Document:

exv10w2

 

Exhibit 10.2

FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

               FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, dated as of March 31, 2006 (this
“Amendment”), among TRIZEC HOLDINGS OPERATING LLC, a Delaware limited liability company
(“Borrower”), TRIZEC PROPERTIES, INC., a Delaware corporation (“Trizec”), the
SUBSIDIARY GUARANTORS party hereto, the LENDERS party hereto, and DEUTSCHE BANK TRUST COMPANY
AMERICAS, in its capacity as Administrative Agent (in such capacity, the “Administrative
Agent”) under the Credit Agreement referred to below. Unless otherwise indicated, all
capitalized terms used herein and not otherwise defined shall have the respective meanings provided
such terms in such Credit Agreement.

WITNESSETH:

               WHEREAS, Borrower, Trizec, the Lenders and the Administrative Agent are parties to an Amended
and Restated Credit Agreement, dated as of October 31, 2005 (the “Credit Agreement”); and

               WHEREAS, the parties hereto desire to amend the Credit Agreement as provided herein, on the
terms and conditions set forth herein;

               NOW, THEREFORE, it is agreed:

     1.   Credit Agreement Amendments. The Credit Agreement is hereby amended as follows:

               (a)     The second sentence of Section 8.04(a) of the Credit Agreement is hereby amended by adding
the following text at the end of such sentence:

“; provided, however, that the First Citizens Property and the Arden
Replacement Property may be owned by a Wholly-Owned Subsidiary of Trizec”.

               (b)     Section 8.13(a) of the Credit Agreement is hereby amended by adding the following text
immediately after “a counterpart of the Subsidiaries Guaranty executed by” in clause (iii) of such
Section:

          “(v) in the case of a Real Estate Asset owned by a Wholly-Owned Subsidiary of
Trizec, such Wholly-Owned Subsidiary,”.

               (c)     Section 8.13(f) of the Credit Agreement is hereby amended by adding the following text at
the end of such Section:

          “Notwithstanding the foregoing and anything to the contrary contained in
Sections 8.13(a) or 8.13(b), in the event the Arden Replacement Property is financed
(including if the Arden Replacement Property becomes a Borrowing Base Property
pursuant to Section 8.13(a) and is thereafter removed from the

 

 

Borrowing Base pursuant to Section 8.13(b) in order to obtain such financing),
then (i) the direct Subsidiary of Trizec that directly or indirectly owns such Real
Estate Asset shall be released as of the date of such financing from its obligations
under the Subsidiaries Guaranty, (ii) if such Real Estate Asset is a Borrowing Base
Property owned by an indirect Wholly-Owned Subsidiary of Trizec, such Subsidiary
shall be released as of the applicable Release Date from its obligations under the
Subsidiaries Guaranty, in each case without any further action on the part of any
party hereto, and (iii) so long as such financing or any refinancing of such Real
Estate Asset is outstanding, neither Trizec nor the Borrower shall be obligated to
cause such direct Subsidiary of Trizec that owns, directly or indirectly, such Real
Estate Asset to be or become a Subsidiary Guarantor under the Subsidiaries Guaranty
pursuant to this Section 8.13(f).”

               (d)     Section 9.04 (a) of the Credit Agreement is hereby amended by adding the following text at
the end of such Section:

“; provided, further, that the Interim Facility Pledge shall not be
considered to be payment guaranties as such term is used in the immediately
preceding proviso.”

               (e)     Clause (b) of Section 9.07 of the Credit Agreement is hereby amended to read in its
entirety as follows:

“(b) any agreements governing any Secured Indebtedness permitted under Section 9.01
(h) and (k) shall be permitted to contain prohibitions or limitations of the type
described in the preceding clause (x) (in which case, any such prohibition or
limitation shall only be effective against the equipment, machinery or materials
financed thereby, or in the case of such 9.01 (k), (A) the Property subject to such
Liens and (B) if such Property is the equity interests in the Interim Borrower, the
assets owned by the Interim Borrower and its Subsidiaries.”

               (f)     Section 9.10 of the Credit Agreement is hereby amended to read in its entirety as follows:

“9.10 Consolidated Total Indebtedness as a Percentage of Consolidated Total
Asset Value. Trizec will not permit its Consolidated Total Indebtedness on any
date to exceed an amount which is 65% of the Consolidated Total Asset Value of
Trizec as of the last day of the most recently ended fiscal quarter of Trizec;
provided that in determining such Consolidated Total Asset Value, such determination
shall be made on a pro forma basis to give effect to any sales and acquisitions of
Real Estate Assets effected after the last day of any such fiscal quarter and on or
prior to the date of any determination pursuant to this Section 9.10 as if such sale
or acquisition was consummated on the last day of the most recently ended fiscal
quarter.”

               (g)     Section 9.12 of the Credit Agreement is hereby amended to read in its entirety as follows:

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“9.12 Consolidated Interest Coverage Ratio. Trizec will not permit its
Consolidated Interest Coverage Ratio for any Test Period to be less than (x)
1.75:1.00 on any date on or prior to the original Maturity Date and (y) 2:00:1.00 on
any date after the original Maturity Date.”

               (h)     Section 9.13 of the Credit Agreement is hereby amended to read in its entirety as follows:

“9.13 Consolidated Fixed Charge Coverage Ratio. Trizec will not permit its
Consolidated Fixed Charge Coverage Ratio for any Test Period to be less than (x)
1.40:1.00 on any date on or prior to the original Maturity Date and (y) 1.50:1.00 on
any date after the original Maturity Date.”

               (i)     Section 9.15 of the Credit Agreement is hereby amended by substituting a comma for the
word “and” immediately before clause (v) of such Section and adding the following text at the end
of such Section:

“and (vi) restrictions of the type described in this Section 9.15 that are imposed
by the credit documents governing the Interim Facility on (x) the Interim Borrower
and its direct and indirect Subsidiaries and (y) Holdings (but in the case of
Holdings, only insofar as such restrictions are limited to the Interim Borrower, its
direct and indirect Subsidiaries, their respective assets, and the equity interests
in the Interim Borrower pledged by Holdings pursuant to the Interim Facility
Pledge).”

               (j)     Clause (v) of the definition of “Borrowing Base Property” in Section 11.01 of the Credit
Agreement is hereby amended by substituting a comma for the word “or” immediately prior to clause
(c) thereof and adding the following text at the end of such clause:

“or (d) in the case of the Arden Replacement Property, a Wholly-Owned Subsidiary of
Trizec.”

               (k)     The definition of “Unsecured Consolidated Total Indebtedness” in Section 11.01 of the
Credit Agreement is hereby amended to read in its entirety as follows:

          “Unsecured Consolidated Total Indebtedness” of any Person at any time shall
mean the aggregate amount of all Consolidated Total Indebtedness of such Person at
such time (including, without limitation, all outstanding Obligations and all
Unsecured Indebtedness in the form of payment guaranties of Secured Indebtedness)
that is not Secured Consolidated Total Indebtedness; provided,
however, that solely for the purpose of calculating the Borrowing Base
Amount, Unsecured Consolidated Total Indebtedness of Trizec shall not include (i)
any Indebtedness incurred under the Interim Facility, including, without limitation,
any payment guaranties thereof and pledges providing security therefor, and (ii) up
to $100,000,000 of other Unsecured Indebtedness incurred at any time by Trizec (but
not any other Credit Party) under payment guaranties by it of the

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Secured Consolidated Total Indebtedness of its Subsidiaries for borrowed money
(excluding payment guaranties of the Interim Facility).

               (l)     The definition of “Unsecured Indebtedness” in Section 11.01 of the Credit Agreement is
hereby amended by adding the following proviso at the end of such definition:

“; provided, however, that solely for purposes of the last paragraph
of Section 9.04, Unsecured Indebtedness shall not include the Interim Facility”.

               (m)     Section 11.01 of the Credit Agreement is hereby amended by (i) deleting the definitions of
“Consolidated Total Indebtedness Election Notice” and “Substantial Acquisition” in their entirety
and (ii) inserting the following new definitions in appropriate alphabetical order:

               “‘Arden Replacement Property’ shall mean the Real Estate Asset commonly known as 9665
Wilshire Boulevard, Beverly Hills, California, or such other Real Estate Asset as may be designated
from time to time by Trizec or the Borrower to complete the 1031 Exchange effected in connection
with the sale of the First Citizens Property.

               “‘First Citizens Property’ shall mean the Real Estate Asset commonly known as First
Citizens Plaza, Charlotte, North Carolina.

               “‘Interim Borrower’ shall mean one or more subsidiaries that are Wholly-Owned
Subsidiaries of Holdings.”; and

               “‘Interim Facility’ shall mean a term loan in the principal amount of not more than
$1,475,000,000 made to the Interim Borrower on or prior to July 31, 2006 to finance the acquisition
of a portfolio of Real Estate Assets located in Southern California owned directly or indirectly by
Arden Realty Limited Partnership, which term loan may be (i) guaranteed by Trizec and each
Subsidiary of the Interim Borrower that directly or indirectly owns the assets of the Interim
Borrower and (ii) secured by a pledge (the “Interim Facility Pledge”) of Holding’s direct or
indirect equity interests in the Interim Borrower.”

               “‘Interim Facility Pledge’ shall have the meaning provided in the definition of
‘Interim Facility’.”

               (n)     Exhibit L to the Credit Agreement is hereby amended by deleting the text of footnote 3 of
Annex II thereof and replacing such footnote with the following footnote:

“Less (i) the Indebtedness incurred under the Interim Facility, including, without
limitation, any payment guaranties thereof and pledges providing security therefor
and (ii) up to $100,000,000 of other Unsecured Indebtedness incurred at any time by
Trizec (but not any other Credit Party) under payment guaranties by it of the
Secured Consolidated Total Indebtedness of its Subsidiaries for borrowed money
(excluding payment guaranties of the Interim Facility)”.

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               (o)     Exhibit O to the Credit Agreement is hereby amended by deleting Schedule I thereof and
replacing such schedule with the schedule attached to this Amendment as Exhibit A.

     2. Miscellaneous Provisions.

               (a)      Each of Borrower and Trizec hereby represents and warrants that (i) the representations
and warranties of each Credit Party contained in the Credit Agreement and the other Credit
Documents are true and correct in all material respects on and as of the Effective Date (as
hereinafter defined) (except that with respect to any such representation and warranty which is
limited by its terms to a specific date, the same is true and correct in all material respects as
of such date), and (ii) there exists no Specified Default or material Event of Default under the
Credit Agreement on the Effective Date (as defined below), after giving effect to this Amendment.

               (b)     This Amendment is limited as specified and shall not constitute a modification, acceptance
or waiver of any other provision of the Credit Agreement or any other Credit Document. As amended
hereby, the Credit Agreement, each Guaranty and the other Credit Documents are ratified and
confirmed in all respects.

               (c)     This Amendment may be executed in any number of counterparts and by the different parties
hereto on separate counterparts, each of which counterparts when executed and delivered (including
by way of facsimile or other electronic transmission) shall together constitute one and the same
instrument. A complete set of counterparts of this Amendment shall be lodged with Borrower and the
Administrative Agent.

               (d)     THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

               (e)     This Amendment shall become effective on the date (the “Effective Date”) on which
(i) Borrower, Trizec, the Subsidiary Guarantors and the Required Lenders shall have signed a
counterpart hereof (whether the same or different counterpart) and shall have delivered (including
by way of facsimile transmission) the same to the Administrative Agent at the Notice Office and
(ii) the following conditions are satisfied: (x) the closing of the Interim Facility shall have
occurred, (y) Borrower shall have paid each of the undersigned Lenders an amendment fee in the
amount of 0.05% of such Lender’s Commitment outstanding immediately prior to the Effective Date and
(z) no Specified Default or material Event of Default shall have occurred and be continuing
immediately after giving effect to this Amendment; provided, however, that if the
Effective Date has not occurred on or prior to July, 31, 2006, this Amendment shall be void and of
no further force or effect. The Administrative Agent shall give Borrower and each Lender written
notice of the occurrence of the Effective Date.

               (f)     From and after the Effective Date, all references in the Credit Agreement, each Guaranty
and the other Credit Documents to the Credit Agreement shall be deemed to be references to the
Credit Agreement as amended hereby.

[Signature Page Follows]

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               IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be duly executed
and delivered as of the date first above written.

 
	 	 	 	 	 
	 	TRIZEC HOLDINGS OPERATING LLC

By: Trizec Properties, Inc., its sole managing
     member

 	 
	 
	 	By:  	/s/ Patrick L. Aldrich
 	 
	 	 	Title: Treasurer 	 
	 	 	 	 
	 	TRIZEC PROPERTIES, INC.

 	 
	 
	 	By:  	/s/ Patrick L. Aldrich
 	 
	 	 	Title: Treasurer 	 
	 	 	 	 
	 	TRIZEC REALTY, LLC, a California limited
     liability company, as a Subsidiary Guarantor

 	 
	 	By:  	/s/ Patrick L. Aldrich
 	 
	 	Title: Assistant Treasurer 	 
	 	 	 	 
	 	By:  	/s/ Ted R. Jadwin
 	 
	 	 	Title: Vice President & Secretary 	 
	 	 	 	 
	 
	 	TRIZECHAHN 1225 CONNECTICUT
     AVENUE LLC, a Delaware limited liability
     company, as a Subsidiary Guarantor

 	 
	 	By:  	/s/ Patrick L. Aldrich
 	 
	 	Title: Assistant Treasurer 	 
	 	 	 	 
	 	By:  	/s/ Ted R. Jadwin
 	 
	 	 	Title: Secretary 	 
	 	 	 	 
	 

 

 

	 	 	 	 	 
	 	T.H.S. NORTHSTAR ASSOCIATES LIMITED
     PARTNERSHIP, a Minnesota limited
     partnership, as a Subsidiary Guarantor

By:     TrizecHahn Northstar LLC, a Delaware
            limited liability, as sole general partner

 	 
	 	By:  	/s/ Patrick L. Aldrich
 	 
	 	Title: Assistant Treasurer 	 
	 	 	 	 
	 	By:  	/s/ Ted R. Jadwin
 	 
	 	 	Title: Secretary 	 
	 	 	 	 
	 
	 
	 	TRIZECHAHN 1250 23RD STREET NW LLC,
     a District of Columbia limited liability
     company, as a Subsidiary Guarantor

 	 
	 	By:  	/s/ Patrick L. Aldrich
 	 
	 	Title: Assistant Treasurer 	 
	 	 	 	 
	 	By:  	/s/ Ted R. Jadwin
 	 
	 	 	Title: Secretary 	 
	 	 	 	 
	 
	 	TRIZECHAHN 1065 LLC, a Delaware limited
     liability company, as a Subsidiary Guarantor

 	 
	 	By:  	/s/ Patrick L. Aldrich
 	 
	 	Title: Assistant Treasurer 	 
	 	 	 	 
	 	By:  	/s/ Ted R. Jadwin
 	 
	 	 	Title: Secretary 	 
	 	 	 	 
	 
	 	TRIZECHAHN FRANKLIN CENTER LLC, a
     Delaware limited liability company, as a
     Subsidiary Guarantor

 	 
	 	By:  	/s/ Patrick L. Aldrich
 	 
	 	Title: Assistant Treasurer 	 
	 	 	 	 
	 	By:  	/s/ Ted R. Jadwin
 	 
	 	 	Title: Secretary 	 
	 	 	 	 
	 

 

 

	 	 	 	 	 
	 	TRIZEC R&E HOLDINGS, LLC, a Delaware
     limited liability company, as a Subsidiary
     Guarantor

 	 
	 	By:  	/s/ Patrick L. Aldrich
 	 
	 	Title: Assistant Treasurer 	 
	 	 	 	 
	 	By:  	/s/ Ted R. Jadwin
 	 
	 	 	Title: Senior Vice President & Secretary 	 
	 	 	 	 
	 	TRIZEC HOLDINGS, LLC, a Delaware limited
     liability company, as a Subsidiary Guarantor

 	 
	 	By:  	/s/ Patrick L. Aldrich
 	 
	 	Title: Assistant Treasurer 	 
	 	 	 	 
	 	By:  	/s/ Ted R. Jadwin
 	 
	 	 	Title: Senior Vice President, General Counsel
          & Corporate Secretary 	 
	 	 	 	 
	 	TRIZECHAHN NEWPORT, LLC, a Delaware
     limited liability company, as a Subsidiary
     Guarantor

 	 
	 	By:  	/s/ Patrick L. Aldrich
 	 
	 	Title: Assistant Treasurer 	 
	 	 	 	 
	 	By:  	/s/ Ted R. Jadwin
 	 
	 	 	Title: Secretary 	 
	 	 	 	 
	 	TRIZECHAHN WATERGATE
     OFFICE/RETAIL/LAND LLC, a District of
     Columbia limited liability company, as a
     Subsidiary Guarantor

 	 
	 	By:  	/s/ Patrick L. Aldrich
 	 
	 	Title: Assistant Treasurer 	 
	 	 	 	 
	 	By:  	/s/ Ted R. Jadwin
 	 
	 	 	Title: Secretary 	 
	 	 	 	 
	 

 

 

	 	 	 	 	 
	 	NEWPORT TOWER URBAN RENEWAL
     COMPANY, a New Jersey general partnership,
     as a Subsidiary Guarantor

By:     TrizecHahn Newport, LLC, a Delaware
            limited liability company, as managing
            general partner

 	 
	 	By:  	/s/ Patrick L. Aldrich
 	 
	 	Title: Assistant Treasurer 	 
	 	 	 	 
	 	By:  	/s/ Ted R. Jadwin
 	 
	 	 	Title: Secretary 	 
	 	 	 	 
	 	TRIZEC PARTNERS REAL ESTATE, L.P.
     a Delaware limited partnership, as a Subsidiary
     Guarantor

By:     THOPI TRS INC. a Delaware
            corporation and its Sole General Partner

 	 
	 
	 	By:  	/s/ Patrick L. Aldrich
 	 
	 	Title: Assistant Treasurer 	 
	 	 	 	 
	 	By:  	/s/ Ted R. Jadwin
 	 
	 	 	Title: Vice President & Secretary 	 
	 	 	 	 
	 

 

 

	 	 	 	 	 
	 	DEUTSCHE BANK TRUST COMPANY
     AMERICAS,
     Individually and as Administrative Agent

 	 
	 
	 	By:  	/s/ George R. Reynolds
 	 
	 	 	Title: Vice President 	 
	 	 	 	 
	 	By:  	/s/ Brenda Casey
 	 
	 	 	Title: Director 	 
	 	 	 	 
	 	BANK OF AMERICA, N.A.

 	 
	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 
	 	THE BANK OF NOVA SCOTIA, NEW
     YORK AGENCY

 	 
	 
	 	By:  	/s/ R. J. Boese
 	 
	 	 	Title: Managing Director 	 
	 	 	 	 
	 	BANK OF MONTREAL

 	 
	 
	 	By:  	/s/ Virginia Neale
 	 
	 	 	Title: Vice President 	 
	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A.

 	 
	 
	 	By:  	/s/ Marc E. Costantino
 	 
	 	 	Title: Vice President 	 
	 	 	 	 
	 	ING REAL ESTATE FINANCE (USA) LLC

 	 
	 
	 	By:  	/s/ David M. Schwarz
 	 
	 	 	Title: Senior Director 	 
	 	 	 	 
	 

 

 

	 	 	 	 	 
	 	WELLS FARGO BANK, N.A.

 	 
	 
	 	By:  	/s/ Scott S. Solis
 	 
	 	 	Title: Vice President 	 
	 	 	 	 
	 	COMMERZBANK AG NEW YORK AND
     GRAND CAYMAN BRANCHES

 	 
	 
	 	By:  	/s/ James Brett
 	 
	 	 	Title: Assistant Treasurer 	 
	 	 	 	 
	 	By:  	/s/ Christian Berry
 	 
	 	 	Title: Vice President 	 
	 	 	 	 
	 	EUROHYPO AG, NEW YORK BRANCH

 	 
	 	By:  	/s/ David Sarner
 	 
	 	 	Title: Director 	 
	 	 	 	 
	 	By:  	/s/
Alice Ha 	 
	 	 	Title: Associate 	 
	 	 	 	 
	 	LASALLE BANK NATIONAL
     ASSOCIATION

 	 
	 
	 	By:  	/s/ A. Brad Feine
 	 
	 	 	Title: Assistant Vice President 	 
	 	 	 	 
	 	US BANK NATIONAL ASSOCIATION 

 	 
	 
	 	By:  	
/s/ Renee Lewis
 	 
	 	 	Title: Vice President 	 
	 	 	 	 
	 	WACHOVIA BANK, NATIONAL
     ASSOCIATION

 	 
	 
	 	By:  	/s/ Amit Khimji
 	 
	 	 	Title: Vice President 	 
	 	 	 	 
	 

 

 

	 	 	 	 	 
	 	CHARTER ONE BANK, NATIONAL
     ASSOCIATION

 	 
	 
	 	By:  	/s/ James C. Beckett
 	 
	 	 	Title: Vice President 	 
	 	 	 	 
	 	PNC BANK, NATIONAL ASSOCIATION

 	 
	 
	 	By:  	/s/ Michael E. Smith
 	 
	 	 	Title: Senior Vice President 	 
	 	 	 	 
	 	THE BANK OF NEW YORK 

 	 
	 
	 	By:  	
/s/ Rick Laudisi
 	 
	 	 	Title: Vice President 	 
	 	 	 	 
	 	MIDFIRST BANK, A FEDERALLY
     CHARTERED SAVINGS ASSOCIATION

 	 
	 
	 	By:  	/s/ Todd G. Wright
 	 
	 	 	Title: Vice President 	 
	 	 	 	 
	 	SOVEREIGN BANK

 	 
	 
	 	By:  	/s/ T. Gregory Donohue
 	 
	 	 	Title: Senior Vice President 	 
	 	 	 	 
	 	ALLIED IRISH BANK, P.L.C.

 	 
	 
	 	By:  	/s/ Kathryn E. Murdoch
 	 
	 	 	Title: Vice President 	 
	 	 	 	 
	 	By:  	                       /s/ Brian Deegan
 	 
	 	 	Title: Assistant Vice President 	 
	 	 	 	 
	 	MORGAN STANLEY BANK

 	 
	 
	 	By:  	/s/ Daniel Twenge
 	 
	 	 	Title: Vice President 	 
	 	 	 	 
	 

 

 

	 	 	 	 	 
	 	UNION BANK OF CALIFORNIA, N.A.
 	 
	 
	 
	 	By:  	/s/ Lawrence Andow
 	 
	 	 	Title: Vice President 	 
	 	 	 	 
	 	COMERICA BANK

 	 
	 
	 	By:  	/s/ James Graycheck
 	 
	 	 	Title: Vice President 	 
	 	 	 	 
	 	FIRST HORIZON BANK, A DIVISION OF
     FIRST TENNESSEE

 
	 
	 	By:  	/s/ J. Jordan O'Neill III	 
	 	 	Title: Senior Vice President 	 
	 	 	 	 
	 	ERSTE BANK, NEW YORK BRANCH

 	 
	 
	 	By:  	/s/ Gregory T. Aptman
 	 
	 	 	Title: Vice President 	 
	 	 	 	 
	 	By:  	/s/ Bryan Lynch
 	 
	 	 	Title: First Vice President 	 
	 	 	 	 
	 	PEOPLES BANK

 
	 
	 	By:  	/s/ Steven Jenassen
 	 
	 	 	Title: Vice President 	 
	 	 	 	 
	 	THE NORTHERN TRUST COMPANY

 	 
	 
	 	By:  	/s/ R.W. Wiarda
 	 
	 	 	Title: Vice Presidentexv10w2

 

Exhibit 10.2

SECOND AMENDMENT

OF BENEFIT EQUALIZATION PLAN OF ZIMMER HOLDINGS, INC.

AND ITS SUBSIDIARY OR AFFILIATE CORPORATIONS PARTICIPATING IN THE

ZIMMER HOLDINGS, INC. RETIREMENT INCOME PLAN OR THE

ZIMMER PUERTO RICO RETIREMENT INCOME PLAN

               This Second Amendment of Benefit Equalization Plan of Zimmer Holdings, Inc. and Its Subsidiary
or Affiliate Corporations Participating in the Zimmer Holdings, Inc. Retirement Income Plan or the
Zimmer Puerto Rico Retirement Income Plan (the “Plan”) is adopted by Zimmer Holdings, Inc. (the
“Company”).

Background

               A.      The Plan was established by the Company effective August 6, 2001, and has been amended
once.

               B.      The Company now wishes to again amend the Plan.

Amendment

               1.      Effective as of May 1, 2006, Paragraph IV.F is hereby deleted in its entirety from the
terms of the Plan.

               2.      Effective May 1, 2006, a new Paragraph IV.G is added to the Plan and shall read as follows:

               G.      (1)      Subject to the terms of this Plan, as amended from time
to time, for purposes of calculating the pension benefits of Jon E.
Kramer (“Kramer”) under Paragraphs IV.A through C, Kramer will be
entitled to receive a supplemental pension benefit under this Plan
determined as if (a) Kramer was entitled to the Retirement Income
Plan’s early retirement subsidies when he commenced his Retirement
Income Plan benefits on or after age 55, and (b) Kramer was credited
with an additional 7.82 years of credited service with the Company
as of the Trigger Date as defined in Paragraph G(2) below.

 

 

                         (2)      Kramer shall be eligible for benefits under Paragraph G(1)
upon the earliest to occur of:

	 	(i)	 	December 31 2008;
	 
	 	(ii)	 	his total disability;
	 
	 	(iii)	 	his death; or
	 
	 	(iv)	 	his entitlement to benefits under the
Change of Control Agreement between
Kramer and the Company, as amended for
Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”)

(the “Trigger Date”).

                         (3)      If the Company terminates Kramer prior to December 31,
2008, without cause, then he shall be eligible for the benefit under
Paragraph G(1); provided, however, that the 7.82 years of credited
service shall be prorated by dividing the number of complete
calendar months worked by Kramer for the Company since May 1, 2006
by 32.

                         (4)      Notwithstanding any of the foregoing, Kramer shall not be
eligible for any additional benefit under this Paragraph G if:

                         (a)      Kramer’s employment terminates before December 31,
2008 for any reason, including, without limitation,
termination by the Company for gross misconduct,
insubordination or willful failure to perform the duties
assigned by the Company’s management, unless specifically
provided otherwise under Paragraph G(2) or G(3) above;

                         (b)      Kramer violates the terms of any applicable
non-disclosure, non-competition or non-solicitation
agreement with the Company; or

                         (c)      Kramer fails to execute a general release in a form
satisfactory to the Company upon his termination.

                         (5)      If, after termination of Kramer’s employment, facts are
disclosed or discovered pursuant to which the Company determines
that Kramer engaged in gross misconduct while employed by the
Company or that Kramer violated the terms of any applicable
non-disclosure, non-competition or non-

-2-

 

solicitation agreement with the Company, then any additional
benefits attributable to the provisions of this Paragraph G shall
cease immediately. Further, if any benefits attributable to the
provisions of this Paragraph G were paid to Kramer before such facts
were discovered or disclosed, then Kramer shall repay the Company
the gross sum of all such benefits attributable to this Paragraph G
and paid to him within 15 days of written demand by the Company.

                         (6)      In the event Kramer does not become entitled to benefits
under this Paragraph G, benefits shall be determined in accordance
with the terms of the Plan as if this Paragraph G had not been
effectuated.

                         (7)      The benefits provided under this Paragraph G shall not be
construed or deemed to be a modification of Kramer’s benefits and
rights as in effect on October 3, 2004, but shall be considered the
grant of a new benefit, subject to and administered in accordance
with Section 409A of the Code. The Company shall maintain adequate
records to identify the portion of benefits accrued prior to
December 31, 2004, and the portion accrued thereafter.

           Zimmer Holdings, Inc. has caused this Second Amendment to Benefit Equalization Plan of Zimmer
Holdings, Inc. and its Subsidiary or Affiliate Corporations participating in the Zimmer Holdings,
Inc. Retirement Income Plan or the Zimmer Puerto Rico Retirement Income Plan to be signed by its
duly authorized officers this 1st day of May, 2006.

	 	 	 	 	 
	 	 	ZIMMER HOLDINGS, INC.
	 
	 	 	 	 
	 

	 	By:
	 	      /s/ Sam R. Leno
	 

	 	 	 	 
	 

	 	 	 	Sam R. Leno
	 

	 	 	 	Executive Vice President, Finance
	 

	 	 	 	and Corporate Services and Chief
	 

	 	 	 	Financial Officer
	 
	 	 	 	 
	 

	 	By:
	 	     /s/ Renee P. Rogers, Ph.D.
	 

	 	 	 	 
	 

	 	 	 	Renee P. Rogers, Ph.D.
	 

	 	 	 	Vice President, Global Human Resources

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