Existing Letters of
Credit shall be deemed to be “Letters of Credit” for all purposes under the
Loan Documents);

 

provided
that on the date of the issuance of any Letter of Credit, and after giving
effect to such issuance, the Aggregate Revolving Credit Outstanding of all
Revolving Lenders does not exceed the Aggregate Revolving Credit Commitments at
such time.  Each Standby Letter of Credit
shall (i) have an expiry date no later than one year from the date of
issuance thereof or, if earlier, five Business Days prior to the Revolving
Credit Termination Date, (ii) be denominated in U.S. Dollars and (iii) be
in a minimum face amount of $100,000. 
Each Commercial Letter of Credit shall (i) provide for the payment
of sight drafts when presented for honor thereunder, or of time drafts, in each
case in accordance with the terms thereof and when accompanied by the documents
described or when such documents are presented, as the case may be, (ii) be
denominated in U.S. Dollars and (iii) have an expiry date no later than
six months from the date of issuance thereof or, if earlier, five Business Days
prior to the Revolving Credit Termination Date. 
Upon the issuance of any Letter of Credit, the Administrative Agent
shall promptly notify each Revolving Lender thereof.

 

3.2.          Procedure for Issuance of Letters of Credit.  The Borrower may from time to time request,
upon at least three Business Days’ notice, the Issuing Lender to issue a Letter
of Credit by delivering to the Issuing Lender at its address specified in
subsection 11.2 a Letter of Credit Application, completed to the reasonable
satisfaction of such Issuing Lender, together with such other certificates,
documents and other papers and information as such Issuing Lender may
reasonably request.  Upon receipt of any
Letter of Credit Application, the Issuing Lender will process such Letter of
Credit Application, and the other certificates, documents and other papers
delivered in connection therewith, in accordance with its customary procedures
and shall promptly issue such Letter of Credit (but in no event earlier than
three Business Days after receipt by the Issuing Lender of the Letter of Credit
Application relating thereto) by issuing the original of such Letter of Credit
to the beneficiary thereof and by furnishing a copy thereof to the
Borrower.  Prior to the issuance of any
Letter of Credit, the Issuing Lender will confirm with the Administrative Agent
that the issuance of such Letter of Credit is permitted pursuant to Section 3
and subsection 6.2.  Additionally, the
Issuing Lender and the Borrower shall inform the Administrative Agent of any modifications
made to outstanding Letters of Credit, of any payments made with respect to
such Letters of Credit, and of any other information regarding such Letters 

 

30

 

of Credit as
may be reasonably requested by the Administrative Agent, in each case pursuant
to procedures established by the Administrative Agent.

 

3.3.          Participating Interests.  Effective as of the date of the issuance of
each Letter of Credit (in the case of a Letter of Credit issued after the date
hereof), the Issuing Lender agrees to allot, and does allot, to each other
Revolving Lender with a Revolving Credit Commitment, and each such Lender
severally and irrevocably agrees to take and does take, a Participating
Interest in such Letter of Credit and the related Letter of Credit Application
in a percentage equal to such Lender’s Revolving Credit Commitment
Percentage.  On the date that any Participating
Lender becomes a party to this Agreement in accordance with subsection 11.6,
Participating Interests in any outstanding Letter of Credit held by the
Revolving Lender from which such Participating Lender acquired its interest
hereunder shall be proportionately reallocated between such Participating
Lender and such transferor Revolving Lender. 
Each Participating Lender hereby agrees that its obligation to
participate in each Letter of Credit issued in accordance with the terms hereof
and to pay or to reimburse the Issuing Lender in respect of such Letter of
Credit for its participating share of the drafts drawn thereunder shall be
irrevocable and unconditional; provided that no Participating Lender
shall be liable for the payment of any amount under subsection 3.4(b) resulting
solely from the Issuing Lender’s gross negligence or willful misconduct.

 

3.4.          Payments.

 

(a)           The Borrower agrees (i) to
reimburse the Administrative Agent for the account of the Issuing Lender,
forthwith upon its demand and otherwise in accordance with the terms of the
Letter of Credit Application, if any, relating thereto, for any payment made by
the Issuing Lender under any Letter of Credit and (ii) to pay to the
Administrative Agent for the account of such Issuing Lender, interest on any
unreimbursed portion of any such payment from the date of such payment until
reimbursement in full thereof at a fluctuating rate per  annum
equal to the rate then borne by Revolving Credit Loans that are ABR Loans
pursuant to subsection 4.1(b) plus 2% per  annum.

 

(b)           In the event that the Issuing Lender
makes a payment under any Letter of Credit and is not reimbursed in full
therefor, forthwith upon demand of the Issuing Lender, and otherwise in
accordance with the terms hereof or of the Letter of Credit Application, if
any, relating to such Letter of Credit, the Issuing Lender will promptly
through the Administrative Agent notify each Participating Lender that acquired
its Participating Interest in such Letter of Credit from the Issuing Lender or
pursuant to an assignment as provided in subsection 11.6(c).  No later than (x) the close of business
on the date such notice is given if such notice is given by 12:00 Noon (New
York City time) on the date such notice is received or (y) 12:00 Noon (New
York City time) on the following Business Day if such notice is not received by
12:00 Noon (New York City time), each such Participating Lender will transfer
to the Administrative Agent, for the account of the Issuing Lender, in
immediately available funds, an amount equal to such Participating Lender’s pro
rata share of the unreimbursed portion of such payment.

 

31

 

(c)           Whenever, at any time, after the
Issuing Lender has made payment under a Letter of Credit and has received from
any Participating Lender such Participating Lender’s pro  rata
share of the unreimbursed portion of such payment, the Issuing Lender receives
any reimbursement on account of such unreimbursed portion or any payment of
interest on account thereof, the Issuing Lender will distribute to the
Administrative Agent, for the account of such Participating Lender, its pro
rata share thereof; provided, however, that in the event
that the receipt by the Issuing Lender of such reimbursement or such payment of
interest (as the case may be) is required to be returned, such Participating
Lender will promptly return to the Administrative Agent, for the account of the
Issuing Lender, any portion thereof previously distributed by the Issuing
Lender to it.

 

3.5.          Further Assurances. 
The Borrower hereby agrees, from time to time, to do and perform any and
all acts and to execute any and all further instruments reasonably requested by
the Issuing Lender more fully to effect the purposes of this Agreement and the
issuance of the Letters of Credit issued hereunder.

 

3.6.          Obligations Absolute.  The payment obligations of the Borrower and
each Participating Lender under subsection 3.4 shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including, without limitation, the following
circumstances:

 

(a)           the existence of any claim, set-off,
defense or other right which the Borrower may have at any time against any
beneficiary, or any transferee, of any Letter of Credit (or any Persons for
whom any such beneficiary or any such transferee may be acting), the Issuing
Lender or any Participating Lender, or any other Person, whether in connection
with this Agreement, the transactions contemplated herein, or any unrelated
transaction;

 

(b)           any statement or any other document
presented under any Letter of Credit opened for its account proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect;

 

(c)           payment by the Issuing Lender under
any Letter of Credit against presentation of a draft or certificate which does
not comply with the terms of such Letter of Credit, except payment resulting
solely from the gross negligence or willful misconduct of the Issuing Lender;
or

 

(d)           any other circumstances or happening
whatsoever, whether or not similar to any of the foregoing, except circumstances
or happenings resulting from the gross negligence or willful misconduct of the
Issuing Lender.

 

3.7.          Letter of Credit Application.  To the extent not inconsistent with the terms
of this Agreement (in which case the provisions of this Agreement shall
prevail), provisions of any Letter of Credit Application related to any Letter
of Credit are supplemental to, and not in derogation of, any rights and
remedies of the Issuing Lender and the Participating Lenders under 

 

32

 

this Section 3
and applicable law.  The Borrower
acknowledges and agrees that all rights of the Issuing Lender under any Letter
of Credit Application shall inure to the benefit of each Participating Lender
to the extent of its Revolving Credit Commitment Percentage as fully as if such
Participating Lender was a party to such Letter of Credit Application.

 

3.8.          Purpose of Letters of Credit.  Each Standby Letter of Credit shall be used
by the Borrower solely (a) to provide credit support for borrowings by the
Borrower or its Subsidiaries, or (b) for other working capital purposes of
the Borrower and Subsidiaries in the ordinary course of business.  Each Commercial Letter of Credit will be used
by the Borrower and Subsidiaries solely to provide the primary means of payment
in connection with the purchase of goods or services by the Borrower and its
Subsidiaries in the ordinary course of business.

 

SECTION 4.  GENERAL
PROVISIONS

 

4.1.          Interest
Rates and Payment Dates.

 

(a)           Each Eurodollar Loan shall bear
interest for each day during each Interest Period with respect thereto at a
rate per  annum equal to the Eurodollar Rate determined for such
Interest Period plus the Applicable Margin.

 

(b)           Each ABR Loan shall bear interest for
each day on which it is outstanding at a rate per  annum equal to
the Alternate Base Rate for such day plus the Applicable Margin.

 

(c)           If all or a portion of (i) the
principal amount of any Loan, (ii) any interest payable thereon or (iii) any
fee or other amount payable hereunder shall not be paid when due (whether at
the stated maturity, by acceleration or otherwise), such amount shall bear
interest for each day after the due date until such amount is paid in full at a
rate per  annum equal to (x) in the case of principal, the
rate that would otherwise be applicable thereto pursuant to the foregoing
provisions of this subsection plus 2% per  annum or (y) in
the case of any such overdue interest, fee or other amount, the rate described
in paragraph (b) of this subsection plus 2% per  annum.  If any Event of Default described in
subsections 9(c) (with respect to subsection 8.1 only), (f), (h) or (j) shall
occur and be continuing, and the Majority Lenders shall give notice to the
Borrower that this sentence shall apply, then, until such Event of Default
shall be cured or waived or such notice shall be withdrawn, the outstanding
principal amount of all Loans shall bear interest at 2% per  annum
above the rate that would otherwise be applicable thereto pursuant to the
foregoing provisions of this subsection 4.1 (other than the first sentence of
this paragraph (c)).

 

(d)           Interest shall be payable in arrears
on each Interest Payment Date, provided that interest accruing pursuant
to paragraph (c) of this subsection 4.1 shall be payable from time to time
on demand.

 

(e)           In the event that any certificate
delivered pursuant to subsection 7.2(b) is inaccurate (regardless of
whether this Agreement or the Commitments are in effect when such inaccuracy is
discovered), and such inaccuracy, if corrected, would have led to the application
of 

 

33

 

a higher Applicable Margin for any period
than the Applicable Margin actually used to determine interest rates for such
period, then (a) the Borrower shall promptly deliver to the Administrative
Agent a corrected certificate for such period, (b) the Applicable Margin
for such period shall be retroactively determined based on the calculations set
forth in the corrected certificate delivered pursuant to subsection 7.2(b) and
(c) the Borrower shall promptly pay to the Administrative Agent (for the
account of the Lenders during such period or their successors and assigns) the
accrued additional interest owing as a result of such increased Applicable
Margin for such period.  This subsection
4.1(e) shall not limit the rights of the Administrative Agent under this Section 4
or Section 9, and shall survive the termination of this Agreement.

 

4.2.          Conversion and Continuation Options.

 

(a)           The Borrower may elect from time to
time to convert outstanding Eurodollar Loans (in whole or in part) to ABR Loans
by giving the Administrative Agent at least two Business Days’ prior
irrevocable notice of such election, provided that any such conversion
of Eurodollar Loans may only be made on the last day of an Interest Period with
respect thereto.  The Borrower may elect
from time to time to convert outstanding ABR Loans (in whole or in part) to
Eurodollar Loans by giving the Administrative Agent at least three Business
Days’ prior irrevocable notice of such election.  Any such notice of conversion to Eurodollar
Loans shall specify the length of the initial Interest Period or Interest
Periods therefor.  Upon receipt of any
such notice the Administrative Agent shall promptly notify each relevant Lender
thereof.  All or any part of outstanding
Eurodollar Loans and ABR Loans may be converted as provided herein, provided
that (i) no ABR Loan may be converted into a Eurodollar Loan when any
Default or Event of Default has occurred and is continuing and the
Administrative Agent or the Majority Lenders have determined that such
conversion is not appropriate, (ii) any such conversion may only be made
if, after giving effect thereto, subsection 4.3 shall not have been violated,
and (iii) no ABR Loan may be converted into a Eurodollar Loan after the
date that is one month prior to the Revolving Credit Termination Date or the
Term Loan Maturity Date, as applicable.

 

(b)           Any Eurodollar Loans may be continued
as such upon the expiration of the then current Interest Period with respect
thereto by the Borrower giving notice to the Administrative Agent of the length
of the next Interest Period to be applicable to such Loans determined in
accordance with the applicable provisions of the term “Interest Period” set
forth in subsection 1.1, provided that no Eurodollar Loan may be
continued as such (i) when any Default or Event of Default has occurred
and is continuing and the Administrative Agent or the Majority Lenders have
determined that such continuation is not appropriate, (ii) if, after
giving effect thereto, subsection 4.3 would be contravened or (iii) after
the date that is one month prior to the Revolving Credit Termination Date or
the Term Loan Maturity Date, as applicable; and provided, further,
that if the Borrower shall fail to give such notice or if such continuation is
not permitted pursuant to the preceding proviso, such Eurodollar Loans shall,
subject to the preceding proviso, be automatically continued as such, with the
length of the next Interest Period to be 30 days.  Upon receipt of any notice pursuant to this
subsection 4.2(b), the Administrative Agent shall promptly notify each Lender
thereof.

 

34

 

4.3.          Minimum Amounts of Tranches.  All borrowings, conversions and continuations
of Loans hereunder and all selections of Interest Periods hereunder shall be in
such amounts and be made pursuant to such elections so that, after giving
effect thereto, (i) the aggregate principal amount of the Eurodollar Loans
comprising each Tranche shall be equal to $5,000,000 or a whole multiple of
$5,000,000 in excess thereof and (ii) there shall not be more than 10
Tranches at any one time outstanding.

 

4.4.          Optional and Mandatory Prepayments.

 

(a)           The Borrower may at any time and from
time to time prepay the Loans, in whole or in part, upon at least three
Business Days’ irrevocable notice to the Administrative Agent (in the case of
Eurodollar Loans) and at least one Business Day’s irrevocable notice to the Administrative
Agent (in the case of ABR Loans), specifying the date and amount of prepayment
and whether the prepayment is of Eurodollar Loans, ABR Loans or a combination
thereof, and, in each case if a combination thereof, the amount allocable to
each.  Upon the receipt of any such
notice the Administrative Agent shall promptly notify each Lender thereof.  If any such notice is given, the amount specified
in such notice shall be due and payable on the date specified therein.  Partial prepayments of the Loans shall be in
an aggregate principal amount of $2,500,000 or a whole multiple of $1,000,000
in excess thereof.

 

(b)           If any Capital Stock shall be issued
by the Borrower (excluding (i) any Capital Stock issued or sold to directors,
officers, employees or consultants of the Borrower or any Subsidiary pursuant
to benefit plans established by the Borrower or any Subsidiary, (ii) any
Capital Stock issued as a dividend or distribution on Capital Stock or (iii) any
Capital Stock issued as consideration for an acquisition, strategic
relationship or partnership), an amount equal to 50% of the Net Cash Proceeds
thereof shall be applied on the date of such issuance toward the prepayment of
the Term Loans as set forth in subsection 4.4(e).

 

(c)           If any Indebtedness shall be incurred
by the Borrower or any of its Subsidiaries (excluding any Indebtedness incurred
in accordance with subsection 8.2), an amount equal to 100% of the Net Cash
Proceeds thereof shall be applied on the date of such incurrence toward the
prepayment of the Term Loans as set forth in subsection 4.4(e).

 

(d)           If on any date the Borrower or any of
its Subsidiaries shall receive Net Cash Proceeds from any Asset Sale or
Recovery Event then, unless a Reinvestment Notice shall be delivered in respect
thereof, such Net Cash Proceeds shall be applied on such date toward the prepayment
of the Term Loans as set forth in subsection 4.4(e); provided, that,
notwithstanding the foregoing, on each Reinvestment Prepayment Date, an amount
equal to the Reinvestment Prepayment Amount with respect to the relevant Reinvestment
Event shall be applied toward the prepayment of the Term Loans as set forth in
subsection 4.4(e); and provided, further, that no Net Cash
Proceeds from any Asset Sale or Recovery Event shall be applied toward the
prepayment of the Term Loans until such time as the aggregate Net Cash Proceeds
from Asset Sales or Recovery Events after the Effective Date exceeds
$75,000,000.

 

35

 

(e)           Amounts to be applied in connection
with prepayments made pursuant to subsection 4.4(b), (c) and (d) shall
be applied to the prepayment of the Term Loans in accordance with subsection
4.8(a)(ii) and shall be made, first, to ABR Loans and, second,
to Eurodollar Loans.

 

(f)            If, at any time during the Revolving
Credit Commitment Period, for any reason the Aggregate Revolving Credit
Outstanding of all the Revolving Lenders exceeds the Aggregate Revolving Credit
Commitments then in effect, or the Aggregate Revolving Credit Outstanding of any
Lender exceeds the Revolving Credit Commitment of such Lender then in effect,
the Borrower shall, without notice or demand, immediately prepay the Revolving
Credit Loans and, to the extent required, cash collateralize Letters of Credit
in an aggregate amount at least sufficient to eliminate any such excess.

 

(g)           Each prepayment of Loans pursuant to
this subsection 4.4 shall be accompanied by accrued and unpaid interest on the
amount prepaid to the date of prepayment and any amounts payable under subsection
4.11 or 4.15 in connection with such prepayment.

 

4.5.          Commitment Fees; Other Fees.

 

(a)           The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Lender (other than any
Revolving Lender which has defaulted in its obligation to fund a Loan under
this Agreement), a commitment fee for the period from and including the
Original Closing Date to but excluding the Revolving Credit Termination Date
(or such earlier date on which the Revolving Credit Commitments shall terminate
as provided herein) computed at the rate per  annum set forth in
the definition of “Applicable Margin” under the heading “Commitment Fee” on the
average daily Available Revolving Credit Commitment of such Lender during the
period for which payment is made, payable quarterly in arrears on the last
Business Day of each calendar quarter and on the Revolving Credit Termination
Date or such earlier date on which the Revolving Credit Commitments shall
terminate as provided herein, commencing on the first such date to occur after
the date hereof.

 

(b)           The Borrower shall pay (without
duplication of any other fee payable under this subsection 4.5) to each Agent
any and all fees separately agreed to by the Borrower and such Agents.

 

(c)           In lieu of any letter of credit commissions
and fees provided for in any Letter of Credit Application relating to a Standby
Letter of Credit (other than any standard issuance, amendment and negotiation
fees), the Borrower will pay the Administrative Agent, (i) for the account
of the Issuing Lender, a non-refundable fronting fee equal to 0.25% per  annum
and (ii) for the account of the Issuing Lender (with respect to its
Participating Interest) and the Participating Lenders, a non-refundable Standby
Letter of Credit fee equal to the Applicable Margin in respect of Eurodollar
Revolving Credit Loans, in each case on the amount available to be drawn under
such Standby Letter of Credit.  Such fees
shall be payable quarterly in arrears on the

 

36

 

last Business Day of each calendar quarter,
and shall be calculated on the average daily amount available to be drawn under
the Standby Letters of Credit.

 

(d)           In lieu of any letter of credit
commissions and fees provided for in any Letter of Credit Application relating
to a Commercial Letter of Credit (other than any standard issuance, amendment
and negotiation fees), the Borrower will pay the Administrative Agent, (i) for
the account of the Issuing Lender, a non-refundable fronting fee equal to 1/16
of 1% of the amount of such Commercial Letter of Credit, (ii) for the
account of the Issuing Lender (with respect to its Participating Interest) and
the Participating Lenders, a non-refundable Commercial Letter of Credit fee
equal to 1/4% of the amount of such Letter of Credit.  Such fees shall be payable to the
Administrative Agent on the date of issuance and shall be distributed by the Administrative
Agent to the Issuing Lender or the Participating Lenders, as applicable,
promptly thereafter and (iii) for the account of the Administrative Agent,
the normal and customary Letter of Credit application and processing fees.

 

(e)           The Borrower agrees to pay the
Issuing Lender for its own account the customary administration, amendment,
transfer and negotiation fees charged by the Issuing Lender in connection with
its issuance and administration of Letters of Credit.

 

4.6.          Computation of Interest and Fees.

 

(a)           Interest and fees shall be calculated
on the basis of a 360-day year for the actual days elapsed (including the first
day but excluding the last day); provided that interest calculated at
the Alternate Base Rate (based on the Prime Rate included therein) shall be
calculated on the basis of a 365- (or 366-, as the case may be) day year for
the actual days elapsed (including the first day but excluding the last
day).  The Administrative Agent shall as
soon as practicable notify the Borrower and the relevant Lenders of each determination
of a Eurodollar Rate.  Any change in the
interest rate on a Loan resulting from a change in the Alternate Base Rate
shall become effective as of the opening of business on the day on which such
change becomes effective.  The
Administrative Agent shall as soon as practicable notify the Borrower and the
relevant Lenders of the effective date and the amount of each such change in
the Alternate Base Rate.

 

(b)           Each determination of an interest
rate by the Administrative Agent pursuant to any provision of this Agreement
shall be conclusive and binding on the Borrower and the Lenders in the absence
of manifest error.  The Administrative
Agent shall, at the request of the Borrower deliver to the Borrower a statement
showing in reasonable detail the calculations used by the Administrative Agent
in determining any interest rate pursuant to subsection 4.1.

 

4.7.          Inability to Determine Interest Rate.  If prior to the first day of any Interest
Period:

 

(a)           the Administrative Agent shall have
determined (which determination shall be conclusive and binding upon the
Borrower) that, by reason of circumstances affecting 

 

37

 

the relevant market, adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate for such Interest Period,
or

 

(b)           the Administrative Agent has received
notice from the Majority Lenders that the Eurodollar Rate determined or to be
determined for such Interest Period will not adequately and fairly reflect the
cost to such Lenders of making or maintaining their Eurodollar Loans during
such Interest Period,

 

the Administrative Agent shall
give telecopy or telephonic notice thereof to the Borrower and the Lenders as
soon as practicable thereafter.  If such
notice is given (i) any Eurodollar Loans requested to be made on the first
day of such Interest Period shall be made as ABR Loans in U.S. Dollars, (ii) any
Loans that were to have been converted on the first day of such Interest Period
to or continued as Eurodollar Loans shall be converted to or continued as ABR
Loans and (iii) any outstanding Eurodollar Loans shall be converted on the
last day of such Interest Period to ABR Loans. 
Until such notice has been withdrawn by the Administrative Agent, no
further Eurodollar Loans shall be made or continued as such, nor shall the
Borrower have the right to convert ABR Loans to Eurodollar Loans.

 

4.8.          Pro Rata Treatment and Payments.

 

(a)           (i) Each borrowing of Loans by
the Borrower from the Lenders hereunder shall be made pro  rata
according to the Term Loan Percentages or Revolving Credit Commitment
Percentages, as applicable, of the relevant Lenders in effect on the date of
such borrowing.

 

                                (ii)           Each
payment (including each prepayment) by the Borrower, on account of principal of
and interest on the Term Loans shall be made pro  rata according
to the respective outstanding principal amounts of the Term Loans then held by
the Term Lenders.  The amount of each
principal prepayment of the Term Loans shall be applied to reduce the then
remaining installments of the Term Loans pro  rata based upon the
respective then remaining principal amounts thereof.  Amounts prepaid on account of the Term Loans
may not be reborrowed.

 

                                (iii)          Each
payment (including each prepayment) by the Borrower on account of principal of
and interest on the Revolving Credit Loans shall be made pro  rata
according to the respective outstanding principal amounts of the Revolving
Credit Loans then held by the Revolving Lenders.

 

                                (iv)          Each
payment by the Borrower on account of any commitment fee or letter of credit
fee hereunder shall be allocated by the Administrative Agent among the
Revolving Lenders in accordance with the respective amounts which such Lenders
are entitled to receive pursuant to subsection 4.5.

 

                                (v)           Any
reduction of the Revolving Credit Commitments of the Lenders shall be allocated
by the Administrative Agent among the Lenders pro  rata according
to the Revolving Credit Commitment Percentages of the Lenders on the date of
such reduction.

 

38

 

(vi)                              All
payments (including prepayments) to be made by the Borrower in respect of Loans
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without set-off or counterclaim and shall be made prior to 12:00 Noon,
New York City time, on the due date thereof to the Administrative Agent,
for the account of the Lenders entitled thereto, at the Administrative Agent’s
office specified in subsection 11.2, in U.S. Dollars and in immediately
available funds.  The Administrative Agent
shall distribute such payments to the Lenders entitled to receive the same
promptly upon receipt in like funds as received.

 

(vii)                           If any
payment hereunder (other than payments on the Eurodollar Loans) becomes due and
payable on a day other than a Business Day, the maturity of such payment shall
be extended to the next succeeding Business Day, and, with respect to payments
of principal, interest thereon shall be payable at the then applicable rate
during such extension.  If any payment on
a Eurodollar Loan becomes due and payable on a day other than a Business Day,
the maturity of such payment shall be extended to the next succeeding Business
Day (and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension) unless the result of
such extension would be to extend such payment into another calendar month, in
which event such payment shall be made on the immediately preceding Business
Day.

 

(b)                                 Unless
the Administrative Agent shall have been notified in writing by any Lender
prior to a Borrowing Date that such Lender will not make the amount that would
constitute its share of such borrowing available to the Administrative Agent,
the Administrative Agent may assume that such Lender is making such amount
available to the Administrative Agent, and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower a corresponding
amount.  If such amount is not made
available to the Administrative Agent by the required time on the Borrowing
Date therefor, such Lender shall pay to the Administrative Agent, on demand,
such amount with interest thereon at a rate per  annum equal to
the daily average Federal Funds Effective Rate for the period until such Lender
makes such amount immediately available to the Administrative Agent.  A certificate of the Administrative Agent
submitted to any Lender with respect to any amounts owing under this subsection
shall be conclusive in the absence of manifest error.  If such Lender’s share of such borrowing is
not made available to the Administrative Agent by such Lender within three
Business Days of such Borrowing Date, the Borrower shall repay such Lender’s
share of such borrowing (together with interest thereon from the date such
amount was made available to the Borrower) at the rate per  annum
applicable to ABR Loans hereunder to the Administrative Agent not later than
three Business Days after receipt of written notice from the Administrative
Agent specifying such Lender’s share of such borrowing that was not made
available to such Administrative Agent, and the Borrower shall have the right
to pursue any remedies against such Lender for its failure to make its portion
of such borrowing available.

 

(c)                                  Unless
the Administrative Agent shall have been notified in writing by the Borrower
prior to a date on which a payment is due from the Borrower hereunder that the
Borrower will not make such payment available to the Administrative Agent, the
Administrative

 

39

 

Agent may assume that the Borrower is making
such amount available to the Administrative Agent, and the Administrative Agent
may, in reliance upon such assumption, make available to the applicable Lenders
a corresponding amount.  If such amount
is not made available to the Administrative Agent by the required time on the
due date therefor, each applicable Lender shall pay to the Administrative
Agent, on demand, such amount with interest thereon at a rate per  annum
equal to the daily average Federal Funds Effective Rate for the period until
such Lender makes such amount immediately available to the Administrative
Agent.  A certificate of the Administrative
Agent submitted to any Lender with respect to any amounts owing under this subsection
shall be conclusive in the absence of manifest error.

 

4.9.                              Illegality.  Notwithstanding any other provision herein,
if the adoption of or any change in any Legal Requirement or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the
commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert ABR Loans to Eurodollar Loans shall
forthwith be cancelled until such time as it shall no longer be unlawful for
such Lender to make or maintain the affected Loans and (b) such Lender’s
Loans then outstanding as Eurodollar Loans, if any, shall be converted automatically
to ABR Loans on the respective last days of the then current Interest Periods
with respect to such Eurodollar Loans or within such earlier period as may be
required by law.  If any such conversion
of a Eurodollar Loan occurs on a day which is not the last day of the then
current Interest Period with respect thereto, the Borrower shall pay to such
Lender such amounts, if any, as may be required pursuant to subsection 4.11.

 

4.10.                        Increased
Costs.

 

(a)                                  In
the event that the adoption of or any change in any Legal Requirement (or in
the interpretation or application thereof) or compliance by any Lender with any
request or directive (whether or not having the force of law) from any central
bank or other Governmental Authority:

 

(i)                                     does or shall
subject any Lender to any tax of any kind whatsoever with respect to this Agreement,
any Note, any Loans made by it or any Letter of Credit, or change the basis of
taxation of payments to such Lender of principal, fees, interest or any other
amount payable hereunder (except for (i) changes in the rate  of tax on the overall net income or profits
of such Lender, (ii) any tax to the extent that the Borrower is or would
be required to pay an additional amount with respect to such tax under subsection 4.12
or (iii) any tax with respect to which the Borrower would not be required
to pay an additional amount under subsection 4.12 because payment of such
additional amount with respect to such tax would be specifically excluded
thereunder);

 

(ii)                                  does or shall impose,
modify or hold applicable any reserve, special deposit, compulsory loan or
similar requirement against assets held by, or deposits or other liabilities in
or for the account of, advances or loans by, or other credit extended by, or

 

40

 

any other acquisition of funds by, any office of such Lender which are
not otherwise included in the determination of the Eurodollar Rate; or

 

(iii)                               does or shall impose on
such Lender any other condition affecting this Agreement or the Loans made by
any Lender or any Letter of Credit participation therein;

 

and the result of any of the
foregoing is to increase the cost to such Lender, by any amount which such
Lender deems to be material, of making, renewing, maintaining or participating
in advances or extensions of credit or to reduce any amount receivable
hereunder, in each case in respect of its Loans or Letters of Credit which it
issues or in which it holds Participating Interests, then, in any such case,
the Borrower shall promptly pay such Lender, upon receipt of its demand setting
forth in reasonable detail, any additional amounts necessary to compensate such
Lender for such additional cost or reduced amount receivable, together with
interest on each such amount from the date two Business Days after the date demanded
until payment in full thereof at the Alternate Base Rate.  A certificate as to any additional amounts
payable pursuant to the foregoing sentence submitted by such Lender, through
the Administrative Agent, to the Borrower shall be conclusive in the absence of
manifest error.  This covenant shall
survive the termination of this Agreement and payment of all amounts
outstanding hereunder for a period of one year.

 

(b)                                 In
the event that any Lender shall have determined that the adoption of any law,
rule, regulation or guideline regarding capital adequacy (or any change therein
or in the interpretation or application thereof) or compliance by any Lender or
any corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any central bank
or Governmental Authority, including, without limitation, the issuance of any
final rule, regulation or guideline, does or shall have the effect of reducing
the rate of return on such Lender’s or such corporation’s capital as a
consequence of its obligations hereunder to a level below that which such
Lender or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender’s or such corporation’s policies
with respect to capital adequacy) by an amount deemed by such Lender to be
material, then from time to time, after submission by such Lender to the
Borrower (with a copy to the Administrative Agent) of a written request
therefor, the Borrower shall promptly pay to such Lender such additional amount
or amounts as will compensate such Lender or such corporation for such
reduction.  A certificate as to any
additional amounts payable pursuant to this subsection 4.10(b), submitted by a
Lender to the Borrower shall be conclusive in the absence of manifest
error.  The provisions of this subsection
4.10(b) shall survive the termination of this Agreement and the payment of
all amounts outstanding hereunder.

 

(c)                                  Any
request by any Lender for compensation under this subsection 4.10 shall be
accompanied by a certificate of a duly authorized officer of such Lender
setting for such information and calculations supporting such request as such
Lender shall customarily provide in similar situations.

 

(d)                                 Failure
or delay on the part of any Lender to demand compensation pursuant to this
subsection 4.10 shall not constitute a waiver of such Lender’s right to demand
such

 

41

 

compensation; provided that the
Borrower shall not be required to compensate a Lender pursuant to this
subsection 4.10 for any increased costs or reductions incurred more than 180
days prior to the date that such Lender notifies the Borrower of the
circumstance giving rise to such increased costs or reductions and of such Lender’s
intention to claim compensation therefor; provided, further,
that, if the circumstance giving rise to such increased costs or reductions is
retroactive in effect, then the 180-day period referred to above shall be
extended to include the period of retroactive effect thereof.

 

4.11.                        Indemnity.  Without duplication of the provisions of
subsection 4.15, the Borrower agrees to indemnify each Lender and to hold
each Lender harmless from any loss or expense which such Lender may sustain or
incur as a consequence of (a) default by the Borrower in payment when due
of the principal amount of or interest on any Loans of such Lender, (b) default
by the Borrower in making a borrowing, continuation or conversion after the
Borrower has given a notice of borrowing, a notice of continuation or a notice
of conversion in accordance with this Agreement, (c) default by the
Borrower in making any prepayment after the Borrower has given a notice in
accordance with this Agreement or (d) the making of a prepayment, continuation
or conversion of a Eurodollar Loan on a day which is not the last day of an
Interest Period with respect thereto, including, without limitation, in each
case, any such loss or expense arising from the reemployment of funds obtained
by it to maintain its Eurodollar Loans hereunder or from fees payable to
terminate the deposits from which such funds were obtained, but excluding, in
each case, lost profit.  A certificate as
to any amounts payable pursuant to this subsection 4.11, submitted by a Lender
to the Borrower shall be conclusive in the absence of manifest error.  This covenant shall survive termination of
this Agreement and payment of all amounts outstanding hereunder.

 

4.12.                        Taxes.

 

(a)                                  Any
and all payments by or on account of any obligation of the Borrower hereunder
shall be made free and clear of and without deduction for any Indemnified Taxes
or Other Taxes; provided that if the Borrower shall be required 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 (including deductions applicable to additional sums payable under
this subsection) the Administrative Agent, Lender or Issuing Lender (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such deductions
and (iii) the Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.

 

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

 

(c)                                  The
Borrower shall indemnify the Administrative Agent, each Lender and the Issuing
Lender, within 10 days after written demand therefor, for the full amount of
any Indemnified Taxes or Other Taxes paid by the Administrative Agent, such
Lender or the Issuing Lender, as the case may be, on or with respect to any
payment by or on account of any obligation

 

42

 

of the Borrower hereunder (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this subsection) 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.  A
certificate as to the amount of such payment or liability delivered to the
Borrower by a Lender or the Issuing Lender, or by the Administrative Agent on
its own behalf or on behalf of a Lender or the Issuing Lender, shall be conclusive
absent manifest error.

 

(d)                                 Each
Lender shall indemnify the Administrative Agent within 10 days after demand
therefor, for the full amount of any Excluded Taxes attributable to such Lender
that are payable by the Administrative Agent and reasonable expenses arising
therefrom or with respect thereto, whether or not such Excluded Taxes were
correctly or legally imposed or asserted by the relevant Governmental
Authority.  A certificate as to the
amount of such payment or liability delivered to any Lender by the
Administrative Agent shall be conclusive absent manifest error.

 

(e)                                  As
soon as practicable after any payment of Indemnified Taxes or Other Taxes by
the Borrower to a Governmental Authority, the 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.

 

(f)                                    Any
Lender that is entitled to an exemption from or reduction of any applicable
withholding tax with respect to payments hereunder or under any other Loan Document
shall deliver to the Borrower (with a copy to the Administrative Agent), at the
time or times reasonably requested by the Borrower or the Administrative Agent,
such properly completed and executed documentation prescribed by applicable law
as will permit such payments to be made without withholding or at a reduced
rate of withholding.  In addition, any
Lender, if requested by the Borrower or the Administrative Agent, shall deliver
such other documentation prescribed by applicable law or reasonably requested
by the Borrower or the Administrative Agent as will enable the Borrower or the
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements. Notwithstanding anything
to the contrary in the preceding two sentences, in the case of any withholding
tax other than U.S. federal withholding tax the completion, execution and
submission of such forms shall not be required if in the Lender’s judgment such
completion, execution or submission would subject such Lender to any material
unreimbursed cost or expense or would materially prejudice the legal or commercial
position of such Lender.

 

Without limiting the generality of the foregoing, any Foreign Lender
shall, to the extent it is legally entitled to do so, deliver to the Borrower
and the Administrative Agent (in such number of copies as shall be requested by
the recipient) on or prior to the date on which such Foreign Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the request
of the Borrower or the Administrative Agent), whichever of the following is
applicable:

 

43

 

(i)  duly completed copies of Internal Revenue Service Form W-8BEN
claiming eligibility for benefits of an income tax treaty to which the United
States of America is a party,

 

(ii)  duly completed copies of Internal Revenue Service Form W-8ECI,

 

(iii)  in the case of a Foreign Lender claiming the benefits of
the exemption for portfolio interest under section 881(c) of the Code, (x) a
certificate substantially in the Form of Exhibit I to the effect that
such Foreign Lender is not (A) a “bank” within the meaning of section
881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the
Borrower within the meaning of section 881(c)(3)(B) of the Code, (C) a
“controlled foreign corporation” described in section 881(c)(3)(C) of the
Code and (D) the interest payment in question are not effectively
connected with the United States trade or business conducted by such Lender (a “U.S.
Tax Compliance Certificate”) and (y) duly completed copies of  Internal Revenue Service Form W-8BEN,

 

(iv) to the extent a Foreign Lender is not the beneficial owner
(for example, where the Foreign Lender is a partnership or participating Lender
granting a typical participation), an Internal Revenue Service Form W-8IMY,
accompanied by a Form W-8ECI, W-8BEN, U.S. Tax Compliance Certificate, Form W-9,
and/or other certification documents from each beneficial owner, as applicable;
provided that, if the Foreign Lender is a partnership (and not a participating
Lender) and one or more beneficial owners of such Foreign Lender are claiming
the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax
Compliance Certificate on behalf of such beneficial owner(s), or

 

(v)  any other form prescribed by applicable law as a basis for
claiming exemption from or a reduction in United States federal withholding tax
duly completed together with such supplementary documentation as may be
prescribed by applicable law to permit the Borrower to determine the
withholding or deduction required to be made.

 

Each Lender agrees that if any form or certification it previously
delivered by it expires or becomes obsolete or inaccurate in any respect, it
shall update such form or certification or promptly notify Borrower and the
Administrative Agent in writing of its legal inability to do so.

 

(g)                                 If the Administrative Agent or a Lender
determines, in its reasonable discretion, that it has received a refund of any
Taxes or Other Taxes as to which it has been indemnified by the Borrower or
with respect to which the Borrower has paid additional amounts pursuant to this
subsection 4.12, it shall pay over such refund to the Borrower as determined in
good faith by the Administrative Agent or such Lender in its sole discretion
(but only to the extent of indemnity payments made, or additional amounts paid,
by the Borrower under this subsection 4.12 with respect to the Taxes or Other
Taxes giving rise to such refund), net of all out-of-pocket expenses of the
Administrative Agent or such Lender and without interest (other than any interest
paid by the relevant Governmental Authority with respect to such refund); provided
that the Borrower upon the request of the Administrative Agent or such Lender,
agrees to repay the

 

44

 

amount paid over
to the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. This subsection 4.12 shall not be
construed to require the Administrative Agent or any Lender to make available
its tax returns (or any other information relating to its taxes which it deems
confidential) to the Borrower or any other Person.

 

4.13.                        Use of
Proceeds.  The proceeds of the Loans
shall be used to fund the Refinancing and pay fees, commissions, and expenses
in connection therewith, on the Effective Date and thereafter for the general
working capital and general corporate purposes of the Borrower and its
Subsidiaries, or for any Acquisitions consummated after the Original Closing
Date.  The Letters of Credit shall be
used for the purposes set forth in subsection 3.8.

 

4.14.                        Change
in Lending Office; Replacement of Lender.

 

(a)                                  Each
Lender agrees that if it makes any demand for payment under subsection 4.10
or 4.12, or if any adoption or change of the type described in
subsection 4.9 shall occur with respect to it, it will use reasonable
efforts (consistent with its internal policy and legal and regulatory
restrictions and so long as such efforts would not be disadvantageous to it, as
determined in its sole discretion) to designate a different lending office or
to assign its rights and obligations hereunder to another of its offices,
branches or affiliates if such designation or assignment would reduce or
obviate the need for the Borrower to make payments under subsection 4.10
or 4.12, or would eliminate or reduce the effect of any adoption or change
described in subsection 4.9.

 

(b)                                 If
any Lender requests any payment under subsection 4.10 or 4.12, the
Borrower  shall have the right to
replace such Lender with one or more replacement lenders, each of which shall
be reasonably acceptable to the Administrative Agent; provided that (i) the
Borrower  shall repay (or the
replacement lender shall purchase) all Loans and other amounts owing hereunder
to such replaced Lender prior to the date of replacement, (ii) until such
time as such replacement shall be consummated, the Borrower  shall pay additional amounts (if any)
required pursuant to subsection 4.10 or 4.12 for the period prior to
replacement and (iii) any such replacement shall not be deemed to be a
waiver of any rights which the Borrower, the
Administrative Agent or any other Lender shall have against the replaced
Lender.

 

4.15.                        Break
Funding 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, without limitation, as a
result of an Event of Default), (b) the conversion of any Eurodollar other
than on the last day of an Interest Period applicable thereto, or (c) the
failure to borrow, convert, continue or prepay any Eurodollar Loan on the date
specified in any notice delivered pursuant hereto, then, in any such event, the
Borrower  shall compensate each
Lender for the loss, cost and expense attributable to such event.  Such loss, cost or expense to any Lender
shall be the 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

 

45

 

Eurodollar
Rate that would have been applicable to such Loan (excluding, for the avoidance
of doubt, any Applicable Margin), 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 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 subsection 4.15 shall be delivered to the Borrower  and shall be conclusive absent manifest
error.  The Borrower  shall pay such lender the amount shown as
due on any such certificate within 10 days after receipt thereof.  The Lender is authorized (but not obligated)
to debit any deposit account of the Borrower now or hereafter maintained by the
Borrower with the Lender to pay any such amount that is not paid when due.

 

4.16.                        Evidence
of Debt

 

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

 

(b)                                 The
Administrative Agent shall maintain the Register pursuant to subsection
11.6(b), and a subaccount therein for each Lender, in which shall be recorded (i) the
amount of each Revolving Credit Loan or Term Loan made hereunder, the Type
thereof and each Interest Period applicable thereto, (ii) the amount of
any principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder in respect of the Revolving Credit Loans or
Term Loans and (iii) both the amount of any sum received by the
Administrative Agent hereunder from the Borrower in respect of the Revolving
Credit Loans or Term Loans and each Lender’s share thereof.

 

(c)                                  The
entries made in the Register and the accounts of each Lender maintained
pursuant to subsection 4.16(a) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however,
that the failure of any Lender to maintain such account or the Administrative
Agent to maintain the Register, or any error therein, shall not in any manner
affect the obligation of the Borrower to repay (with applicable interest) the
Loans made to the Borrower by such Lender in accordance with the terms of this
Agreement.

 

(d)                                 The
Borrower agrees that it will, upon the request of any Term Lender, execute and
deliver to such Lender a promissory note of the Borrower evidencing the Term
Loans of such Lender owed by it, substantially in the form attached hereto as Exhibit A-1
with appropriate insertions as to date and principal amount (each, a “Term
Loan Note”).  The Borrower agrees
that it will, upon the request of any Revolving Lender, execute and deliver to
such

 

46

 

Lender (i) a promissory note of the
Borrower evidencing the Revolving Credit Loans of such Lender, substantially in
the form attached hereto as Exhibit A-2 with appropriate insertions
as to date and principal amount (each, a “Revolving Credit Note”) and/or
(ii) a promissory note of the Borrower evidencing the Swing Line Loans of
such Lender, substantially in the form attached hereto as Exhibit A-3
with appropriate insertions as to date and principal amount (each, a “Swing
Line Note”); provided that any Revolving Credit Note or Swing Line
Note previously delivered to such Lender (or any predecessor thereof) has been
returned to the Borrower and marked cancelled or an affidavit of lost or
destroyed Note (in form acceptable to the Borrower) is executed and delivered
by such requesting Lender in lieu of such Note.

 

SECTION 5.  REPRESENTATIONS
AND WARRANTIES

 

To induce the Lenders to enter into this
Agreement and to make the Loans, and to induce the Issuing Lender to issue
Letters of Credit, the Borrower represents and warrants to each Agent and to
each Lender that:

 

5.1.                              Financial
Condition; Accuracy of Public Information.

 

(a)                                  During
the period from September 30, 2007 to and including the date hereof, there
has been no sale, transfer or other disposition by the Borrower or any of its
consolidated Subsidiaries of any material part of its business or property and
no purchase or other acquisition of any business or property (including any
capital stock of any other Person) material in relation to the consolidated
financial condition of the Borrower and its consolidated Subsidiaries at September 30,
2007, other than (i) the closure of the “Vitamin World” stores, (ii) the
sale of inventory in the ordinary course of business, (iii) as disclosed
in its filing with the U.S. Securities and Exchange Commission pursuant to the
Exchange Act on Form 10-Q made on May 9, 2008, and (iv) the Transaction.

 

(b)                                 The  consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at March 31, 2008 and a pro forma statement
of operations for the 12-month period ending on such date, in each case
prepared on a pro forma basis giving effect
to the Transaction and the Extensions of Credit to be made on the Effective
Date as if such transactions had occurred on such date or on the first day of
such period, as applicable (the “Pro Forma Balance Sheet”), copies of
which have heretofore been furnished to each Lender, have been prepared based
on the best information available to the Borrower as of the date of delivery
thereof, and in good faith based upon assumptions believed by the Borrower to
be reasonable and consistent in all material respects with information
previously provided by the Borrower.

 

(c)                                  The
financial projections of the Borrower and its Subsidiaries described in subsection
6.1(l), copies of which have been furnished to each Lender, have been prepared
in good faith based upon assumptions believed by the Borrower to be reasonable.

 

47

 

5.2.                              No
Change.  Since September 30,
2007, there has been no development or event which has had or would reasonably
be expected to have a Material Adverse Effect, except as disclosed in the
Borrower’s filing with the U.S. Securities and Exchange Commission pursuant to
the Exchange Act on Form 10-Q made on May 9, 2008.

 

5.3.                              Corporate
Existence; Compliance with Law.  Each
Loan Party and its Subsidiaries (a) is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization, (b) has
the power and authority, and the legal right, to own and operate its property,
to lease the property it operates as lessee and to conduct the business in
which it is currently engaged, (c) is duly qualified as a foreign entity
and in good standing under the laws of each jurisdiction where its ownership,
lease or operation of property or the conduct of its business requires such
qualification except to the extent that the failure to be so qualified in any
such jurisdiction could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect, and (d) is in compliance with all Requirements of
Law except to the extent that the failure to comply therewith would not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.

 

5.4.                              Corporate
Power; Authorization; Enforceable Obligations.  Each Loan Party has the power and authority,
and the legal right, to make, deliver and perform the Loan Documents to which
it is a party and to borrow and obtain other extensions of credit hereunder and
has taken all necessary action to authorize the borrowings and other extensions
of credit hereunder on the terms and conditions of this Agreement and any Notes
and to authorize the execution, delivery and performance of the Loan Documents
to which it is a party.  No consent or
authorization of, filing with, notice to or other act by or in respect of, any
Governmental Authority or any other Person is required as a condition precedent
to the borrowings or other extensions of credit hereunder or the execution,
delivery, performance, validity or enforceability of the Loan Documents.  This Agreement has been, and each other Loan
Document to which it is a party will be, duly executed and delivered on behalf
of each Loan Party that is a party hereto or thereto.  This Agreement constitutes, and each other
Loan Document to which it is a party constitutes, a legal, valid and binding
obligation of each Loan Party that is a party hereto or thereto, enforceable
against such Loan Party in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors’ rights generally,
general equitable principles (whether considered in a proceeding in equity or
at law) and an implied covenant of good faith and fair dealing.

 

5.5.                              No
Legal Bar.  The execution, delivery
and performance by the Borrower of the Loan Documents, the borrowings and other
extensions of credit hereunder and the use of the proceeds thereof and the
consummation of the Transaction will not (or, with respect to the consummation
of the Transaction, did not) (a) violate any Requirement of Law or
Contractual Obligation of any Loan Party or of any of its Subsidiaries except
(other than with respect to Security Documents or the organizational and
governing documents of such Loan Party or Subsidiaries), as would not, in the
aggregate, reasonably be expected to result in a Material Adverse Effect, or (b) result
in, or require, the creation or imposition of any Lien on any of its or their

 

48

 

respective
properties or revenues pursuant to any such Requirement of Law or Contractual
Obligation (other than those Liens created by the Loan Documents).

 

5.6.                              No
Material Litigation.  Except as
disclosed in the Borrower’s filings with the U.S. Securities and Exchange Commission
pursuant to the Exchange Act on Form 10-Q made on May 9, 2008 under
the headings “Litigation” or “Legal Proceedings” or similar headings, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Loan Parties,
threatened by or against any Loan Party or any of its Subsidiaries or against
any of its or their respective properties or revenues (a) with respect to
any of the Loan Documents and the other transactions contemplated hereby or
thereby, or (b) which would reasonably be expected to have a Material Adverse
Effect.

 

5.7.                              No
Default.  No Loan Party or any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which could reasonably be expected to have a
Material Adverse Effect.  No Default or
Event of Default (under and as defined in the indenture governing the Existing
Notes) has occurred and is continuing. 
No Default or Event of Default has occurred and is continuing.

 

5.8.                              Ownership
of Property; Liens.  Each of the Loan
Parties and its Subsidiaries has good record and marketable title in fee simple
to, or a valid leasehold interest in, all its real property, and good title to,
or a valid leasehold interest in, all its other property, except to the extent
that the failure to have such title would not have a Material Adverse
Effect.  None of such property is subject
to any Lien except as permitted by subsection 8.3.  With respect to real property or interests in
real property, as of the Effective Date, the Borrower or its Subsidiaries have (i) fee
title to all of the real property listed on Schedule 5.8 under the
heading “Fee Properties” (each, a “Fee Property”), and (ii) good
and valid title to the leasehold estates in all of the real property leased by
it and listed on Schedule 5.8 under the heading “Leased Properties”
(each, a “Leased Property”), in each case free and clear of all
mortgages, liens, security interests, easements, covenants, rights-of-way and
other similar restrictions of any nature whatsoever, except (A) Liens
permitted pursuant to subsection 8.3, (B) as to Leased Property, the terms
and provisions of the respective lease therefor and any matters affecting the
fee title and any estate superior to the leasehold estate related thereto, and (C) title
or lease defects, or leases or subleases granted to others, which are not
material to the Fee Properties or the Leased Properties, as the case may be,
taken as a whole.  The Fee Properties
constitute, as of the Effective Date, substantially all of the real property
owned in fee by the Borrower and its Subsidiaries.

 

5.9.                              Intellectual
Property.  Each Loan Party, and each
of its Subsidiaries, owns, or is licensed to use or otherwise has the right to
use, all trademarks, trade names, copyrights, patents, domain names, trade
secrets and other proprietary information that it uses in the conduct of its
business as currently conducted except for those for which the failure to own
or license which would not reasonably be expected to have a Material Adverse
Effect (the “Intellectual Property”). 
To the knowledge of each Loan Party, no claim has been asserted and is
pending or is threatened to be asserted by any Person challenging or questioning
the use of any material

 

49

 

Intellectual
Property or the validity or enforceability of any such Intellectual Property
which would reasonably be expected to have a Material Adverse Effect, nor does
any Loan Party know of any valid basis for any such claim.  The use of such Intellectual Property by each
Loan Party and its Subsidiaries does not infringe on the rights of any Person,
except for such claims and infringements that, in the aggregate, would not
reasonably be expected to have a Material Adverse Effect.

 

5.10.                        Taxes.  Except as disclosed in Schedule 5.10,
each Loan Party, and each of its Subsidiaries, has filed or caused to be filed
all material tax returns which are required to be filed (and each such tax
return is true and correct in all material respects) and has paid all taxes
shown to be due and payable on said returns or on any assessments made against
it or any of its property and all other taxes, fees or other charges imposed on
it or any of its property by any Governmental Authority (other than any the
amount or validity of which are currently being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of such Loan Party or its Subsidiaries, as
the case may be), and no tax Lien has been filed, and, to the knowledge of the
Loan Parties, no claim is being asserted, with respect to any such tax, fee or
other charge, in each case other than to the extent that any such failure to
act or existence of claim would not, in the aggregate, reasonably be expected
to have a Material Adverse Effect.

 

5.11.                        Federal
Regulations.  No part of the proceeds
of any Loans, and no Letter of Credit, will be used for “purchasing” or “carrying”
any “margin stock” within the respective meanings of each of the quoted terms
under Regulation U of the Board as now and from time to time hereafter in
effect.  If requested by any Lender or
the Administrative Agent, the Borrower will furnish to the Administrative Agent
and each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1 referred to in said Regulation U,
as the case may be.

 

5.12.                        ERISA.

 

(i)                  No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other such
ERISA Events for which liability is reasonably expected to occur, would
reasonably be expected to result in a Material Adverse Effect.  The present value of all accumulated benefit
obligations under each Plan (based on the assumptions used for purposes of
Statement of Financial Accounting Standards No. 87) did not, as of the
date of the most recent financial statements reflecting such amounts, exceed
the fair market value of the assets of such Plan by more than $10,000,000, and
the present value of all accumulated benefit obligations of all underfunded
Plans (based on the assumptions used for purposes of Statement of Financial
Accounting Standards No. 87) did not, as of the date of the most recent
financial statements reflecting such amounts, exceed the fair market value of
the assets of all such underfunded Plans by more than $10,000,000.

 

50

 

(ii)               Except as would not reasonably be
expected to result in a Material Adverse Effect, (i) each Foreign Plan has
been maintained in 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, and (ii) neither the Borrower nor any Subsidiary have
incurred any obligation in connection with the termination of or withdrawal
from any Foreign Plan.

 

5.13.                        Investment
Company Act; Other Regulations.  The
Borrower is not an “investment company,” or a company “controlled” by an “investment
company,” within the meaning of the Investment Company Act of 1940, as amended.  The Borrower is not subject to regulation
under any Federal or State statute or regulation (other than Regulation X
of the Board) which limits its ability to incur Indebtedness.

 

5.14.                        Subsidiaries.  Schedule II sets forth all
Subsidiaries of the Borrower as of the Effective Date.

 

5.15.                        Environmental
Matters.  Except to the extent that
all of the following, in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect:

 

(a)                                  The
facilities and properties owned, leased or operated by each Loan Party or any
of its Subsidiaries (the “Properties”) do not contain any Hazardous
Materials in amounts or concentrations which (i) constitute a violation
of, or (ii) could reasonably be expected to give rise to liability under,
any Environmental Law.

 

(b)                                 The
Properties and all operations at the Properties are in compliance in all
material respects with all applicable Environmental Laws, and there is no
contamination at, under or about the Properties or violation of any
Environmental Law with respect to the Properties or the business operated by
any Loan Party or any of its Subsidiaries (the “Business”) which could
materially interfere with the continued operation of the Properties.

 

(c)                                  Neither
any Loan Party nor any of its Subsidiaries has received any written notice of
violation, alleged violation, non-compliance, liability or potential liability
regarding any Environmental Laws with regard to any of the Properties or the
Business, nor does any Loan Party have knowledge that any such notice will be
received or is being threatened.

 

(d)                                 No
Hazardous Materials have been transported or disposed of from the Properties in
violation of, or in a manner or to a location which could reasonably be expected
to give rise to liability under, any Environmental Law, nor have any Hazardous
Materials been generated, treated, stored or disposed of at, on or under any of
the Properties in violation of, or in a manner that could reasonably be
expected to give rise to liability under, any applicable Environmental Law.

 

(e)                                  No
judicial proceeding or governmental or administrative action is pending or, to
the knowledge of any Loan Party, threatened, under any Environmental Law to
which

 

51

 

any Loan Party or any Subsidiary thereof is
or will be named as a party with respect to the Properties or the Business, nor
are there any decrees, orders or agreements which impose obligations, or other
administrative or judicial requirements outstanding under any Environmental Law
with respect to the Properties or the Business.

 

(f)                                    There
has been no release or threat of release of Hazardous Materials at, under or
from the Properties, or arising from or related to the operations of any Loan
Party or any Subsidiary thereof in connection with the Properties or otherwise
in connection with the Business, in violation of or in amounts or in a manner
that could reasonably be expected to give rise to liability under Environmental
Laws.

 

5.16.                        Solvency.  Each Loan Party is, and after giving effect
to the consummation of any Acquisition and to the incurrence of all
Indebtedness and obligations being incurred in connection herewith and
therewith will be, Solvent.

 

5.17.                        Security
Documents.  The Guarantee and
Collateral Agreement is effective to create in favor of the Administrative
Agent, for the benefit of the Lenders, a legal, valid and enforceable security
interest in the Collateral described, and as defined, therein and proceeds
thereof, and, after taking the actions described in Schedule 3
thereto, the Liens created under the Guarantee and Collateral Agreement shall
at all times constitute fully perfected Liens on, and security interests in,
all right, title and interest of the Loan Parties in such Collateral and the proceeds
thereof, as security for the Obligations (as defined in the Guarantee and
Collateral Agreement) intended to be secured thereby, in each case prior and
superior in right to any other Person, other than with respect to Liens
expressly permitted by subsection 8.3.

 

5.18.                        Insurance.  Schedule 5.18 sets forth a true,
complete and correct summary description of all material insurance maintained
by each Loan Party.  Such insurance is in
full force and effect and all premiums have been duly paid.  Each Loan Party has insurance through insurers
it reasonably believes to be of recognized financial responsibility covering
its properties, operations, personnel and businesses, including business
interruption insurance, which insurance is in amounts and insures against such
losses and risks as it reasonably believes are adequate to protect it and its
Subsidiaries and their respective businesses; and neither the Borrower nor any
of its Subsidiaries has received notice from any insurer or agent of such
insurer that capital improvements or other expenditures are required or
necessary to be made in order to continue such insurance.

 

5.19.                        Affiliate
Transactions.  All Contractual
Obligations between the Borrower and any of its Subsidiaries on the one hand,
and their respective Affiliates, on the other hand, are disclosed in the Borrower’s
most recent proxy statement filed on Form 14A with the Securities and
Exchange Commission to the extent required under its regulations.

 

5.20.                        Accuracy
of Information.  No statement or
information contained in this Agreement, any other Loan Document or any other
document, certificate or statement furnished in writing to the Administrative
Agent or the Lenders or any of them (including, without limitation,

 

52

 

filings made
by the Borrower under the Exchange Act and the regulations promulgated
thereunder), by or on behalf of any Loan Party for use in connection with the
transactions contemplated by this Agreement or the other Loan Documents, taken
as a whole together with all other information provided in this Agreement, the
other Loan Documents or any other such document, certificate or statement,
contained as of the date such statement, information, document or certificate
was so furnished any untrue statement of any fact material to the interests of
the Administrative Agent or any Lender, or omitted to state a fact necessary in
order to make the statements contained herein or therein, in the light of the
circumstances under which they were made, not misleading in any respect
material to the interests of the Administrative Agent or any Lender; provided
that, with respect to projected financial information, the Borrower represents
only that such information was prepared in good faith based upon assumptions
believed by the Borrower to be reasonable at the time.  There is no fact known to any Loan Party that
would reasonably be expected to have a Material Adverse Effect that has not
been expressly disclosed herein, in the other Loan Documents in the Borrower’s
filings with the U.S. Securities and Exchange Commission pursuant to the
Exchange Act on Form 10-Q made on May 9, 2008, or in such other
documents, certificates and statements furnished to the Administrative Agent
and the Lenders for use in connection with the transactions contemplated hereby
and by the other Loan Documents.

 

5.21.                        OFAC.  Neither any Loan Party, nor any Subsidiary of
any Loan Party, nor any Affiliate of any Loan Party, is (a) named on the
list of Specially Designated Nationals or Blocked Persons maintained by the
U.S. Department of the Treasury’s Office of Foreign Assets Control available at
http://www.treas.gov/offices/eotffe/ofac/sdn/index.html, or (b)(i) an
agency of the government of a country, (ii) an organization controlled by
a country, or (iii) a Person resident in a country that is subject to a
sanctions program identified on the list maintained by the U.S. Department of
the Treasury’s Office of Foreign Assets Control and available at
http://www.treas.gov/offices/eotffc/ofac/sanctions/index.html, or as otherwise
published from time to time, as such program maybe be applicable to such
agency, organization or Person, and the proceeds from the credit extensions
made pursuant to this Agreement will not be used to fund any operations in,
finance any investments or activities in, or make any payments to, any such
country or Person.

 

SECTION 6.  CONDITIONS
PRECEDENT

 

6.1.                              Conditions
to Effective Date.  The Effective
Date shall occur on the date of satisfaction of the following conditions
precedent:

 

(a)                                  Loan
Documents.  The Administrative Agent
shall have received (i) this Agreement, executed and delivered by a duly
authorized officer of the Borrower, with a counterpart or a conformed copy for
each Lender, (ii) the Guarantee and Collateral Agreement, executed and
delivered by a duly authorized officer of each party thereto, with a
counterpart or a conformed copy for each Lender, and (iii) signed Term
Loan Notes and Revolving Credit Notes for

 

53

 

the account of each Lender that shall so
request, executed and delivered by a duly authorized officer of the Borrower.

 

(b)                                 Transaction.  The Transaction shall have been consummated
in accordance with the Leiner Acquisition Agreement and no provision of the Leiner
Acquisition Agreement shall have been waived, amended, supplemented or
otherwise modified in any material respect without the approval of the
Administrative Agent; the Transaction shall have been approved by the United
States Bankruptcy Court for the District of Delaware presiding over Leiner’s
Chapter 11 Bankruptcy proceedings, Case Nos. 08-10446, 08-10447, 08-10448 and
08-10449.

 

(c)                                  Effective
Date Certificate.  The Administrative
Agent shall have received, with a copy for each Lender, a certificate of each
of the Borrower and the other Loan Parties, dated the Effective Date,
substantially in the form attached hereto as Exhibit F, with
appropriate insertions and attachments satisfactory in form and substance to
the Administrative Agent, executed by the President or any Vice President and
the Secretary or any Assistant Secretary of the Borrower or the relevant Loan
Party, as applicable.

 

(d)                                 Corporate
Proceedings of the Borrower.  The
Administrative Agent shall have received, with a counterpart for each Lender, a
copy of the resolutions, in form and substance satisfactory to the
Administrative Agent, of the Board of Directors of the Borrower authorizing (i) the
execution, delivery and performance of this Agreement and (ii) the
borrowings contemplated hereunder, certified by the Secretary or an Assistant
Secretary of the Borrower as of the Effective Date, which certificate shall be
in form and substance satisfactory to the Administrative Agent and shall state
that the resolutions thereby certified have not been amended, modified, revoked
or rescinded.

 

(e)                                  Incumbency
Certificate of the Borrower.  The
Administrative Agent shall have received, with a counterpart for each Lender, a
certificate of the Borrower dated the Effective Date, as to the incumbency and
signature of the officers of the Borrower executing any Loan Document
satisfactory in form and substance to the Administrative Agent, executed by the
President or any Vice President and the Secretary or any Assistant Secretary of
the Borrower.

 

(f)                                    Corporate
Proceedings of Subsidiaries.  The
Administrative Agent shall have received, with a counterpart for each Lender, a
copy of the resolutions, in form and substance satisfactory to the
Administrative Agent, of the Board of Directors of each other Subsidiary of the
Borrower which is a party to a Loan Document authorizing the execution,
delivery and performance of the Loan Documents to which it is a party,
certified by the Secretary or an Assistant Secretary of each such Subsidiary as
of the Effective Date, which certificate shall be in form and substance
satisfactory to the Administrative Agent and shall state that the resolutions
thereby certified have not been amended, modified, revoked or rescinded.

 

(g)                                 Subsidiary
Incumbency Certificates.  The
Administrative Agent shall have received, with a counterpart for each Lender, a
certificate of each other Subsidiary of the Borrower which is a party to a Loan
Document, dated the Effective Date, as to the incumbency and

 

54

 

signature of the officers of such Subsidiary,
satisfactory in form and substance to the Administrative Agent, executed by the
President or any Vice President and the Secretary or any Assistant Secretary of
each such Subsidiary.

 

(h)                                 Corporate
Documents.  The Administrative Agent
shall have received, with a counterpart for each Lender, true and complete
copies of the certificate of incorporation and by-laws of each Loan Party,
certified as of the Effective Date as complete and correct copies thereof by the
Secretary or an Assistant Secretary of such Loan Party.

 

(i)                                     Fees.  The Arranger, each Agent and the Lenders
shall have received all invoiced fees, costs, expenses and compensation
required to be paid on the Effective Date (including reasonable fees, disbursements
and other charges of legal counsel to the Arranger and the Lenders and expenses
of appraisers, consultants and other advisors to the Arranger and the Lenders
and who have been approved by the Borrower).

 

(j)                                     Legal
Opinions.  The Administrative Agent
shall have received, with a counterpart for each Lender, (i) the executed
legal opinion of Milbank, Tweed, Hadley & McCloy LLP, special New York
counsel to the Borrower and the other Loan Parties, substantially in the form
attached hereto as Exhibit E-1, and (ii) the executed legal
opinion of Irene Fisher, General Counsel of the Borrower and the other Loan
Parties, substantially in the form attached hereto as Exhibit E-2.

 

(k)                                  Financial
Statements.  The Administrative Agent
shall have received, with a copy for each Lender, and each Lender shall have
reviewed, and shall be satisfied with the financial statements set forth in
subsection 5.1(b).  The Pro Forma Balance
Sheet shall be consistent in all material respects with the financial
projections provided to the Lenders described in paragraph (l) below.

 

(l)                                     Projections.  The Administrative Agent shall have received,
with a copy for the Arranger, projected balance sheets and related statements
of income and cash flows (including any and all supporting schedules and
assumptions) of the Borrower and its Subsidiaries after giving effect to the
Transaction for five years after the Effective Date (with such projections to
be prepared on a quarterly basis through the end of the fiscal year ending September 30,
2009 and on an annual basis thereafter).

 

(m)                               Actions
to Perfect Liens.  The Administrative
Agent shall have received evidence in form and substance satisfactory to it
that all filings, recordings, registrations and other actions, including,
without limitation, the filing of duly executed financing statements on form
UCC-1 necessary or, in the opinion of the Administrative Agent, desirable to
perfect or continue the Liens created by the Security Documents shall have been
completed or shall continue to be in full force and effect.

 

(n)                                 Lien
Searches.  The Administrative Agent
shall have received the results of a recent search by a Person satisfactory to
the Administrative Agent of the Uniform Commercial

 

55

 

Code filings which may have been filed with
respect to personal property of each Loan Party and each patent, trademark or
copyright recorded with the United States Patent and Trademark Office or the
United States Copyright Office, as applicable, and such search shall reveal no
material liens on any of the assets of such Loan Party except for liens created
by the Security Documents or Liens permitted by the Loan Documents.

 

(o)                                 Consents,
Licenses and Approvals.  All
governmental and material third party approvals necessary in connection with
the execution, delivery and performance of the Loan Documents shall have been
obtained and be in full force and effect or shall continue to be in full force
and effect.

 

(p)                                 Designated
Senior Indebtedness.  (i) The
Indebtedness under this Agreement shall be designated by the Borrower as “Designated
Senior Indebtedness” pursuant to, and as defined under, the Indenture, dated as
of September 23, 2005, among the Borrower, as issuer, and The Bank of New
York, as trustee, relating to the Existing Notes (the “Existing Notes Indenture”),
and (ii) the Administrative Agent shall have received a certificate of the
Borrower executed by the Secretary of the Borrower satisfactory to the
Administrative Agent reaffirming such designation.

 

(q)                                 Adequate
Working Capital.  The Lenders shall
be satisfied that the Borrower and its Subsidiaries will have adequate working
capital and capital expenditure funds and availability immediately after the
Effective Date after giving effect to the Transaction and the Extensions of
Credit on the Effective Date.

 

(r)                                    Litigation.  There shall be no litigation or
administrative proceeding or proposed or pending regulatory changes in law or
regulations applicable to the Borrower or its Subsidiaries, that would reasonably
be expected to have a Material Adverse Effect or a material adverse effect on
the ability of the parties to consummate the execution, delivery and performance
of the Loan Documents and the borrowings hereunder.

 

(s)                                  Indebtedness.  Immediately after giving effect to the
Transaction and the Extensions of Credit on the Effective Date, the Borrower
and its Subsidiaries shall not have outstanding Indebtedness for borrowed money
or preferred stock other than (v) Indebtedness under the Loan Documents, (w) the
Existing Notes, (x) Indebtedness permitted hereunder, (y) other
Indebtedness for borrowed money, not to exceed $30,000,000 and (z) as set
forth on Schedule 8.2.

 

(t)                                    Documentation.  The Lenders have received such other legal
opinions, corporate documents and other instruments and/or certificates as they
may reasonably request.

 

(u)                                 Material
Adverse Change.  Since September 30,
2007 (or March 31, 2008 solely with respect to the Leiner Business), there
has been no development or event which has had or would reasonably be expected
to have a Material Adverse Effect, except as disclosed in

 

56

 

the Borrower’s filings with the U.S.
Securities and Exchange Commission pursuant to the Exchange Act on Form 10-Q
made on May 9, 2008.

 

(v)                                 Execution
by Lenders.  This Agreement shall
have been executed and delivered by each Lender hereunder, and the
Administrative Agent shall have received written consents from Lenders which
constitute Majority Lenders under the Existing Credit Agreement to the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby (it being agreed that the entering into this
Agreement by such Lender shall constitute such written consent).

 

6.2.                              Conditions
to Each Extension of Credit.  The
agreement of each Lender to make any Extension of Credit (including, without
limitation, pursuant to subsection 2.4(b)) requested to be made by it on any
date (including, without limitation, the Effective Date), is subject to the
receipt of a notice of request for a Term Loan, a Revolving Credit Loan or a
Swing Line Loan, as applicable, and the satisfaction of the following
conditions precedent as of the date such Extension of Credit is requested to be
made:

 

(a)                                  Representations
and Warranties.  Each of the
representations and warranties made by each of the Loan Parties in or pursuant
to the Loan Documents shall be true and correct in all material respects on and
as of such date as if made on and as of such date, other than any such
representations and warranties that, by their terms, refer to a specific date
other than such date, in which case as of such specific date.

 

(b)                                 No
Default.  No Default or Event of
Default shall have occurred and be continuing on such date or immediately after
giving effect to the Extension of Credit requested to be made on such date.

 

Each request by the Borrower for an Extension
of Credit to be made to the Borrower hereunder shall constitute a
representation and warranty by the Borrower as of the date of such Extension of
Credit that the conditions contained in this subsection 6.2 have been satisfied.

 

SECTION 7.  AFFIRMATIVE
COVENANTS

 

The Borrower hereby agrees that, so long as
the Commitments (or any of them) remain in effect, any Loan or Reimbursement
Obligation remains outstanding and unpaid or any other amount is owing to any
Lender or the Administrative Agent hereunder or under any other Loan Document,
the Borrower shall and shall cause each of its Subsidiaries to:

 

7.1.                              Financial
Statements.  Furnish to each Lender:

 

(a)                                  as
soon as available, but in any event within 90 days (or such earlier date on
which the Borrower is required to file a Form 10-K under the Exchange Act)
after the end of each fiscal year of the Borrower, copies of the consolidated
and consolidating balance sheets of the Borrower and its consolidated
Subsidiaries as at the end of such year and the related

 

57

 

consolidated and consolidating statements of
income and retained earnings and of cash flows for such year, setting forth in
each case in comparative form the figures as of the end of and for the previous
year, reported on without a “going concern” or like qualification, assumption
or exception, or qualification arising out of the scope of the audit, by
PricewaterhouseCoopers LLP or other independent certified public accountants of
nationally recognized standing; and

 

(b)                                 as
soon as available, but in any event not later than 45 days (or such earlier
date on which the Borrower is required to file a Form 10-Q under the
Exchange Act) after the end of each of the first three quarterly periods of
each fiscal year of the Borrower, the unaudited consolidated and consolidating
balance sheets of the Borrower and its consolidated Subsidiaries as at the end
of such quarter and the related unaudited consolidated and consolidating
statements of income and retained earnings and of cash flows of the Borrower
and its consolidated Subsidiaries for such quarter and the portion of the
fiscal year through the end of such quarter, setting forth in each case in
comparative form the figures as of the end of and for the corresponding period
in the previous year, certified by a Responsible Officer of the Borrower as
being fairly stated in all material respects (subject to normal year-end audit
adjustments).

 

All such financial statements
shall be complete and correct in all material respects and shall be prepared in
reasonable detail and in accordance with GAAP applied consistently throughout
the periods reflected therein and with prior periods (except that interim
statements may exclude detailed footnote disclosure in accordance with standard
practice).  For purposes of this subsection 7.1,
information posted on Intralinks shall be deemed distributed to all Lenders.

 

7.2.                              Certificates;
Other Information.  Furnish to each
Lender:

 

(a)                                  concurrently
with the delivery of the financial statements referred to in subsection 7.1(a),
a certificate of the independent certified public accountants reporting on such
financial statements stating that in making the examination necessary therefor
no knowledge was obtained of any Default or Event of Default, except as
specified in such certificate;

 

(b)                                 concurrently
with the delivery of the financial statements referred to in subsections 7.1(a) and
7.1(b), a certificate of a Responsible Officer of the Borrower stating that, to
the best of such officer’s knowledge, each Loan Party during such period has
observed or performed all of its covenants and other agreements, and satisfied
every condition, contained in this Agreement and the other Loan Documents to be
observed, performed or satisfied by it, and that such officer has obtained no
knowledge of any Default or Event of Default except as specified in such
certificate; and in the case of financial statements referred to in subsections
7.1(a) and 7.1(b), including calculations and information demonstrating in
reasonable detail compliance with the requirements of subsection 8.1 and
determining the Applicable Margins;

 

(c)                                  not
later than 90 days following the end of each fiscal year of the Borrower, a
copy of the projections by the Borrower of the operating budget of the Borrower
and its Subsidiaries for the succeeding fiscal year, such projections to be
accompanied by a certificate of a Responsible Officer of the Borrower to the
effect that such projections have been prepared on

 

58

 

the basis of assumptions believed by the
Borrower to be reasonable at the time and that such officer has no reason to
believe they are incorrect or misleading in any material respect;

 

(d)                                 within
five Business Days after the same are filed, copies of all financial statements
and reports which the Borrower may make to, or file with, the Securities and Exchange
Commission or any successor or analogous Governmental Authority;

 

(e)                                  concurrently
with the delivery of the financial statements referred to in subsections 7.1(a) and
7.1(b), to the extent not included in the financial statements and reports
referred to in subsection 7.2(d), a management narrative report explaining all
significant variances from forecasts, projections and previous results and all
significant current developments in staffing, marketing, sales and operations;
and

 

(f)                                    promptly,
such additional financial and other information as any Lender may from time to
time reasonably request.

 

Documents
required to be delivered pursuant to Sections 7.1 and 7.2 may be delivered by
posting such documents electronically with notice of such posting to the Administrative
Agent and if so posted, shall be deemed to have been delivered on the date on
which such documents are posted on the Borrower’s behalf on
IntraLinks/IntraAgency or another relevant website, if any, to which each
Lender and the Administrative Agent have access (whether a commercial,
third-party website or whether sponsored by the Administrative Agent).

 

7.3.                              Payment
of Obligations.  Pay, discharge or
otherwise satisfy at or before maturity or before they become delinquent, as
the case may be, all its obligations of whatever nature (including taxes),
except where the amount or validity thereof is currently being contested in
good faith by appropriate proceedings and reserves in conformity with GAAP with
respect thereto have been provided on the books of the Borrower or its
Subsidiaries, as the case may be.

 

7.4.                              Maintenance
of Existence.  Preserve, renew and
keep in full force and effect its corporate existence and take all reasonable
action to maintain all rights, privileges and franchises necessary or desirable
in the normal conduct of its business except as otherwise permitted pursuant to
subsection 8.5; and comply with all Contractual Obligations and Requirements of
Law except to the extent that failure to comply therewith would not, in the aggregate,
be reasonably expected to have a Material Adverse Effect.

 

7.5.                              Maintenance
of Property; Insurance.  Keep all
property material to the conduct of the business of the Borrower and its
Subsidiaries, taken as a whole, in good working order and condition; maintain
with financially sound and reputable insurance companies insurance on all its
property in at least such amounts and against at least such risks (but
including in any event public liability, product liability and business
interruption) as are usually insured against in the same general area by
companies engaged in the same or a similar business; and furnish to each
Lender, upon written request, full information as to the insurance carried.

 

59

 

7.6.                              Inspection of Property;
Books and Records; Discussions.  Keep proper books of records and account in
which full, true and correct entries in conformity with GAAP and all
Requirements of Law shall be made of all dealings and transactions in relation
to its business and activities; and, upon prior written notice, permit
representatives of any Lender to visit and inspect any of its properties and
examine and make abstracts from any of its books and records during normal
business hours and as often as may reasonably be desired and to discuss the
business, operations, properties and financial and other condition of the
Borrower and its Subsidiaries with officers and employees of the Borrower and
its Subsidiaries and, in the presence of an officer of the Borrower, with its
independent certified public accountants.

 

7.7.                              Notices.  Promptly give notice to the Administrative
Agent (who shall promptly notify each Lender) of:

 

(a)                                  the occurrence
of any Default or Event of Default;

 

(b)                                 any (i) default
or event of default under any Contractual Obligation of the Borrower or any of
its Subsidiaries or (ii) litigation, investigation or proceeding which may
exist at any time between the Borrower or any of its Subsidiaries and any
Governmental Authority, which in either case, if not cured or if adversely
determined, as the case may be, would reasonably be expected to have a Material
Adverse Effect;

 

(c)                                  any litigation
or proceeding (including without limitation any notice of violation, alleged
violation, liability or potential liability under any Environmental Law)  that is filed or commenced (in each case
after the Original Closing Date) affecting the Borrower or any of its
Subsidiaries in which the amount claimed by the plaintiff is $5,000,000 or more
and not covered by insurance;

 

(d)                                 any ERISA
Event, that alone or together with any other ERISA Events that have occurred,
would reasonably be expected to result in a liability of the Borrower and its
Subsidiaries in an amount exceeding $5,000,000 (as soon as possible and in any
event within 30 days after any Loan Party knows or has reason to know thereof);
and

 

(e)                                  any development
or event which has had or would reasonably be expected to have a Material
Adverse Effect.

 

Each notice pursuant to this subsection shall be
accompanied by a statement of a Responsible Officer of the Borrower setting
forth details of the occurrence referred to therein and stating what action the
Borrower proposes to take with respect thereto.

 

7.8.                              Environmental Laws.

 

(a)                                  Comply with,
and ensure compliance by all tenants and subtenants, if any, with, all
applicable Environmental Laws and obtain and comply in all respects with and
maintain, and ensure that all tenants and subtenants obtain and comply in all
respects with and maintain, 

 

60

 

any and all licenses, approvals, notifications,
registrations or permits required by applicable Environmental Laws, except to
the extent that any failures could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect or to result in the payment of a
Material Environmental Amount.

 

(b)                                 Conduct and
complete all investigations, studies, sampling and testing, and all remedial,
removal and other actions required under Environmental Laws and promptly comply
in all material respects with all lawful orders and directives of all
Governmental Authorities regarding Environmental Laws except to the extent that
the same are being contested in good faith by appropriate proceedings and the
pendency of such proceedings could not be reasonably expected to have a
Material Adverse Effect.

 

7.9.                              Additional Subsidiaries;
Additional Collateral.

 

(a)                                  With respect to
any Domestic Subsidiary created or acquired after the Effective Date by the
Borrower, promptly cause such Subsidiary to become a party to the Guarantee and
Collateral Agreement, deliver to the Administrative Agent the certificates
representing the Capital Stock of such Subsidiary, together with undated stock
powers, executed in blank, securing the Obligations as described in the
Guarantee and Collateral Agreement and covering the types of assets covered by
the Guarantee and Collateral Agreement, take all required actions to perfect
the security interests created by the Guarantee and Collateral Agreement in the
assets of such Subsidiary and if requested by the Administrative Agent, deliver
to the Administrative Agent legal opinions relating to the preceding matters,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.

 

(b)                                 With respect to
each direct Material Foreign Subsidiary of the Borrower or of any Domestic
Subsidiary acquired or formed after the Effective Date or a Foreign Subsidiary
that otherwise becomes a direct Material Foreign Subsidiary after the Effective
Date (or with respect to such other direct Foreign Subsidiaries as, together
with all direct Material Foreign Subsidiaries, constitute 80% or more of the
assets or revenues (computed for the most recent fiscal year) of the Foreign Subsidiaries,
taken as a whole), promptly after the acquisition or formation thereof or such
other Foreign Subsidiary becoming a direct Material Foreign Subsidiary, execute
and deliver and cause each such Foreign Subsidiary to execute and deliver to
the Administrative Agent, in form and substance reasonably satisfactory to the
Administrative Agent, such documents and instruments (including, without
limitation, pledge agreements) and take such action (including, without
limitation, the delivery of stock certificates and instruments) as the Administrative
Agent may reasonably request in order to grant to the Administrative Agent, for
the ratable benefit of the Lenders, as collateral security for the Obligations,
a first priority perfected security interest in 65% of the voting Capital Stock
and 100% of the non-voting Capital Stock of, or equivalent ownership interests
in, such direct Foreign Subsidiary, along with any warrants, options, or other
rights to acquire the same, in all cases to the extent legally permissible and
practicable and deliver to the Administrative Agent such legal opinions as it
shall reasonably request 

 

61

 

with respect thereto.  For purposes of this subsection 7.9(b), “direct”
means directly held by the Borrower or any Domestic Subsidiary.

 

(c)                                  If requested by
the Administrative Agent, grant in favor of the Administrative Agent, for the
benefit of the Lenders, Liens on any other assets other than real property
(owned or leased) hereafter acquired by the Borrower or any Domestic Subsidiary
and on previously encumbered assets which become unencumbered, to the extent
such Liens are then permissible under applicable law and pursuant to any
agreements to which the Borrower or its Subsidiaries are a party, pursuant to
documentation in form and substance reasonably satisfactory to the Administrative
Agent.

 

(d)                                 In connection
with any Acquisition, to the extent not otherwise provided for in this subsection
7.9, take all action necessary to assure that security interests and Liens for
the benefit of the Lenders are granted and perfected in all material assets
acquired in such Acquisition (including assets of Subsidiaries acquired in such
Acquisition), subject in each case to Liens permitted under subsection 8.3.

 

SECTION 8.  NEGATIVE COVENANTS

 

The Borrower hereby agrees that, so long as the
Commitments (or any of them) remain in effect, any Loan or Reimbursement
Obligation remains outstanding and unpaid or any other amount is due and
payable to any Lender or the Administrative Agent hereunder or under any other
Loan Document, the Borrower shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly:

 

8.1.                              Financial Condition
Covenants.

 

(a)                                  Maintenance of
Consolidated Interest Coverage Ratio.  Permit at the end of each fiscal quarter of
the Borrower a Consolidated Interest Coverage Ratio of less than 5.00x.

 

(b)                                 Maintenance of
Consolidated Indebtedness to Consolidated EBITDA Ratio.  Permit at any time the ratio of (i) Consolidated
Indebtedness to (ii) Consolidated EBITDA for the four fiscal quarters most
recently ended on or prior to such date, to be greater than 2.50 to 1.0.

 

(c)                                  Maintenance of
Consolidated Senior Indebtedness to Consolidated EBITDA Ratio. 
Permit at any time the ratio of (i) Consolidated Senior
Indebtedness to (ii) Consolidated EBITDA for the four fiscal quarters most
recently ended on or prior to such date, to be greater than 1.50 to 1.0.

 

62

 

8.2.                              Limitation on Indebtedness.  Create, incur, assume or suffer to exist any
Indebtedness, except:

 

(a)                                  Indebtedness of
the Borrower or any Subsidiary under this Agreement or any other Loan Document;

 

(b)                                 existing
Indebtedness of the Borrower and its Subsidiaries listed on Schedule 8.2
and any Refinancing Indebtedness in respect thereof;

 

(c)                                  Indebtedness of
the Borrower to any Subsidiary of the Borrower, of any Domestic Subsidiary to
the Borrower or to any other Subsidiary of the Borrower, provided that (i) such
indebtedness is subordinated to the Loans under this Agreement, and (ii) such
indebtedness is evidenced by a promissory note that is pledged to the Administrative
Agent in accordance with the Guarantee and Collateral Agreement;

 

(d)                                 Indebtedness
under sale and leaseback transactions permitted by subsection 8.12;

 

(e)                                  Indebtedness of
the Borrower under Hedge Agreements entered into solely to hedge interest rate
exposure and not for speculative purposes;

 

(f)                                    Indebtedness of
the Borrower or any Subsidiary incurred to finance the acquisition,
construction or improvement of any fixed or capital assets, including
obligations under Financing Leases and any Indebtedness assumed in connection
with the acquisition of any such assets or secured by a Lien on any such assets
prior to the acquisition thereof which Lien was not created in contemplation of
such acquisition and on any extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount thereof; provided
that (A) such Indebtedness is incurred prior to or within 120 days after
such acquisition or the completion of such construction or improvement and (B) the
aggregate principal amount of Indebtedness permitted by this paragraph (f), and
the aggregate amount of sale-leaseback transactions permitted under subsection
8.12 theretofore consummated, shall not exceed $25,000,000 at any time outstanding;

 

(g)                                 Indebtedness of
any Person that becomes a Subsidiary after the date hereof; provided
that (A) such Indebtedness exists at the time such Person becomes a
Subsidiary and is not created in contemplation of or in connection with such
Person becoming a Subsidiary and (B) the aggregate principal amount of
Indebtedness permitted by this paragraph (g) shall not exceed $10,000,000
at any time outstanding;

 

(h)                                 Indebtedness of
any Foreign Subsidiaries, in addition to Indebtedness permitted by paragraph
(i), in an aggregate amount not in excess of $25,000,000 at any time outstanding;

 

63

 

(i)                                     Indebtedness of
any Foreign Subsidiary to the Borrower or any other Subsidiary; provided
that (A) the aggregate principal amount of Indebtedness of Holland &
Barrett to the Borrower and the Domestic Subsidiaries, taken together with
guarantees of obligations of Holland & Barrett permitted under
subsection 8.4(h) and investments in Holland & Barrett permitted
under subsection 8.9(d), shall not exceed $35,000,000 at any time outstanding],
and (B) the aggregate principal amount of Indebtedness of Foreign Subsidiaries
other than Holland & Barrett to the Borrower and the Domestic
Subsidiaries, taken together with guarantees of obligations of Foreign
Subsidiaries other than Holland & Barrett permitted under subsection
8.4(g) and investments in Foreign Subsidiaries other than Holland &
Barrett permitted under subsection 8.9(d), shall not exceed $20,000,000 at any
time outstanding;

 

(j)                                     Refinancing
Indebtedness incurred in order to refinance in whole or in part the Obligations;
and

 

(k)                                  other unsecured
Indebtedness in an aggregate principal amount not exceed $30,000,000 at any
time outstanding.

 

8.3.                              Limitation on Liens.  Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:

 

(a)                                  Liens for taxes
not yet due or which are being contested in good faith by appropriate
proceedings, provided that adequate reserves with respect thereto are
maintained on the books of such Person in conformity with GAAP (or, in the case
of Foreign Subsidiaries, generally accepted accounting principles in effect
from time to time in their respective jurisdictions of incorporation);

 

(b)                                 carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens
arising in the ordinary course of business which are not overdue for a period
of more than 60 days or which are being contested in good faith by appropriate
proceedings;

 

(c)                                  pledges or
deposits in connection with workers’ compensation, unemployment insurance and
other social security legislation;

 

(d)                                 deposits to
secure the performance of bids, trade contracts (other than for borrowed
money), leases, statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature incurred in the ordinary course of
business;

 

(e)                                  easements,
zoning restrictions, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business which do not secure any monetary obligations
and do not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the
business of such Person;

 

64

 

(f)                                    Liens (i) existing
as of the Effective Date and listed on Schedule 8.3 and extensions,
renewals and replacements thereof that do not increase the outstanding
principal amount thereof, and (ii) previously identified in writing to the
Administrative Agent, arrangements for the release of which satisfactory to the
Administrative Agent have been made;

 

(g)                                 Liens securing
Indebtedness of the Borrower or any Subsidiaries permitted by subsection 8.2(f) incurred
to finance the acquisition of fixed or capital assets (whether pursuant to a
loan, a Financing Lease or otherwise), provided that (i) such Liens
shall be created substantially simultaneously with the acquisition of such
fixed or capital assets, (ii) such Liens do not at any time encumber any
property other than the property financed by such Indebtedness, (iii) the
amount of Indebtedness secured thereby is not increased and (iv) the
principal amount of Indebtedness secured by any such Lien shall at no time exceed
the original purchase price of such property at the time it was acquired;

 

(h)                                 Liens on
current assets of any Foreign Subsidiary securing Indebtedness of such Foreign
Subsidiary permitted under subsection 8.2(h);

 

(i)                                     Liens on
current assets of any Foreign Subsidiary securing Indebtedness of such Foreign
Subsidiary permitted under subsection 8.2(i);

 

(j)                                     Liens (not
otherwise permitted hereunder) which secure obligations in aggregate amount at
any time outstanding not exceeding (as to the Borrower and all Subsidiaries),
and on property with an aggregate value not exceeding, $10,000,000;

 

(k)                                  Liens created
pursuant to the Security Documents;

 

(l)                                     Liens securing
Indebtedness permitted by subsection 8.2(g) to the extent such Lien is
secured at the time that such Person becomes a Subsidiary and was not incurred
in contemplation thereof;

 

(m)                               judgment Liens
in respect of  judgments that do not, in
the aggregate, constitute an Event of Default under clause (j) of Section 9;

 

(n)                                 Liens on
Indebtedness incurred pursuant to the proviso of subsection 8.10(a);

 

(o)                                 Liens in favor
of the lender on cash deposited to collateralize the promissory note dated September 22,
2006 between JPMorgan Chase Bank, N.A., London Branch, as lender, and Good ‘N’
Natural Limited, as borrower, and guaranteed by NBTY, Inc. in an amount
not to exceed £9,575,000; and

 

(p)                                 Liens (not
otherwise permitted hereunder) upon assets which are not subject to the Lien of
the Security Documents which secure obligations in an aggregate amount at any
time outstanding not to exceed $30,000,000.

 

65

 

8.4.                              Limitation on Guarantee
Obligations.  Create, incur,
assume or suffer to exist any Guarantee Obligation except:

 

(a)                                  (x) Guarantee
Obligations in existence on the date hereof and listed on Schedule 8.4,
(y) Guarantee Obligations in respect of any Refinancing Indebtedness of
the Indebtedness to which such Guarantee Obligations listed on Schedule 8.4
relate and (z) Guarantee Obligations in respect of any Refinancing
Indebtedness of the Existing Notes by Subsidiaries that are party to the
Guarantee and Collateral Agreement so long as such Guarantee Obligations are
subordinated to the obligations of each Subsidiary under the Guarantee and
Collateral Agreement to the same extent as the Refinancing Indebtedness of the
Borrower referred to in this clause (z) is subordinated to the
Obligations;

 

(b)                                 Guarantee Obligations
incurred after the date hereof in an aggregate amount not to exceed $10,000,000
at any one time outstanding;

 

(c)                                  Guarantee
Obligations incurred by any Foreign Subsidiary after the date hereof in an
aggregate amount not to exceed $25,000,000 at any one time outstanding;

 

(d)                                 guarantees made
in the ordinary course of its business by the Borrower of obligations of any of
its Domestic Subsidiaries, which obligations are otherwise permitted under this
Agreement;

 

(e)                                  the guarantee
by the Domestic Subsidiaries under the Guarantee and Collateral Agreement;

 

(f)                                    guarantees of
any Foreign Subsidiary of the obligations of any other Foreign Subsidiary;

 

(g)                                 guarantees by
the Borrower of obligations of Foreign Subsidiaries other than Holland &
Barrett; provided that the aggregate amount of such guarantees, taken together
with Indebtedness of Foreign Subsidiaries other than Holland & Barrett
permitted under subsection 8.2(i) and investments in Foreign Subsidiaries
other than Holland & Barrett permitted under subsection 8.9(d), shall
not exceed $20,000,000 at any time outstanding; and

 

(h)                                 guarantees by
the Borrower of obligations of Holland & Barrett; provided that
the aggregate amount of such guarantees, taken together with Indebtedness of Holland &
Barrett permitted under subsection 8.2(i) and investments in Holland &
Barrett permitted under subsection 8.9(d), shall not exceed $35,000,000 at any
time outstanding.

 

8.5.                              Limitation on Fundamental
Changes.  Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign,
transfer or otherwise dispose of, all or substantially all of its property,
business or assets, except:

 

66

 

(a)                                  any Subsidiary
of the Borrower may be merged or consolidated with or into the Borrower (provided
that the Borrower shall be the continuing or surviving corporation) or with or
into any one or more wholly owned Subsidiaries of the Borrower (provided
that if a Domestic Subsidiary is a party to such transaction, such Domestic
Subsidiary shall be the continuing or surviving corporation);

 

(b)                                 any wholly
owned Subsidiary may sell, lease, transfer or otherwise dispose of any or all
of its assets (upon voluntary liquidation or otherwise) to the Borrower or any
other wholly owned Domestic Subsidiary of the Borrower; and

 

(c)                                  any Subsidiary
may liquidate or dissolve if the Borrower determines in good faith that such
liquidation or dissolution is in the best interests of the Borrower and its Subsidiaries,
taken as a whole, and is not materially disadvantageous to the Lenders.

 

8.6.                              Limitation on Sale of Assets.  Convey, sell, lease, assign, transfer or otherwise
dispose of any of its property, business or assets (including, without
limitation, receivables and leasehold interests), whether now owned or
hereafter acquired, or, in the case of any Subsidiary, issue or sell any shares
of such Subsidiary’s Capital Stock to any Person other than the Borrower or any
wholly owned Domestic Subsidiary, except:

 

(a)                                  the sale or
other disposition of obsolete or worn out property in the ordinary course of
business;

 

(b)                                 the sale of
inventory in the ordinary course of business;

 

(c)                                  as permitted by
subsection 8.5(b) or (c); and

 

(d)                                 the sale or
other disposition of any other property at fair market value for consideration
not in excess of $35,000,000 in the aggregate in any fiscal year.

 

8.7.                              Limitation on Dividends and
Other Restricted Payments. 
Declare or pay any dividend (other than dividends payable solely in its
common stock) on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any shares of any class of Capital Stock of
the Borrower or any Subsidiary or any warrants or options to purchase any such
Capital Stock, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether in cash
or property or in obligations of the Borrower or any Subsidiary thereof (such
declarations, payments, setting apart, purchases, redemptions, defeasances,
retirements, acquisitions and distributions being herein called “Restricted
Payments”) except (a) as permitted by subsections 8.5 or 8.9, (b) any
Subsidiary may pay dividends to the Borrower or any other Subsidiary, (c) the
Borrower or any Subsidiary may make Restricted Payments pursuant to and in
accordance with customary stock option plans or other customary benefit plans
for management or employees of the Borrower and its Subsidiaries, and (d) notwithstanding
anything to the contrary in subsection 8.9, the Borrower may repurchase, and/or
pay dividends in 

 

67

 

respect of, Capital Stock of
the Borrower in an amount not to exceed $250,000,000 in the aggregate prior to
the Term Loan Maturity Date.

 

8.8.                              Limitation on Capital
Expenditures.  Make any
Capital Expenditure except for Capital Expenditures by the Borrower and its
Subsidiaries in the ordinary course of business not exceeding $100,000,000 in
the aggregate during any fiscal year of the Borrower; provided,  however, that (x) if
the aggregate amount of Capital Expenditures made in any fiscal year shall be less
than the maximum amount of Capital Expenditures permitted under this subsection
8.8 for such fiscal year (before giving effect to any carryover), then an
amount of such shortfall not exceeding 50% of such maximum amount may be added
to the amount of Capital Expenditures permitted under this subsection 8.8 for
the immediately succeeding (but not any other) fiscal year, and (y) in determining
whether any amount is available for carryover, the amount expended in any
fiscal year shall first be deemed to be from the amount allocated to such
fiscal year (before giving effect to any carryover).

 

8.9.                              Limitation on Investments,
Loans and Advances.  Make any
advance, loan, extension of credit or capital contribution to, or purchase any
stock, bonds, notes, debentures or other securities of or any assets
constituting a business unit of, or make any other investment in, any Person,
except:

 

(a)                                  extensions of
trade credit in the ordinary course of business;

 

(b)                                 investments in
Cash Equivalents;

 

(c)                                  loans and
advances to employees of the Borrower or its Subsidiaries for travel,
entertainment and relocation expenses in the ordinary course of business in an
aggregate amount for the Borrower and its Subsidiaries not to exceed $1,000,000
at any one time outstanding;

 

(d)                                 investments by
the Borrower or its Subsidiaries in any wholly owned Subsidiary of the Borrower
which has complied with the conditions set forth in subsection 7.9(a) or
any wholly owned Foreign Subsidiary which has complied with the conditions set
forth in subsection 7.9(b) or (c); provided that (A) the
aggregate amount of all such advances, loans, investments, transfers or
guarantees by the Borrower and the Domestic Subsidiaries made to or on behalf
of Holland & Barrett, taken together with loans to Holland &
Barrett permitted under subsection 8.2(i) and guarantees of obligations of
Holland & Barrett permitted under subsection 8.4(h), shall not exceed
$35,000,000 at any time outstanding, and (B) the aggregate amount of all
such advances, loans, investments, transfers or guarantees by the Borrowers and
the Domestic Subsidiaries made to or on behalf of the Foreign Subsidiaries
other than Holland & Barrett, taken together with loans to Foreign
Subsidiaries other than Holland & Barrett permitted under subsection
8.2(i) and guarantees of obligations of Foreign Subsidiaries other than
Holland & Barrett permitted under subsection 8.4(g), shall not exceed
$20,000,000 at any time outstanding.

 

68

 

(e)                                  investments by
the Borrower and its Subsidiaries existing on the Effective Date and set forth
on Schedule 8.9(e);

 

(f)                                    other
Acquisitions; provided that (i) such Acquisitions permitted
pursuant to this paragraph (f) shall be nonhostile acquisitions and (ii) investments
constituting Acquisitions of entities that become Subsidiary Guarantors shall
be permitted if the ratio of Consolidated Indebtedness to Consolidated EBITDA
(calculated after giving pro forma effect to the borrowings to be made on the
date of such Acquisition and to any change in Consolidated EBITDA and any
increase in Consolidated Indebtedness immediately resulting from the
consummation of any acquisition or disposition permitted by this Agreement
concurrently with such borrowings) is less than or equal to 2.25 to 1.0;

 

(g)                                 Acquisitions of
entities that become Foreign Subsidiaries; provided that (i) such
Acquisitions permitted pursuant to this paragraph (g) shall be nonhostile
acquisitions, (ii) the aggregate amount of investments (whether cash,
securities or other consideration) constituting Acquisitions of entities that
become Foreign Subsidiaries permitted pursuant to this paragraph (g) from
and after the Original Closing Date shall not exceed in the aggregate the sum
of $150,000,000 and (iii) the ratio of Consolidated Indebtedness to
Consolidated EBITDA (calculated after giving pro forma effect to the borrowings
to be made on the date of any such Acquisition and to any change in
Consolidated EBITDA and any increase in Consolidated Indebtedness immediately
resulting from the consummation of any acquisition or disposition permitted by
this Agreement concurrently with such borrowings) is less than or equal to 2.25
to 1.0;

 

(h)                                 the
Transaction; and

 

(i)                                     additional
investments not to exceed $30,000,000 in the aggregate while this Agreement is
outstanding.

 

8.10.                        Limitation on Optional
Payments and Modifications of Debt Instruments.

 

(a)                                  Make any
optional payment or prepayment on or redemption or purchase of any Indebtedness
in excess of $50,000,000 per fiscal year (other than in respect of (i) the
Loans, (ii) the Existing Notes and (iii) any Refinancing Indebtedness
in respect of the Existing Notes, to the extent such payment, prepayment,
redemption or purchase under the foregoing clauses (ii) and (iii) is
financed with Refinancing Indebtedness); provided  that
notwithstanding clause (ii) of the definition of Refinancing Indebtedness,
the Borrower or any Subsidiary may prepay Subordinated Debt with the proceeds
of the Loans or an incurrence of senior secured debt or senior unsecured notes
if the ratio of Consolidated Indebtedness to Consolidated EBITDA (calculated
after giving pro forma effect to the borrowings to be made on the date of such
incurrence and to any change in Consolidated EBITDA and any increase in
Consolidated Indebtedness resulting from the consummation of any acquisition or
disposition permitted by this Agreement concurrently with such borrowings) is
less than or equal to 2.25 to 1.0,

 

69

 

(b)                                 amend, modify
or change, or consent or agree to any amendment, modification or change to, any
of the terms of any Indebtedness (excluding the Loans) (other than any such
amendment, modification or change which would extend the maturity or reduce the
amount of any payment of principal thereof or which would reduce the rate or
extend the date for payment of interest thereon), or

 

(c)                                  amend, modify
or change the subordination provisions of any Subordinated Debt or any
Refinancing Indebtedness in respect thereof; provided that notwithstanding
clause (ii) of the definition of Refinancing Indebtedness, the Borrower or
any Subsidiary may prepay Subordinated Debt with the proceeds of the Loans or
an incurrence of senior secured debt or senior unsecured notes if the ratio of
Consolidated Indebtedness to Consolidated EBITDA (calculated after giving pro
forma effect to the borrowings to be made on the date of such incurrence and to
any change in Consolidated EBITDA and any increase in Consolidated Indebtedness
resulting from the consummation of any acquisition or disposition permitted by
this Agreement concurrently with such borrowings) is less than or equal to 2.25
to 1.0.

 

8.11.                        Limitation on Transactions
with Affiliates.  Enter into
any transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is (a) otherwise permitted under this Agreement and (b) upon
fair and reasonable terms no less favorable to the Borrower or such Subsidiary,
as the case may be, than it would obtain in a comparable arm’s length
transaction with a Person which is not an Affiliate.

 

8.12.                        Limitation on Sales and
Leasebacks.  Enter into
any arrangement with any Person providing for the leasing by the Borrower or
any Subsidiary of real or personal property which has been or is to be sold or
transferred by the Borrower or such Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the security
of such property or rental obligations of the Borrower or such Subsidiary; provided
that such sale leaseback transactions in an amount of, together with the
aggregate principal amount of Indebtedness permitted under subsection 8.2(f) then
outstanding, up to $20,000,000 in the aggregate while this Agreement is in
effect may be consummated by the Borrower; provided that the Borrower
will not mortgage any existing Fee Property or Leased Property (including, without
limitation, the Gel-Cap Facility) other than any mortgage to which such Fee
Property or Leased Property is subject on the Original Closing Date (or any
other mortgage in respect thereof so long as the related Indebtedness
constitutes Refinancing Indebtedness).

 

8.13.                        Limitation on Changes in
Fiscal Year.  Permit the
fiscal year of the Borrower to end on a day other than September 30.

 

8.14.                        Limitation on Negative
Pledge Clauses.  Enter into
with any Person any agreement, other than (a) this Agreement and the other
Loan Documents, (b) the Subordinated Debt and any Refinancing Indebtedness
in respect thereof (so long as such Refinancing Indebtedness addresses
prohibitions or limitations of the nature described below in a manner not less
favorable to the Lenders, taken as a whole, than the treatment thereof in the
Subordinated Debt) 

 

70

 

and (c) any industrial
revenue bonds, purchase money mortgages or Financing Leases permitted by this
Agreement (in which cases, any prohibition or limitation shall only be
effective against the assets financed thereby), which prohibits or limits the
ability of the Borrower or any of its Subsidiaries to create, incur, assume or
suffer to exist any Lien upon any of its property, assets or revenues, whether
now owned or hereafter acquired; provided that the foregoing shall not
apply to (i) restrictions and conditions imposed by law, (ii) customary
restrictions and conditions contained in agreements relating to the sale of a
Subsidiary permitted hereunder pending such sale, provided such restrictions or
conditions apply only to the Subsidiary that is to be sold, (iii) restrictions
or conditions imposed by any agreement relating to secured Indebtedness permitted
hereunder if such restrictions or conditions apply only to the property or
assets securing such Indebtedness and (iv) customary provisions in leases
and other contracts restricting the assignment thereof.

 

8.15.                        Limitation on Lines of
Business.  Enter into
any business, either directly or through any Subsidiary, except for the
nutritional supplements and healthfood businesses and business reasonably
related thereto.

 

8.16.                        Hedging Agreements.  Enter into any Hedging Agreement, except (a) Hedging
Agreements entered into to hedge or mitigate risks to which the Borrower or any
Subsidiary has actual exposure (other than those in respect of Capital Stock of
the Borrower or any of its Subsidiaries) and (b) Hedging Agreements
entered into in order to effectively cap, collar or exchange interest rates
(from fixed to floating rates, from one floating rate to another floating rate
or otherwise) with respect to any interest-bearing liability or investment of
the Borrower or any Subsidiary.

 

SECTION 9.  EVENTS OF DEFAULT

 

Upon the occurrence of any
of the following events:

 

(a)                                  The Borrower
shall fail to pay (i) any principal of any Loans or any Reimbursement
Obligations when due (whether at the stated maturity, by acceleration or otherwise)
in accordance with the terms thereof or hereof or (ii) any interest on any
Loans, or any fee or other amount payable hereunder, within five days after any
such interest, fee or other amount becomes due in accordance with the terms
hereof; or

 

(b)                                 Any
representation or warranty made or deemed made by the Borrower or any other
Loan Party herein or in any other Loan Document or which is contained in any
certificate, document or financial or other statement furnished at any time under
or in connection with this Agreement or any other Loan Document shall prove to
have been incorrect in any material respect on or as of the date made or deemed
made or furnished; or

 

(c)                                  The Borrower or
any other Loan Party shall default in the observance or performance of any
covenant contained in Section 8 hereof or in any negative covenant contained
in any Security Document to which it is a party; or

 

71

 

(d)                                 The Borrower or
any other Loan Party shall default in the observance or performance of any
other agreement contained in this Agreement or any other Loan Document other
than as provided in (a) through (c) above, and such default shall
continue unremedied for a period of the greater of (x) 30 days, and (y) 60
days (if the Borrower or such Loan Party is diligently pursuing a remedy of
such default) after the earlier to occur of (A) actual knowledge of such
default by a Responsible Officer of the Borrower and (B) notice from the
Administrative Agent to the Borrower; or

 

(e)                                  Any Loan
Document shall cease, for any reason, to be in full force and effect, or the
Borrower or any other Loan Party shall so assert; or any security interest created
by any of the Security Documents in a material portion of the Collateral (as
defined in the Guarantee and Collateral Agreement) shall cease to be
enforceable and of the same effect and priority purported to be created thereby
and, in each case, shall remain unremedied for a period of 10 days; or

 

(f)                                    The subordination provisions contained in any
instrument pursuant to which any Subordinated Debt or Refinancing Indebtedness
in respect thereof was created or in any instrument evidencing the same shall,
so long as such Subordinated Debt or Refinancing Indebtedness shall be
outstanding, cease, for any reason, to be in full force and effect or enforceable
in accordance with its terms; or

 

(g)                                 The Borrower or
any of its Subsidiaries shall (i) default in any payment of principal of
or interest on any Indebtedness (other than Indebtedness under this Agreement),
in the payment of any Guarantee Obligation or in the payment of any Hedge
Agreement Obligation, where, in any case or in the aggregate, the principal
amount thereof then outstanding exceeds $5,000,000, beyond the period of grace,
if any, provided in the instrument or agreement under which such Indebtedness,
Guarantee Obligation or Hedge Agreement Obligation was created; or (ii) default
in the observance or performance of any other agreement or condition relating
to any such Indebtedness, Guarantee Obligation or Hedge Agreement Obligation or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit the holder or
holders of such Indebtedness or Hedge Agreement Obligation or, beneficiary or
beneficiaries of such Guarantee Obligation (or a trustee or agent on behalf of
such holder or holders or beneficiary or beneficiaries) to cause, with the
giving of notice if required, such Indebtedness to become due prior to its
stated maturity or such Guarantee Obligation to become payable; or

 

(h)                                 (i) The
Borrower, any Domestic Subsidiary or any Material Foreign Subsidiary shall
commence any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B) seeking

 

72

 

appointment of a receiver, trustee, custodian or
other similar official for it or for all or any substantial part of its assets,
or the Borrower, any Domestic Subsidiary or any Material Foreign Subsidiary
shall make a general assignment for the benefit of its creditors; or (ii) there
shall be commenced against the Borrower, any Domestic Subsidiary or any Material
Foreign Subsidiary any case, proceeding or other action of a nature referred to
in clause (i) above which (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall be
commenced against the Borrower, any Domestic Subsidiary or any Material Foreign
Subsidiary any case, proceeding or other action seeking issuance of a warrant
of attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order for any
such relief which shall not have been vacated, discharged, or stayed or bonded
pending appeal within 60 days from the entry thereof; or (iv) the Borrower,
any Domestic Subsidiary or any Material Foreign Subsidiary shall take any
action in furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) the
Borrower, any Domestic Subsidiary or any Material Foreign Subsidiary shall generally
not, or shall be unable to, or shall admit in writing its inability to, pay its
debts as they become due; or

 

(i)                                     An ERISA Event
shall have occurred that, when taken together with all other ERISA Events that
have occurred, could reasonably be expected to result in liability of the
Borrower and its Subsidiaries in an aggregate amount exceeding $5,000,000; or

 

(j)                                     One or more
judgments or decrees shall be entered against the Borrower or any of its
Subsidiaries involving in the aggregate a liability (not paid by insurance or
otherwise fully covered by insurance or paid by a third-party indemnitor) of
$5,000,000 or more and all such judgments or decrees shall not have been
vacated, discharged, stayed or bonded pending appeal within 30 days from the
entry thereof; or

 

(k)                                  (i) Any
Person or “group” (within the meaning of Section 13(d) or 15(d) of
the Exchange Act), other than any Person or group beneficially owning 10% or
more of the Capital Stock of the Borrower on the date hereof (A) shall
have acquired, combined with previous holdings, beneficial ownership of 25% or
more of any outstanding class of capital stock of the Borrower having ordinary
voting power in the election of directors or (B) shall obtain the power
(whether or not exercised) to elect a majority of the Borrower’s directors; or (ii) the
Board of Directors of the Borrower shall not consist of a majority of
Continuing Directors.

 

then, and in any such event, (A) if such
event is an Event of Default specified in clause (i) or (ii) of
paragraph (h) above with respect to the Borrower or if such event is an
Event of Default specified in clause (g) above resulting from the
acceleration of the Subordinated Debt automatically the Commitments shall
immediately terminate and the Loans hereunder (with accrued interest thereon)
and all other amounts owing under this Agreement (including, without
limitation, all Reimbursement Obligations, regardless of whether or not such
Reimbursement Obligations are then due and payable) shall immediately become
due and payable, and (B) if such event is 

 

73

 

any other Event of Default, any of the
following actions may be taken:  (i) with
the consent of the Majority Lenders, the Administrative Agent may, or upon the
direction of the Majority Lenders, the Administrative Agent shall, by notice to
the Borrower declare the Commitments to be terminated forthwith, whereupon the
Commitments shall immediately terminate; (ii) with the consent of the
Majority Lenders, the Administrative Agent may, or upon the direction of the Majority
Lenders, the Administrative Agent shall, by notice of default to the Borrower
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement 
(including, without limitation, all Reimbursement Obligations,
regardless of whether or not such Reimbursement Obligations are then due and payable)
to be due and payable forthwith, whereupon the same shall immediately become
due and payable and (iii) with the consent of the Majority Lenders the Administrative
Agent may, and upon the direction of the Majority Lenders, the Administrative
Agent shall, exercise any and all remedies and other rights provided pursuant
to this Agreement and/or the other Loan Documents.

 

With respect to all Letters of Credit with respect
to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to the preceding paragraph, the Borrower shall at such
time deposit in a cash collateral account opened by the Administrative Agent an
amount equal to the aggregate then undrawn and unexpired amount of such Letters
of Credit.  The Borrower hereby grants to
the Administrative Agent, for the benefit of the Issuing Lender and the
Participating Lenders, a security interest in such cash collateral to secure
all obligations of the Borrower under this Agreement and the other Loan
Documents.  Amounts held in such cash collateral
account shall be applied by the Administrative Agent to the payment of drafts
drawn under such Letters of Credit, and the unused portion thereof after all
such Letters of Credit shall have expired or been fully drawn upon, if any,
shall be applied to repay other obligations of the Borrower hereunder and under
the Notes.  After all such Letters of
Credit shall have expired or been fully drawn upon, all Reimbursement
Obligations shall have been satisfied and all other obligations of the Borrower
hereunder and under the Notes shall have been paid in full, the balance, if
any, in such cash collateral account shall be returned to the Borrower.  The Borrower shall execute and deliver to the
Administrative Agent, for the account of the Issuing Lender and the
Participating Lenders, such further documents and instruments as the Administrative
Agent may request to evidence the creation and perfection of the within
security interest in such cash collateral account.

 

Except as expressly provided above in this Section 9,
presentment, demand, protest and all other notices of any kind are hereby
expressly waived.

 

SECTION 10.  THE AGENTS AND THE ARRANGER

 

10.1.                        Appointment.  Each Lender hereby irrevocably designates and
appoints JPMorgan Chase as the Administrative Agent and as the Collateral Agent
of such Lender under this Agreement and the other Loan Documents, and each
Lender irrevocably authorizes each of the Administrative Agent and the
Collateral Agent, in such respective capacities, to take such action on its
behalf under the provisions of this Agreement and the other Loan Documents and
to 

 

74

 

exercise such powers and
perform such duties as are expressly delegated to the Administrative Agent and
the Collateral Agent, as the case may be, by the terms of this Agreement and
the other Loan Documents, together with such other powers as are reasonably
incidental thereto.  Each Lender hereby
irrevocably designates and appoints Bank of America, N.A., Citibank, N.A., HSBC
Bank USA, National Association and Wachovia Bank, National Association, as the
Co-Syndication Agents of such Lender under this Agreement and the other Loan
Documents, and each Lender irrevocably authorizes the Co-Syndication Agents, in
such capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Co-Syndication Agents by the
terms of this Agreement and the other Loan Documents, together with such other
powers as are reasonably incidental thereto. 
Notwithstanding any provision to the contrary elsewhere in this
Agreement, no Agent shall have any duties or responsibilities, except those expressly
set forth herein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Loan Document or otherwise exist
against any Agent.

 

10.2.                        Delegation of Duties.  Each Agent may execute any of its duties
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties.  No
Agent shall be responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.

 

10.3.                        Exculpatory Provisions.  No Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates shall be (i) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement or any other Loan Document (except for its or
such Person’s own gross negligence or willful misconduct) or (ii) responsible
in any manner to any of the Lenders for any recitals, statements, representations
or warranties made by the Borrower or any officer thereof contained in this
Agreement or any other Loan Document or in any certificate, report, statement
or other document referred to or provided for in, or received by such Agent
under or in connection with, this Agreement or any other Loan Document or for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of this Agreement or any other Loan Document or for any failure of the Borrower
to perform its obligations hereunder or thereunder.  No Agent shall be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Borrower.

 

10.4.                        Reliance by Agents.  Each Agent shall be entitled to rely, and
shall be fully protected in relying, upon any Note, writing, resolution,
notice, consent, certificate, affidavit, letter, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Borrower), independent accountants and other
experts selected by such 

 

75

 

Agent with reasonable
care.  Each Agent may deem and treat the
Person whose name is recorded in the Register pursuant to the terms hereof as
the owner thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Administrative
Agent.  Each Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Majority Lenders (or, to the extent provided in subsection 11.1, all of the
Lenders) as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.  Each Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Loan Documents in accordance with a request of the Majority Lenders (or,
to the extent provided in subsection 11.1, all of the Lenders), and such
request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders and all future holders of the Loans.

 

10.5.                        Notice of Default.  No Agent shall be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless
the Administrative Agent has received notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a “notice of default” (and, in the case of the
Collateral Agent and the Co-Syndication Agents, shall have received notice
thereof as described in the following sentence).  In the event that the Administrative Agent receives
such a notice, the Administrative Agent shall give notice thereof to the other
Agents and Lenders.  The Administrative
Agent shall take such action with respect to such Default or Event of Default
as shall be reasonably directed by the Majority Lenders; provided that
unless and until the Administrative Agent shall have received such directions,
the Administrative Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.

 

10.6.                        Non-Reliance on Agents and
Other Lenders.  Each Lender
expressly acknowledges that no Agent or any Agent’s officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representations
or warranties to it and that no act by any Agent hereafter taken, including any
review of the affairs of the Borrower shall be deemed to constitute any
representation or warranty by any Agent to any Lender.  Each Lender represents to each Agent that it
has, independently and without reliance upon any Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Borrower and into the
Transaction and the Extensions of Credit hereof, and made its own decision to
make its Loans hereunder and enter into this Agreement.  Each Lender also represents that it will,
independently and without reliance upon the Agents, the Arranger or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit analysis, appraisals and decisions
in taking or not taking action under this Agreement and the other Loan
Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition
and creditworthiness of the Borrower. 
Except for notices, reports and other documents 

 

76

 

expressly required to be
furnished to the Lenders by the Administrative Agent, the Collateral Agent or
the Co-Syndication Agents hereunder, no Agent shall have any duty or responsibility
to provide any Lender with any credit or other information concerning the
business, operations, property, condition (financial or otherwise), prospects
or creditworthiness of the Borrower which may come into the possession of such
Agent or any of its officers, directors, employees, agents, attorneys-in-fact
or Affiliates.

 

10.7.                        Indemnification.  The Lenders agree to indemnify each Agent in
its capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Total Loan Percentages in effect on the date on which indemnification
is sought (or, if indemnification is sought after the date upon which the Commitments
shall have terminated and the Loans shall have been paid in full, ratably in
accordance with their Total Loan Percentages immediately prior to such date),
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever which may at any time (including, without limitation, at any
time following the payment of the Loans) be imposed on, incurred by or asserted
against such Agent in any way relating to or arising out of the Commitments,
this Agreement, any of the other Loan Documents or any documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by such Agent under or in connection
with any of the foregoing; provided that no Lender shall be liable for
the payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
solely from such Agent’s gross negligence or willful misconduct.  The agreements in this subsection 10.7 shall
survive the payment of the Loans and all other amounts payable hereunder.

 

10.8.                        Agent in Its Individual
Capacity.  The entity
which is an Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower as though the
entity which is such Agent were not such Agent hereunder and under the other
Loan Documents.  With respect to the
Loans made by it, such entity shall have the same rights and powers under this
Agreement and the other Loan Documents as any Lender and may exercise the same
as though it were not an Agent, and the terms “Lender” and “Lenders” shall
include the entity which is such Agent in its individual capacity.

 

10.9.                        Successor Agents.  Any Agent may resign as Agent upon 45 days’
notice to the Lenders.  If any Agent
shall resign as Agent under this Agreement and the other Loan Documents, then
the Majority Lenders shall appoint from among the Lenders a successor agent for
the Lenders, which successor agent shall be approved by the Borrower (except
during the occurrence and continuation of an Event of Default), such approval
not to be unreasonably withheld, whereupon such successor agent shall succeed
to the rights, powers and duties of such Agent, and the term “Administrative
Agent,” “Collateral Agent” or “Co-Syndication Agent,” as the case may be, shall
mean such successor agent effective upon such appointment and approval, and the
former Agent’s rights, powers and duties as Agent shall be terminated, without
any other or further act or deed on the part of such former Agent or any of the
parties to this Agreement or 

 

77

 

any holders of the
Loans.  After any retiring Agent’s
resignation as Agent, the provisions of this Section 10 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement and the other Loan Documents.

 

10.10.                  Issuing Lender.  Each Lender hereby acknowledges that the
provisions of this Section 10 shall apply to the Issuing Lender, in its
capacity as issuer of any Letter of Credit, in the same manner as such
provisions are expressly stated to apply to the Agents.

 

SECTION 11.  MISCELLANEOUS

 

11.1.                        Amendments and Waivers.  Except as provided in subsection 2.4(b) with
respect to a new Revolving Credit Commitment, neither this Agreement nor any
other Loan Document, nor any terms hereof or thereof, may be amended,
supplemented, waived or modified except in accordance with the provisions of
this subsection 11.1.  The Majority
Lenders may, or, with the written consent of the Majority Lenders, the Administrative
Agent may, from time to time, (i) enter into with the applicable Loan
Parties written amendments, supplements or modifications hereto and to the
other Loan Documents for the purpose of adding any provisions to this Agreement
or the other Loan Documents or changing in any manner the rights or obligations
of the Lenders or of the Borrower or of any other Loan Party hereunder or
thereunder or (ii) waive at the Borrower’s request, on such terms and
conditions as the Majority Lenders or the Administrative Agent, as the case may
be, may specify in such instrument, any of the requirements of this Agreement
or the other Loan Documents or any Default or Event of Default and its consequences;
provided, however, that no such waiver and no such amendment,
supplement or modification shall:

 

(i)                  increase the
Commitment of any Lender without the written consent of such Lender,

 

(ii)               reduce the
principal amount of any Loan or Reimbursement Obligation or reduce the rate of
interest thereon or require any Lender to offer Interest Periods of longer than
six months without regard to availability, or reduce any fees payable
hereunder, without the written consent of each Lender affected thereby,

 

(iii)            postpone the
scheduled date of payment of the principal amount of any Loan or Reimbursement
Obligation, or any interest thereon, or any fees payable hereunder, or reduce
the amount of, waive or excuse any such payment, or postpone the scheduled date
of expiration of any Commitment, without the written consent of each Lender affected
thereby,

 

(iv)           change
subsection 4.8 or 2.4(b) in a manner that would alter the pro rata sharing
of payments required thereby, without the written consent of each Lender affected
thereby,

 

78

 

(v)     release the Guarantee and
Collateral Agreement or all or substantially all of the Collateral under, and
as defined in, the Security Documents or any Guarantor under, and as defined
in, the Guarantee and Collateral Agreement, without the written consent of each
Lender,

 

(vi)    change any of the
provisions of this subsection 11.1 or the definition of “Majority Lenders” or
any other provision hereof specifying the number or percentage of Lenders
required to waive, amend or modify any rights hereunder or make any determination
or grant any consent hereunder, without the written consent of each Lender, or

 

(vii)   amend or waive any
provisions of this Agreement or any other Loan Document for purposes of
determining whether the conditions precedent set forth in subsection 6.2 to the
making of any Revolving Credit Loan have been satisfied without the written
consent of the Lenders holding a majority in interest of the Aggregate
Revolving Credit Commitments.

 

In addition to the foregoing, (x) no
such amendment, supplement or modification shall amend, modify or otherwise
affect the rights or duties of any Agent, the Issuing Bank or the Swing Line
Lender hereunder without the prior written consent of such Agent, the Issuing
Bank or the Swing Line Lender, as the case may be, and (y) no such
amendment, supplement, modification or waiver shall amend, modify or otherwise
affect subsection 8.1 at a time when a Default or Event of Default shall have
occurred and be continuing unless the Lenders holding a majority in interest of
the Aggregate Revolving Credit Commitments shall have consented in writing to
such amendment, modification or waiver. 
Any waiver and any amendment, supplement or modification pursuant to
this subsection 11.1 shall apply to each of the Lenders and shall be binding
upon the Borrower, the applicable other Loan Parties, the Lenders, the Agents
and all future holders of the Loans and the Reimbursement Obligations.  In the case of any waiver, the Borrower, the
Lenders and the Agents shall be restored to their former positions and rights
hereunder and under the other Loan Documents, and any Default or Event of Default
waived shall be deemed to be cured and not continuing; but no such waiver shall
extend to any subsequent or other Default or Event of Default, or impair any
right consequent thereon.

 

11.2.        Notices.  All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by
hand, when delivered, (b) in the case of delivery by mail, three days
after being deposited in the mails, postage prepaid, or (c) in the case of
delivery by facsimile transmission, when sent and receipt has been confirmed,
addressed as follows in the case of the Borrower, the Issuing Lender and the
Administrative Agent, and as set forth in Schedule I in the case of the
other parties hereto, or to such other address as may be hereafter notified in
writing by the respective parties hereto:

 

79

 

	
   

  	
  The
  Borrower:

  	
  c/o
  NBTY, Inc.

  	
   

  
	
   

  	
   

  	
  2100
  Smithtown Avenue

  	
   

  
	
   

  	
   

  	
  Ronkonkoma,
  New York 11779

  	
   

  
	
   

  	
   

  	
  Attention:
  President

  	
   

  
	
   

  	
   

  	
  Fax:
  (631) 567-7148

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  The Administrative

  	
   

  	
   

  
	
   

  	
  Agent, the Collateral

  	
   

  	
   

  
	
   

  	
  Agent, the Issuing

  	
   

  	
   

  
	
   

  	
  Lender or Swing Line

  	
   

  	
   

  
	
   

  	
  Lender:

  	
  JPMorgan Chase Bank, N.A.

  	
   

  
	
   

  	
   

  	
  395 North Service Road

  	
   

  
	
   

  	
   

  	
  Melville, New York 11747

  	
   

  
	
   

  	
   

  	
  Attention: Stephen Zajac

  	
   

  
	
   

  	
   

  	
  Fax: (631) 755-5184

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  With
  a copy to:

  	
  JPMorgan
  Chase Bank, N.A.

  	
   

  
	
   

  	
   

  	
  Loan
  and Agency Services Group

  	
   

  
	
   

  	
   

  	
  10
  S. Dearborn, Floor 19

  	
   

  
	
   

  	
   

  	
  Chicago,
  IL 60603-2003

  	
   

  
	
   

  	
   

  	
  Attention:
  Mi Y. Kim

  	
   

  
	
   

  	
   

  	
  Fax:
  (312) 385-7098

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  The
  Co-Syndication Agents:

  	
  Bank
  of America, N.A.

  	
   

  
	
   

  	
   

  	
  600
  Peachtree St. 6th Floor

  	
   

  
	
   

  	
   

  	
  GAl
  -006-06-10

  	
   

  
	
   

  	
   

  	
  Atlanta,
  GA 30318-2265

  	
   

  
	
   

  	
   

  	
  Attention:
  William O. Tucker

  	
   

  
	
   

  	
   

  	
  Fax:
  (404) 607-4040

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Citibank,
  N.A.

  	
   

  
	
   

  	
   

  	
  730
  Veterans Memorial Highway

  	
   

  
	
   

  	
   

  	
  Hauppauge,
  NY 11788

  	
   

  
	
   

  	
   

  	
  Attention:
  Stephen G. Kelly, VP

  	
   

  
	
   

  	
   

  	
  Fax:
  631-265-4888

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  HSBC
  Bank USA, National Association

  	
   

  
	
   

  	
   

  	
  534
  Broad Hollow Road

  	
   

  
	
   

  	
   

  	
  Suite
  #130

  	
   

  
	
   

  	
   

  	
  Melville,
  NY 11747

  	
   

  
	
   

  	
   

  	
  Attention:
  Gary Sarro, First Vice President

  	
   

  
	
   

  	
   

  	
  Fax:
   631-752-4340

  	
   

  

 

80

 

	
   

  	
   

  	
  Wachovia
  Bank, National Association

  	
   

  
	
   

  	
   

  	
  58
  S. Service Road - Suite 110

  	
   

  
	
   

  	
   

  	
  Melville,
  NY 11747

  	
   

  
	
   

  	
   

  	
  Attention:
  Ed Nallan, Senior VP

  	
   

  
	
   

  	
   

  	
  Fax:
   631-577-8333

  	
   

  

 

provided that any
notice, request or demand to or upon any Agent, the Issuing Lender or the
Lenders pursuant to subsection 2.2, 2.4, 2.6, 2.8, 3.2 or 4.2 shall not be
effective until received.

 

11.3.        No
Waiver; Cumulative Remedies.  No
failure to exercise and no delay in exercising, on the part of any Agent or any
Lender, any right, remedy, power or privilege hereunder or under the other Loan
Documents shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power
or privilege.  The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.

 

11.4.        Survival.  All representations and warranties made hereunder,
in the other Loan Documents and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement and the making of the Loans hereunder until all
obligations hereunder and under the other Loan Documents have been paid in full
and the Commitments hereunder have been terminated.  The agreements in subsection 4.12 shall
survive the termination of this Agreement and the payment of the Notes and all
other amounts payable hereunder until the expiration of the applicable statute
of limitations for such taxes.

 

11.5.        Payment
of Expenses and Taxes.  The Borrower
agrees (a) to pay or reimburse the Administrative Agent for all its
reasonable out-of-pocket costs and expenses incurred in connection with the
development, preparation, syndication and execution of, and any amendment, supplement
or modification to, this Agreement and the other Loan Documents and any other
documents prepared in connection herewith or therewith, and the consummation
and administration of the transactions contemplated hereby and thereby,
including, without limitation, the reasonable fees and disbursements of New
York counsel to the Administrative Agent, (b) to pay or reimburse each
Lender and any Agent for all its costs and expenses incurred during the
continuance of any Default or Event of Default in connection with the
enforcement or preservation of any rights under this Agreement, the other Loan
Documents and any such other documents, including, without limitation, the fees
and disbursements of counsel to each Lender and of counsel to the Agents, (c) to
pay, indemnify, and hold harmless each Lender and the Agent from, any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, Other Taxes, if any, which may be payable
or determined to be payable in connection with the execution and delivery of,
or consummation or administration of any of the transactions contemplated by,
or any amendment, supplement or modification of, or any waiver 

 

81

 

or consent under or in respect
of, this Agreement, the other Loan Documents and any such other documents, and (d) to
pay, indemnify, and hold harmless each Lender and the Administrative Agent from
and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the other Loan Documents and
related documents or the use of the proceeds of the Loans, including, without
limitation, any of the foregoing relating to the violation of, noncompliance
with or liability under, any Environmental Law applicable to the operations of
the Borrower, any of its Subsidiaries or any of the Properties (all the
foregoing in this clause (d), collectively, the “indemnified liabilities”),
provided that the Borrower shall have no obligation hereunder to the
Administrative Agent or any Lender with respect to indemnified liabilities
solely arising from the gross negligence or willful misconduct of the Agents or
any such Lender, as the case may be.  The
agreements in this subsection shall survive the termination of this Agreement
and the repayment of the Loans and all other amounts payable hereunder.

 

11.6.        Successors
and Assigns; Participation and Assignments.

 

(a)           This Agreement shall be binding upon and inure to the
benefit of the Borrower, the Lenders, the Agents and their respective
successors and assigns permitted hereby (including any Affiliate of the Issuing
Lender that issues any Letter of Credit), except that (i) the Borrower may
not assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of each Lender (and any attempted assignment
or transfer by the Borrower without such consent shall be null and void) and (ii) no
Lender may assign or otherwise transfer its rights or obligations hereunder
except in accordance with this subsection 11.6. 
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
Lender that issues any Letter of Credit), Participants (to the extent provided
in paragraph (c) of this subsection 11.6) and, to the extent expressly
contemplated hereby, the Related Parties 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)           (i)   Subject
to the conditions set forth in clause (ii) below, any Lender may assign to
one or more assignees 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) with the prior written consent (such consent not to be
unreasonably withheld, delayed or conditioned) of:

 

(A)          the Borrower, provided
that no consent of the Borrower shall be required at any time for an assignment
to a Lender, an Affiliate of a Lender or an Approved Fund, or for any
assignment to any assignee prior to completion of primary syndication of the
Loans and Commitments hereunder (as determined by JPMorgan Chase in its sole
discretion) or if a Default or Event of Default has occurred and is continuing;
and

 

82

 

(B)           the Administrative
Agent, provided that no consent of the Administrative Agent shall be
required for (i) an assignment of any Revolving Credit Commitment to an
assignee that is a Lender with a Revolving Credit Commitment immediately prior
to giving effect to such assignment or an Affiliate of such Lender or (ii) an
assignment of all or portion of a Term Loan to an assignee that is a Term
Lender immediately prior to giving effect to such assignment or an Affiliate of
such Lender.

 

(ii)           Assignments shall
be subject to the following additional conditions:

 

(A)          except in the case of
an assignment to a Lender or an Affiliate of a Lender or an assignment of the
entire remaining amount of the assigning Lender’s Commitment or Loans of any
Class, 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
not be less than $5,000,000 or unless each of the Borrower and the
Administrative Agent otherwise consents, provided that no such consent
of the Borrower shall be required prior to completion of primary syndication of
the Loans and Commitments hereunder (as determined by JPMorgan Chase in its
sole discretion) or if a Default or Event of Default has occurred and is continuing;

 

(B)           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, provided that this
clause 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;

 

(C)           each assignment of
Term Loans by a Lender shall include a ratable assignment of Term Loans made to
the Borrower;

 

(D)          the parties to each
assignment shall execute and deliver to the Administrative Agent an Assignment
and Acceptance, together with a processing and recordation fee of $3,500, provided
that only one such fee shall be payable in the event of simultaneous
assignments by a Lender to or from two or more Approved Funds; and

 

(E)           the assignee, if it
shall not be a Lender, shall deliver to the Administrative Agent a completed Administrative
Questionnaire.

 

For purposes of the minimum assignment sizes set
forth in subsection 11.6(b)(ii)(A), simultaneous assignments to Approved Funds
under common management by a Lender shall be aggregated, provided that any such
individual assignment shall not be less than $500,000.  For the purposes of this
subsection 11.6(b), the term “Approved Fund” has the following meaning:

 

83

 

“Approved Fund” means any Person (other than
a natural person) that is engaged in making, purchasing, holding or investing
in bank loans and similar extensions of credit in the ordinary course of its
business and that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

 

(iii)    Subject to acceptance and
recording thereof pursuant to paragraph (b)(iv) of this subsection, from
and after the effective date specified in each Assignment and Assumption the
assignee thereunder (“Assignee”) shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this
Agreement (and, in the case of an Assignment and Assumption covering all of the
assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto).  Any
assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this subsection 11.6 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 paragraph (c) of this
subsection.

 

(iv)    The Administrative Agent,
acting for this purpose as an agent of the Borrower, shall maintain at one of
its offices a copy of each Assignment and Assumption 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 Letter of Credit 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 the Borrower, the Agents, 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,
notwithstanding notice to the contrary. 
The Register shall be available for inspection by the Borrower, the
Issuing Bank and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.

 

(v)     Upon its receipt of a duly
completed Assignment and Assumption executed by an assigning Lender and an
Assignee, the Assignee’s completed Administrative Questionnaire (unless the
Assignee shall already be a Lender hereunder), the processing and recordation
fee referred to in paragraph (b) of this subsection and any written
consent to such assignment required by paragraph (b) of this subsection,
the Administrative Agent shall accept such Assignment and Assumption 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 paragraph.

 

(c)     (i)  Any Lender may, without the consent of the Borrower,
the Administrative Agent, the Issuing Bank or the Swing Line Lender, sell
participations to one or more banks 

 

84

 

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 (A) such Lender’s obligations under this Agreement shall remain
unchanged, (B) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (C) the
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 this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; 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 clauses (ii), (iii) and (v) of subsection 11.1 that
affects such Participant.  Subject to
paragraph (c)(ii) of this subsection, the Borrower agrees that each
Participant shall be entitled to the benefits of subsections 4.10, 4.11 and
4.12 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this subsection.  To the extent permitted by law, each
Participant also shall be entitled to the benefits of subsection 11.7 as
though it were a Lender, provided that such
Participant agrees to be subject to subsection 4.8 as though it were a
Lender.  Each Lender that sells a
participation shall, acting solely for this purpose as an agent of the Borrower,
maintain a register on which it enters the name and address of each Participant
and the principal amounts (and stated interest) of each participant’s interest
in the Loans or other obligations under this Agreement (the “Participant
Register”).  The entries in the
Participant Register shall be conclusive absent manifest error, and such Lender
shall treat each person whose name is recorded in the Participant Register as
the owner of such participation for all purposes of this Agreement
notwithstanding any notice to the contrary.

 

(ii)           A Participant shall not be entitled to receive any greater
payment under subsections 4.10 or 4.12 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 Borrower’s prior written consent. 
A Participant that would be a Foreign Lender if it were a Lender shall
not be entitled to the benefits of subsection 4.12 unless the Borrower is
notified of the participation sold to such Participant and such Participant agrees,
for the benefit of the Borrower, to comply with subsection 4.12(e) as
though it were a Lender.

 

(d)           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 without limitation any pledge or
assignment to secure obligations to a Federal Reserve Bank, and this subsection
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.

 

85

 

11.7.        Adjustments;
Set-off.

 

(a)           If any Lender (a “Benefited Lender”) shall at any
time receive any payment of all or part of its Loans owing to it by the
Borrower, or interest thereon, or receive any collateral in respect thereof
(whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings
of the nature referred to in clause (h) of Section 9 or otherwise,
except for payments pursuant to the operation of subsections 4.14(b) or
11.6), in a greater proportion than any such payment to or collateral received
by any other Lender, if any, in respect of such other Lender’s Loans owing to
it by the Borrower or interest thereon, such Benefited Lender shall purchase
for cash from the other Lenders a participating interest in such portion of
each such other Lender’s Loan owing to it by the Borrower or shall provide such
other Lenders with the benefits of any such collateral, or the proceeds
thereof, as shall be necessary to cause such Benefited Lender to share the
excess payment or benefits of such collateral or proceeds ratably with each of
the Lenders; provided, however, that if all or any portion of
such excess payment or benefits is thereafter recovered from such Benefited
Lender, such purchase shall be rescinded, and the purchase price and benefits
returned, to the extent of such recovery, but without interest.

 

(b)           In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise) to set off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower.  Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such set-off and application
made by such Lender, provided that the failure to give such notice shall
not affect the validity of such set-off and application.

 

11.8.        Counterparts.  This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts
(including by facsimile transmission), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.  A set of the copies of this Agreement signed
by all the parties shall be delivered to the Borrower and the Administrative
Agent.

 

11.9.        Severability.  Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction.

 

11.10.      Integration.  This Agreement and the other Loan Documents
represent the entire agreement of the Borrower, the Agents and the Lenders with
respect to the subject matter 

 

86

 

hereof and thereof, and
there are no promises, undertakings, representations or warranties by the
Borrower, any Agent or any Lender relative to the subject matter hereof or
thereof not expressly set forth or referred to herein or in the other Loan
Documents.

 

11.11.      GOVERNING LAW.  THIS AGREEMENT AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

11.12.      Submission
to Jurisdiction; Waivers.  The
Borrower hereby irrevocably and unconditionally:

 

(i)            submits for itself
and its property in any legal action or proceeding relating to this Agreement
or any other Loan Document to which it is a party, or for recognition and
enforcement of any judgment in respect thereof, to the non-exclusive general
jurisdiction of the courts of the State of New York, the courts of the United
States of America for the Southern District of New York, and appellate courts
from any thereof;

 

(ii)           consents that any
such action or proceeding may be brought in such courts and waives any
objection that it may now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or proceeding was brought in
an inconvenient court and agrees not to plead or claim the same;

 

(iii)          agrees that service
of process in any such action or proceeding may be effected by mailing a copy
thereof by registered or certified mail (or any substantially similar form of
mail), postage prepaid, to the Borrower at its address set forth in subsection 11.2
or at such other address of which the Administrative Agent shall have been notified
pursuant thereto; and

 

(iv)          agrees that nothing
herein shall affect the right to effect service of process in any other manner
permitted by law or shall limit the right to sue in any other jurisdiction.

 

11.13.      Acknowledgements.  The Borrower hereby acknowledges that:

 

(a)           it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents; 

 

(b)           none of the Administrative Agent or any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between the Administrative Agents and the Lenders, on the one
hand, and the Borrower, on the other hand, in connection herewith or therewith
is solely that of debtor and creditor; and

 

87

 

(c)           no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Lenders or among the Borrower and the Lenders.

 

11.14.      WAIVERS OF JURY TRIAL.  EACH
OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

11.15.      Confidentiality.  Each Agent and Lender and the Issuing Lender
agrees to take normal and reasonable precautions to maintain the
confidentiality of information provided to it by the Borrower or any Subsidiary
in connection with this Agreement (and, if delivered after the date of this
Agreement, designated in writing as confidential); provided, however,
that any such Person may disclose such information (a) at the request of
any regulatory authority having supervisory jurisdiction over it or in
connection with an examination of such Person by any such authority or the
request of any rating agency requiring access to a Lender’s portfolio, (b) pursuant
to subpoena or other court process, (c) when required to do so in
accordance with the provisions of any applicable law, (d) at the direction
of any other Governmental Authority, (e) to such Person’s Affiliates,
independent auditors and other professional 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), (f) which has become generally available to the public,
other than as a result of a disclosure by such Person or agent of such Person
or a disclosure known to such Person or agent of such Person to have been made
by any person or entity to which such Person or agent has delivered such
confidential information, (g) which becomes available to such Person from
a source other than the Borrower or any Subsidiary (provided that such
source is not known to such Person to be bound by a duty of confidentiality to
the Borrower or any Subsidiary), (h) subject to an agreement containing
provisions substantially the same as those of this subsection 11.15, to any
actual or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Borrower and its obligations or (i) to any
Participant or Assignee or potential Participant or Assignee (each, a “Transferee”)
or any pledgee (or prospective pledgee) (each, a “Pledgee”) of any
Lender that is a Person (other than a natural person) that is engaged in
making, purchasing, holding or investing in bank loans and similar extensions
of credit in the ordinary course of its business; provided that such
Transferee or Pledgee agrees in writing to comply with the provisions of this
subsection 11.15.

 

11.16.      Designation
of Senior Indebtedness.  The
Indebtedness of the Borrower under this Agreement shall constitute “Designated
Senior Indebtedness” pursuant to, for all purposes of, and under and as defined
in, the Existing Notes Indenture.

 

11.17.      USA
PATRIOT ACT.  Each Lender hereby
notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot
Act”), it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the
Borrower and 

 

88

 

other information that will
allow such Lender to identify the Borrower in accordance with the Patriot Act.

 

89

 

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

 

	
   

  	
  NBTY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Hans Lindgren

  
	
   

  	
   

  	
  Name:
  Hans Lindgren

  
	
   

  	
   

  	
  Title:
  Senior Vice President

  

 

 

	
   

  	
  JPMORGAN CHASE BANK, N.A.

  
	
   

  	
  as Administrative Agent and Collateral Agent 

  and as a Lender, and as Swing Line Lender, and 

  as Issuing Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Alicia T. Schreibstein

  
	
   

  	
   

  	
  Name:
  Alicia T. Schreibstein

  
	
   

  	
   

  	
  Title:
  Vice President

  

 

 

	
   

  	
  BANK OF AMERICA, N.A.,

  
	
   

  	
  as Co-Syndication Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  J. Casey Cosgrove

  
	
   

  	
   

  	
  Name:
  J. Casey Cosgrove

  
	
   

  	
   

  	
  Title:
  Vice President

  

 

 

	
   

  	
  CITIBANK, N.A.,

  
	
   

  	
  as Co-Syndication Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Stephen Kelly

  
	
   

  	
   

  	
  Name:
  Stephen Kelly

  
	
   

  	
   

  	
  Title:
  Vice President

  

 

 

	
   

  	
  HSBC BANK USA, NATIONAL ASSOCIATION,

  
	
   

  	
  as Co-Syndication Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Garry Sarro

  
	
   

  	
   

  	
  Name:
  Garry Sarro

  
	
   

  	
   

  	
  Title:
  First Vice President

  

 

 

	
   

  	
  WACHOVIA BANK, NATIONAL 

  ASSOCIATION,

  
	
   

  	
  as Co-Syndication Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Edward P. Nallan, Jr.

  
	
   

  	
   

  	
  Name:
  Edward P. Nallan, Jr.

  
	
   

  	
   

  	
  Title:
  Senior Vice President

  

 

 

	
   

  	
  Accepted and Agreed:

  
	
   

  	
  Fifth Third Bank, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Nancy W. Lanzoni

  
	
   

  	
   

  	
  Name:
  Nancy W. Lanzoni

  
	
   

  	
   

  	
  Title:
  Vice President

  

 

 

	
   

  	
  Accepted and Agreed:

  
	
   

  	
  The Bank of Nova Scotia, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Todd Meller

  
	
   

  	
   

  	
  Name:
  Todd Meller

  
	
   

  	
   

  	
  Title:
  Managing Director

  

 

 

	
   

  	
  Accepted and Agreed:

  
	
   

  	
  Capital One, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Gerard Waters

  
	
   

  	
   

  	
  Name:
  Gerard Waters

  
	
   

  	
   

  	
  Title:
  Vice President

  

 

 

	
   

  	
  Accepted and Agreed:

  
	
   

  	
  Manufacturers & Traders Trust Co., as a
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  William S. Terraglio

  
	
   

  	
   

  	
  Name:
  William S. Terraglio

  
	
   

  	
   

  	
  Title:
  Vice President

  

 

 

	
   

  	
  Accepted and Agreed:

  
	
   

  	
  Bank Leumi USA, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Iris Schechter

  
	
   

  	
   

  	
  Name:
  Iris Schechter

  
	
   

  	
   

  	
  Title:
  Vice President

  

 

	
   

  	
  By:

  	
  /s/
  Eric A. Halpern

  
	
   

  	
   

  	
  Name:
  Eric A. Halpern

  
	
   

  	
   

  	
  Title:
  Senior Vice President

  

 

 

 

	
   

  	
  Accepted and Agreed:

  
	
   

  	
  Israel Discount Bank of New York, as a
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Scott Fishbein

  
	
   

  	
   

  	
  Name:
  Scott Fishbein

  
	
   

  	
   

  	
  Title:
  First Vice President

  

 

	
   

  	
  By:

  	
  /s/
  Roy Grossman

  
	
   

  	
   

  	
  Name:
  Roy Grossman

  
	
   

  	
   

  	
  Title:
  Senior Vice President

  

 

 

 

	
   

  	
  Accepted and Agreed:

  
	
   

  	
  Sovereign Bank, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Antonia Badolato

  
	
   

  	
   

  	
  Name:
  Antonia Badolato

  
	
   

  	
   

  	
  Title:
  Senior Vice President

  

 

 

	
   

  	
  Accepted and Agreed:

  
	
   

  	
  BNP Paribas, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Shayn March

  
	
   

  	
   

  	
  Name:
  Shayn March

  
	
   

  	
   

  	
  Title:
  Managing Director

  

 

	
   

  	
  By:

  	
  /s/
  Berangere Allen

  
	
   

  	
   

  	
  Name:
  Berangere Allen

  
	
   

  	
   

  	
  Title:
  Vice President

  

 

 

	
   

  	
  Accepted and Agreed:

  
	
   

  	
  HSBC Bank plc, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Stephen Stout

  
	
   

  	
   

  	
  Name:
  Stephen Stout

  
	
   

  	
   

  	
  Title:
  Senior Corporate Banking Manager

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