Exhibit 10.42
MSW WH ACQUISITION CORP.
$165,000,000 11 3/4% SENIOR SUBORDINATED NOTES DUE 2010
PURCHASE AGREEMENT
June 21, 0000
Xxx Xxxx, Xxx Xxxx
UBS WARBURG LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
WH Acquisition Corp., a Nevada corporation (the "ISSUER"), Herbalife
International, Inc., a Nevada corporation (the "COMPANY"), and the entities
listed on the signature page hereto as Guarantors (as defined herein), agree
with you as follows:
1. Issuance of Notes. The Issuer proposes to issue and sell to UBS
Warburg LLC (the "INITIAL PURCHASER") $165,000,000 aggregate principal amount of
11 3/4% Senior Subordinated Notes due 2010 (the "ORIGINAL NOTES"). The Original
Notes will be issued pursuant to an indenture (the "INDENTURE"), to be dated the
Closing Date (as defined herein), by and among the Issuer, the WH Guarantors (as
defined herein) and The Bank of New York, as trustee (the "TRUSTEE"). The
Original Notes will be initially guaranteed (the "GUARANTEES") by WH
Intermediate Holdings Ltd., a Cayman Islands corporation ("HOLDINGS") and each
of its wholly owned subsidiaries, WH Luxembourg Holdings SaRL, WH Luxembourg
Intermediate Holdings SaRL and WH Luxembourg CM SaRL (collectively with
Holdings, the "WH GUARANTORS"), as and to the extent set forth in the Indenture.
After the issuance of the Notes and following the consummation of the Merger (as
defined herein), the Notes will be guaranteed by the WH Guarantors and each
subsidiary of the Company that guarantees the Credit Facilities (as defined
herein) (the "HERBALIFE GUARANTORS"), as and to the extent set forth in the
Indenture. The WH Guarantors and the Herbalife Guarantors (subject to Section 17
of this Agreement) are sometimes collectively referred to herein as the
"GUARANTORS." Capitalized terms used but not otherwise defined herein shall have
the meanings given to such terms in the Offering Memorandum (as defined herein).
The Original Notes will be offered and sold to the Initial Purchaser
pursuant to an exemption from the registration requirements under the Securities
Act of 1933, as amended (the "ACT"). The Issuer, with the assistance of the
Company, has prepared a preliminary
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offering memorandum, dated May 24, 2002 (the "PRELIMINARY OFFERING MEMORANDUM"),
and a final offering memorandum dated and available for distribution on the date
hereof (the "OFFERING MEMORANDUM") relating to the Issuer, the Company the
Guarantors and the Original Notes.
The Initial Purchaser has advised the Issuer and the Company that the
Initial Purchaser intends, as soon as it deems practicable after this Purchase
Agreement (this "AGREEMENT") has been executed and delivered, to resell (the
"EXEMPT RESALES") the Original Notes purchased by the Initial Purchaser under
this Agreement in private sales exempt from registration under the Act on the
terms set forth in the Offering Memorandum, as amended or supplemented, solely
to (i) persons whom the Initial Purchaser reasonably believes to be "qualified
institutional buyers," as defined in Rule 144A under the Act ("QIBS"), and (ii)
other eligible purchasers pursuant to offers and sales that occur outside the
United States within the meaning of Regulation S under the Act; the Persons
specified in clauses (i) and (ii) are sometimes collectively referred to herein
as the "ELIGIBLE PURCHASERS."
Upon issuance of the Original Notes and until such time as the same is
no longer required under the applicable requirements of the Act, the Original
Notes shall bear the legend relating thereto substantially in the form set forth
under "Notice to Investors" in the Offering Memorandum.
Holders (including subsequent transferees) of the Original Notes will
have the registration rights set forth in the registration rights agreement, to
be dated the Closing Date, substantially in the form attached hereto as Annex A
(the "REGISTRATION RIGHTS AGREEMENT"). Pursuant to the Registration Rights
Agreement, the Issuer and, after the Merger, the Company will agree to (i) file
with the Securities and Exchange Commission (the "COMMISSION") under the
circumstances set forth in the Registration Rights Agreement, (a) a registration
statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating
to a new issue of debt securities (collectively with the Private Exchange Notes
(as defined in the Registration Rights Agreement) as the "EXCHANGE NOTES" and,
the Exchange Notes are referred to herein, together with the Original Notes, as
the "NOTES") to be offered in exchange for the Original Notes (the "EXCHANGE
OFFER") and issued under the Indenture or indentures substantially identical to
the Indenture and/or (b) under certain circumstances set forth in the
Registration Rights Agreement, a shelf registration statement pursuant to Rule
415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with the
Exchange Offer Registration Statement, the "REGISTRATION STATEMENTS") relating
to the resale by certain holders of the Original Notes, and (ii) to use its
reasonable best efforts to cause such Registration Statements to be declared
effective. This Agreement, the Notes, the Indenture and the Registration Rights
Agreement are hereinafter sometimes referred to collectively as the "NOTE
Documents."
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As described in the Offering Memorandum under "The Acquisition,"
proceeds from the issuance and sale of the Original Notes, together with
available cash of the Company and credit facilities to be entered into by the
Company (the "CREDIT Facilities"), will be used to consummate the acquisition of
the Company, pursuant to an Agreement and Plan of Merger dated as of April 10,
2002 (the "MERGER AGREEMENT") among the Company, the Issuer and WH Holdings
(Cayman Islands) Ltd., a Cayman Islands corporation ("PARENT"), pursuant to
which the Issuer will merge with and into the Company (the "MERGER"), and the
Company will be the surviving corporation and an indirect wholly owned
subsidiary of Parent. The Merger is subject to the approval by majority vote of
the Class A shareholders of the Company.
The net proceeds from the issuance of the Original Notes will be paid in
cash directly to The Bank of New York, as securities intermediary (the
"SECURITIES INTERMEDIARY"). The Securities Intermediary will invest those
proceeds in United States Treasury securities (the "PLEDGED SECURITIES") and
will deposit the Pledged Securities into a securities account (the "SECURED
PROCEEDS ACCOUNT"). All earnings on the Pledged Securities will accumulate in
the Secured Proceeds Account. Under a Security and Control Agreement among the
Issuer, the Securities Intermediary and the Trustee (the "SECURITY AGREEMENT")
substantially in the form attached as Annex B, the Trustee will have a security
interest in the Secured Proceeds Account.
In the event the Merger has not occurred on or prior to August 31, 2002,
the Issuer will be required to redeem (a "MANDATORY REDEMPTION") all of the
outstanding Notes, for a price equal to 101% of their principal amount, plus
accrued and unpaid interest thereon through the redemption date (the "MANDATORY
REDEMPTION PRICE"). Under (i) a Collateral Support and Assignment Agreement
between Whitney V, L.P., Whitney Equity Partners V, L.L.C., the Issuer and the
Trustee substantially in the form attached hereto as Annex C-1 (the "WHITNEY
SUPPORT AGREEMENT") and (ii) a Collateral Support and Assignment Agreement
between CCG Investments (BVI) L.P., Golden Gate Capital Management, L.L.C., the
Issuer and the Trustee substantially in the form attached hereto as Annex C-2
(the "GOLDEN GATE SUPPORT AGREEMENT," and together with the Whitney Support
Agreement, the "SUPPORT AGREEMENTS")), the equity sponsors have agreed to
provide, when and if due, the difference between the special Mandatory
Redemption Price and the net proceeds of the offering.
The issuance and sale of the Original Notes (including the Guarantees)
and the placement of the net proceeds in the Secured Proceeds Account are
referred to as the "TRANSACTIONS."
2. Agreements to Sell and Purchase. On the basis of the representations,
warranties and covenants contained in this Agreement and subject to the terms
and conditions contained in this Agreement, the Issuer agrees to issue and sell
to the Initial Purchaser and the
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Initial Purchaser agrees to purchase from the Issuer $165,000,000 aggregate
principal amount of Original Notes at a purchase price equal to 95.755% of their
principal amount.
3. Delivery and Payment. Delivery of, and payment of the purchase price
for, the Original Notes will be made at 9:00 a.m., New York time, on June 27,
2002 (such date and time, the "CLOSING DATE") at the offices of Xxxxxxxxxx &
Xxxxx LLP, 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000. The Closing Date and
the location of delivery of and the form of payment for the Original Notes may
be varied by mutual agreement between the Initial Purchaser and the Issuer.
All of the Original Notes will be delivered by the Issuer to the Initial
Purchaser (or as the Initial Purchaser may direct) against payment by the
Initial Purchaser of the purchase price therefor by means of transfer of
immediately available funds to such account or accounts specified by the Issuer
in accordance with its obligations under Section 4(g) hereof on or prior to the
Closing Date, or by such means as the parties hereto agree prior to the Closing
Date. Delivery of the Original Notes shall be made through the facilities of the
Depositary Trust Company ("DTC") unless the Initial Purchaser shall otherwise
instruct. The Original Notes shall be evidenced by one or more certificates in
global form registered in such names as the Initial Purchaser may request upon
at least one business day's notice prior to the Closing Date and having an
aggregate principal amount corresponding to the aggregate principal amount of
the Original Notes.
4. Agreements of the Issuer, the Company and the Guarantors. Each of the
Issuer, the Company (subject to Section 17 of this Agreement) and the Guarantors
severally covenant and agree with the Initial Purchaser as follows:
(a) To furnish the Initial Purchaser and those persons identified
by the Initial Purchaser, without charge, with as many copies of the
Preliminary Offering Memorandum and the Offering Memorandum, and any
amendments or supplements thereto, as the Initial Purchaser may
reasonably request. Each of the Issuer, the Company and the Guarantors
consent to the use of the Preliminary Offering Memorandum and the
Offering Memorandum, and any amendments and supplements thereto required
pursuant to this Agreement, by the Initial Purchaser in connection with
Exempt Resales.
(b) Not to amend or supplement the Offering Memorandum prior to
the Closing Date unless the Initial Purchaser has previously been
advised of such proposed amendment or supplement at least two business
days prior to the proposed use, and shall not have reasonably objected
to such amendment or supplement.
(c) If, prior to the time that the Initial Purchaser has notified
the Issuer that it has completed its distribution of the Original Notes,
any event shall occur that makes
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any statement of a material fact in the Offering Memorandum, as then
amended or supplemented, untrue or requires the making of any additions
to or changes in the Offering Memorandum in order to make the statements
in the Offering Memorandum, as then amended or supplemented, in light of
the circumstances under which they are made, not misleading, or if it is
necessary to amend or supplement the Offering Memorandum to comply with
all applicable laws known to the Issuer, the Issuer or the Company shall
promptly notify the Initial Purchaser of such event and prepare an
appropriate amendment or supplement to the Offering Memorandum so that
(i) the statements in the Offering Memorandum, as amended or
supplemented, in light of the circumstances as of the time of the
amendment or supplement will not be misleading and (ii) the Offering
Memorandum will comply with applicable law.
(d) To cooperate with the Initial Purchaser and counsel to the
Initial Purchaser in connection with the qualification or registration
of the Original Notes under the securities laws of such jurisdictions as
the Initial Purchaser may reasonably request and to continue such
qualification in effect so long as required for the Exempt Resales.
Notwithstanding the foregoing, neither the Issuer nor the Company shall
be required to qualify as a foreign corporation in any jurisdiction in
which it is not so qualified or to file a general consent to service of
process in any such jurisdiction or subject itself to taxation in any
such jurisdiction where it is not then so subject.
(e) To advise the Initial Purchaser promptly and, if requested by
the Initial Purchaser, to confirm such advice in writing, of the
issuance by any securities commission of any stop order suspending the
qualification or exemption from qualification of any of the Original
Notes for offering or sale in any jurisdiction, or the initiation of any
proceeding for such purpose by any securities commission or other
regulatory authority. Each of the Issuer, the Company and the Guarantors
shall use its reasonable best efforts to prevent the issuance of any
stop order or order suspending the qualification or exemption of any of
the Original Notes under any securities laws, and if at any time any
securities commission or other regulatory authority shall issue an order
suspending the qualification or exemption of any of the Original Notes
under any securities laws, each of the Issuer, the Company and the
Guarantors shall use its reasonable best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time.
(f) Whether or not the transactions contemplated by this
Agreement are consummated, to pay all costs, expenses, fees,
disbursements (including reasonable fees, expenses and disbursements of
each of the counsel to the Issuer, the Company, the Guarantors and the
Initial Purchaser) reasonably incurred and stamp, documentary or similar
taxes incident to and in connection with: (i) the preparation, printing
and distribution of the Preliminary Offering Memorandum and the Offering
Memorandum
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(including, without limitation, financial statements) and all amendments
and supplements thereto, (ii) all expenses (including travel expenses)
of the Issuer, the Company and the Initial Purchaser in connection with
any meetings with prospective investors in the Original Notes, (iii) the
preparation, notarization (if necessary) and delivery of the Note
Documents and all other agreements, memoranda, correspondence and
documents prepared and delivered in connection with this Agreement and
with the Exempt Resales, (iv) the issuance, transfer and delivery of the
Original Notes by the Issuer to the Initial Purchaser, (v) (subject to
Section 4(d)) hereof, the qualification or registration of the Notes for
offer and sale under the securities laws of the several states of the
United States or provinces of Canada (including, without limitation, the
cost of printing and mailing preliminary and final Blue Sky or legal
investment memoranda and fees, and disbursements of counsel (including
local counsel) to the Initial Purchaser relating thereto up to $20,000),
(vi) the furnishing of such copies of the Preliminary Offering
Memorandum and the Offering Memorandum, and all amendments and
supplements thereto, as may be reasonably requested for use in
connection with Exempt Resales, (vii) the preparation of certificates
for the Notes, (viii) the application for quotation of the Original
Notes and the Exchange Notes in The PORTAL Market ("PORTAL") of the
National Association of Securities Dealers, Inc. ("NASD"), including,
but not limited to, all listing fees and expenses, (ix) the approval of
the Notes by the DTC for "book-entry" transfer, (x) the rating of the
Notes by investment rating agencies, (xi) the fees and expenses of the
Trustee and its counsel and (xii) the performance by the Issuer, the
Company and the Guarantors of their other obligations under the Note
Documents, to which they are a party.
(g) In the case of the Issuer, to direct the deposit of the net
proceeds from the sale of the Original Notes with the Securities
Intermediary in accordance with the terms of the Security Agreement;
(h) In the case of the Issuer, to use the proceeds from the sale
of the Original Notes substantially in the manner described in the
Offering Memorandum under the caption "Use of Proceeds."
(i) To do and perform all things required to be done and
performed under this Agreement by it prior to or after the Closing Date
and to use its reasonable best efforts to satisfy all conditions
precedent on its part to the delivery of the Original Notes.
(j) Not to, and not to cause any of its subsidiaries to, sell,
offer for sale or solicit offers to buy any security (as defined in the
Act) that would be integrated with the sale of the Original Notes in a
manner that would require the registration under the Act of the sale of
the Original Notes to the Initial Purchaser or any Eligible Purchasers.
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(k) Not to, and to use its reasonable best efforts to cause its
affiliates (as defined in Rule 144 under the Act) not to, resell any of
the Original Notes that have been reacquired by any of them; provided,
that, affiliates of the Company may resell any Original Notes that have
been acquired by such affiliate so long as such resale (i) is made
pursuant to an exemption from the registration requirements of the Act
or a transaction registered under the Act and (ii) such Original Notes,
when resold by such affiliates do not constitute restricted securities
(as defined in Rule 144 of the Act).
(l) Not to engage, not to allow any of its subsidiaries to
engage, and to use its reasonable best efforts to cause its other
affiliates and any person acting on their behalf (other than, in any
case, the Initial Purchaser and any of their affiliates, as to whom none
of the Issuer, the Company or the Guarantors makes any covenant) not to
engage, in any form of general solicitation or general advertising
(within the meaning of Regulation D under the Act) in connection with
any offer or sale of the Original Notes in the United States prior to
the effectiveness of a registration statement with respect to the Notes.
(m) Not to engage, not to allow any of its subsidiaries to
engage, and to use its reasonable best efforts to cause its other
affiliates and any person acting on its behalf (other than, in any case,
the Initial Purchaser and any of their affiliates, as to whom none of
the Issuer, the Company or the Guarantors make any covenant) not to
engage, in any directed selling effort with respect to the Original
Notes, and to comply with the offering restrictions requirement of
Regulation S under the Act. Terms used in this paragraph have the
meanings given to them by Regulation S.
(n) From and after the Closing Date, to provide to the holders of
the Notes the information required by the Indenture and, for so long as
any of the Notes remain outstanding and are "restricted securities"
within the meaning of Rule 144(a)(3) under the Act and during any period
in which the Issuer, and after the Merger, the Company, is not subject
to Section 13 or 15(d) of the Exchange Act, to make available upon
request the information required by Rule 144A(d)(4) under the Act to (i)
any holder of Notes in connection with any sale of such Notes and (ii)
any prospective purchaser of such Notes from any such holder designated
by the holder. The Issuer (and, after the Merger, the Company) will pay
the expenses of printing and distributing such documents.
(o) To comply with all of its agreements set forth in the
Registration Rights Agreement.
(p) To comply with all of its agreements set forth in the
Security Agreement.
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(q) To use its best efforts to obtain approval of the Notes by
DTC for "book-entry" transfer.
(r) Prior to the Closing Date, to furnish without charge to the
Initial Purchaser, (i) as soon as they have been prepared by the Issuer
and the Company, a copy of any regularly prepared internal financial
statements of the Issuer, the Company and their subsidiaries for any
period subsequent to the period covered by the financial statements
appearing in the Offering Memorandum, (ii) all other reports and other
communications (financial or otherwise) that the Issuer or the Company
mails or otherwise makes available to their security holders and (iii)
such other information as the Initial Purchaser shall reasonably
request.
(s) During the period of two years after the Closing Date or, if
earlier, until such time as the Original Notes are no longer restricted
securities (as defined in Rule 144 under the Act), not to be or become a
closed-end investment company required to be registered, but not
registered, under the Investment Company Act of 1940, as amended.
(t) In connection with the offering, until the Initial Purchaser
shall have notified the Issuer and the Company of the completion of the
resale of the Notes, not to, and not to permit any of their affiliates
(as such term is defined in Rule 501(b) of Regulation D under the Act)
to, either alone or with one or more other Persons, bid for or purchase
for any account in which it or any of its affiliates has a beneficial
interest, and none of the Issuer, the Company, the Guarantors or any of
their affiliates will make bids or purchases for the purpose of creating
actual or apparent active trading in, or of raising the price of, the
Notes.
(u) To use its reasonable best efforts to effect the inclusion of
the Notes in PORTAL.
5. Representations and Warranties. (a) Each of the Issuer, the
Company (subject to Section 17 of this Agreement) and the WH Guarantors hereby
severally and not jointly represent and warrant to the Initial Purchaser that,
and, after execution of this Agreement by the Herbalife Guarantors upon
consummation of the Merger, each of the Herbalife Guarantors (solely with
respect to themselves) represent and warrant to the Initial Purchaser that:
(i) Each of the Preliminary Offering Memorandum and the
Offering Memorandum has been prepared for use in connection with
the Exempt Resales. The Preliminary Offering Memorandum as of its
date, and the Offering Memorandum or any supplement or amendment
thereto as of the date of this Agreement and as of the Closing
Date do not, and will not, contain any
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untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; provided, however, that none of the Issuer, the
Company or any Guarantor makes any representation or warranty
with respect to information relating to the Initial Purchaser
contained in or omitted from the Preliminary Offering Memorandum
or the Offering Memorandum or any supplement or amendment thereto
in reliance upon and in conformity with information furnished to
the Issuer in writing by or on behalf of the Initial Purchaser
expressly for use in the Preliminary Offering Memorandum, the
Offering Memorandum or any supplement or amendment thereto. No
order preventing the use of the Preliminary Offering Memorandum
or the Offering Memorandum, or any order asserting that any of
the transactions contemplated by this Agreement are subject to
the registration requirements of the Act, has been issued or, to
the knowledge of the Issuer, the Company or the Guarantors, has
been threatened.
(ii) There are no securities of the Issuer, the Company or
any Guarantor that are listed on a national securities exchange
registered under Section 6 of the Exchange Act or that are quoted
in a United States automated interdealer quotation system of the
same class as the Notes within the meaning of Rule 144A under the
Act.
(iii) Upon consummation of the Merger, the Issuer shall
have an authorized capitalization as set forth under the heading
"Capitalization--Pro Form As Adjusted" in the Offering
Memorandum. All of the issued and outstanding shares of capital
stock or other equity interests of the Issuer have been duly
authorized and validly issued, are fully paid and nonassessable
and were not issued in violation of any preemptive or similar
right. Attached as Schedule I is a true and complete list of each
entity, as of the Closing Date, in which Holdings, the Issuer or
the Company has a direct or indirect majority equity or voting
interest (all such entities, the "SUBSIDIARIES"), their
jurisdictions of incorporation or formation, type of entity and
percentage equity ownership by the Issuer. All of the issued and
outstanding shares of capital stock or other equity interests of
the Subsidiaries referred to in Schedule II (the "SPECIFIED
SUBSIDIARIES") have been duly and validly authorized and issued,
fully paid and nonassessable, were not issued in violation of any
preemptive or similar right and, except as set forth in Schedule
II herein, are owned by the Issuer, the Company or another
Subsidiary, as appropriate, free and clear of all Liens (as
defined in the Indenture), (other than transfer restrictions
imposed by the Act, the securities or Blue Sky laws of certain
jurisdictions and security interests granted pursuant to the
Indenture, the Security Agreement or the
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Credit Facilities). Except as set forth in the Offering
Memorandum, and except for directors qualifying shares or shares
or other securities issued under circumstances similar to those
applicable to directors qualifying shares, there are no
outstanding options, warrants or other rights to acquire or
purchase, or instruments convertible into or exchangeable for,
any shares of capital stock of Holdings, the Issuer, the Company
or any of the Subsidiaries. No holder of any securities of the
Issuer, the Company or any of the Subsidiaries is entitled to
have such securities (other than the Notes) registered under any
registration statement contemplated by the Registration Rights
Agreement.
(iv) Each of Holdings, the Issuer, the Company and their
respective subsidiaries (a) is a corporation, partnership,
limited liability company or other entity duly organized and
validly existing under the laws of the jurisdiction of its
organization; (b) has all requisite power and authority
(corporate or otherwise), and has all governmental licenses,
authorizations, consents and approvals, necessary to own its
property and carry on its business as now being conducted, except
if the failure to obtain any such license, authorization, consent
and approval could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect (as
defined below); and (c) is qualified to do business and is in
good standing in all jurisdictions in which the nature of the
business conducted by it makes such qualification necessary and
where failure to be so qualified and in good standing,
individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect. A "MATERIAL ADVERSE EFFECT" means
any material adverse effect on the business, condition (financial
or other), results of operations, performance or properties of
the Issuer, the Company, the Guarantors and their respective
subsidiaries, taken as a whole.
(v) Each of the Issuer, the Company and the Guarantors has
all requisite power and authority (corporate or otherwise) to
execute, deliver, and perform all of its obligations under, the
Note Documents to which it is a party and to consummate the
transactions contemplated hereby and by the Note Documents to be
consummated on its part and, without limitation, the Issuer, and
after the Merger, the Company, has all requisite corporate power
and authority to issue, sell and deliver, and perform its
obligations under, the Notes.
(vi) This Agreement has been duly and validly authorized,
executed and delivered by each of the Issuer, the Company and the
Guarantors.
(vii) The Indenture has been duly and validly authorized
by the Issuer and, at the Closing Date, when duly executed and
delivered by the Issuer (assuming the due authorization,
execution and delivery thereof by the
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Trustee), will be valid and legally binding obligations of the
Issuer and, after the Merger, the Company, enforceable against
the Issuer and, after the Merger, the Company, in accordance with
their terms, except as the enforcement thereof may be subject to
(x) bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium and similar laws of general applicability
relating to or affecting creditors' rights generally and (y)
general principles of equity and the discretion of the court
before which any proceeding therefor may be brought (regardless
of whether such enforcement is considered in a proceeding in
equity or at law). The Indenture, when executed and delivered,
will conform in all material respects to the description thereof
in the Offering Memorandum.
(viii) The Indenture has been duly and validly authorized
by each WH Guarantor and the Guarantees to be endorsed on the
Original Notes by each WH Guarantor has been duly and validly
authorized by the applicable WH Guarantor; at the Closing Date,
when duly executed and delivered by each WH Guarantor (assuming
the due authorization, execution and delivery thereof by the
Trustee), the Indenture and the Guarantees will be valid and
legally binding obligations of each of WH Guarantor, enforceable
against each such WH Guarantor, in accordance with their terms,
except as the enforcement thereof may be subject to (x)
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium and similar laws of general applicability relating to
or affecting creditors' rights generally and (y) general
principles of equity and the discretion of the court before which
any proceeding therefor may be brought (regardless of whether
such enforcement is considered in a proceeding in equity or at
law).
(ix) The Original Notes have been duly and validly
authorized for issuance and sale to the Initial Purchaser by the
Issuer, and when issued, authenticated and delivered by the
Issuer against payment by the Initial Purchaser in accordance
with the terms of this Agreement and the Indenture, the Original
Notes will be valid and legally binding obligations of the Issuer
and, after the Merger, the Company, entitled to the benefits of
the Indenture and enforceable against the Issuer and, after the
Merger, the Company in accordance with their terms, except as the
enforcement thereof may be subject to (x) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium and similar
laws of general applicability relating to or affecting creditors'
rights generally and (y) general principles of equity and the
discretion of the court before which any proceeding therefor may
be brought (regardless of whether such enforcement is considered
in a proceeding in equity or at law). The Original Notes, when
issued, authenticated and delivered, will conform in all material
respects to the descriptions thereof in the Offering Memorandum.
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(x) The Guarantees endorsed on the Original Notes have
been duly and validly authorized for issuance by each of the
Guarantors, and when issued, will be valid and legally binding
obligations of the Guarantors, enforceable against the
Guarantors, in accordance with their terms, except as the
enforcement thereof may be subject to (x) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium and similar
laws of general applicability relating to or affecting creditors'
rights generally and (y) general principles of equity and the
discretion of the court before which any proceeding therefor may
be brought (regardless of whether such enforcement is considered
in a proceeding in equity or at law).
(xi) The Exchange Notes have been, or on or before the
Closing Date will be, duly and validly authorized for issuance by
the Issuer, and after the Merger, the Company, and when issued,
authenticated and delivered by the Issuer, and after the Merger,
the Company, in accordance with the terms of the Registration
Rights Agreement, the Exchange Offer and the Indenture, the
Exchange Notes will be valid and legally binding obligations of
the Issuer and, after the Merger, the Company, entitled to the
benefits of the Indenture and enforceable against the Issuer and,
after the Merger, the Company, in accordance with their terms,
except as the enforcement thereof may be subject to (x)
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium and similar laws of general applicability relating to
or affecting creditors' rights generally and (y) general
principles of equity and the discretion of the court before which
any proceeding therefor may be brought (regardless of whether
such enforcement is considered in a proceeding in equity or at
law).
(xii) The Guarantees endorsed on the Exchange Notes have
been, or on or before the Closing Date will be, duly and validly
authorized for issuance by each of the Guarantors, and when
issued, will be valid and legally binding obligations of the
Guarantors, enforceable against the Guarantors, in accordance
with their terms, except as the enforcement thereof may be
subject to (x) bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium and similar laws of general applicability
relating to or affecting creditors' rights generally and (y)
general principles of equity and the discretion of the court
before which any proceeding therefor may be brought (regardless
of whether such enforcement is considered in a proceeding in
equity or at law).
(xiii) The Registration Rights Agreement has been duly and
validly authorized by the Issuer and the WH Guarantors, and after
the Merger, will be duly and validly authorized by the Company
and each of the Herbalife Guarantors and, when duly executed and
delivered by the Issuer and the WH
-13-
Guarantors, and after the Merger, the Company and each of the
Herbalife Guarantors (assuming the due authorization, execution
and delivery thereof by the Initial Purchaser), will constitute a
valid and legally binding obligation of the Issuer and, after the
Merger, the Company and each of the Guarantors, enforceable
against the Issuer, and after the Merger, the Company and each of
the Guarantors, in accordance with its terms, except that (A)
except as the enforcement thereof may be subject to (x)
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium and similar laws of general applicability relating to
or affecting creditors' rights generally and (y) general
principles of equity and the discretion of the court before which
any proceeding therefor may be brought (regardless of whether
such enforcement is considered in a proceeding in equity or at
law) and (B) any rights to indemnity or contribution thereunder
may be limited by federal and state securities laws and public
policy considerations. The Registration Rights Agreement, when
executed and delivered, will conform in all material respects to
the description thereof in the Offering Memorandum.
(xiv) All Taxes (as defined herein), fees and other
governmental charges that are due and payable on or prior to the
Closing Date in connection with the execution, delivery and
performance of the Note Documents and the execution, delivery and
sale of the Original Notes shall have been paid by or on behalf
of the Issuer at or prior to the Closing Date.
(xv) None of Holdings, the Issuer, the Company or any
Subsidiary is (A) in violation of its charter, bylaws or other
constitutive documents, (B) in default (or, with notice or lapse
of time or both, would be in default) in the performance or
observance of any obligation, agreement, covenant or condition
contained in any bond, debenture, note, indenture, mortgage, deed
of trust, loan or credit agreement, lease, license, franchise
agreement, authorization, permit, certificate or other agreement
or instrument to which Holdings, the Issuer, the Company or any
Subsidiary is a party or by which any of them is bound or to
which any of their assets or properties is subject (collectively,
"AGREEMENTS AND INSTRUMENTS"), or (C) except as disclosed in the
Offering Memorandum, in violation of any law, statute, rule,
regulation, judgment, order or decree of any domestic or foreign
court with jurisdiction over any of them or any of their assets
or properties or other governmental or regulatory authority,
agency or other body, which, in the case of clauses (B) and (C)
herein, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect. There exists no
condition that, with notice, the passage of time or otherwise,
would constitute a default by Holdings, the Issuer, the Company
or any Subsidiary under any such document or instrument or result
in the imposition
-14-
of any penalty or the acceleration of any indebtedness, other
than penalties, defaults or conditions that, individually or in
the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
(xvi) Assuming the accuracy of the representations and
warranties of the Initial Purchaser in Section 5(b) of this
Agreement, the execution, delivery and performance of the Note
Documents and consummation of the Transactions does not and will
not violate, conflict with or constitute a breach of any of the
terms or provisions of or a default under (or an event that with
notice or the lapse of time, or both, would constitute a
default), or require consent under, or result in the creation or
imposition of a lien, charge or encumbrance on any property or
assets of Holdings, the Issuer, the Company or any Specified
Subsidiary (other than as created pursuant to the Indenture or
the Security Agreement) or an acceleration of any indebtedness of
Holdings, the Issuer, the Company, any Subsidiary or Specified
Subsidiary, as applicable, pursuant to, (i) the charter, bylaws
or other constitutive documents of Holdings, the Issuer, the
Company or any Specified Subsidiary, (ii) any of the Agreements
and Instruments, except for any such violation, conflict, breach,
default or event which would not individually or in the aggregate
reasonably be expected to have a Material Adverse Effect, (iii)
assuming compliance with all applicable state securities or "blue
sky" laws and assuming qualification of the Indenture under the
Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), any law, statute, rule or regulation applicable to
Holdings, the Issuer, the Company or any Subsidiary or their
respective assets or properties, or (iv) any judgment, order or
decree of any domestic or foreign court or governmental agency or
authority having jurisdiction over Holdings, the Issuer, the
Company or any Specified Subsidiary or their respective assets or
properties, except for any such violation, conflict, breach,
default or event which would not individually or in the aggregate
reasonably be expected to have a Material Adverse Effect.
Assuming the accuracy of the representations and warranties of
the Initial Purchaser in Section 5(b) of this Agreement, no
consent, approval, authorization or order of, or filing,
registration, qualification, license or permit of or with, any
court or governmental agency, body or administrative agency,
domestic or foreign, is required to be obtained or made by the
Issuer, the Company or any of the Subsidiaries for the execution,
delivery and performance by the Issuer, the Company or any of the
Subsidiaries of the Note Documents and the consummation of the
Transactions, except (w) such as have been or will be obtained or
made on or prior to the Closing Date, (x) registration of the
Exchange Offer or resale of the Notes under the Act pursuant to
the Registration Rights Agreement, (y) qualification of the
Indenture under the Trust Indenture Act, in connection with the
issuance of the
-15-
Exchange Notes and (z) any state or foreign securities laws or by
the regulations of the NASD. No consents or waivers from any
other person or entity are required for the execution, delivery
and performance of this Agreement or any of the other Note
Documents and the consummation of the Transactions, other than
such consents and waivers as have been obtained or will be
obtained prior to the Closing Date and will be in full force and
effect, or such consents or waivers the failure to obtain which
individually or in the aggregate could not reasonably be expected
to have a Material Adverse Effect.
(xvii) Except as set forth in the Offering Memorandum,
there is (A) no action, suit or proceeding before or by any
court, arbitrator or governmental agency, body or official,
domestic or foreign, now pending or, to the knowledge of
Holdings, the Issuer, the Company or any Subsidiary threatened or
contemplated, to which Holdings, the Issuer, the Company or any
Subsidiary is or may be a party or to which the business, assets
or property of such Person is or may be subject, (B) no statute,
rule, regulation or order that has been enacted, adopted or
issued or, to the knowledge of Holdings, the Issuer, the Company
or any Subsidiary, that has been proposed by any governmental
body or agency, domestic or foreign, (C) no injunction,
restraining order or order of any nature by a federal or state
court or foreign court of competent jurisdiction to which
Holdings, the Issuer, the Company or any Subsidiary is or may be
subject, which in the case of clauses (A) through (C), could
reasonably be expected, individually or in the aggregate, (1) to
have a Material Adverse Effect or (2) to interfere with or
adversely affect the consummation of the Transactions. Every
request of any securities authority or agency of any jurisdiction
for additional information with respect to the Transactions that
has been received by Holdings, the Issuer, the Company or any
Subsidiary or their counsel prior to the date hereof has been, or
will prior to the Closing Date be, complied with in all material
respects.
(xviii) Except as could not reasonably be expected to have
a Material Adverse Effect, no labor disturbance by the employees
of Holdings, the Issuer, the Company or any Subsidiary exists or,
to the knowledge of the Issuer or the Company, is imminent.
(xix) Except as set forth in the Offering Memorandum, each
of Holdings, the Issuer, the Company and the Subsidiaries (A) is
in compliance with, or not subject to costs or liabilities under,
laws, regulations, rules of common law, orders and decrees, as in
effect as of the date hereof, and any present judgments and
injunctions issued or promulgated thereunder relating to
pollution or protection of public and employee health and safety,
the environment or
-16-
hazardous or toxic substances or wastes, pollutants or
contaminants applicable to it or its business or operations or
ownership or use of its property ("ENVIRONMENTAL LAWS"), other
than noncompliance or such costs or liabilities that,
individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect, and (B) possesses all
permits, licenses or other approvals required under applicable
Environmental Laws, except where the failure to possess any such
permit, license or other approval could not reasonably be
expected to have, either individually or in the aggregate, a
Material Adverse Effect. All currently pending and, to the
knowledge of Holdings, the Issuer, the Company and each of the
Subsidiaries, threatened proceedings, notices of violation,
demands, notices of potential responsibility or liability, suits
and existing environmental investigations by any governmental
authority relating to Environmental Laws which Holdings, the
Issuer the Company or any Subsidiary could reasonably expect to
result in a Material Adverse Effect are fully and accurately
described in all material respects in the Offering Memorandum.
The Company maintains a system of internal environmental
management controls sufficient to provide reasonable assurance of
compliance in all material respects of its business facilities,
real property and operations with requirements of applicable
Environmental Laws.
(xx) Each of Holdings, the Issuer, the Company and each of
the Subsidiaries has (A) all licenses, certificates, permits,
authorizations, approvals, franchises and other rights from, and
has made all declarations and filings with, all applicable
authorities, all self-regulatory authorities and all courts and
other tribunals (each, an "AUTHORIZATION") necessary to engage in
the business conducted by it in the manner described in the
Offering Memorandum, except where the failure to hold such
Authorizations could not, individually or in the aggregate, be
reasonably expected to have a Material Adverse Effect, and (B)
except as set forth in the Offering Memorandum, no reason to
believe that any governmental body or agency, domestic or
foreign, is considering limiting, suspending or revoking any such
Authorization, except where such limitation, suspension or
revocation could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. All
such Authorizations are valid and in full force and effect and
each of Holdings, the Issuer, the Company and each of the
Subsidiaries is in compliance in all material respects with the
terms and conditions of all such Authorizations and with the
rules and regulations of the regulatory authorities having
jurisdiction with respect to such Authorizations, except for any
invalidity, failure to be in full force and effect or
noncompliance with any Authorization that could not, individually
or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
-17-
(xxi) The Company and each of the Subsidiaries has good,
valid and marketable title in fee simple to all items of owned
real property, and valid title to all personal property owned by
each of them, in each case free and clear of any pledge, lien,
encumbrance, security interest or other defect or claim of any
third party other than Permitted Liens, except such as do not
adversely affect the value of such property and do not interfere
with the use made or proposed to be made of such property by the
Company any of the Subsidiaries to an extent that such effect on
value and/or interference could reasonably be expected to have a
Material Adverse Effect. Any real property, personal property
that is leased and buildings held under lease by the Company and
each of the Subsidiaries are held under valid, subsisting and
enforceable leases, with such exceptions as do not interfere with
the use made or proposed to be made of such property and
buildings the Company or the Subsidiaries to the extent such
interference could reasonably be expected to have a Material
Adverse Effect.
(xxii) To the knowledge of Holdings, the Issuer, the
Company and the Subsidiaries, each of Holdings, the Issuer, the
Company and the Subsidiaries own, possess or have the right to
employ all patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks
and trade names (collectively, the "INTELLECTUAL PROPERTY")
necessary to conduct the businesses operated by it as described
in the Offering Memorandum, except where the failure to own,
possess or have the right to employ such Intellectual Property,
individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect. None of Holdings, the
Issuer, the Company or the Subsidiaries has received any notice
of infringement of or conflict with (and neither knows of any
such infringement or a conflict with) asserted rights of others
with respect to any of the foregoing that could reasonably be
expected to have a Material Adverse Effect. To the knowledge of
Holdings, the Issuer, the Company and the Subsidiaries, the use
of the Intellectual Property in connection with the business and
operations of Holdings, the Issuer, the Company and the
Subsidiaries does not infringe on the rights of any person,
except for such infringement as could not reasonably be expected
to have a Material Adverse Effect.
(xxiii) Except as set forth in the Offering Memorandum,
all Tax returns required to be filed by Holdings, the Issuer, the
Company and each Specified Subsidiary have been filed and all
such returns are true, complete, and correct in all material
respects, except as could not reasonably be expected to have a
-18-
Material Adverse Effect. Except as set forth in the Offering
Memorandum, all Taxes due or claimed to be due from Holdings, the
Issuer, the Company and each Specified Subsidiary have been paid,
other than those (i) currently payable without penalty or
interest or (ii) being contested in good faith and by appropriate
proceedings and for which, in the case of both clauses (i) and
(ii), adequate reserves have been established on the books and
records of Holdings, the Issuer, the Company and each Specified
Subsidiary in accordance with GAAP. To the knowledge of Holdings,
the Issuer, the Company and the Specified Subsidiaries, there are
no proposed, material tax assessments against any of Holdings,
the Issuer, the Company or the Specified Subsidiaries. The
accruals and reserves on the books and records of Holdings, the
Issuer, the Company and each Specified Subsidiary, in respect of
any material Tax liability for any taxable period not finally
determined have been made and established in accordance with
GAAP. For purposes of this Agreement, the term "Tax" and "Taxes"
shall mean all Federal, state, local, and foreign taxes, and
other assessments of a similar nature (whether imposed directly
or through withholding), including any interest, additions to
tax, or penalties applicable thereto.
(xxiv) Except as set forth in the Offering Memorandum,
none of Holdings, the Issuer, the Company or any Subsidiary has
any liability for any prohibited transaction (within the meaning
of Section 4975 of the Code) which could have a Material Adverse
Effect, accumulated funding deficiency (within the meaning of
Section 412 of the Code) or any complete or partial withdrawal
liability with respect to any pension, profit sharing or other
plan which is subject to Title IV of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), to which
Holdings, the Issuer, the Company or any Subsidiary makes or ever
has made a contribution and in which any employee of Holdings,
the Issuer, the Company or any Subsidiary is or has ever been a
Sponsor. With respect to such plans, there has been no failure by
Holdings, the Issuer, the Company or any Subsidiary to comply
with any applicable provisions of ERISA, which failure could
reasonably be expected to have a Material Adverse Effect.
(xxv) None of Holdings, the Issuer, the Company or any
Subsidiary is an "investment company" or a company "controlled"
by an "investment company" incorporated in the United States
within the meaning of the Investment Company Act of 1940, as
amended; and, after giving effect to the offering and sale of the
Notes, none of Holdings, the Issuer, the Company or any
Subsidiary will be required to register as an investment company.
-19-
(xxvi) Each of the Company and its subsidiaries maintains
a system of internal accounting controls sufficient to provide
reasonable assurance that: (A) transactions are executed in
accordance with management's general or specific authorizations;
(B) transactions are recorded as necessary to permit preparation
of their financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (C) access to assets is permitted only in accordance with
management's general or specific authorization; and (D) the
recorded accountability for their assets is compared with the
existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(xxvii) Except as set forth in the Offering Memorandum,
each of Holdings, the Issuer, the Company and the Subsidiaries
maintain insurance covering their properties, assets, operations
personnel and businesses, and such insurance is of such type and
in such amounts in accordance with customary industry practice to
protect Holdings, the Issuer, the Company and the Subsidiaries
and their businesses.
(xxviii) None of Holdings, the Issuer, the Company, the
Subsidiaries or any of their respective affiliates (as defined in
Rule 501(b) of Regulation D under the Act) has (A) taken,
directly or indirectly, any action designed to, or that might
reasonably be expected to, cause or result in stabilization or
manipulation of the price of any security of Issuer or the
Company to facilitate the sale or resale of the Original Notes or
(B) sold, bid for, purchased or paid any person any compensation
for soliciting purchases of the Original Notes in a manner that
would require registration of the Original Notes under the Act or
paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Issuer
or the Company in a manner that would require registration of the
Original Notes under the Act.
(xxix) None of Holdings, the Issuer, the Company, the
Subsidiaries or any of their respective affiliates (as defined in
Regulation D under the Act) has, directly or through any agent
(other than the Initial Purchaser or any affiliate of the Initial
Purchaser, as to which no representation is made), sold, offered
for sale, contracted to sell, pledged, solicited offers to buy or
otherwise disposed of or negotiated in respect of any security
(as defined in the Act) that is currently or will be integrated
with the sale of the Original Notes in a manner that would
require the registration of the Original Notes under the Act.
(xxx) None of Holdings, the Issuer, the Company, the
Subsidiaries or any of their respective affiliates, or any person
acting on its or their behalf (other than any Initial Purchaser,
as to whom none of the Issuer and the Company
-20-
makes any representation), is engaged in any directed selling
effort with respect to the Original Notes, and each of them has
complied with the offering restrictions requirement of Regulation
S under the Act. Terms used in this paragraph have the meaning
given to them by Regulation S.
(xxxi) No form of general solicitation or general
advertising (within the meaning of Regulation D under the Act)
was used by Holdings, the Issuer, the Company, the Subsidiaries
or any of their respective representatives (other than any
Initial Purchaser, as to whom none of Holdings, the Issuer, the
Company and the Subsidiaries makes any representation) in
connection with the offer and sale of any of the Original Notes
or in connection with Exempt Resales, including, but not limited
to, articles, notices or other communications published in any
newspaper, magazine or similar medium or broadcast over
television or radio or displayed on any computer terminal, or any
seminar or meeting whose attendees have been invited by any
general solicitation or general advertising. None of Holdings,
the Issuer, the Company, the Subsidiaries or any of their
respective affiliates has entered into, and none of Holdings, the
Issuer, the Company, the Subsidiaries or any of their respective
affiliates will enter into, any contractual arrangement with
respect to the distribution of the Original Notes except for this
Agreement.
(xxxii) As of the date of the latest balance sheet
presented in the Offering Memorandum, neither the Company nor any
of its subsidiaries had any material liabilities or obligations,
direct or contingent, that were required in accordance with GAAP,
to be set forth in the Company's consolidated balance sheet as of
such date or in the notes thereto set forth in the Offering
Memorandum not so set forth. Since the date of the latest balance
sheet presented in the Offering Memorandum, except as set forth
or contemplated in the Offering Memorandum, (a) none of the
Issuer, the Company or any Subsidiary has (1) incurred any
liabilities or obligations, direct or contingent, that,
individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect, or (2) entered into any material
transaction not in the ordinary course of business, (b) there has
not been any event or development in respect of the business or
condition (financial or other) of the Issuer, the Company and the
Subsidiaries that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, (c)
there has been no dividend or distribution of any kind declared,
paid or made by the Company on any class of its capital stock and
(d) there has not been any material change in the long-term debt
of the Company or any of its subsidiaries.
-21-
(xxxiii) None of Holdings, the Issuer, the Company or any
of their respective subsidiaries (or any agent thereof acting on
their behalf) has taken, and none of them will take, any action
that might cause the issuance or sale of the Notes to violate
Regulation T, U or X of the Board of Governors of the Federal
Reserve System, as in effect, or as the same may hereafter be in
effect, on the Closing Date.
(xxxiv) Deloitte & Touche LLP are independent accountants
within the meaning of Regulation S-X of the Exchange Act. The
historical financial statements and the notes thereto included in
the Offering Memorandum present fairly in all material respects
the consolidated financial position, income statement, cash flows
and changes in stockholder's equity of the Company and its
subsidiaries at the respective dates and for the respective
periods indicated. All such financial statements have been
prepared in accordance with GAAP applied on a consistent basis
throughout the periods presented (except as disclosed therein).
The unaudited pro forma financial statements and the notes
thereto included in the Offering Document have been prepared on a
basis consistent with the historical financial statements of the
Company and its subsidiaries and give effect to assumptions used
in the preparation thereof on a reasonable basis and in good
faith and present fairly in all material respects the historical
and proposed transactions contemplated by the Offering
Memorandum; and such pro forma financial statements comply as to
form in all material respects with the requirements applicable to
pro forma financial statements set forth in Regulation S-X under
the Act, except that Article 11 of Regulation S-X under the Act
does not require the inclusion of pro forma financial statements
for the twelve months ended March 31, 2002. The other financial
and statistical information and data included in the Offering
Memorandum (other than industry and market-related data) are
accurately presented in all material respects and prepared on a
basis consistent with the financial statements and the books and
records of the Company and its subsidiaries.
(xxxv) As of the date hereof and as of the Closing Date,
immediately prior to and immediately following the consummation
of the Transactions, each of Holdings, the Issuer and the Company
and its subsidiaries (on a consolidated basis) is and will be
Solvent. None of Holdings, the Issuer, the Company or the
Subsidiaries is contemplating the filing of a petition by it
under any bankruptcy or insolvency laws or the liquidating of all
or a substantial portion of its property, and none of Holdings,
the Issuer, the Company or the Subsidiaries has knowledge of any
Person contemplating the filing of any such petition. As used
herein, "SOLVENT" shall mean, for any Person on a particular
date, after
-22-
giving effect, in the case of each of the Guarantors, to the
limitations contained in each Guarantee, 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 matured, (c)
such Person does not intend to, and does not believe that it
will, incur debts and liabilities beyond such Person's ability to
pay as such debts and liabilities mature, (d) such Person is not
engaged in a business or a transaction, and is not about to
engage in a business or a transaction, for which such Person's
property would constitute an unreasonably small capital and (e)
such Person is able to pay its debts as they become due and
payable.
(xxxvi) Except as described in the section entitled "Plan
of Distribution" in the Offering Memorandum, and except for fees
and expenses payable in connection with the Merger that are
described elsewhere in the Offering Memorandum, there are no
contracts, agreements or understandings between Holdings, the
Issuer, the Company or any Subsidiary and any other Person other
than the Initial Purchaser pursuant to this Agreement that would
give rise to a valid claim against Holdings, the Issuer, the
Company, any of the Subsidiaries or the Initial Purchaser for a
brokerage commission, finder's fee or like payment in connection
with the issuance, purchase and sale of the Notes.
(xxxvii) The statistical and market-related data and
forward-looking statements (within the meaning of Section 27A of
the Act and Section 21E of the Exchange Act) included in the
Offering Memorandum are based on or derived from sources that the
Issuer and the Company believe to be reliable and represent good
faith estimates that are made on the basis of data derived from
such sources.
(xxxviii) Each certificate signed by any officer of the
Issuer, the Company or any Guarantor and delivered to the Initial
Purchaser or counsel for the Initial Purchaser pursuant to, or in
connection with, this Agreement shall be deemed to be a
representation and warranty by the Issuer, the Company and the
Guarantors to the Initial Purchasers as to the matters covered by
such certificate.
(xxxix) Each of the Issuer and the WH Guarantors has
conducted no business prior to the date hereof other than in
connection with the transaction contemplated by this Agreement,
the Offering Memorandum and the Merger Agreement.
-23-
(xl) The Security Agreement has been duly authorized by
the Issuer and, on the Closing Date, will have been duly executed
and delivered by the Issuer. When the Security Agreement has been
duly executed and delivered, the Security Agreement will be a
valid and binding agreement of the Issuer, enforceable against
the Issuer in accordance with its terms except as the enforcement
thereof may be subject to (x) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium and similar
laws of general applicability relating to or affecting creditors'
rights generally and (y) general principles of equity and the
discretion of the court before which any proceeding therefor may
be brought (regardless of whether such enforcement is considered
in a proceeding in equity or at law). On the Closing Date, the
Security Agreement will conform to the description thereof
contained in the Offering Memorandum in all material respects.
(xli) The provisions of the Security Agreement are
effective to create, in favor of the Trustee to secure the
Obligations (as defined in the Security Agreement), a valid
security interest in the Issuer's rights in all Security
Entitlements (as defined in the Security Agreement).
(xlii) The provisions of the Security Agreement are
effective to perfect the security interest of the Trustee in the
Security Entitlements, assuming that all filings and other
actions contemplated by the Security Agreement to perfect such
security interest are made and taken.
Each of the Issuer, the Company and the Guarantors acknowledge
that the Initial Purchaser and, for purposes of the opinions to be delivered to
the Initial Purchaser pursuant to Section 8 of this Agreement, counsel to the
Issuer and the WH Guarantors, counsel to the Company and the Herbalife
Guarantors and counsel to the Initial Purchaser will rely upon the accuracy and
truth of the foregoing representations and each of the Issuer, the Company and
the Guarantors hereby consent to such reliance.
Each of the foregoing representations and warranties, as far as
each relates to the Company and its Subsidiaries, is made by the Issuer to the
best of its knowledge; upon consummation of the Merger and the assumption by the
Company of the obligations of the Issuer hereunder, such representations and
warranties shall be deemed to have been made by the Company without such
knowledge limitation.
(b) The Initial Purchaser acknowledges that it is purchasing the
Original Notes pursuant to a private sale exemption from registration under the
Act, and that the Original Notes have not been registered under the Act and may
not be offered or sold within the United States or to, or for the account or
benefit of, U.S. Persons except pursuant to an
-24-
exemption from the registration requirements of the Act. The Initial Purchaser
represents, warrants and covenants to the Issuer, the Company and the Guarantors
that:
(i) Neither it, nor any person acting on its behalf, has
or will solicit offers for, or offer or sell, the Original Notes
by any form of general solicitation or general advertising (as
those terms are used in Regulation D under the Act) or in any
manner involving a public offering within the meaning of Section
4(2) of the Act, including, but not limited to, articles, notices
or other communications published in any newspaper, magazine or
similar medium or broadcast over television or radio or displayed
on any computer terminal, or any seminar or meeting whose
attendees have been invited by any general solicitation or
general advertising, and it has and will solicit offers for the
Original Notes only from, and will offer and sell the Original
Notes only to, (A) Persons whom the Initial Purchaser reasonably
believes to be QIBs or, if any such Person is buying for one or
more institutional accounts for which such Person is acting as
fiduciary or agent, only when such Person has represented to the
Initial Purchaser, and the Initial Purchaser reasonably believes
based on such representation, that each such account is a QIB to
whom notice has been given that such sale or delivery is being
made in reliance on Rule 144A, and, in each case, in reliance on
the exemption from the registration requirements of the Act
pursuant to Rule 144A, or (B) Persons other than U.S. Persons
outside the United States in reliance on the exemption from the
registration requirements of the Act provided by Regulation S.
The Initial Purchaser agrees, with respect to resales made in
reliance on Rule 144A of any of the Notes, to deliver either with
the confirmation of such resale or otherwise prior to settlement
of such resale a notice to the effect that the resale of such
Notes have been made in reliance upon the exemption from the
registration requirements of the Act provided by Rule 144A.
(ii) With respect to offers and sales outside the United
States, the Initial Purchaser has offered the Original Notes and
will offer and sell the Original Notes (1) as part of its
distribution at any time and (2) otherwise until 40 days after
the later of the commencement of the offering of the Original
Notes and the Closing Date, only in accordance with Rule 903 of
Regulation S or another exemption from the registration
requirements of the Act. Accordingly, neither the Initial
Purchaser nor any person acting on its behalf has engaged or will
engage in any directed selling efforts (within the meaning of
Regulation S) with respect to the Original Notes, and all such
persons have complied and will comply with the offering
restrictions requirements of Regulation S.
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The Initial Purchaser agrees that it and each of its
affiliates has not entered and will not enter into any
contractual arrangement with respect to the distribution of the
Notes except with the prior written consent of the Issuer or as
contemplated by this Agreement.
Terms used in this Section 5(b)(ii) have the meanings given to
them by Regulation S.
The Initial Purchaser understands that the Issuer, the Company,
the Guarantors and, for purposes of the opinions to be delivered to them
pursuant to Section 8 hereof, counsel to the Issuer and the WH Guarantors,
counsel to the Company and the Herbalife Guarantors and counsel to the Initial
Purchaser will rely upon the accuracy and truth of the foregoing
representations, and the Initial Purchaser hereby consents to such reliance.
6. Indemnification. (a) Each of the Issuer, the WH Guarantors,
and after the Merger, the Company and the Herbalife Guarantors, jointly and
severally agrees to indemnify and hold harmless the Initial Purchaser, each
person, if any, who controls any Initial Purchaser within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act, the agents, employees,
officers and directors of any Initial Purchaser and the agents, employees,
officers and directors of any such controlling person from and against any and
all losses, liabilities, claims, damages and expenses whatsoever (including, but
not limited, to reasonable attorneys' fees and any and all reasonable expenses
whatsoever incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
reasonable amounts paid in settlement of any claim or litigation) (collectively,
"LOSSES") to which they or any of them may become subject under the Act, the
Exchange Act or otherwise insofar as such Losses (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the Preliminary Offering Memorandum or the
Offering Memorandum, or in any supplement thereto or amendment thereof, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the foregoing indemnity agreement shall not apply any such case to the
extent, but only to the extent, that any such Loss arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission relating to the Initial Purchaser made therein in reliance upon
and in conformity with written information furnished to the Issuer by or on
behalf of the Initial Purchaser expressly for use therein; provided, however,
that with respect to any untrue statement or alleged untrue statement in or
omission or alleged omission from the Preliminary Offering Memorandum, the
indemnity agreement contained in this section shall not inure to the benefit of
the Initial Purchaser if the Initial Purchaser sold the Notes concerned to the
Person asserting any such Losses, to the extent that such sale was an initial
resale by the Initial Purchaser and any such Losses of the Initial
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Purchaser results from the fact that there was not sent or given to such Person,
at or prior to the written confirmation of the sale of such Notes to such
Person, a copy of the Offering Memorandum (exclusive of any material included
therein but not attached thereto) if the Issuer had previously furnished copies
thereof to the Initial Purchaser. This indemnity agreement will be in addition
to any liability that the Issuer, the WH Guarantors, and after the Merger, the
Company and the Herbalife Guarantors, may otherwise have, including, but not
limited to, liability under this Agreement.
(b) The Initial Purchaser agrees to indemnify and hold harmless
the Issuer the WH Guarantors, and after the Merger, also the Company and the
Herbalife Guarantors and each person, if any, who controls the Issuer, the WH
Guarantors, and after the Merger, also the Company and the Herbalife Guarantors,
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act, each of its respective agents, employees, officers and directors and the
agents, employees, officers and directors of any such controlling person from
and against any Losses to which they or any of them may become subject under the
Act, the Exchange Act or otherwise insofar as such Losses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Preliminary Offering Memorandum or
the Offering Memorandum, or in any amendment thereof or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, in each case to the
extent, but only to the extent, that any such Loss arises out of or is based
upon any untrue statement or alleged untrue statement or omission or alleged
omission relating to the Initial Purchaser made therein in reliance upon and in
conformity with information furnished in writing to the Issuer by or on behalf
of such Initial Purchaser expressly for use therein. Each of the Issuer, the
Company, the Guarantors and the Initial Purchasers acknowledge that the
information described in Section 9 of this Agreement is the only information
furnished in writing by the Initial Purchasers to the Issuer expressly for use
in the Preliminary Offering Memorandum or the Offering Memorandum.
(c) Promptly after receipt by an indemnified party under
subsection 6(a) or 6(b) above of notice of the commencement of any action, suit
or proceeding (collectively, an "action"), such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party under such
subsection, notify each party against whom indemnification is to be sought in
writing of the commencement of such action (but the failure so to notify an
indemnifying party shall not relieve such indemnifying party from any liability
that it may have under this Section 6 except to the extent that it has been
prejudiced in any material respect by such failure). In case any such action is
brought against any indemnified party, and it notifies an indemnifying party of
the commencement of such action, the indemnifying party will be entitled to
participate in such action, and to the extent it may elect by written notice
delivered to the indemnified party promptly after receiving the aforesaid notice
from such
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indemnified party, to assume the defense of such action with counsel
satisfactory to such indemnified party. Notwithstanding the foregoing, the
indemnified party or parties shall have the right to employ its or their own
counsel in any such action, but the reasonable fees and expenses of such counsel
shall be at the expense of such indemnified party or parties unless (i) the
employment of such counsel shall have been authorized in writing by the
indemnifying parties in connection with the defense of such action, (ii) the
indemnifying parties shall not have employed counsel to take charge of the
defense of such action within a reasonable time after notice of commencement of
the action, or (iii) the named parties to such action (including any impleaded
parties) include such indemnified party and the indemnifying parties (or such
indemnifying parties have assumed the defense of such action), and such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them that are different from, in addition to, or in
conflict with, those available to one or all of the indemnifying parties (in
which case the indemnifying parties shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties), in any of
which events such reasonable fees and expenses of counsel shall be borne by the
indemnifying parties. In no event shall the indemnifying party be liable for the
fees and expenses of more than one counsel (together with appropriate local
counsel) at any time for all indemnified parties in connection with any one
action or separate but substantially similar or related actions arising in the
same jurisdiction out of the same general allegations or circumstances. An
indemnifying party shall not be liable for any settlement of any claim or action
effected without its written consent, which consent may not be unreasonably
withheld. Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel as contemplated by paragraph (a) or (b)
of this Section 6, then the indemnifying party agrees that it shall be liable
for any settlement of any proceeding effected without its written consent if (i)
such settlement is entered into more than 45 business days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
not have reimbursed the indemnified party in accordance with such request prior
to the date of such settlement and (iii) such indemnified party shall have given
the indemnifying party at least 45 days prior notice of its intention to settle.
No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding and does
not include a statement as to or an admission of fault, culpability or failure
to act on behalf of any indemnified party.
7. Contribution. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 6 of this
Agreement is for any reason held to be unavailable from an indemnifying party,
or is insufficient to hold harmless a party indemnified under Section 6 of this
Agreement, each party that is obligated under Section 6 of
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this Agreement to indemnify any other party shall contribute to the amount paid
or payable by such indemnified party as a result of such aggregate Losses (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Issuer, the Company or the Guarantors, on the one hand, and the Initial
Purchaser, on the other hand, from the offering of the Original Notes or (ii) if
such allocation is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to above but also
the relative fault of the Issuer, the Company or the Guarantors, on the one
hand, and the Initial Purchaser, on the other hand, in connection with the
statements or omissions that resulted in such Losses, as well as any other
relevant equitable considerations. The relative benefits received by the Issuer,
the Company and the Guarantors, on the one hand, and the Initial Purchasers, on
the other hand, shall be deemed to be in the same proportion as (x) the total
proceeds from the offering of Original Notes (net of discounts and commissions
but before deducting expenses) received by the Issuer are to (y) the total
discount, commissions and other compensation received by the Initial Purchaser.
The relative fault of the Issuer, the Company and the Guarantors, on the one
hand, and the Initial Purchaser, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Issuer, the Company or the Guarantors or
the Initial Purchasers and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission or
alleged statement or omission.
The Issuer, the Company, the Guarantors and the Initial
Purchaser agree that it would not be just and equitable if contribution pursuant
to this Section 7 were determined by pro rata allocation or by any other method
of allocation that does not take into account the equitable considerations
referred to above. Notwithstanding the provisions of this Section 7, (i) in no
case shall the Initial Purchaser be required to contribute any amount in excess
of the amount by which the total discount, commissions and other compensation
applicable to the Original Notes purchased by the Initial Purchaser pursuant to
this Agreement exceeds the amount of any damages that the Initial Purchaser has
otherwise been required to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission and (ii) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 7, each person, if
any, who controls the Initial Purchaser within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act shall have the same rights to
contribution as the Initial Purchaser, and each person, if any, who controls the
Issuer, the Company or the Guarantors within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act and each director, officer, employee
and agent of the Issuer, the Company or the Guarantors shall have the same
rights to contribution as the Issuer, the Company or the Guarantors. Any party
entitled to contribution will, promptly after receipt of notice of commencement
of any action against such party in respect of which a claim for contribution
may be made against another party or parties under this Section 7, notify such
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party or parties from whom contribution may be sought, but the omission to so
notify such party or parties shall not relieve the party or parties from whom
contribution may be sought from any obligation it or they may have under this
Section 7 or otherwise, except to the extent that it has been prejudiced in any
material respect by such failure; provided, however, that no additional notice
shall be required with respect to any action for which notice has been given
under Section 6 of this Agreement for purposes of indemnification. Anything in
this section to the contrary notwithstanding, no party shall be liable for
contribution with respect to any action or claim settled without its written
consent; provided, however, that such written consent was not unreasonably
withheld.
8. Conditions to the Initial Purchaser's Obligations. The
obligations of the Initial Purchaser to purchase and pay for the Original Notes,
as provided for in this Agreement, shall be subject to satisfaction of the
following conditions prior to or concurrently with such purchase:
(a) All of the representations and warranties of the Issuer, the
Company and each of the Guarantors contained in this Agreement shall be
true and correct in all material respects on the date of this Agreement
and on the Closing Date (other than any such representations or
warranties which are qualified as to materiality, which representations
and warranties shall be accurate in all respect on the date hereof and
on the Closing Date). The Issuer, the Company and each of the Guarantors
shall have in all material respects performed or complied with all of
the agreements and covenants contained in this Agreement and required to
be performed or complied with by it on or prior to the Closing Date.
(b) The Offering Memorandum shall have been printed and copies
distributed to the Initial Purchaser on the date of this Agreement or at
such later date as the Initial Purchaser may determine. No stop order
suspending the qualification or exemption from qualification of the
Original Notes in any jurisdiction shall have been issued and no
proceeding for that purpose shall have been commenced or shall be
pending or threatened.
(c) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency that would, as of the Closing Date, prevent the
issuance and sale of the Original Notes or consummation of the Exchange
Offer; except as disclosed in the Offering Memorandum, no action, suit
or proceeding shall have been commenced and be pending against or
affecting or, to the best knowledge of the Issuer, the Company or the
Guarantors, threatened against the Issuer, the Company, the Guarantors
or any of their respective subsidiaries before any court or arbitrator
or any governmental body, agency or official that could reasonably be
expected to have a Material Adverse Effect; and no stop order preventing
the use of the Preliminary Offering Memorandum or the
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Offering Memorandum, or any amendment or supplement thereto, or any
order asserting that any of the transactions contemplated by this
Agreement are subject to the registration requirements of the Act shall
have been issued.
(d) As of the date of the latest balance sheet presented in the
Offering Memorandum, neither the Company nor any of its subsidiaries had
any material liabilities or obligations, direct or contingent, that were
required in accordance with GAAP, to be set forth in the Company's
consolidated balance sheet as of such date or in the notes thereto set
forth in the Offering Memorandum not so set forth. Since the date of the
latest balance sheet presented in the Offering Memorandum, except as set
forth or contemplated in the Offering Memorandum, (a) none of the
Issuer, the Company or any Guarantor has (1) incurred any liabilities or
obligations, direct or contingent, that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect, or (2) entered into any material transaction not in the ordinary
course of business, (b) there has not been any event or development in
respect of the business or condition (financial or other) of the Issuer,
the Company and the Guarantors that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect, (c)
there has been no dividend or distribution of any kind declared, paid or
made by the Company on any class of its capital stock and (d) there has
not been any material change in the long-term debt of the Company or any
of its subsidiaries.
(e) The Initial Purchaser shall have received certificates from
each of the Issuer, the Company and the WH Guarantors, dated the Closing
Date, signed by two authorized officers of each of the Issuer, the
Company and the WH Guarantors confirming, as of the Closing Date, to its
knowledge, the matters set forth in paragraphs (a), (b), (c) and (d) of
this Section 8.
(f) The Initial Purchaser shall have received on the Closing Date
opinions dated the Closing Date, addressed to the Initial Purchaser, of
(i) Xxxxxxxxxx & Xxxxx LLP, special counsel to the Issuer, (ii) Irell &
Xxxxxxx LLP, counsel to the Company, (iii) Xxxxx & Xxxxxxx LLP, special
regulatory counsel to the Company, (iv) Xxxxx Xxxxx, general counsel to
the Company, (v) Xxxxxxxx Xxxx Xxxxxx & di Lipkau, special Nevada
counsel to the Issuer, (vi) Xxxxxxx Xxxxxxxx Xxxxxxx, special Nevada
counsel to the Company, (vii) Xxxxxx and Calder, Special Cayman counsel
to Holdings, (viii) Bonn Xxxxxxx Xxxxxxxx, special Luxembourg counsel to
WH Luxembourg Holdings SaRL, WH Luxembourg Intermediate Holdings SaRL
and WH Luxembourg CM SaRL, (ix) Xxxxxxxxxx & Xxxxx LLP, special counsel
to Whitney V, L.P. and Whitney Equity Partners V, LLC under the Whitney
Support Agreement, (x) Xxxxxxxx & Xxxxx, special counsel to Golden Gate
Capital Management, L.L.C. under the Golden Gate Support Agreement and
(xi) and Xxxxxx Westwood & Riegels, special counsel to CCG
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Investments (BVI), L.P., each substantially in the form of Exhibits X-0,
X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, A-10 and A-11 attached hereto,
with such reasonable assumptions and qualifications satisfactory to the
Initial Purchaser.
(g) The Initial Purchaser shall have received on the Closing Date
an opinion dated the Closing Date of Skadden, Arps, Slate, Xxxxxxx &
Xxxx LLP, counsel to the Initial Purchaser.
(h) On the date hereof, the Initial Purchaser shall have received
a "comfort letter" from Deloitte & Touche LLP, independent public
accountants for the Company, dated the date of this Agreement, addressed
to the Initial Purchaser and in form and substance satisfactory to the
Initial Purchaser and counsel to the Initial Purchaser. In addition, the
Initial Purchaser shall have received "bring-down comfort letter" from
Deloitte & Touche LLP, dated as of the Closing Date, addressed to the
Initial Purchaser and in form and substance satisfactory to the Initial
Purchaser and counsel to the Initial Purchaser.
(i) Each of the other Note Documents shall have been executed and
delivered and the Initial Purchaser shall have received copies,
conformed as executed, thereof.
(j) The Security Agreement substantially in the form attached
hereto as Annex C, shall have been executed and delivered, and the
Initial Purchaser shall have received copies, conformed and executed,
thereof.
(k) The Support Agreements shall have been duly executed and
delivered , and the Initial Purchaser shall have received copies,
conformed and executed, thereof.
(l) The Issuer shall have deposited, or shall have directed the
deposit of, the net proceeds of the offering of the Original Notes with
the Securities Intermediary, as contemplated in the Security Agreement
(it being understood that this condition shall be deemed satisfied to
the extent it occurs simultaneously with the purchase and payment of the
Original Notes).
(m) Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel to the
Initial Purchaser, shall have been furnished with such documents as they
may reasonably request to enable them to review or pass upon the matters
referred to in this Section 8 and in order to evidence the accuracy,
completeness or satisfaction in all material respects of any of the
representations, warranties or conditions contained in this Agreement.
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(n) The Notes shall be eligible for trading in The PORTAL Market
upon issuance. All agreements set forth in the representation letter of
the Issuer to DTC relating to the approval of the Notes by DTC for
"book-entry" transfer shall have been complied with.
(o) The Issuer shall have (i) granted to the Trustee for its
benefit and the ratable benefit of the Holders of the Notes a valid,
perfected and first priority security interest in the Secured Proceeds
Account, the Pledged Securities and related collateral to secure the
Issuer's payment and performance of its Obligations, and (ii) executed
and delivered the Security Agreement to evidence that security interest.
The Initial Purchaser shall have received an original copy thereof, duly
executed by the Issuer, the Trustee and the Securities Intermediary.
If any of the conditions specified in this Section 8 shall not
have been fulfilled when and as required by this Agreement to be fulfilled (or
waived by the Initial Purchaser), this Agreement may be terminated by the
Initial Purchaser on notice to the Issuer and the Company at any time at or
prior to the Closing Date, and such termination shall be without liability of
any party to any other party. Notwithstanding any such termination, the
provisions of Sections 4(f), 6, 7, 9, 10 and 11(d) shall remain in effect.
The documents required to be delivered by this Section 8 will be
delivered at the office of counsel for the Initial Purchaser on the Closing
Date.
9. Initial Purchaser Information. The Issuer, the Company, the
Guarantors and the Initial Purchaser severally acknowledge that the statements
with respect to the delivery of the Original Notes to the Initial Purchaser set
forth in the third, sixth, seventh, eighth, ninth, eleventh and twelfth
paragraph under "Plan of Distribution" in the Preliminary Offering Memorandum
and the Offering Memorandum constitute the only information furnished in writing
by the Initial Purchaser expressly for use in the Preliminary Offering
Memorandum or the Offering Memorandum.
10. Survival of Representations and Agreements. All
representations and warranties, covenants and agreements contained in this
Agreement, including the agreements contained in Sections 4(f) and 11(d), the
indemnity agreements contained in Section 6 and the contribution agreements
contained in Section 7, shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of the Initial Purchaser or
any controlling person thereof or by or on behalf of the Issuer, the Company,
any Guarantor or any controlling person thereof, and shall survive delivery of
and payment for the Original Notes to and by the Initial Purchaser. The
agreements contained in Sections 4(f), 6, 7, 9 and 11(d) shall survive the
termination of this Agreement, including pursuant to Section 11.
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11. Effective Date of Agreement; Termination. (a) This Agreement
shall become effective upon execution and delivery of a counterpart hereof by
each of the parties hereto.
(b) The Initial Purchaser shall have the right to terminate this
Agreement at any time prior to the Closing Date by notice to the Issuer and the
Company from the Initial Purchaser, without liability (other than with respect
to Sections 6 and 7) on the Initial Purchaser's part to the Issuer, the Company,
the Guarantors or any affiliate thereof if, on or after the date hereof there
shall have occurred: (i) a failure, refusal or inability to perform by the
Issuer, the Company or any Guarantor in any material respect any agreement on
its part to be performed under this Agreement when and as required, (ii) a
failure by the Issuer, the Company or any Guarantor to fulfill pursuant to
Section 8 any other condition to the obligations of the Initial Purchaser under
this Agreement when and as required, (iii) a general moratorium on commercial
banking activities is declared by either Federal or New York State authorities
or a material disruption in commercial banking or securities settlement or
clearance services in the United States, (iv) the outbreak or escalation of
hostilities involving the United States or the declaration by the United States
of a national emergency or war or (v) the occurrence of any other calamity or
crisis or any change in financial, political or economic conditions in the
United States or elsewhere, if the effect of any such event specified in clause
(iv) or (v) in the judgment of the Initial Purchaser makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the Original
Notes on the terms and in the manner contemplated in the Offering Memorandum.
(c) Any notice of termination pursuant to this Section 11 shall
be given at the address specified in Section 12 below by telephone, telex,
telephonic facsimile or telegraph, confirmed in writing by letter.
(d) If this Agreement shall be terminated pursuant to Section
11(b), or if the sale of the Notes provided for in this Agreement is not
consummated because of any refusal, inability or failure on the part of the
Issuer, the Company or any Guarantor to satisfy any condition to the obligations
of the Initial Purchaser set forth in this Agreement to be satisfied on its part
or because of any refusal, inability or failure on the part of the Issuer, the
Company or any WH Guarantor to perform in any material respect any agreement in
this Agreement or comply in any material respect with any provision of this
Agreement, the Issuer and the WH Guarantors will reimburse the Initial Purchaser
for all of their reasonable out-of-pocket expenses (including, without
limitation, the fees and expenses of the Initial Purchaser's counsel) incurred
in connection with this Agreement.
12. Notice. All communications with respect to or under this
Agreement, except as may be otherwise specifically provided in this Agreement,
shall be in writing and, if sent to the Initial Purchaser, shall be mailed,
delivered, or, telegraphed or telecopied and confirmed in writing to UBS Warburg
LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
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(telephone: (000) 000-0000, fax number: 000-000-0000), Attention: Syndicate
Department, with a copy to Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 000 Xxxxx
Xxxxx Xxx., Xxx Xxxxxxx, Xxxxxxxxxx, 00000 (telephone: (000) 000-0000, fax:
(000) 000-0000), Attention: Xxxxxxxx X. Xxxxxxx, Esq.; and if sent to the Issuer
or the WH Guarantors, shall be mailed, delivered or, telegraphed or telecopied
and confirmed in writing to WH Acquisition Corp., c/o Whitney & Co, LLC, 000
Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000 (telephone: (000) 000-0000, fax: (203)
000-0000), Attention: Xx. Xxxxx Xxxxxxx with a copy to Xxxxxxxxxx and Xxxxx,
LLP, 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: Xxxxx Xxxxx,
Esq.; and if to the Company, shall be mailed, delivered or telegraphed or
telecopied and confirmed in writing to Herbalife International, Inc., 0000
Xxxxxxx Xxxx Xxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000 (telephone: (000) 000-0000,
fax: (000) 000-0000), Attention: General Counsel, with a copy to Irell & Xxxxxxx
LLP, 0000 Xxxxxx xx xxx Xxxxx, xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx 00000
(telephone: (000) 000-0000, fax: (000) 000-0000), Attention: Xxxxxxx Xxxx, Esq.
All such notices and communications shall be deemed to have been
duly given: when delivered by hand, if personally delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged by telecopier machine, if telecopied; and one business day after
being timely delivered to a next-day air courier.
13. Parties. This Agreement shall inure solely to the benefit
of, and shall be binding upon, the Initial Purchaser, the Issuer, the Company,
the Guarantors and the controlling persons and agents referred to in Sections 6
and 7 above, and their respective successors and assigns, and no other person
shall have or be construed to have any legal or equitable right, remedy or claim
under or in respect of or by virtue of this Agreement or any provision herein
contained. The term "successors and assigns" shall not include a purchaser, in
its capacity as such, of Notes from the Initial Purchaser.
14. Construction. This Agreement shall be construed in
accordance with the internal laws of the State of New York including, without
limitation, Sections 5-1401 and 5-1402 of the New York General Obligations Law
and New York Civil Practice Laws and Rules 327(b) (without giving effect to any
provisions thereof relating to conflicts of law).
15. Captions. The captions included in this Agreement are
included solely for convenience of reference and are not to be considered a part
of this Agreement.
16. Counterparts. This Agreement may be executed in various
counterparts that together shall constitute one and the same instrument.
17. Guarantor Execution. The Company shall cause each of the
Herbalife Guarantors in existence at the time of the closing of the Merger to
(i) execute and deliver a joinder to this Agreement substantially in the form of
Exhibit B attached hereto, and (ii)
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execute and deliver the Registration Rights Agreement and supplemental indenture
to the Indenture, concurrently with the closing of the Merger and the
consummation of the Related Financing Transactions (as defined in the Offering
Memorandum) and the Herbalife Guarantors shall execute each of the foregoing in
consideration of, among other things, consummation of the Transactions and the
Merger; provided, however, that all obligations of the Herbalife Guarantors
arising under this Agreement (including indemnity obligations) shall be as of
the closing of the Merger. In the event of a breach by the Company under this
Section 17, the Company agrees that monetary damages would not be adequate
compensation for any loss or damage incurred by such breach and hereby further
agrees that, in the event of an action for specific performance in respect of
such breach, it shall waive the defense that a remedy at law would be adequate.
18. Company and Herbalife Guarantors. Notwithstanding anything
to the contrary contained herein or in any of the Note Documents and
notwithstanding that the Company is a signatory of this Agreement, unless and
until the Merger is consummated, none of the Company or the Herbalife Guarantors
shall have any obligation or liability arising under or related to this
Agreement, the Offering Memorandum or any of the Note Documents (or any
certificate or instrument delivered in connection herewith or therewith, or
arising in connection with the offering of the Notes; provided, that upon the
consummation of the Merger, the Company expressly assumes the obligations of the
Issuer hereunder and the Herbalife Guarantors will become a party to this
Agreement.
If the foregoing Purchase Agreement correctly sets forth the
understanding among the Issuer, the Company, the Guarantors and the Initial
Purchaser, please so indicate in the space provided below for the purpose,
whereupon this letter and your acceptance shall constitute a binding agreement
among the Issuer, the Company, the Guarantors and the Initial Purchaser.
ISSUER:
WH ACQUISITION CORP.
By: /s/
-------------------------------
Name:
Title:
COMPANY:
HERBALIFE INTERNATIONAL, INC.
By: /s/
-------------------------------
Name:
Title:
GUARANTORS:
WH INTERMEDIATE HOLDINGS (CAYMAN
ISLANDS) LTD.
By: /s/
-------------------------------
Name:
Title:
WH LUXEMBOURG HOLDINGS SaRL
By: /s/
-------------------------------
Name:
Title:
WH LUXEMBOURG INTERMEDIATE HOLDINGS
SARL
By: /s/
-------------------------------
Name:
Title:
WH LUXEMBOURG CM SARL
By: /s/
-------------------------------
Name:
Title:
INITIAL PURCHASER:
Confirmed and accepted as of the
date first above written:
UBS WARBURG LLC
By: /s/
-----------------------------
Name:
Title:
SCHEDULE I
SUBSIDIARIES OF WH INTERMEDIATE HOLDINGS LTD.
JURISDICTION
OF
SUBSIDIARY TYPE OF ENTITY % OWNERSHIP INCORPORATION
---------- -------------- ----------- -------------
WH Luxembourg Holdings SaRL Corporation 100% Luxembourg
WH Luxembourg Intermediate Holdings SaRL Corporation 100% Luxembourg
WH Luxembourg CM SaRL Corporation 100% Luxembourg
WH Acquisition Corp. Corporation 100% Nevada
SUBSIDIARIES OF WH ACQUISITION CORP.
NONE.
SUBSIDIARIES OF HERBALIFE INTERNATIONAL, INC.
% JURISDICTION
OWNED BY OF
SUBSIDIARY TYPE OF ENTITY HERBALIFE INCORPORATION
---------- -------------- --------- -------------
Herbalife International Argentina S.A. Corporation 99.9% (direct) Argentina
100% (indirect)
Herbalife Australisia Pty, Ltd. Corporation 99.9% (direct) Australia
100% (indirect)
Herbalife Foreign Sales Corporation Corporation 100% Barbados
Herbalife International Belgium, S.A. Corporation 99% (direct) Belgium
100% (indirect)
Herbalife International Do Brasil Ltda. Corporation 99.9% (direct) Brazil and Delaware
100% (indirect)
Herbalife of Canada, Ltd. Corporation 100% Canada
Importadora Y Distribuidora Herbalife Corporation 100% Chile
International de Chile Limitada Avenida
H&L (Suzhou) Health Products LTD* Corporation 100% (indirect Republic of China
through Herbalife
Xxxxxx LLC)
Herbalife Denmark ApS Corporation 100% Denmark
Herbalife Domincana, S.A.* Corporation 34% (direct) Dominican Republic
100% (indirect)
% JURISDICTION
OWNED BY OF
SUBSIDIARY TYPE OF ENTITY HERBALIFE INCORPORATION
---------- -------------- --------- -------------
Herbalife Del Ecuador, S.A.* Corporation 99% (direct) Ecuador
100% (indirect)
Herbalife International Finland OY Corporation 100% Finland
Herbalife International France, S.A. Corporation 99.9% (direct) France
100% (indirect)
Herbalife International Deutschland GmbH Corporation 100% Germany
Herbalife International Greece S.A*. Corporation 100% Greece
Herbalife International Hong Kong Ltd. Corporation 50% (direct) Hong Kong
100% (indirect)
Herbalife Hungary Trading, Limited* Corporation 90% (direct) Hungary
100% (indirect)
Herbalife International India Private Limited Corporation India
PT Herbalife Indonesia Corporation Indonesia
Herbalife International of Israel (1990) Ltd. Corporation 99% (direct) Israel
100% (indirect)
Herbalife Italia S.p.A Corporation 95% (direct) Italy
100% (indirect)
Herbalife of Japan K.K. Corporation 92.9% Japan and Delaware
Herbalife Korea Co., Ltd. Corporation 100% Korea and Delaware
Herbalife International SDN.BHD* Corporation 100% Malaysia
Herbalife Internacional de Mexico, S.A. de C.V. Corporation 99.9% (direct) Mexico
100% (indirect)
Herbalife Products De Mexico, S.A. de C.V. Corporation 99% (direct) Mexico
100% (indirect)
Herbavida International de Mexico, S.A. de C.V.* Corporation Mexico
HBL International Maroc SaRL Corporation 100% Morocco
Herbalife International (Netherlands) B.V. Corporation 100% Netherlands
Herbalife International Products N.V. Corporation 100% Netherlands
Antilles
Herbalife (NZ) limited Corporation 99.9% New Zealand
Herbalife Norway Products AS Corporation 100% Norway
Herbalife International Holdings, Inc.* Corporation 40% Philippines
Herbalife International Philippines, Inc. Corporation 99.9% Philippines
Herbalife Polska Sp.z.o.o Corporation 100% Poland
Herbalife International, S.A. Corporation 96% (direct) Portugal
100% (indirect)
% JURISDICTION
OWNED BY OF
SUBSIDIARY TYPE OF ENTITY HERBALIFE INCORPORATION
---------- -------------- --------- -------------
Herbalife International Russia 1995 Ltd. Corporation 99% (direct) Israel
100% (indirect)
Herbalife International Espana, S.A. Corporation 99.8% (direct) Spain
100% (indirect)
Herbalife Sweden Aktiebolag Corporation 100% Sweden
HBL Products, SA Corporation 48% (direct) Switzerland
99% (indirect)
Herbalife International Taiwan Co., Ltd.* Corporation 99.9% (direct)
100% (indirect)
Herbalife International Urunleri Tic. Ltd. Corporation 50% (direct) Turkey and Delaware
100% (indirect)
Herbalife (UK) Limited Corporation 76.9% (direct) United Kingdom
100% (indirect)
Herbalife Europe Limited Corporation 100% (indirect, United Kingdom
through Herbalife
(UK) Limited)
Vida Herbalife Suplementos Alimenticios, C.A. Corporation 100% Venezuela and
Delaware
Herbalife Xxxxxx, LLC LLC 100% Delaware
HIIP Investment Co., LLC LLC 40% Delaware
Herbalife International of America, Inc. Corporation 100% California
Herbalife International Communications, Inc. Corporation 100% California
Herbalife International Distribution, Inc. Corporation 100% California
Herbalife International of Europe, Inc. Corporation 100% California
Promotions One, Inc. Corporations 100% California
Herbalife International del Colombia Corporations 100% California
Herbalife International South Africa, Ltd. Corporation 100% California
Herbalife International del Ecuador Corporation 100% California
Herbalife Taiwan, Inc. Corporation 100% California
Herbalife International (Thailand) Ltd. Corporation 100% California
Xxxxxxxx.xxx Inc. Corporation 100% Delaware
Schedule II
SPECIFIED SUBSIDIARIES OF WH INTERMEDIATE HOLDINGS LTD.
JURISDICTION
OF
SUBSIDIARY TYPE OF ENTITY % OWNERSHIP INCORPORATION
---------- -------------- ----------- -------------
WH Luxembourg Holdings SaRL Corporation 100% Luxembourg
WH Luxembourg Intermediate Holdings SaRL Corporation 100% Luxembourg
WH Luxembourg CM SaRL Corporation 100% Luxembourg
WH Acquisition Corp. Corporation 100% Nevada
SPECIFIED SUBSIDIARIES OF WH ACQUISITION CORP.
NONE.
SPECIFIED SUBSIDIARIES OF HERBALIFE INTERNATIONAL, INC.
% JURISDICTION
OWNED BY OF
SUBSIDIARY TYPE OF ENTITY HERBALIFE INCORPORATION
---------- -------------- --------- -------------
Herbalife Australisia Pty, Ltd. Corporation 99.9% (direct) Australia
100% (indirect)
Herbalife International Do Brasil Ltda. Corporation 99.9% (direct) Brazil and Delaware
100% (indirect)
Herbalife of Canada, Ltd. Corporation 100% Canada
H&L (Suzhou) Health Products LTD* Corporation 100% (indirect Republic of China
through Herbalife
Xxxxxx LLC)
Herbalife International Finland OY Corporation 100% Finland
Herbalife International France, S.A. Corporation 99.9% (direct) France
100% (indirect)
Herbalife International Deutschland GmbH Corporation 100% Germany
Herbalife International Greece S.A*. Corporation 100% Greece
Herbalife International Hong Kong Ltd. Corporation 50% (direct) Hong Kong
100% (indirect)
% JURISDICTION
OWNED BY OF
SUBSIDIARY TYPE OF ENTITY HERBALIFE INCORPORATION
---------- -------------- --------- -------------
Herbalife International of Israel (1990) Ltd. Corporation 99% (direct) Israel
100% (indirect)
Herbalife of Japan K.K. Corporation 92.9% Japan and Delaware
Herbalife Korea Co., Ltd. Corporation 100% Korea and Delaware
Herbalife Internacional de Mexico, S.A. de C.V. Corporation 99.9% (direct) Mexico
100% (indirect)
Herbalife Products De Mexico, S.A. de C.V. Corporation 99% (direct) Mexico
100% (indirect)
Herbalife International (Netherlands) B.V. Corporation 100% Netherlands
Herbalife Sweden Aktiebolag Corporation 100% Sweden
Herbalife International Urunleri Tic. Ltd. Corporation 50% (direct) Turkey and Delaware
100% (indirect)
Herbalife (UK) Limited Corporation 76.9% (direct) United Kingdom
100% (indirect)
Herbalife Europe Limited Corporation 100% (indirect, United Kingdom
through Herbalife
(UK) Limited)
Vida Herbalife Suplementos Alimenticios, C.A. Corporation 100% Venezuela and
Delaware
Herbalife Xxxxxx, LLC LLC 100% Delaware
Herbalife International of America, Inc. Corporation 100% California
Herbalife International Communications, Inc. Corporation 100% California
Herbalife International Distribution, Inc. Corporation 100% California
Herbalife International of Europe, Inc. Corporation 100% California
Herbalife International South Africa, Ltd. Corporation 100% California
Herbalife International del Ecuador Corporation 100% California
Herbalife Taiwan, Inc. Corporation 100% California
Herbalife International (Thailand) Ltd. Corporation 100% California
EXHIBIT A-1
FORM OF OPINION OF XXXXXXXXXX & XXXXX LLP
Ladies and Gentlemen:
We have acted as United States special counsel to WH Acquisition
Corp., a Nevada corporation (the "Issuer"), and as United States special counsel
to WH Intermediate Holdings Ltd., a Cayman Islands corporation, WH Luxembourg
Holdings SaRL, a Luxembourg company, WH Luxembourg Intermediate Holdings SaRL, a
Luxembourg company, WH Luxembourg CM SaRL, a Luxembourg company (collectively,
the "WH Guarantors" and, together with the Issuer, the "Parties"), in connection
with the preparation of the Offering Memorandum, dated June __, 2002 (the
"Offering Memorandum"), relating to the offering by the Issuer of $165,000,000
aggregate principal amount of 11 3/4% Senior Subordinated Notes due 2010 (the
"Notes"). This opinion is furnished pursuant to Section 8(f) of the Purchase
Agreement, dated June 21, 2002 (the "Purchase Agreement"), between the Issuer,
the Company, the WH Guarantors and you. Capitalized terms not otherwise defined
herein shall have the meaning ascribed to them in the Purchase Agreement.
In the course of our representation of the Issuer, we have examined
and relied on originals, or copies certified or otherwise identified to our
satisfaction, of the following documents (collectively referred to herein as the
"Documents"):
(a) an executed copy of the Purchase Agreement;
(b) the Offering Memorandum, dated June ___, 2002;
(c) copies of the certificate of incorporation of the Parties, as
amended to the date hereof, as certified by the Secretary thereof;
(d) copies of the by-laws of each of the Parties, as amended to the
date hereof, as certified by the Secretary thereof;
(e) an executed copy of the Indenture, dated as of June __, 2002,
between the Issuer and the WH Guarantors, on the one hand, and The Bank
of New York, as Trustee, on the other hand, governing the Notes;
(f) a specimen of the certificates for the Notes;
(g) an executed copy of the Registration Rights Agreement, dated
June __, 2002, between the Issuer, on the one hand, and you, on the
other hand;
(h) an executed copy of the Security and Control Agreement, dated
June __, 2002, between the Issuer, the Trustee and The Bank of New York,
as Securities Intermediary; and
A-1-1
(i) Action of Directors of the Issuer by Unanimous Written Consent
in Lieu of a Meeting dated June __, 2002 and Action of
Directors/Managers of the WH Guarantors by Unanimous Written Consent in
Lieu of a Meeting, dated June __, 2002.
We have also examined originals, or copies certified to our
satisfaction, of such records of the Parties and other instruments, certificates
of public officials and representatives of the Parties and other documents as we
have deemed necessary as a basis for the opinions expressed in this opinion. In
such examination, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals and the conformity
with the originals of all documents submitted to us as copies. As to questions
of fact material to this opinion, we have, when relevant facts were not
independently established, relied upon, and assumed the accuracy of, the
representations and warranties made in or pursuant to the Purchase Agreement and
such certificates of appropriate public officials and officers and
representatives of the Parties, including the Officer's Certificate attached
hereto as Exhibit A. In addition, we have attended the closing of the
transactions contemplated by the Purchase Agreement held on the date hereof.
On the basis of the foregoing, and having regard for such legal
considerations as we deem relevant, we are of the opinion that:
(i) The Indenture has been duly and validly authorized, executed and
delivered by the Issuer and each of the WH Guarantors thereto and
(assuming the due authorization, execution and delivery thereof by the
Trustee) constitutes the valid and legally binding obligation of the
Issuer and each of the WH Guarantors thereto, enforceable against each
of them in accordance with their terms, except that the enforcement
thereof may be subject to (x) bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium and similar laws of general
applicability relating to or affecting creditors' rights generally and
(y) general principles of equity and the discretion of the court before
which any proceeding therefor may be brought (regardless of whether such
enforcement is considered in a proceeding in equity or at law).
(ii) The Original Notes, when issued, authenticated and delivered by
the Issuer against payment by the Initial Purchaser in accordance with
the terms of the Purchase Agreement and the Indenture, (assuming the due
authorization, execution and delivery of the Indenture by the Trustee in
accordance with the Indenture) will constitute the valid and legally
binding obligations of the Issuer (and following the Merger, the
Company) entitled to the benefits of the Indenture and enforceable
against the Issuer (and following the Merger, the Company) in accordance
with their terms, except that the enforcement thereof may be subject to
(x) bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights generally and (y) general principles of
equity and the discretion of the court before which any proceeding
therefor may be brought (regardless of whether such enforcement is
considered in a proceeding in equity or at law).
(iii) The Guarantees endorsed on the Original Notes, when issued in
connection with the issuance of the Original Notes or, if later, upon
the consummation of the Merger
A-1-2
with respect to the Herbalife Guarantors, (assuming the due
authorization, execution and delivery of the Indenture by the Trustee,
and the due authorization, execution and delivery of the Guarantees and
the Supplemental Indenture by the Guarantors) will constitute the valid
and legally binding obligations of each of the Guarantors, entitled to
the benefits of the Indenture and enforceable against each of the
Guarantors in accordance with their terms, except that the enforcement
thereof may be subject to (x) bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium and similar laws of general
applicability relating to or affecting creditors' rights generally and
(y) general principles of equity and the discretion of the court before
which any proceeding therefor may be brought (regardless of whether such
enforcement is considered in a proceeding in equity or at law).
(iv) The Exchange Notes, when issued, authenticated and delivered by
the Issuer (and following the Merger, the Company) in accordance with
the terms of the Registration Rights Agreement, the Exchange Offer and
the Indenture, (assuming the due authorization, execution and delivery
thereof by the Trustee and assuming the due authorization, execution and
delivery of the Exchange Notes by the Trustee in accordance with the
Indenture) will constitute the valid and legally binding obligations of
the Issuer (and following the Merger, the Company) entitled to the
benefits of the Indenture and enforceable against the Issuer (and
following the Merger, the Company) in accordance with their terms,
except that the enforcement thereof may be subject to (x) bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights generally and (y) general principles of equity and the
discretion of the court before which any proceeding therefor may be
brought (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
(v) The Guarantees endorsed on the Exchange Notes, when issued in
connection with the issuance of the Exchange Notes or, if later, upon
the consummation of the Merger with respect to the Herbalife Guarantors,
(assuming the due authorization, execution and delivery of the Indenture
by the Trustee, and the due authorization, execution and delivery of the
Guarantees and the Supplemental Indenture by the Guarantors) will
constitute the valid and legally binding obligations of each of the
Guarantors, entitled to the benefits of the Indenture and enforceable
against each of the Guarantors in accordance with their terms, except
that the enforcement thereof may be subject to (x) bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights generally and (y) general principles of equity and the
discretion of the court before which any proceeding therefor may be
brought (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
(vi) The Registration Rights Agreement has been duly and validly
authorized, executed and delivered by the Issuer and (assuming the due
authorization, execution and delivery thereof by the Initial Purchaser)
will constitute the valid and legally binding
A-1-3
obligation of the Issuer enforceable against it in accordance with its
terms, except that (a) the enforcement thereof may be subject to (x)
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights generally and (y) general principles of
equity and the discretion of the court before which any proceeding
therefor may be brought (regardless of whether such enforcement is
considered in a proceeding in equity or at law) and (b) we express no
opinion with respect to the provisions set forth in Section 7 of the
Registration Rights Agreement.
(vii) Assuming the accuracy of the representations and warranties of
the Initial Purchaser in the Purchase Agreement, no consent, approval,
authorization or order of, or filing, registration or qualification of
or with any court, governmental agency or body or administrative agency
of the State of New York or the federal government of the United States
is required to be obtained or made by the Issuer or any of the WH
Guarantors for the execution, delivery and performance by the Issuer and
the WH Guarantors of the Note Documents, to which it is a party, and
except as set forth in the Offering Memorandum, the consummation of the
Transactions, except (a) such as have been or will be obtained or made
on or prior to the Closing Date, (b) registration of the Exchange Offer
under the Act pursuant to the Registration Rights Agreement, (c)
qualification of the Indenture under the Trust Indenture Act, in
connection with the issuance of the Exchange Notes or (d) any state or
foreign securities laws or by the regulations of the NASD .
(viii) To our knowledge, and except as set forth in the Offering
Memorandum, there does not exist any judgment, order, injunction or
other restraint issued or filed which seek to restrain, enjoin, prevent
the consummation of or otherwise challenge the Transactions or the
performance by the Issuer or the WH Guarantors of their respective
obligations under the Note Documents.
(ix) None of the Issuer or the WH Guarantors is, nor immediately
after sale of the Notes to the Initial Purchaser and assuming immediate
application of the proceeds therefrom in accordance with the Security
Agreement and as set forth in the Offering Memorandum under the caption
"Use of Proceeds" will be, an "investment company" or a company
"controlled" by an "investment company" incorporated in the United
States within the meaning of the Investment Company Act of 1940, as
amended.
(x) Assuming (x) the accuracy of the representations and warranties
of the Initial Purchaser and the Issuer contained in the Purchase
Agreement and (y) compliance by the Initial Purchaser and the Issuer
with their respective covenants contained in the Purchase Agreement,
neither registration of the Original Notes under the Act, nor
qualification of the Indenture under the Trust Indenture Act is required
for the offer and sale of the Original Notes by the Issuer to the
Initial Purchaser, or the initial resale of the Original Notes by the
Initial Purchaser, in each case in accordance with the Offering
Memorandum and the Purchase Agreement. We express no opinion, however,
as to
A-1-4
when or under what circumstances any Notes sold by the Initial Purchaser
may be reoffered or resold.
(xi) To our knowledge, none of the Issuer or the WH Guarantors (or
any agent thereof acting on their behalf) has taken any action that
might cause the issuance or sale of the Notes to violate Regulations T,
U or X of the Board of Governors of the Federal Reserve System.
(xii) Each of the Note Documents conforms in all material respects
to the description thereof contained in the Offering Memorandum.
(xiii) The statements set forth in the Offering Memorandum under the
caption "Description of Notes", insofar as they purport to constitute a
summary of the terms of the Notes, the Indenture and the Guarantees, and
under the caption "United States Federal Income Tax Consequences",
insofar as they purport to describe relevant federal tax laws of the
United States, fairly summarize the matters referred to therein in all
material respects.
(xiv) The Security Agreement has been duly and validly authorized,
executed and delivered by the Issuer and (assuming the due
authorization, execution and delivery thereof by the Trustee) and
constitutes the valid and legally binding obligations of the Issuer,
enforceable against the Issuer in accordance with its terms, except that
the enforcement thereof may be subject to (x) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium and similar laws of
general applicability relating to or affecting creditors' rights
generally and (y) general principles of equity and the discretion of the
court before which any proceeding therefor may be brought (regardless of
whether such enforcement is considered in a proceeding in equity or at
law).
(xv) If the Securities Account (as defined in the Security
Agreement) is a "securities account" within the meaning of Section
8-501(a) of the New York Uniform Commercial Code ("UCC"), the provisions
of the Security Agreement, upon execution and delivery thereof by the
parties thereto, are effective to create and perfect the security
interest of the Trustee for the benefit of the holders of the Notes in
the Issuer's rights in the Securities Account and the "security
entitlements" (as defined in Section 8-102(a)(17) of the UCC) with
respect to the Securities Account. As used in this paragraph (xv) and
hereinafter in this opinion, "security entitlements" means "security
entitlements" (as defined in Section 8-102(a)(17) of the UCC) with
respect to "financial assets" (as defined in Section 8-102(a)(9) of the
UCC) now or hereafter credited to the Securities Account. Assuming that
the Trustee on behalf of the holders of the Notes has acquired its
security interest for "value" (within the meaning of Section 9-203 of
the UCC) and without notice of an "adverse claim" (as defined in Section
8-102(a)(1) of the UCC), no action based on such adverse claim to a
Financial Asset, whether framed in conversion, replevin, constructive
trust, equitable lien or other theory, may be asserted against the
Trustee.
(xvi) If the Securities Account is a "deposit account" within the
meaning of Section 9-102(a)(29) of the UCC (the "Deposit Account"), the
provisions of the Security
A-1-5
Agreement, upon execution and delivery thereof by the parties thereto,
are effective to create and perfect the security interest of the Trustee
for the benefit of the holders of the Notes in the Issuer's rights in
the Deposit Account, and in the "proceeds" (as defined in Section
9-102(a)(64) of the UCC) thereof, subject to the conditions set forth in
Section 9-315 and 9-322(c) of the UCC.
(xvii) Subject to paragraphs (xv) and (xvi), the Security Agreement
creates in favor of the Trustee for the benefit of the holders of the
Notes a valid security interest in the Issuer's rights in the Security
Entitlements (as defined in the Security Agreement) to secure the
payment and performance when due of the Obligations (as defined in the
Security Agreement).
In giving the opinions set forth above, we express no opinion as to:
(i) The enforceability of any provisions contained in the Note
Documents that purport to establish (or may be construed to establish)
evidentiary standards;
(ii) The enforceability of forum selection clauses in Federal
courts;
(iii) The legality, validity, binding effect or enforceability of
any provision of any of the Note Documents insofar as they provide for
the payment or reimbursement of costs and expenses or indemnification
for claims, losses, or liabilities in excess of a reasonable amount
determined by any court or other tribunal;
(iv) The enforceability under certain circumstances of provisions
indemnifying a party against liability for its own wrongful or negligent
acts;
(v) The effect of the compliance or noncompliance of the Initial
Purchaser with any state or federal laws or regulations (including,
without limitation, any unpublished order, decree, or directive issued
by any governmental authority but excluding Regulations T, U and X of
the Board of Governors of the Federal Reserve System to the extent set
forth in paragraph (xi) above) applicable to the Initial Purchaser
because of its legal or regulatory status, the nature of its business,
or its authority to conduct business in any jurisdiction;
(vi) The enforceability of any provisions of the Note Documents that
provide that the assertion or employment of any right or remedy shall
not prevent the concurrent assertion or employment of any other right or
remedy, or that each and every remedy shall be cumulative and in
addition to every other remedy or that any delay or omission to exercise
any right or remedy shall not impair any other right or remedy or
constitute a waiver thereof;
(vii) The validity, the binding nature or the enforceability of the
obligations of any Guarantor under the Guarantees if Section 548 of the
Bankruptcy Code or Article 10 of the New York Debtor and Creditor Law or
any other law relating to fraudulent transfers or obligations were
applicable thereto or the applicability of any such law to the
obligations of any Guarantor under the Guarantees. In addition, we have
assumed, without independent inquiry, that the Guarantees are in
furtherance of the corporate
A-1-6
purposes of or is necessary or convenient to the conduct, promotion or
attainment of the business of each Guarantor.
The foregoing opinion is limited to the Federal laws of the United
States, the laws of the State of New York and we are expressing no opinion as to
the effect of the laws of any other jurisdiction.
In connection with our opinion set forth in paragraphs (iv) and (v)
above, we have, with your permission, assumed that at the time of the issuance
and delivery of any Exchange Notes and the Guarantees thereon there will not
have occurred any change in law affecting the validity, legally binding
character or enforceability of such Exchange Notes and Guarantees and that the
issuance and delivery of such Exchange Notes and the Guarantees thereon, all of
the terms of such Exchange Notes and Guarantees and the performance by the
Issuer, the Company and the Guarantors of its obligations thereunder will comply
with applicable law and with each requirement or restriction imposed by any
court or governmental body having jurisdiction over the Issuer, the Company or
the Guarantors and will not result in a default under or a breach of any
agreement or instrument then binding upon the Company.
In connection with our opinion set forth in paragraph (x) above, we
have, also with your permission, relied upon the representations, warranties,
agreements and undertakings of the Issuer, the Company, the Guarantors and the
Initial Purchaser and the Initial Purchaser contained in the Purchase Agreement,
including those with respect to the absence of any directed selling efforts (as
defined in Regulation S under the Securities Act) relating to the Original
Notes, the absence of any general solicitation or general advertising in
connection with the offering of the Original Notes and as to certain other
matters. Insofar as such opinion relates to the sale of the Original Notes by
the Issuer to the Initial Purchaser, we have assumed that all offers and resales
of Original Notes by the Initial Purchaser will be made in accordance with the
Purchase Agreement.
With your permission, with respect to matters of Nevada law, we have
relied exclusively upon the opinion of Xxxxxxxx Xxxx Xxxxxx & de Lipkau, dated
the date hereof, as to the matters set forth therein, a copy of which has been
delivered to you and which is in form and scope satisfactory to us. Without
limiting the foregoing, we have assumed, in reliance upon the opinion of
Xxxxxxxx Xxxx Cassas & de Lipkau, that (i) the Issuer is duly organized, validly
existing and in good standing under the laws of the State of Nevada, (ii) the
Issuer has all corporate power and authority under Nevada law to consummate the
Transactions and to execute, deliver and perform its obligations under the Note
Documents and (iii) each of the Note Documents has been duly authorized,
executed and delivered by the Issuer under Nevada law.
With your permission, with respect to matters of Cayman Islands law,
we have relied exclusively upon the opinion of Xxxxxx and Xxxxxx, dated the date
hereof, as to the matters set forth therein, a copy of which has been delivered
to you and which is in form and scope satisfactory to us. Without limiting the
foregoing, we have assumed, in reliance upon the opinion of Xxxxxx and Calder,
that (i) WH Intermediate Holdings Ltd. is duly organized, validly existing and
in good standing under the laws of Cayman Islands, (ii) the WH
A-1-7
Intermediate Holdings Ltd. has all corporate power and authority under Cayman
Islands to consummate the Transactions and to execute, deliver and perform its
obligations under the Note Documents and (iii) each of the Note Documents has
been duly authorized, executed and delivered by WH Intermediate Holdings Ltd.
under Cayman Islands law.
With your permission, with respect to matters of Luxembourg law, we
have relied exclusively upon the opinion of Bonn Xxxxxxx Xxxxxxxx, dated the
date hereof, as to the matters set forth therein, a copy of which has been
delivered to you and which is in form and scope satisfactory to us. Without
limiting the foregoing, we have assumed, in reliance upon the opinion of Bonn
Xxxxxxx Xxxxxxxx, that (i) each of WH Luxembourg Holdings SaRL, WH Luxembourg
Intermediate Holdings SaRL and WH Luxembourg CM SaRL is duly organized and
validly existing under the laws of Luxembourg, (ii) each of WH Luxembourg
Holdings SaRL, WH Luxembourg Intermediate Holdings SaRL and WH Luxembourg CM
SaRL has all corporate power and authority under Luxembourg law to consummate
the Transactions and to execute, deliver and perform its obligations under the
Note Documents and (iii) each of the Note Documents has been duly authorized,
executed and delivered by each of WH Luxembourg Holdings SaRL, WH Luxembourg
Intermediate Holdings SaRL and WH Luxembourg CM SaRL under Luxembourg law.
We are furnishing this opinion to you at the request of the Issuer
and no other person is entitled to rely hereon. This opinion is not to be used,
circulated, quoted or otherwise referred to for any other purposes without our
prior written consent. All of the opinions expressed herein are based upon the
pertinent facts and laws in existence as of the date hereof. We expressly
disclaim any obligation to advise you of changes to pertinent laws or facts that
may hereafter come to our attention.
A-1-8
Xxxxxxxxxx & Xxxxx LLP will also provide a letter stating that as
special U.S. counsel to the Issuer we reviewed the Offering Memorandum and
participated in discussions with representatives of the Initial Purchaser and
those of the Issuer, the Company and its accountants regarding the contents of
the Offering Memorandum and certain related matters. Between the date of the
Offering Memorandum and the time of the delivery of this letter, we participated
in further discussions with representatives of the Issuer, the Company and its
accountants regarding the contents of certain portions of the Offering
Memorandum and certain related matters, reviewed certain records of the Issuer
and the Company relating to the proceedings of their Boards of Directors,
certificates of certain officers of the Issuer and the Company, legal opinions
from other counsel to the Company and a letter from the Company's accountants.
On the basis of the information that we gained in the course of the performance
of the services referred to above, considered in the light of our understanding
of the applicable Federal securities laws and the experience we have gained
through our practice in this field, nothing that came to our attention in the
course of such review has caused us to believe that the Offering Memorandum, as
of the date of the Offering Memorandum, contained any untrue statement of a
material fact or omitted to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. Also, nothing that has come to our attention in the course
of such review or the procedure described in the second sentence of this
paragraph has caused us to believe that the Offering Memorandum, as of the date
and time of delivery of this letter, contained any untrue statement of a
material fact or omitted to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading.
The limitations inherent in the independent verification of factual
matters and the character of determinations involved in the preparation of the
Offering Memorandum are such, however, that we have not independently verified
and are not passing upon nor do we assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Offering Memorandum
except for those made under the captions "Description of Notes" and "Plan of
Distribution" in the Offering Memorandum insofar as they relate to provisions of
documents therein described. Also, we do not comment on or express any opinion
or belief as to the financial statements or other technical, statistical or
financial data contained in the Offering Memorandum.
X-0-0
XXXXXXX X-0
FORM OF OPINION OF IRELL & XXXXXXX LLP
June __, 2002
UBS Warburg LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Herbalife International, Inc.
This opinion is furnished to you pursuant to Section 8(f)(ii) of the
Purchase Agreement, dated as of June 21, 2002, by and among you, WH Acquisition
Corp., a Nevada corporation (the "Issuer"), Herbalife International, Inc., a
Nevada corporation (the "Company") and the entities listed on the signature
pages thereto as guarantors relating to the sale by the Issuer and the purchase
by you, as Initial Purchaser, of $165,000,000 principal amount of 11 3/4% Senior
Subordinated Notes due 2010 (the "Purchase Agreement"). Capitalized terms used
herein and not otherwise defined herein shall have the respective meanings
ascribed to them in the Purchase Agreement.
We have acted as counsel for the Company and certain U.S. subsidiaries
of the Company listed on Schedule A hereto (the "Applicable Herbalife
Guarantors") in connection with the transactions contemplated by the Purchase
Agreement.
For the purpose of rendering this opinion, we have reviewed the
following documents:
(a) the Purchase Agreement; and
(b) the other Note Documents referred to in the Purchase Agreement.
We also have reviewed such other matters and documents as we have deemed
necessary or relevant as a basis for this opinion. In our review, we have
assumed, without investigation, the legal capacity of all natural persons
signing documents in their respective individual capacities, the genuineness of
all signatures, the authenticity of all documents submitted to us as originals,
the conformity to original documents of all documents submitted to us as
certified or reproduction copies, and the authenticity of the originals of such
copies.
Insofar as this opinion relates to factual matters, information with
respect to which is in the possession of the Company or the Applicable Herbalife
Guarantors, we have relied upon certificates, statements and representations of
officers and other representatives of the
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Company and the Applicable Herbalife Guarantors, including, without limitation,
the representations contained in the Purchase Agreement and the other Note
Documents, and upon statements contained in the Offering Memorandum.
This opinion is limited to the laws of the State of California and we
express no opinion as to the laws of any other jurisdiction (including, without
limitation, the securities and blue sky laws of any such jurisdiction) except
the General Corporation Law of the State of Delaware (the "DGCL") and the laws
of the United States of America to the extent specifically referred to herein.
We call your attention to the fact that the Purchase Agreement provides
that it is to be governed by and construed in accordance with the internal laws
of the State of New York. Our opinion in paragraph 3 below with respect to the
due execution and delivery of the Purchase Agreement by the Company and the
Applicable Herbalife Guarantors is being rendered only to the extent that the
laws of the State of California or the provisions of the DGCL may be relevant to
such due execution and delivery.
Based upon the foregoing, and on the assumptions herein set forth, and
subject to the limitations, qualifications and exceptions set forth herein, we
are of the opinion that:
Each of the Applicable Herbalife Guarantors (a) is a corporation,
partnership or other entity duly incorporated or formed and validly existing and
in good standing under the laws of the jurisdiction of its organization, (b) has
all requisite corporate or other power and authority and, to our knowledge, has
all governmental licenses, authorizations, consents and approvals necessary to
own its property and carry on its business as now being conducted, and (c) is
qualified to do business and is in good standing in the jurisdictions listed on
Schedule B hereto.
1. Each of the Applicable Herbalife Guarantors has all requisite
corporate or other power and authority to execute, deliver and perform all of
its obligations under the Note Documents to which it is or will be a party and
to consummate the Transactions.
2. The Purchase Agreement has been duly and validly authorized, executed
and delivered by the Applicable Herbalife Guarantors.
3. The execution, delivery and performance by the Applicable Herbalife
Guarantors of the Note Documents to which they are or will be a party and the
consummation of the Transactions do not and will not violate, conflict with or
constitute a breach of any of the terms or provisions of, or a default under (or
an event that with notice or the lapse of time, or both, would constitute a
default), or require consent under, or result in the creation or imposition of a
lien, charge or encumbrance on any property or assets of any of the Applicable
Herbalife Guarantors (other than as created pursuant to the Indenture or the
Security Agreement) or an acceleration of any indebtedness of any of the
Applicable Herbalife
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Guarantors (a) pursuant to the charter, bylaws or other constitutive documents
of any of the Applicable Herbalife Guarantors, or (b) to our knowledge, pursuant
to (i) any of the terms, conditions or provisions of any material document,
agreement or other instrument to which any of the Applicable Herbalife
Guarantors is a party, (ii) any law, statute, rule or regulation applicable to
any of the Applicable Herbalife Guarantors or their respective assets or
properties and which in our experience is generally applicable to transactions
of the type contemplated by the Purchase Agreement or (iii) any judgment, order
or decree of any domestic or foreign court or governmental agency or authority
having jurisdiction over any of the Applicable Herbalife Guarantors or their
respective assets or properties except, in the case of this clause (b), for such
as would not have a Material Adverse Effect.
4. Assuming the accuracy of the representations and warranties of the
Initial Purchaser in Section 5(b) of the Purchase Agreement, no consent,
approval, authorization or order of, or filing, registration, qualification,
license or permit of or with, any court or governmental agency, body or
administrative agency is required to be obtained or made by any of the
Applicable Herbalife Guarantors for the execution, delivery and performance by
any of the Applicable Herbalife Guarantors of the Note Documents to which it is
or will be a party and the consummation of the Transactions, except (a) such as
have been or will be obtained or made on or prior to the date on which any such
Applicable Herbalife Guarantor becomes a Guarantor under the Indenture, (b)
registration of the Exchange Offer or resale of the Notes under the Act pursuant
to the Registration Rights Agreement, (c) qualification of the Indenture under
the Trust Indenture Act, in connection with the issuance of the Exchange Notes
or (d) such as may be required by any applicable state or foreign securities or
"blue sky" laws or the rules and regulations of the National Association of
Securities Dealers, Inc. No consents or waivers from any other person or entity
are required for the execution, delivery and performance of any of the Note
Documents and the consummation of any of the Transactions, other than such
consents and waivers as have been obtained or will be obtained prior to the
Closing Date and will be in full force and effect, and such other consents and
waivers the failure to obtain which will not have a Material Adverse Effect.
5. To our knowledge, there does not exist any judgment, order,
injunction or other restraint issued or filed to or against any of the
Applicable Herbalife Guarantors with respect to the Transactions or the
performance by any of the Applicable Herbalife Guarantors of their respective
obligations under the Note Documents to which they are a party.
6. Neither the Company nor any of its subsidiaries is, and none of the
Company's subsidiaries immediately after sale of the Notes to the Initial
Purchaser and application of the proceeds therefrom in accordance with the
Security Agreement will be, an "investment company" or a company "controlled" by
an "investment company" incorporated in the United States within the meaning of
the Investment Company Act of 1940, as amended.
7. Neither the Company nor any of its subsidiaries (or any agent thereof
acting on their behalf) has taken, and none of them will take, any action that
might cause the Purchase
A-2-3
Agreement or the issuance or sale of the Notes to violate Regulations T, U or X
of the Board of Governors of the Federal Reserve System.
In connection with the preparation of the Offering Memorandum, we have
participated in conferences with officers and other representatives of the
Company, representatives of the independent public or certified public
accountants for the Company, representatives (including counsel) of the equity
sponsors referred to in the Purchase Agreement and representatives of the
Initial Purchaser at which the contents of the Offering Memorandum and related
matters were discussed and, although we are not passing upon and do not assume
any responsibility for the accuracy, completeness or fairness of the statements
contained in the Offering Memorandum, on the basis of the foregoing, nothing has
come to our attention that would lead us to believe that the Offering
Memorandum, as of its date or as of the date hereof, contained or contains an
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (except that we express
no such belief as to the financial statements or schedules or other financial,
statistical, industry or market data included therein).
Our opinions expressed in paragraph 1 above as to the incorporation or
formation, valid existence, good standing and qualification of the Applicable
Herbalife Guarantors are based solely on certificates of legal existence and/or
good standing and/or qualification issued by the Secretaries of State or other
appropriate officials of the jurisdictions in which the Company and the
significant subsidiaries of the Company are incorporated or qualified as foreign
corporations, as set forth on Schedule B attached hereto.
We have assumed, with your permission, that no agreement or
understanding that is not otherwise known to us exists between you and any
parties that would modify, supplement or amend any document reviewed by us.
Whenever our opinion herein with respect to the existence or
nonexistence of facts is qualified by the phrase "to our knowledge", or any
similar phrase implying a limitation on the basis of knowledge, such phrase
means only that the individual attorneys in this firm who have had active
involvement in the transactions contemplated by the Purchase Agreement and the
Offering Memorandum do not have actual knowledge that the facts as stated herein
are untrue. Unless otherwise expressly stated herein, such persons have not
undertaken any investigation to determine the existence or nonexistence of such
facts, and no inference as to the extent of their knowledge should be drawn from
the fact of their representation of the Company or its subsidiaries in this or
any other instance.
The opinions rendered herein are based upon applicable law and the state
of our knowledge as of the date of this opinion. We do not undertake, and hereby
expressly disclaim, any obligation to inform you of changes in any applicable
law or relevant legal principles of law, or changes in our interpretation of
such law or principles, or the state of our
A-2-4
knowledge of the relevant facts subsequent to the date of this opinion. We note
in this regard that the Applicable Herbalife Guarantors are expected to execute
and deliver certain of the Note Documents on dates subsequent to the date
hereof, and any such changes in law, principles of law or our interpretations
thereof, or the state of our knowledge of relevant facts, may occur prior to the
execution and delivery of such Note Documents. Please note that we are opining
only as to the matters expressly set forth herein, and no opinion should be
inferred as to any other matters.
This opinion is rendered only to you pursuant to the Purchase Agreement
and is solely for your benefit in connection with the above transaction. This
opinion may not be relied upon by any other person for any other purpose or in
any other context, or furnished to, used, circulated, quoted or referred to, or
relied upon by, any person for any purpose without our prior written consent.
Very truly yours,
IRELL & XXXXXXX LLP
X-0-0
XXXXXXX X-0
FORM OF OPINION OF XXXXX & XXXXXXX L.L.P.
June __, 2002
UBS Warburg LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter is furnished to you pursuant to Section 8(f) of the Purchase
Agreement dated June __, 2002 (the "Purchase Agreement") between you and WH
Acquisition, a Nevada corporation (the "Issuer"), Herbalife International, Inc.,
a Nevada corporation (the "Company") and the entities listed on the signature
pages thereto as guarantors relating to the sale by the Issuer and the purchase
by you as the Initial Purchasers of $__________ principal amount of __% Senior
Subordinated Notes due 2010.
This firm serves as special regulatory counsel to the Company in the
U.S. Food and Drug Administration ("FDA") area only. In such capacity, we have
been retained by the Company to review certain information under the captions
"Risk Factors--Regulatory matters governing our industry could have a
significant negative effect on our business" and
"Business--Regulation--General--Products", in the Company's final Offering
Memorandum dated June __, 2002 (the "Offering Memorandum"). We have not been
retained or engaged by the Company to perform, nor have we performed, any review
of any other information in the Offering Memorandum, nor have we acted as the
Company's corporate or securities counsel in connection with the sale of the
Securities. Terms used herein that are defined in the Purchase Agreement shall
have the respective meanings set forth in the Purchase Agreement, unless
otherwise defined herein.
For purposes of the opinion expressed in this letter, which is set forth
below (the "Opinion"), we have examined copies of the following:
1. An executed copy of the Purchase Agreement.
2. The information contained in the Offering Memorandum under the
captions "Risk Factors--Regulatory matters governing our industry could
have a significant negative
A-3-1
effect on our business" and "Business--Regulation--General--Products",
insofar as it relates to FDA regulatory matters.
3. A certificate dated as of June __, 2002 of certain officers of
the Company as to certain facts relating to the Company.
For purposes of the Opinion, we have not made any independent review or
investigation of factual or other matters, including the assets, business or
affairs of the Company. We have assumed the authenticity, accuracy and
completeness of the foregoing documents, certification and statements of fact,
on which we are relying, and have made no independent investigations thereof.
Further, we have not independently verified, nor do we take any responsibility
for nor are we addressing in any way any statements of fact, any statements
concerning state or foreign law or any statements of belief attributable to the
Company concerning whether or not the Company is in compliance with applicable
FDA requirements. The Opinion is given in the context of the foregoing.
This letter is based as to matters of law solely on the Federal Food,
Drug, and Cosmetic Act, as amended (the "FDC Act"), and the regulations
promulgated thereunder, and we express no view as to any other laws, statutes,
regulations or ordinances, including without limitation any foreign, federal or
state licensing, tax or securities laws or regulations.
Nothing herein shall be construed to cause us to be considered "experts"
within the meaning of Section 11 of the Securities Act of 1933, as amended.
Based upon, subject to and limited by the foregoing, we are of the
opinion that the statements in the Offering Memorandum under the captions "Risk
Factors--Regulatory matters governing our industry could have a significant
negative effect on our business" and "Business--Regulation--General--Products",
insofar as such statements purport to summarize applicable provisions of the FDC
Act, and the regulations promulgated thereunder, are accurate summaries in all
material respects of the provisions purported to be summarized under such
captions in the Offering Memorandum (the "Opinion").
During the course of preparation of the Offering Memorandum, we
participated in certain discussions with certain officers and employees of the
Company as to the FDA regulatory matters dealt with under the captions "Risk
Factors--Regulatory matters governing our industry could have a significant
negative effect on our business" and "Business--Regulation--General--Products"
in the Offering Memorandum. While we have not undertaken to determine
independently, and we do not assume any responsibility for, the accuracy,
completeness, or fairness of the statements under the above-referenced captions
in the Offering Memorandum, we may state on the basis of these discussions and
our activities as special regulatory counsel to the Company in connection with
our review of the statements contained in such captioned sections, that no facts
have come to our attention that cause us to believe that the statements in the
Offering Memorandum under such captioned sections,
A-3-2
insofar as such statements relate to FDA regulatory matters, as of the date of
the Offering Memorandum or as of the date hereof, included or includes an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
* * * * *
We assume no obligation to advise you of any changes in the foregoing
subsequent to the delivery of this letter. This letter has been prepared solely
for your use in connection with the Closing under the Purchase Agreement on the
date hereof, and should not be quoted in whole or in part or otherwise be
referred to, nor be filed with or furnished to any governmental agency or other
person or entity, without the prior written consent of this firm.
Very truly yours,
XXXXX & XXXXXXX L.L.P.
X-0-0
XXXXXXX X-0
FORM OF OPINION OF GENERAL COUNSEL FOR THE COMPANY
June __, 2002
UBS Warburg LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Herbalife International, Inc.
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 8(f)(iv) of the
Purchase Agreement, dated as of June 21, 2002, by and among you, WH Acquisition
Corp., a Nevada corporation (the "Issuer"), Herbalife International, Inc., a
Nevada corporation (the "Company") and the entities listed on the signature
pages thereto as guarantors relating to the sale by the Issuer and the purchase
by you, as Initial Purchaser, of $165,000,000 principal amount of 11 3/4% Senior
Subordinated Notes due 2010 (the "Purchase Agreement"). Capitalized terms used
herein and not otherwise defined herein shall have the respective meanings
ascribed to them in the Purchase Agreement.
I am _________________________________, of the Company and in such
capacity, I have reviewed the Purchase Agreement and such other matters and
documents as I have deemed necessary or relevant as a basis for this opinion. I
am admitted to practice in the State of California. This opinion is limited to
the laws of the State of California, and I express no opinion as to the laws of
any other jurisdiction.
Based upon the foregoing, and on the assumptions herein set forth, and
subject to the limitations, qualifications and exceptions set forth herein, I am
of the opinion that:
1. Except as set forth in the Offering Memorandum, there is (a) no
action, suit or proceeding before or by any court, arbitrator or governmental
agency, body or official, domestic or foreign, now pending or, to my knowledge,
threatened or contemplated, to which the Company or any of its subsidiaries is
or may be a party or to which the business, assets or property of the Company or
any of its subsidiaries is or may be subject, (b) no statute, rule, regulation
or order that has been enacted, adopted or issued, or to my knowledge, that has
been proposed by any governmental body or agency, domestic or foreign, (c) no
injunction, restraining order or order of any nature by a federal or state court
or foreign court of competent jurisdiction to which the Company or any of its
subsidiaries is or may be subject
A-4-1
that, in the case of any of clauses (a), (b) or (c), could reasonably be
expected, individually or in the aggregate, (1) to have a Material Adverse
Effect or (2) to interfere with or adversely affect the consummation of the
Transactions, assuming, in the case of clause (a), such action, suit or
proceeding is determined adversely to the Company or any of its subsidiaries.
2. None of the Company or any of its subsidiaries is (a) in violation of
its charter, bylaws or other constitutive documents or (b) in default (or, with
notice or lapse of time or both, would be in default) in the performance or
observance of any obligation, agreement, covenant or condition contained in any
of the Agreements and Instruments, or (c) in violation of any law, statute,
rule, regulation, judgment, order or decree of any domestic or foreign court
with jurisdiction over any of them or any of their assets or properties or other
governmental or regulatory authority, agency or other body, that, in the case of
clauses (b) and (c) herein, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect.
The opinion rendered herein is based upon applicable law as stated
herein and the state of my knowledge, after due inquiry, as of the date of this
opinion. I do not undertake, and hereby expressly disclaim, any obligation to
inform you of changes in any applicable law or relevant legal principles of law,
or changes in my interpretation of such law or principles, or the state of my
knowledge of the relevant facts subsequent to the date of this opinion. Please
note that I am opining only as to the matters expressly set forth herein, and no
opinion should be inferred as to any other matters.
This opinion is rendered only to you pursuant to the Purchase Agreement
and is solely for your benefit in connection with the above transaction. This
opinion may not be relied upon by any other person for any other purpose or in
any other context, or furnished to, used, circulated, quoted or referred to, or
relied upon by, any person for any purpose without my prior written consent.
Very truly yours,
-----------------------------
X-0-0
XXXXXXX X-0
FORM OF OPINION OF XXXXXXXX XXXX XXXXXX & DI LIPKAU
June ___, 2002
UBS Warburg LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Purchase Agreement among WH Acquisition Corp., Herbalife
International, Inc., UBS Warburg LLC and the entities listed on
the signature page thereof, dated __, 2002
Ladies and Gentlemen:
This office has acted as special Nevada counsel to WH Acquisition Corp.,
a Nevada corporation (the "Issuer") in connection with the Purchase Agreement
among Issuer, UBS Warburg LLC (the "Initial Purchaser") and the entities listed
on the signature page thereof as Guarantors, by which Issuer will issue and sell
to the Initial Purchaser $165,000,000 aggregate principal amount of _____%
Senior Subordinated Notes due 2010 (the "Original Notes"). The Original Notes
will be issued pursuant to an Indenture (the "Indenture"), by and among the
Issuer, the WH Guarantors (as defined in the Purchase Agreement) and the Bank of
New York as Trustee. The Original Notes will be offered and sold to the Initial
Purchaser pursuant to an exemption from the registration requirements under the
Securities Act of 1933, as amended. The Issuer, with the assistance of
Herbalife, has prepared a Preliminary Offering Memorandum, dated May 24, 2002
(the "Preliminary Offering Memorandum") and a Final Offering Memorandum dated
and available for distribution on the date hereof (the "Final Offering
Memorandum") relating to the Issuer, the Company, the Guarantors and the
Original Notes.
In connection with the opinions set forth in this letter, we have
examined copies of the following documents only:
(a) The Articles of Incorporation of Issuer filed with the Nevada
Secretary of State on April 4, 2002;
(b) The Bylaws of the Issuer adopted by the Unanimous Written Consent
of the Board of Directors of the Issuer on June ___, 2002;
(c) The Purchase Agreement;
(d) The Indenture;
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(e) The Security and Control Agreement among the Issuer as Pledgor,
the Bank of New York as Trustee and as Securities Intermediary
dated June ___, 2002 (the "Security and Control Agreement");
(f) The Registration Rights Agreement dated as of June ___, 2002 by
and among the Issuer, Herbalife and the Guarantors listed on the
signature pages thereto and Initial Purchaser (the "Registration
Rights Agreement");
(g) The Final Offering Memorandum;
(h) Unanimous Written Consent of the Board of Directors of Issuer
dated June ___, 2002 authorizing and approving the Purchase
Agreement, the Final Offering Memorandum and matters related
thereto, certified as a true and correct copy by Xxxx Xxxxxx,
Secretary of Issuer;
(i) Unanimous Written Consent of the Board of Directors of Issuer
dated June ___, 2002 authorizing and approving new bylaws of
Issuer;
(j) Certificate of Good Standing issued by the Nevada Secretary of
State for Issuer on June ___, 2002;
(k) Certificate of Xxxxxx X. Xxxxxxx, President and Treasurer of
Issuer, a copy of which is attached hereto (the "Certificate").
Items (c) through (f) described above shall be hereinafter collectively
referred to as the "Note Documents." The issuance and sale of the Original Notes
(as defined in the Purchase Agreement) and the placement of the net proceeds in
the Secured Proceeds Account (as defined in the Purchase Agreement) shall be
referred to in this letter as the "Transactions."
In giving the opinions expressed in this letter, we exclude from the
scope of the opinions state securities or "blue sky" laws and federal law. In
reviewing the documents reviewed for this letter, we have assumed the
genuineness of all signatures and the capacity and legal competency of all
individuals, the authenticity and completeness of all documents submitted to us
as originals, the conformity to the original documents of all documents
submitted to us as copies, the due execution and delivery by any person or
entity of all documents where due execution and delivery is a prerequisite to
the effectiveness of such documents, the authority of the person or persons who
executed each of the documents on behalf of any person or entity other than an
officer of Issuer, and the correctness and accuracy of the Issuer's
representations and warranties contained in the Purchase Agreement and the
statements in the Certificate. We have made no attempt to investigate or verify
the accuracy and completeness of any document submitted to us upon which we have
relied in giving our opinions expressed below.
We have assumed that the Articles of Incorporation described at item (a)
above are the only charter documents of Issuer on file with the Nevada Secretary
of State and that the Bylaws described at item (b) above are the
currently-effective Bylaws of the Issuer.
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Attorneys involved in the preparation of this opinion are admitted to
practice in the State of Nevada, and we do not express any opinion as to the
laws of any jurisdiction other than the laws of the State of Nevada.
Based upon and subject to the foregoing, we are of the opinion that,
under Nevada law:
1. The Issuer (a) is a corporation duly organized and validly existing and
in good standing under the laws of the State of Nevada, and (b) has all
requisite corporate or other power and authority, and has all Nevada
governmental licenses, authorizations, consents and approvals necessary
to own its property and carry on its business as described in the
Certificate;
2. The Issuer has all requisite corporate power and authority to execute,
deliver and perform all of its obligations under the Note Documents to
which it is a party and to consummate the Transactions and, without
limitation, the Issuer has all requisite corporate power and authority
to issue, sell and deliver and perform its obligations under the Notes;
3. All of the outstanding shares of capital stock of the Issuer (as
described in the Certificate) have been duly authorized and validly
issued and are fully paid, non-assessable and not subject to any
preemptive or similar rights;
4. The Original Notes have been duly authorized and, when executed by the
Authorized Officers as provided in the Resolutions, will be duly
executed;
5. The Indenture has been duly authorized and, when executed by the
Authorized Officers as provided in the Resolutions, will be duly
executed;
6. The Purchase Agreement has been duly authorized and, when executed by
the Authorized Officers as provided in the Resolutions, will be duly
executed;
7. The Registration Rights Agreement has been duly authorized and, when
executed by the Authorized Officers as provided in the Resolutions, will
be duly executed;
8. The execution, delivery and performance of the Purchase Agreement and
the other Note Documents to which it is a party by the Issuer, the
compliance by the Issuer with all provisions thereof, as applicable, and
the consummation of the transactions contemplated thereby, as
applicable, will not (i) require any consent, approval, authorization or
other order of, or qualification with, any Nevada court or governmental
body or agency (except as such as may be required under the securities
or Blue Sky laws of Nevada), or (ii) in the case of the Issuer, conflict
with our
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constitute a breach of any of the terms or provisions of, or a default
under, the charter or bylaws or other organizational documents of the
Issuer.
This opinion is being furnished only to you and is solely for your
benefit and is not to be used, circulated, quoted, relied upon or otherwise
referred to by any other party or entity. All of the opinions expressed herein
are based upon the pertinent facts and laws in existence as of the date hereof.
We expressly disclaim any obligation to advise you of changes to pertinent laws
or facts that may hereafter come to our attention.
Very truly yours,
XXXXXXXX XXXX XXXXXX & de LIPKAU
X-0-0
XXXXXXX X-0
FORM OF OPINION OF XXXXXXX XXXXXXXX XXXXXXX
The opinion of Xxxxxxx Xxxxxxxx Xxxxxxx, special Nevada counsel
for the Company (capitalized terms not otherwise defined herein shall have the
meanings provided in the Purchase Agreement, to which this is an Exhibit), to be
delivered pursuant to Section 8(f) of the Purchase Agreement shall be to the
effect that:
(i) the Company is a corporation duly organized and validly existing and in
good standing under the laws of the jurisdiction of the State of Nevada,
and has all requisite corporate power and authority to own its property
and carry on its business as now being conducted as described in the
Offering Memorandum;
(ii) the Company has all requisite corporate power and authority to execute,
deliver and perform its obligations under the Note Documents to which it
is a party and to consummate the Transactions and, without limitation,
the Company has all requisite corporate power and authority to issue,
sell and deliver and perform its obligations under the Notes;
(iii) the Company has authorized capital stock of _______________ and such
capital stock is not subject to any statutory preemptive or, to our
knowledge, similar rights;
(iv) the Purchase Agreement has been duly authorized, executed and delivered
by the Company;
(v) the Registration Rights Agreement has been duly authorized, executed and
delivered by the Company;
(vi) the execution, delivery and performance of the Purchase Agreement and
the other Note Documents to which it is a party by the Company, the
compliance by the Company with all provisions thereof, as applicable,
and the consummation of the transactions contemplated thereby, as
applicable, will not (i) require any consent, approval, authorization or
other order of, or qualification with, to our knowledge, any Nevada
court, or any Nevada governmental body or agency (except as such as may
be required under the securities or Blue Sky laws of Nevada (as to which
we express no opinion)), or (ii) constitute a breach of any of the terms
or provisions of, or a default under, the articles of incorporation or
by-laws of the Company.
X-0-0
XXXXXXX X-0
FORM OF OPINION OF XXXXXX AND CALDER
June __, 2002
To: The addressees named in the Schedule
Dear Sirs
WH Intermediate Holdings Ltd. (THE "COMPANY")
We have acted as counsel as to Cayman Islands law to the Company in connection
with its incorporation and the issue of a guarantee by the Company pursuant to
the Indenture (as defined below) in respect of the obligations of WH Acquisition
Corp. (the "ISSUER") of up to US$165,000,000 aggregate principal amount of
11 3/4% Senior Subordinated Notes due 2010 denominated in US dollars (the
"SECURITIES").
1 DOCUMENTS REVIEWED
We have reviewed originals, copies, drafts or conformed copies of the following
documents:
1.1 the Certificate of Incorporation and Memorandum and Articles of
Association of the Company as registered or adopted on 23rd May, 2002;
1.2 the written resolutions dated June __, 2002 and the corporate records of
the Company maintained at its registered office in the Cayman Islands;
1.3 a Certificate of Good Standing issued by the Registrar of Companies (the
"CERTIFICATE OF GOOD STANDING");
1.4 a certificate from a Director of the Company a copy of which is annexed
hereto (the "DIRECTOR'S CERTIFICATE");
1.5 the Indenture dated as of ___ June, 2002 between the Issuer, The Bank of
New York as Trustee and the Company, WH Luxembourg Holdings SARL, WH
Luxembourg Intermediate Holdings SARL and WH Luxembourg CM SARL as
Guarantors in respect of the Securities (the "INDENTURE");
1.6 the Registration Rights Agreement dated as of ___ June, 2002 between the
Issuer, Herbalife International, Inc., UBS Warburg LLC as Initial
Purchaser, the Company and the other Guarantors named therein;
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1.7 the Purchase Agreement dated as of 21st June, 2002 between the Issuer,
Herbalife International, Inc., the Company and the other Guarantors
named therein; and
1.8 the form of Guarantee set forth in Exhibit A to the Indenture.
The documents referred to in paragraphs 1.5 to 1.8 above are collectively
referred to as the "TRANSACTION DOCUMENTS".
2 ASSUMPTIONS
The following opinion is given only as to, and based on, circumstances and
matters of fact existing and known to us on the date of this opinion. This
opinion only relates to the laws of the Cayman Islands which are in force on the
date of this opinion. In giving this opinion we have relied (without further
verification) upon the completeness and accuracy of the Director's Certificate
and the Certificate of Good Standing. We have also relied upon the following
assumptions, which we have not independently verified:
2.1 the Transaction Documents have been or will be authorised and duly
executed and delivered by or on behalf of all relevant parties (other
than the Company as a matter of Cayman Islands law) in accordance with
all relevant laws (other than the laws of the Cayman Islands);
2.2 the Transaction Documents are, or will be, legal, valid, binding and
enforceable against all relevant parties in accordance with their terms
under the laws of the State of New York and all other relevant laws
(other than the laws of the Cayman Islands);
2.3 the choice of the laws of the State of New York as the governing law of
the Transaction Documents has been made in good faith and would be
regarded as a valid and binding selection which will be upheld by the
courts of the State of New York as a matter of the laws of the State of
New York and all other relevant laws (other than the laws of the Cayman
Islands);
2.4 copy documents, conformed copies or drafts of documents provided to us
are true and complete copies of, or in the final forms of, the
originals;
2.5 all signatures, initials and seals are genuine;
2.6 the power, authority and legal right of all parties under all relevant
laws and regulations (other than the laws of the Cayman Islands) to
enter into, execute, deliver and perform their respective obligations
under the Transaction Documents; and
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2.7 there is nothing under any law (other than the law of the Cayman
Islands) which would or might affect the opinions hereinafter appearing.
Specifically, we have made no independent investigation of the laws of
the State of New York.
3 OPINIONS
Based upon, and subject to, the foregoing assumptions and the qualifications set
out below, and having regard to such legal considerations as we deem relevant,
we are of the opinion that:
3.1 The Company has been duly incorporated as an exempted company with
limited liability and is validly existing and in good standing under the
laws of the Cayman Islands.
3.2 The Company has full power and authority under its Memorandum and
Articles of Association to enter into, execute and perform its
obligations under the Transaction Documents.
3.3 The execution and delivery of the Transaction Documents and the
performance by the Company of its obligations thereunder do not conflict
with or result in a breach of any of the terms or provisions of the
Memorandum and Articles of Association of the Company or any law, public
rule or regulation applicable to the Company in the Cayman Islands
currently in force.
3.4 The execution, delivery and performance of the Transaction Documents has
been authorised by and on behalf of the Company and, assuming the
Transaction Documents have been executed and delivered by a director of
the Company, the Transaction Documents have been duly executed and
delivered on behalf of the Company and constitute the legal, valid and
binding obligations of the Company enforceable in accordance with their
terms.
3.5 No authorisations, consents, approvals, licenses, validations or
exemptions are required by law from any governmental authorities or
agencies or other official bodies in the Cayman Islands in connection
with:
3.5.1 the execution, creation or delivery of the Transaction Documents;
3.5.2 subject to the payment of the appropriate stamp duty, enforcement
of the Transaction Documents; or
3.5.3 the performance by the Company of its obligations under any of
the Transaction Documents.
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3.6 No taxes, fees or charges (other than stamp duty) are payable (either by
direct assessment or withholding) to the government or other taxing
authority in the Cayman Islands under the laws of the Cayman Islands in
respect of:
3.6.1 the execution or delivery of the Transaction Documents;
3.6.2 the enforcement of the Transaction Documents;
3.6.3 payments made under, or pursuant to, the Transaction Documents.
The Cayman Islands currently have no form of income, corporate or
capital gains tax and no estate duty, inheritance tax or gift tax.
3.7 The courts of the Cayman Islands will observe and give effect to the
choice of the laws of the State of New York as the governing law of the
Transaction Documents.
3.8 Based solely on our inspection of the Register of Writs and Other
Originating process in the Grand Court of the Cayman Islands from the
date of incorporation of the Company there were no actions or petitions
pending against the Company in the courts of the Cayman Islands as at
close of business in the Cayman Islands on [date on or before day
opinion issued].
3.9 Although there is no statutory enforcement in the Cayman Islands of
judgments obtained in the State of New York, the courts of the Cayman
Islands will recognise a foreign judgment as the basis for a claim at
common law in the Cayman Islands provided such judgment:
3.9.1 is given by a competent foreign court;
3.9.2 imposes on the judgment debtor a liability to pay a liquidated
sum for which the judgment has been given;
3.9.3 is final;
3.9.4 is not in respect of taxes, a fine or a penalty; and
3.9.5 was not obtained in a manner and is not of a kind the enforcement
of which is contrary to the public policy of the Cayman Islands.
3.10 It is not necessary to ensure the legality, validity, enforceability or
admissibility in evidence of the Transaction Documents that any document
be filed, recorded or
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enrolled with any governmental authority or agency or any official body
in the Cayman Islands.
4 QUALIFICATIONS
The opinions expressed above are subject to the following qualifications:
4.1 The term "ENFORCEABLE" as used above means that the obligations assumed
by the Company under the Transaction Documents are of a type which the
courts of the Cayman Islands will enforce. It does not mean that those
obligations will necessarily be enforced in all circumstances in
accordance with their terms. In particular:
4.1.1 enforcement may be limited by bankruptcy, insolvency,
liquidation, reorganisation, readjustment of debts or moratorium
or other laws of general application relating to or affecting the
rights of creditors;
4.1.2 enforcement may be limited by general principles of equity. For
example, equitable remedies such as specific performance may not
be available, inter alia, where damages are considered to be an
adequate remedy;
4.1.3 some claims may become barred under the statutes of limitation or
may be or become subject to defenses of set-off, counterclaim,
estoppel and similar defenses;
4.1.4 where obligations are to be performed in a jurisdiction outside
the Cayman Islands, they may not be enforceable in the Cayman
Islands to the extent that performance would be illegal under the
laws of that jurisdiction;
4.1.5 the Cayman Islands court has jurisdiction to give judgment in the
currency of the relevant obligation and statutory rates of
interest payable upon judgments will vary according to the
currency of the judgment. If the Company becomes insolvent and is
made subject to a liquidation proceeding, the Cayman Islands
court will require all debts to be proved in a common currency,
which is likely to be the "functional currency" of the Company
determined in accordance with applicable accounting principles.
Currency indemnity provisions have not been tested, so far as we
are aware, in the courts of the Cayman Islands; and
4.1.6 obligations to make payments that may be regarded as penalties
will not be enforceable.
4.2 Cayman Islands stamp duty may be payable if the original Transaction
Documents are brought to or executed in the Cayman Islands.
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4.3 To maintain the Company in good standing under the laws of the Cayman
Islands, annual filing fees must be paid and returns made to the
Registrar of Companies.
4.4 The obligations of the Company may be subject to restrictions pursuant
to United Nations sanctions as implemented under the laws of the Cayman
Islands.
4.5 A certificate, determination, calculation or designation of any party to
the Transaction Documents as to any matter provided therein might be
held by a Cayman Islands court not to be conclusive final and binding
if, for example, it could be shown to have an unreasonable or arbitrary
basis, or in the event of manifest error.
4.6 In principle a Cayman Islands court will award costs and disbursements
in litigation in accordance with the relevant contractual provisions but
there remains some uncertainty as to the way in which the rules of the
Grand Court will be applied in practice. Whilst it is clear that costs
incurred prior to judgment can be recovered in accordance with the
contract, it is likely that post-judgment costs (to the extent
recoverable at all) will be subject to taxation in accordance with Grand
Court Rules Order 62.
4.7 We reserve our opinion as to the extent to which a Cayman Islands court
would, in the event of any relevant illegality, sever the offending
provisions and enforce the remainder of the transaction of which such
provisions form a part, notwithstanding any express provisions in this
regard.
4.8 We make no comment with regard to the references to foreign statutes in
the Transaction Documents.
We express no view as to the commercial terms of the Transaction Documents or
whether such terms represent the intentions of the parties and make no comment
with regard to the representations which may be made by the Company.
This opinion is given as of the date shown and may not be relied upon as of any
later date. This opinion may be relied upon by the addressees only. It may not
be relied upon by any other person except with our prior written consent.
Yours faithfully,
XXXXXX and XXXXXX
SCHEDULE
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WH Intermediate Holdings Ltd.
P.O. Box 309GT, Xxxxxx House,
South Church Street, Xxxxxx Town
Grand Cayman, Cayman Islands
UBS Warburg LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
The Bank of New York
[address]
X-0-0
XXXXXXX X-0
FORM OF OPINION OF BONN XXXXXXX STIECHEN
UBS WARBURG LLC
000, Xxxx Xxxxxx
XXX-XXXX, XXX-XXXX 00000
XXXXXX XXXXXX OF AMERICA
Luxembourg, June ___, 2002
WH LUXEMBOURG HOLDINGS S.A.R.L.
WH LUXEMBOURG INTERMEDIATE HOLDINGS S.A.R.L.
WH LUXEMBOURG CM S.A.R.L.
(HEREINAFTER REFERRED TO AS THE "WH GUARANTORS")
------------------------------------------------
Dear Sirs,
We have acted as Luxembourg counsel in connection with:
- an indenture dated June ___, 2002 (hereinafter referred to as the
"Indenture") between WH ACQUISITION CORP., a Nevada corporation, WH
INTERMEDIATE HOLDINGS LIMITED, a Cayman Islands corporation, the WH
Guarantors and the BANK OF NEW-YORK as trustee;
- a registration rights agreement dated June __, 2002 (hereinafter
referred to as the "Registration Rights Agreement") between WH
ACQUISITION CORP., a Nevada corporation, the WH Guarantors and UBS
WARBURG LLC; and
- a purchase agreement dated June ___, 2002 (hereinafter referred to
as the "Purchase Agreement") between WH ACQUISITION CORP., a Nevada
corporation, HERBALIFE INTERNATIONAL, INC., a Nevada corporation,
and the entities listed on the signature pages of the Agreement as
guarantors, including the WH Guarantors.
We have examined copies of the Indenture, the Registration Rights
Agreement and the Purchase Agreement and such other documents as we have
considered necessary.
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We have not made any investigation of, and do not purport to express any
opinion on, the law of any jurisdiction other than Luxembourg.
We have assumed:
(i) the capacity, power and authority of each of the parties (other
than the WH Guarantors) to execute and deliver the Indenture, the
Registration Rights Agreement and the Purchase Agreement
(together the "DOCUMENTS");
(ii) that the execution copies of the Documents correspond in
substance to the drafts that were submitted to us;
(iii) the due execution of the Documents by each of the parties (other
than the WH Guarantors);
(iv) the due delivery of the Documents by each of the parties (other
than the WH Guarantors);
(v) the conformity to original documents of all copy documents
examined by us; and
(vi) the validity of the Documents and all other documents related to
this transaction under their governing laws (other than the laws
of Luxembourg) and the laws governing the parties thereto (other
than the WH Guarantors).
Capitalised terms used herein but not otherwise defined shall have the
meanings given to them in the Documents.
Based upon and subject to the foregoing, we are of the following
opinion:
1. The WH Guarantors are corporations (societes a responsabilite
limitee) duly organised and validly existing for an unlimited duration under the
laws of Luxembourg and have the corporate capacity, power and authority to enter
into the Documents and to carry out the transactions on the part of the WH
Guarantors thereby contemplated. The WH Guarantors have not been declared
bankrupt and, to the best of our knowledge, no steps have been taken for their
winding up.
2. The entry into and the execution, delivery and performance of the
Documents has been duly authorised on behalf of each of the WH Guarantors.
3. The Documents have been duly executed and delivered and the
obligations of the WH Guarantors contained in the Documents constitute valid and
legally binding
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obligations of the WH Guarantors enforceable against the WH Guarantors in
accordance with their terms by the courts of Luxembourg.
4. None of the WH Guarantors is in violation of its constitutional
documents.
5. The execution or delivery of the Documents or performance of any of
the WH Guarantors' obligations under the Documents does not infringe or is not
inconsistent with or a breach of or default under, any provision of the
constitutional documents of any of the WH Guarantors or any Luxembourg law or
regulation by which the WH Guarantors are bound and nothing in Luxembourg law or
public policy will prevent the Documents from being enforced in the Luxembourg
courts.
6. Subject to the provisions of qualification (o), it is not necessary
or advisable in order to ensure the legality, validity, enforceability or
admissibility in evidence of any of the Documents that it or any other document
be notarised or subject to any other formality or be filed, recorded, registered
or enrolled with any court or authority in Luxembourg or that any other action
be taken in relation to the same or any of them.
7. There is no withholding or other tax or duty imposed by any law, rule
or regulation in Luxembourg on any payment to be made by the WH Guarantors under
any of the Documents, save that payments made pursuant to the Documents may
constitute taxable income in the hands of recipients resident in Luxembourg
and/or recipients not resident in Luxembourg but having a permanent
establishment or a permanent representative in Luxembourg to which or to whom
the Documents are attributable.
8. If a Luxembourg court were to accept jurisdiction in any legal suit,
action or proceeding arising out of or in connection with the Documents, it
would accept, and give effect to, the choice of law provisions of the Documents.
The opinions expressed herein are subject to the following
qualifications:
(a) the obligations of the parties under the Documents may be limited by
the general principles of bankruptcy, insolvency, liquidation, reorganisation,
reconstruction or other laws affecting the enforcement of creditors' rights
generally (hereafter the "INSOLVENCY LAWS", and the relevant proceedings being
referred to collectively as the "INSOLVENCY PROCEEDINGS"), and, in particular,
in relation to the WH Guarantors:
- during a gestion controlee (controlled management) procedure
under the Grand-Ducal Decree dated May 24, 1935 on the procedure
of gestion controlee, the rights of secured creditors are frozen
until a final decision has been taken by the court as to the
petition for controlled management;
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- the obligations of the WH Guarantors under the Documents may be
affected and, after their performance, subject to annulment by a
court on the basis of Article 445 of the Luxembourg Code of
Commerce, if the Documents have been entered into during the
suspect period ("periode suspecte"), such period being determined
by the court in the judgement opening the insolvency proceedings,
and preceding the date of such judgement by a maximum of 6 months
and 10 days, and if the Documents constitute or contain, or the
performance of such obligations thereunder would constitute (i) a
contract for the transfer of movable or immovable property done
without consideration, or a contract or transaction done with
notably insufficient consideration for the insolvent party, or
(ii) a payment, whether in cash or by transfer, assignment, sale,
set-off or otherwise for debts not yet due, or a payment other
than in cash or bills of exchange for debts due, or (iii) a
contractual or judiciary mortgage, pledge, or charge on the
debtor's assets for previously contracted debts;
- the obligations of the WH Guarantors under the Documents may be
affected and after their performance, subject to annulment by a
court on the basis of Article 446 of the Luxembourg Code of
Commerce, if the Documents constitute or contain, or the
performance of such obligations thereunder would constitute a
payment for due debts or an onerous act done by the WH Guarantors
after the stoppage of payments (such date as determined by the
court) and prior to the judgement opening insolvency proceedings,
if the counter-party that has received from or dealt with the WH
Guarantors had knowledge of the stoppage of payments;
- regardless of the date of execution and performance, the
Documents may be declared null and void in relation to the WH
Guarantors, if they have been entered into with the fraudulent
intent of the parties thereto to deprive other creditors of the
insolvent party of their rights (Article 448 of the Code of
Commerce);
- the obligations of the WH Guarantors may be affected or limited
by the rights of the receiver liquidator or other court official
appointed in the Insolvency Proceedings to selectively perform
contracts profitable to the insolvent party's estate and renounce
to the performance of contracts which are not profitable to the
insolvent party's estate ("cherry-picking"), where such contracts
have not been terminated automatically by the opening of the
insolvency proceedings on the basis of an express contractual
provision, or by operation of law;
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(b) by application of article 203 of the Luxembourg Code on Commercial
Companies a company not respecting any provision of Luxembourg criminal law or
Luxembourg Law on Commercial Companies (especially but not limited to the
obligations to lodge with the Register and publish the annual accounts) may be
put into judicial liquidation upon the application of the Public Prosecutor;
(c) the rights and obligations of the parties under the Documents may be
limited by general principles of criminal law, including but not limited to
criminal freezing orders;
(d) whilst, in the event of any proceedings being brought in a
Luxembourg court in respect of a monetary obligation expressed to be payable in
a currency other than Euro, a Luxembourg court would have power to give
judgement expressed as an order to pay a currency other than Euro, enforcement
of the judgement against the WH Guarantors in Luxembourg would be available only
in Euro and for such purposes all claims or debts would be converted into Euro;
(e) a Luxembourg court may stay proceedings if concurrent proceedings
are being brought elsewhere;
(f) the expression valid and binding in paragraph 3 above means that the
obligations expressed to be assumed under the Documents are of a type which the
Luxembourg courts would treat as valid and binding. It does not mean that these
obligations will necessarily be enforced in all circumstances in accordance with
their terms, as to which reference is made to the other qualifications expressed
in this opinion and to the fact that a remedy such as specific performance or
the issue of an injunction or a remedy such as termination for breach of
contract are discretionary. In particular, notwithstanding any agreement
purporting to confer the availability of any remedy, such remedy may not be
available where damages instead of specific performance or specific performance
instead of termination for breach of contract are considered by the court to be
an adequate alternative remedy;
(g) a contractual provision conferring or imposing a remedy, an
obligation or penalty consequent upon default may not be fully enforceable if it
were construed by a Luxembourg court as constituting an excessive pecuniary
remedy;
(h) a Luxembourg court may refuse to give effect to a purported
contractual obligation to pay costs imposed upon another party in respect of the
costs of any unsuccessful litigation brought against that party before a
Luxembourg court and a Luxembourg court may not award by way of costs all of the
expenditure incurred by a successful litigant in proceeding brought before such
court;
(i) with respect to provisions under which determination of
circumstances or certification by any party is stated or implied to be
conclusive and binding upon the WH
A-8-5
Guarantors, a Luxembourg court would be authorised to examine whether such
determination occurred in good faith;
(j) claims may become barred under the statute of limitations or may be
or become subject to defences of set-off or counterclaim. As a principle, in
commercial matters, claims are barred at the end of ten years and claims
relating to interests at the end of five years;
(k) the Luxembourg courts would not apply a chosen foreign law if the
choice was not made bona fide and/or if:
- the foreign law was not pleaded and proved; or
- if pleaded and proved, such foreign law would be contrary to the
mandatory rules of Luxembourg law or manifestly incompatible
with Luxembourg international public policy or public order;
(l) a Luxembourg court may refuse to apply the chosen governing law:
- if all elements of the matter are localised in a country other
than the jurisdiction of the chosen governing law in which case
it may apply the imperative laws of that jurisdiction; or
- if the agreement has a strong connection to another jurisdiction
and certain laws of that jurisdiction are applicable regardless
of the chosen governing law ("xxxx de police"), in which case it
may apply those laws; or
- if a party is subject to insolvency proceedings, in which case
it apply the insolvency laws of the jurisdiction in which such
insolvency proceedings have been regularly opened to the effects
of such insolvency;
(m) notwithstanding the jurisdiction clause contained in the Documents,
Luxembourg courts would have in principle jurisdiction for any conservatory or
provisional action in connection with assets located in Luxembourg and such
action would most likely be governed by Luxembourg law;
7. the admissibility as evidence of the Documents before a Luxembourg
court or Public Authority to which the Documents are produced may require that
the Documents be accompanied by a complete or partial translation in the French
or German language;
8. although such orders are rarely made in practice, Luxembourg courts
may require the prior registration of the Documents, or any other document if
they were to be
A-8-6
produced in a Luxembourg court action, in which case a registration duty would
become payable;
9. no opinion is given as to whether the performance of the Documents
would cause any borrowing limits, debt/equity ratios, prudential, regulatory or
other applicable ratios or borrowing limits to be exceeded or as to the
consequences thereof;
10. other than as referred to in paragraph 6, no opinion is expressed on
any tax consequences of the transactions considered;
11. no opinion is expressed or implied in relation to the accuracy of
any representation or warranty given by or concerning any of the parties to the
Documents or whether such parties or any of them have complied with or will
comply with any covenant or undertaking given by them or the terms and
conditions of any obligations binding upon them;
12. a severability clause may be ineffective if a Luxembourg court
considers that the illegal, invalid or unenforceable clause was a substantive or
material clause;
13. as regards the enforcement in Luxembourg of a civil or commercial
judgement delivered in a court of a state different from the Signatory States of
the Brussels or the Lugano Convention which is expressed to have jurisdiction in
the Documents (the "Court"), such enforcement would make it necessary to
commence recognition and enforcement proceedings before the Luxembourg courts
and, in this respect, (i) the enforceable nature of such judgement, (ii) the
international jurisdiction of the Court in light of the Luxembourg applicable
rules, (iii) the jurisdiction of the Court in light of its own domestic
applicable rules, (iv) the application of the appropriate law as determined by
the Luxembourg rules of conflict of laws, (v) the compliance with the rules of
procedure as determined by the law applicable to the Court and (vi) the
compliance of such judgement with Luxembourg public order ("ordre public") would
be examined;
14. a company which has been incorporated, but whose articles of
incorporation have not yet been published in the Memorial C will not be entitled
to start any legal proceedings as plaintiff until such publication has been
made;
15. we express no opinion as regards the enforceability of any security
interest (including any guarantee) in the Documents in case the security
interest was called in an abusive manner.
This opinion is given to you for use in connection with the entry into
of Documents. It may not be relied upon by any other person or used for any
other purpose and neither its contents nor its existence may be disclosed
without our written consent, save that its delivery may be referred to as a
condition of the closing and it may be disclosed to (but may not be relied upon
by) your legal advisors.
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This opinion is governed by Luxembourg law and Luxembourg courts shall
have exclusive jurisdiction thereon.
Yours faithfully,
BONN XXXXXXX XXXXXXXX
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EXHIBIT A-9
FORM OF OPINION OF XXXXXXXXXX & XXXXX LLP
The opinion of Xxxxxxxxxx & Xxxxx LLP, special counsel to Xxxxxxx
X., L.P. (the "SPONSOR") and Whitney Equity Partners V, LLC (the "GENERAL
PARTNER") with regard to the Whitney Support Agreement (capitalized terms not
otherwise defined herein shall have the meanings provided in the Purchase
Agreement, to which this is an Exhibit), to be delivered pursuant to Section
8(f) of the Purchase Agreement shall be to the effect that:
(vii) The Sponsor is a limited partnership duly formed, validly existing and
in good standing under the Delaware Revised Uniform Limited Partnership
Act, as amended (the "Partnership Act"), and has all partnership power
and authority under the Partnership Act and its limited partnership
agreement required to carry on its business as now conducted;
(viii) The General Partner is a limited liability company duly formed, validly
existing and in good standing under the Delaware Limited Liability
Company Act, as amended, and has all company and partnership power and
authority to act as the general partner of the Sponsor and to enter into
the Whitney Support Agreement on behalf of the Sponsor;
(ix) The General Partner has duly take or caused to be taken all necessary
company and partnership action to authorize the execution and delivery
of the Whitney Support Agreement on behalf of the Sponsor.
(x) The Sponsor has the partnership power and authority to enter into the
Whitney Support Agreement and to perform its obligations thereunder and
has, by proper partnership action, duly authorized the execution and
delivery of the Whitney Support Agreement and the performance of its
obligations thereunder.
(xi) The Whitney Support Agreement has been duly executed and delivered by
the Sponsor.
(xii) The Whitney Support Agreement constitutes a legal, valid and binding
obligation of the Sponsor, enforceable against the Sponsor in accordance
with its terms.
(xiii) The execution and deliver of the Whitney Support Agreement by the
Sponsor and the performance of the obligations thereunder will not
violate, represent a breach of or constitute a default under any
provision of the certificate of limited partnership or the limited
partnership agreement of the Sponsor.
A-9-1
EXHIBIT A-10
FORM OF OPINION OF XXXXXXXX & XXXXX
The opinion of Xxxxxxxx & Xxxxx, special counsel to Golden Gate
Capital Management, L.L.C. (the "GENERAL PARTNER"), as general partner of CCG
Investments (BVI), L.P. (the "Fund") with regard to the Golden Gate Support
Agreement (capitalized terms not otherwise defined herein shall have the
meanings provided in the Purchase Agreement, to which this is an Exhibit), to be
delivered pursuant to Section 8(f) of the Purchase Agreement shall be to the
effect that:
(i) The General Partner is a limited liability company duly formed, validly
existing and in good standing under the Delaware Limited Liability
Company Act.
(ii) The General Partner, in its capacity as general partner of the Fund, has
all limited liability company power to enter into the Golden Gate
Support Agreement on behalf of the Fund.
(iii The General Partner's Board of managers have, by unanimous written
resolution, authorized the General Partner's execution and delivery of
the Golden Gate Support Agreement on behalf of the Fund.
A-10-1
EXHIBIT A-10
FORM OF OPINION OF XXXXXX WESTWOOD & RIEGELS
The opinion of Xxxxxx Westwood & Riegels, special counsel to CCG
Investments (BVI) L.P. (the "SPONSOR") with regard to the Golden Gate Support
Agreement (capitalized terms not otherwise defined herein shall have the
meanings provided in the Purchase Agreement, to which this is an Exhibit), to be
delivered pursuant to Section 8(f) of the Purchase Agreement shall be to the
effect that:
(xiv) The Sponsor is a limited partnership duly formed, validly existing and
in good standing under the Xxxxxxxxxxx Xxx, 0000, as amended (the
"Partnership Act") and has all partnership power and authority under the
Partnership Act the Articles required to carry on its business in
accordance therewith;
(xv) The Sponsor has the partnership power and authority to enter into the
Golden Gate Support Agreement and to perform its obligations thereunder
and has, by proper partnership action, duly authorized the execution and
delivery of the Golden Gate Support Agreement and the performance of its
obligations thereunder.
(xvi) The Golden Gate Support Agreement has been duly executed and delivered
by the Sponsor.
(xvii) The Golden Gate Support Agreement constitutes a legal, valid and binding
obligation of the Sponsor, enforceable against the Sponsor in accordance
with its terms.
(xviii) The execution and deliver of the Golden Gate Support Agreement by the
Sponsor and the performance of the obligations thereunder will not
violate, represent a breach of or constitute a default under any
provision of the Certificate of Limited Partnership or the Articles.
(xix) It is not necessary under the laws of the British Virgin Islands (a) in
order to enable you to enforce your rights under the Golden Gate Support
Agreement or (b) by reason of the execution, delivery or performance of
the Golden Gate Support Agreement, that you be licensed, qualified or
entitled to carry on business in the Business Virgin Islands and you are
not and will not be resident, domiciled, carrying on business or subject
to taxation in the British Virgin Islands by reason only of the
execution, delivery, performance or enforcement of the Golden Gate
Support Agreement.
A-11-1
EXHIBIT B
WH ACQUISITION CORP.
$165,000,000 11 3/4% SENIOR SUBORDINATED NOTES DUE 2010
JOINDER TO THE PURCHASE AGREEMENT
____________, 0000
Xxx Xxxx, Xxx Xxxx
UBS WARBURG LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Reference is made to the Purchase Agreement (the "PURCHASE
AGREEMENT") dated June 21, 2002, among WH Acquisition Corp., a Nevada
corporation (the "ISSUER"), Herbalife International, Inc., a Nevada corporation
(the "COMPANY") and UBS Warburg LLC, (the "INITIAL PURCHASER"), concerning the
purchase of the Notes from the Issuer by the Initial Purchaser. Capitalized
terms used herein but not defined herein shall have the meanings assigned to
such terms in the Purchase Agreement. This is the agreement referred to in
Section 17 of the Purchase Agreement.
The Issuer and each of the Herbalife Guarantors listed on Schedule I
hereto agree that this letter agreement is being executed and delivered in
connection with the issue and sale of the Notes pursuant to the Purchase
Agreement and to induce the Initial Purchase to purchase the Notes thereunder
and is being executed concurrently with the consummation of the Merger.
1. Joinder. Each of the parties hereto hereby agrees to become bound
by the terms, conditions and other provisions of the Purchase Agreement with all
attendant rights, duties and obligations stated therein, with the same force and
effect as if originally named as a Guarantor therein and as if such party
executed the Purchase Agreement on the date thereof.
2. Representations, Warranties and Agreements of the Guarantors.
Each of the Guarantors represent and warrant to, and agree with, the Initial
Purchaser on and as of the date hereof that:
B-1
(a) such Guarantor has all requisite power and authority (corporate
or otherwise) to execute and deliver this letter agreement and all requisite
power and authority (corporate or otherwise) required to be taken for the due
and proper authorization, execution, delivery and performance of this letter
agreement and the consummation of the transactions contemplated hereby has been
duly and validly taken; this letter agreement has been duly authorized, executed
and delivered by such Guarantor.
(b) the representations, warranties and agreements of such Guarantor
set forth in Section 5 of the Purchase Agreement are true and correct on and as
of the date hereof.
3. Governing Law. This letter agreement shall be governed by and
construed in accordance with the laws of the State of New York.
4. Counterparts. This letter agreement may be executed in one or
more counterparts (which may include counterparts delivered by telecopier) and,
if executed in more than one counterpart, the executed counterparts shall each
be deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
5. Amendments. No amendment or waiver of any provision of this
letter agreement, nor any consent or approval to any departure therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
parties hereto.
6. Headings. The headings herein are inserted for the convenience of
reference only and are not intended to be part of, of to affect the meaning or
interpretation of, this letter agreement.
[signature page follows]
B-2
If the foregoing is in accordance with your understanding of this
letter agreement, kindly sign and return to us a counterpart thereof, whereupon
this instrument will become a binding agreement between the Issuer, the Company,
the Guarantors and the Initial Purchaser in accordance with its terms.
Very truly yours,
[GUARANTOR]
By:
----------------------------
Accepted , 2002
-------------
UBS WARBURG LLC
By: /s/
------------------------
B-3
ANNEX A
FORM OF REGISTRATION RIGHTS AGREEMENT
[ATTACHED]
Annex A-1
ANNEX B
FORM OF SECURITY AND CONTROL AGREEMENT
[ATTACHED]
Annex B-1
ANNEX C-1
FORM OF WHITNEY SUPPORT AGREEMENT
COLLATERAL SUPPORT AND ASSIGNMENT AGREEMENT
THIS COLLATERAL SUPPORT AND ASSIGNMENT AGREEMENT, is dated as of
June __, 2002 (as amended, supplemented, restated or otherwise modified from
time to time, this "Agreement"), and is entered into by and among WH Acquisition
Corp, a Nevada corporation (the "Company"), Whitney V, L.P., a Delaware limited
partnership (the "Sponsor"), Whitney Equity Partners V, LLC, a Delaware limited
liability company, the general partner of the Sponsor (the "General Partner")
and The Bank of New York, as trustee (the "Trustee") under the Indenture
referred to below.
WITNESSETH
WHEREAS, pursuant to an agreement and plan of merger, dated as of
April 10, 2002 (the "Merger Agreement"), by and among WH Holdings (Cayman
Islands) Ltd., a Cayman Islands corporation, the Company and Herbalife
International, Inc., a Nevada corporation ("Herbalife"), the Company has agreed
to merge with and into Herbalife (the "Merger") with Herbalife continuing as the
surviving corporation and wholly-owned subsidiary of WH Holdings (Cayman
Islands) Ltd.;
WHEREAS, the Company is issuing on the date hereof $165,000,000
aggregate principal amount of 11 3/4% Senior Subordinated Notes due 2010 (and
any notes that may from time to time be issued in substitution therefor, the
"Notes"). The Notes will be issued pursuant to an indenture, dated as of the
date hereof, by and among the Company, the guarantors signatory thereto and the
Trustee (as amended, restated, supplemented or otherwise modified from time to
time, the "Indenture");
WHEREAS, the Company has entered into a Security and Control
Agreement, dated as of the date hereof (the "Security and Control Agreement"),
by and among the Company, the Trustee, and The Bank of New York, as securities
intermediary (the "Securities Intermediary"), pursuant to which the Company has
agreed to place the net proceeds of the offering of the Notes in a secured
proceeds account pending the completion of the Merger;
WHEREAS, under the terms of the Indenture,
(a) If (i) the Merger has not occurred prior to the close of
business on August 31, 2002, or (ii) the Company has determined that the Merger
will not occur by that date on substantially the terms set forth in the Merger
Agreement and the Offering Memorandum (each, a "Triggering Event"), the Company
shall, in accordance with the procedures set forth in the Indenture, redeem (a
"Mandatory Redemption") all of the outstanding Notes, for a price equal to 101%
of their principal amount, plus accrued and
Annex C-1-1
unpaid interest thereon through the redemption date, together with Liquidated
Damages, if any (the "Mandatory Redemption Price"). The Mandatory Redemption
must occur no later than 10 Business Days after the Triggering Event (the
"Mandatory Redemption Date"); and
WHEREAS, it is a condition precedent to the issuance and sale of the
Notes that the Sponsor enter into this Agreement to provide support for the
obligations of the Company in connection with any Mandatory Redemption.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINITIONS. Capitalized terms used herein but not
otherwise defined herein shall have the meanings provided in the Indenture.
Capitalized terms defined herein and also defined in the Indenture shall have
the meanings provided herein. In addition, the following terms shall have the
following meanings:
"Fully Satisfied" means, with respect to the Support Obligation as
of any date, that, as of such date, (a) the Support Obligation shall have been
paid in full in cash and, (b) all fees, expenses and other amounts then due and
payable under this Agreement shall have been paid in cash.
"Material Adverse Effect" means a material adverse effect on (i) the
ability of the Sponsor to perform any material obligation under this Agreement
or (ii) the material rights and remedies of the Trustee under this Agreement.
"Partners" means a collective reference to all of the partners of
the Sponsor.
"Transaction Documents" means the Indenture, the Notes, the
Registration Rights Agreement and the Security and Control Agreement,
collectively.
SECTION 2. COLLATERAL SUPPORT OBLIGATION.
(a) Support Obligation. If a Triggering Event occurs, the Sponsor
shall, on or prior to the Mandatory Redemption Date, make a capital contribution
to the Company in an amount equal to: (i) the Mandatory Redemption Price, minus
(ii) the net liquidation proceeds (after deducting any applicable Securities
Intermediary and Trustee fees and charges) delivered to the Trustee in
accordance with Section 6.2 of the Security and Control Agreement (the
obligation to make such payment, the "Support Obligation").
(b) Limitation of Support Obligation. Notwithstanding the provisions
of clause (a) of this Section 2, the Sponsor shall have no obligation hereunder
to make any contribution to the Company in respect of any amount of the Support
Obligation that has been previously funded by any other Person.
Annex C-1-2
SECTION 3. ASSIGNMENT TO TRUSTEE. The Company hereby unconditionally
and irrevocably assigns, transfers, conveys, contributes, delivers and sets over
to the Trustee all right, title and interest of the Company in and to the
Support Obligation (the "Assignment"). The Assignment is an absolute assignment
and not a transfer for security. The Trustee hereby accepts the Assignment of
the Support Obligation. The Sponsor hereby consents to the Assignment. The
Assignment shall take effect as of the date hereof.
SECTION 4. OBLIGATIONS UNCONDITIONAL. The obligations of the Sponsor
under Section 2 hereof are absolute and unconditional, irrespective of the
value, genuineness, validity, regularity or enforceability of any of the
Transaction Documents, or any other agreement or instrument referred to therein,
or any substitution, release, impairment or exchange of any other guarantee of
or security for the Support Obligation, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever which might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of all parties that the Sponsor's Support
Obligation shall be absolute and unconditional under any and all circumstances.
With respect to its obligations hereunder, the Sponsor hereby waives
diligence, presentment, demand of payment, protest, all notices whatsoever, and
any requirement that the Trustee or Securities Intermediary exhaust any right,
power or remedy or proceed against any Person under any Transaction Document or
any other agreement or instrument referred to in the Transaction Documents, or
against any other Person under any other guarantee of, or security for, the
Support Obligation, except that upon closing of the Merger Sponsor shall be
released.
SECTION 5. REINSTATEMENT. Neither the Support Obligation nor any
remedy for the enforcement thereof shall be impaired, modified, changed or
released in any manner whatsoever by an impairment, modification, change,
release or limitation of the liability of the Company or any guarantor, by
reason of the Company's or any guarantor's bankruptcy or insolvency or by reason
of the invalidity or unenforceability of all or any portion of the Support
Obligation. The obligations of the Sponsor under this Agreement shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Support Obligation is rescinded or
must be otherwise restored by any holder of the Support Obligation, whether as a
result of any proceedings in bankruptcy or reorganization or otherwise.
SECTION 6. CERTAIN ADDITIONAL WAIVERS. The Sponsor agrees that this
Agreement may be enforced by the Trustee without the necessity of resorting to
or exhausting any other security or collateral and without the necessity at any
time of having recourse under the Indenture or any collateral securing the
Support Obligation or otherwise, and the Sponsor agrees not to assert any right
to require the Trustee proceed against the Company or any other Person or to
require the Trustee pursue any other remedy or enforce any other right. The
Sponsor further acknowledges and agrees that nothing contained in this Agreement
shall
Annex C-1-3
prevent the Trustee from suing any other Person in respect of the Support
Obligation, foreclosing on any security interest or lien on any collateral
securing the Support Obligation or from exercising any other right available to
the Trustee in respect of the Support Obligation, if the Sponsor does not timely
perform the Support Obligation. The exercise of any of such rights and
completion of any such foreclosure proceedings shall not constitute a discharge
of the Sponsor's obligations hereunder unless as a result thereof the Support
Obligation shall have been Fully Satisfied, it being all parties' purpose and
intent that the Support Obligation is absolute, irrevocable, independent and
unconditional under all circumstances, except as such obligations may be
terminated in accordance with the terms hereof.
SECTION 7. CALIFORNIA WAIVERS. For purposes of this Section 7 only,
references to the "principal" include the Sponsor and references to the
"creditor" includes the Trustee. In accordance with Section 2856 of the
California Civil Code, the Sponsor waives all rights and defenses (i) available
to it by reason of Sections 2787 through 2855, 2899, and 3433 of the California
Civil Code, including all rights or defenses it may have by reason of protection
afforded to the principal with respect to the Support Obligation, or to any
other person liable for the Support Obligation, in either case in accordance
with the antideficiency or other laws of the State of California limiting or
discharging the principal's Indebtedness or such person's obligations, including
Sections 580a, 580b, 580d and 726 of the California Code of Civil Procedure; and
(ii) arising out of an election of remedies by the creditor, even though such
election, such as a nonjudicial foreclosure with respect to security for Support
Obligation (or any obligation of any other person of the Support Obligation),
has destroyed the Sponsor's right of subrogation and reimbursement against the
principal (or such other person), by operation of Section 580d of the California
Code of Civil Procedure or otherwise. No other provision of this Agreement shall
be construed as limiting the generality of any of the covenants and waivers set
forth in this Section 7. As provided below, this Agreement shall be governed by,
and shall be construed and enforced in accordance with the laws of the State of
New York. This Section 7 is included solely out of an abundance of caution, and
shall not be construed to mean that any of the above-referenced provisions of
California law are in any way applicable to this Agreement or to the Support
Obligation.
SECTION 8. REPRESENTATIONS AND WARRANTIES. The Sponsor hereby
represents and warrants to the Trustee and the Company that:
(a) Existence and Power. The Sponsor is a limited partnership duly
formed, validly existing and in good standing under the State of Delaware, is in
good standing as a foreign limited partnership in each other jurisdiction where
ownership of its properties or the conduct of its business requires it to be so
(except to the extent that the failure to be in good standing as a foreign
limited partnership would not have a Material Adverse Effect), and has all power
and authority under such laws and the Limited Partnership Agreement and all
material governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted.
Annex C-1-4
(b) Authorization. The Sponsor has the power and authority to enter
into this Agreement, to perform its obligations hereunder and consummate the
transactions contemplated hereby and has by proper action duly authorized the
execution and delivery of this Agreement.
(c) No Conflicts or Consents. Neither the execution and delivery of
this Agreement, the consummation of the transactions contemplated herein, nor
the performance of and compliance with the terms and provisions hereof will (i)
violate or conflict with any provision of the Limited Partnership Agreement or
other governance document, (ii) violate any material law, regulation, order,
writ, judgment, injunction, decree or permit applicable to the Sponsor, (iii)
violate or materially conflict with material contractual provisions of, or cause
an event of default under, any indenture, loan agreement, mortgage, deed of
trust, contract or other agreement or instrument to which the Sponsor is a party
or by which it may be bound or (iv) result in or require the creation of any
material lien, security interest or other charge or encumbrance (other than
those contemplated in or in connection with this Agreement) upon or with respect
to the Sponsor's properties.
(d) Consents. No consent, approval, authorization or order of, or
filing, registration or qualification with, any Person which has not been
obtained is required in connection with the execution, delivery or performance
of this Agreement by the Sponsor.
(e) Enforceable Obligations. This Agreement has been duly executed
and delivered by the Sponsor and constitutes the legal, valid and binding
obligation of the Sponsor, enforceable in accordance with its respective terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
(i) Adequate Capital Commitments. The Sponsor has adequate capital
commitments from the Partners to satisfy its Support Obligations.
SECTION 9. COVENANTS. The Sponsor hereby covenants and agrees with
the Trustee that so long as this Agreement is in effect:
(a) Preservation of Existence and Franchises. The Sponsor will do,
or cause to be done, all things necessary to preserve and keep in full force and
effect its existence, material rights, material franchises and authority.
(b) Compliance with Law. The Sponsor will comply in all material
respects with all applicable laws, rules, regulations and orders of, and all
applicable restrictions imposed by, all applicable governmental bodies, foreign
or domestic, or authorities and agencies thereof (including quasi-governmental
authorities and agencies), in respect of the conduct of its business and the
ownership of its property (including applicable statutes, regulations, orders
and restrictions relating to environmental standards and controls).
Annex C-1-5
(c) Nature of Business. The Sponsor will not engage in any business
activity that is not permitted by its limited partnership agreement.
(d) Consolidation or Merger. The Sponsor will not dissolve,
liquidate in its entirety, or wind up its affairs, or enter into any transaction
of merger or consolidation.
(e) Adequate Capital Commitments. The Sponsor will cause the capital
commitments from the Partners at all times to be sufficient to satisfy its
Support Obligations.
(f) Requests for Capital Contributions. Upon the occurrence of a
Triggering Event, the General Partner to take all steps required to cause the
Partners to make capital contributions in an aggregate amount (taken together
with any corresponding capital contribution by the General Partner and any
amounts to be provided in respect of the Support Obligation by Persons other
than the Sponsor) at least equal to the Support Obligation no later than four
Business Days following the Triggering Event.
SECTION 10. ADDITIONAL LIABILITY OF THE SPONSOR. If the Sponsor is
or becomes liable for any indebtedness owing by the Company to the Trustee by
endorsement or otherwise other than under this Agreement, such liability shall
not be in any manner impaired or reduced hereby but shall have all and the same
force and effect it would have had if this Agreement had not existed and the
Sponsor's liability hereunder shall not be in any manner' impaired or reduced
thereby.
SECTION 11. NO WAIVER; CUMULATIVE RIGHTS. No failure or delay on the
part of the Trustee in exercising any right, power or privilege hereunder or
under any other Transaction Document and no course of dealing between the
Trustee and the Company or the Sponsor shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege hereunder
or under any other Transaction Document preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder or
thereunder. The rights and remedies provided herein are cumulative and not
exclusive of any rights or remedies which the Trustee would otherwise have. No
notice to or demand on the Company or the Sponsor in any case shall entitle
either of them to any other or further notice or demand in similar or other
circumstances or constitute a waiver of any rights of the Trustee.
SECTION 12. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
on and enforceable against the Sponsor and its successors and assigns. The
Sponsor may not assign or transfer any of its obligations hereunder without
prior written consent of the Trustee.
SECTION 13. MODIFICATIONS. This Agreement and the provisions hereof
may be amended, changed, waived, discharged or terminated only by an instrument
in writing signed by the Sponsor and the Trustee. Without limiting the
generality of the immediately preceding sentence, no action under and in
accordance with Article IX of the Indenture to effectuate any amendment, change,
waiver, discharge or termination in respect of any event or
Annex C-1-6
condition constituting a Default shall be effective to amend, change, waive,
discharge or terminate any provision of this Agreement.
SECTION 14. NOTICES. Except as otherwise expressly provided herein,
all notices and other communications shall have been duly given and shall be
effective (a) when delivered, (b) when transmitted via telecopy (or other
facsimile device) to the number set out below, (c) on the Business Day following
the day on which the same has been delivered prepaid to a reputable national
overnight air courier service, or (d) on the third Business Day following the
day on which the same is sent by certified or registered mail, postage prepaid,
in each case to the address set forth below or such other address as a party may
specify by written notice to the other parties hereto:
if to the Sponsor:
Whitney V, L.P.
c/o Whitney & Co., LLC
000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: General Counsel
Telecopier: (000) 000-0000
with a copy to:
Xxxxxxxxxx & Xxxxx LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxx, Esq.
Telecopier: (000) 000-0000
if to the General Partner:
Whitney Equity Partners V, LLC
c/o Whitney & Co., LLC
000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: General Counsel
Telecopier: (000) 000-0000
with a copy to:
Xxxxxxxxxx & Xxxxx LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxx, Esq.
Telecopier: (000) 000-0000
Annex C-1-7
if to the Company:
WH Acquisition Corp.
c/o Whitney & Co., LLC
000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: General Counsel
Telecopier: (000) 000-0000
with a copy to:
Xxxxxxxxxx & Xxxxx LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxx, Esq.
Telecopier: (000) 000-0000
if to the Trustee:
The Bank of New York
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Global Finance Unit
Telecopier: (000) 000-0000
SECTION 15. SEVERABILITY. If any provision of this Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provision.
SECTION 16. GOVERNING LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, INCLUDING, WITHOUT LIMITATION, SECTION 5-1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW.
Annex C-1-8
SECTION 17. HEADINGS. The headings in this instrument are for
convenience of reference only and shall not limit or otherwise affect the
meaning of any provisions hereof.
SECTION 18. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by different parties hereto on separate counterparts,
each constituting an original, but all together one and the same instrument.
Delivery by facsimile by any party hereto of an executed counterpart of this
Agreement shall be as effective as an original executed counterpart hereof and
shall be deemed a representation that an original executed counterpart hereof
will be delivered.
SECTION 19. TERM OF AGREEMENT. This Agreement shall continue in full
force and effect until the earlier of (i) the date upon which all of the Notes
are redeemed pursuant to Section 3.8 of the Indenture and (ii) the date the
Merger is consummated, and following any such termination, Sponsor shall have no
further liability hereunder.
Annex C-1-9
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed and delivered as of the day and year first above
written.
WH ACQUISITION CORP.
By: /s/
------------------------------------
Name:
Title:
WHITNEY V, L.P.
By: WHITNEY EQUITY PARTNERS V, L.L.C.,
its General Partner
By: /s/
------------------------------------
its Managing Member
By: /s/
------------------------------------
Name:
Title:
WHITNEY EQUITY PARTNERS V, L.L.C.
By: /s/
------------------------------------
its Managing Member
By: /s/
------------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as trustee
By: /s/
------------------------------------
Name:
Title:
Annex X-0-00
XXXXX X-0
XXXX XX XXXXXX XXXX SUPPORT AGREEMENT
COLLATERAL SUPPORT AND ASSIGNMENT AGREEMENT
THIS COLLATERAL SUPPORT AND ASSIGNMENT AGREEMENT, is dated as of
June __, 2002 (as amended, supplemented, restated or otherwise modified from
time to time, this "Agreement"), and is entered into by and among WH Acquisition
Corp, a Nevada corporation (the "Company"), CCG Investments (BVI), L.P., a
British Virgin Islands limited partnership (the "Sponsor"), Golden Gate Capital
Management, L.L.C., a Delaware limited liability company, the general partner of
the Sponsor (the "General Partner") and The Bank of New York, as trustee (the
"Trustee") under the Indenture referred to below.
WITNESSETH
WHEREAS, pursuant to an agreement and plan of merger, dated as of
April 10, 2002 (the "Merger Agreement"), by and among WH Holdings (Cayman
Islands) Ltd., a Cayman Islands corporation, the Company and Herbalife
International, Inc., a Nevada corporation ("Herbalife"), the Company has agreed
to merge with and into Herbalife (the "Merger") with Herbalife continuing as the
surviving corporation and wholly-owned subsidiary of WH Holdings (Cayman
Islands) Ltd.;
WHEREAS, the Company is issuing on the date hereof $165,000,000
aggregate principal amount of 11 3/4% Senior Subordinated Notes due 2010 (and
any notes that may from time to time be issued in substitution therefor, the
"Notes"). The Notes will be issued pursuant to an indenture, dated as of the
date hereof, by and among the Company, the guarantors signatory thereto and the
Trustee (as amended, restated, supplemented or otherwise modified from time to
time, the "Indenture");
WHEREAS, the Company has entered into a Security and Control
Agreement, dated as of the date hereof (the "Security and Control Agreement"),
by and among the Company, the Trustee, and The Bank of New York, as securities
intermediary (the "Securities Intermediary"), pursuant to which the Company has
agreed to place the net proceeds of the offering of the Notes in a secured
proceeds account pending the completion of the Merger;
WHEREAS, under the terms of the Indenture,
(a) If (i) the Merger has not occurred prior to the close of
business on August 31, 2002, or (ii) the Company has determined that the Merger
will not occur by that date on substantially the terms set forth in the Merger
Agreement and the Offering Memorandum (each, a "Triggering Event"), the Company
shall, in accordance with the procedures set forth in the Indenture, redeem (a
"Mandatory Redemption") all of the outstanding Notes, for a price equal to 101%
of their principal amount, plus accrued and
Annex C-2-1
unpaid interest thereon through the redemption date, together with Liquidated
Damages, if any (the "Mandatory Redemption Price"). The Mandatory Redemption
must occur no later than 10 Business Days after the Triggering Event (the
"Mandatory Redemption Date"); and
WHEREAS, it is a condition precedent to the issuance and sale of the
Notes that the Sponsor enter into this Agreement to provide support for the
obligations of the Company in connection with any Mandatory Redemption.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINITIONS. Capitalized terms used herein but not
otherwise defined herein shall have the meanings provided in the Indenture.
Capitalized terms defined herein and also defined in the Indenture shall have
the meanings provided herein. In addition, the following terms shall have the
following meanings:
"Fully Satisfied" means, with respect to the Support Obligation as
of any date, that, as of such date, (a) the Support Obligation shall have been
paid in full in cash and, (b) all fees, expenses and other amounts then due and
payable under this Agreement shall have been paid in cash.
"Material Adverse Effect" means a material adverse effect on (i) the
ability of the Sponsor to perform any material obligation under this Agreement
or (ii) the material rights and remedies of the Trustee under this Agreement.
"Partners" means a collective reference to all of the partners of
the Sponsor.
"Transaction Documents" means the Indenture, the Notes, the
Registration Rights Agreement and the Security and Control Agreement,
collectively.
SECTION 2. COLLATERAL SUPPORT OBLIGATION.
(a) Support Obligation. If a Triggering Event occurs, the Sponsor
shall, on or prior to the Mandatory Redemption Date, make a capital contribution
to the Company in an amount equal to: (i) the Mandatory Redemption Price, minus
(ii) the net liquidation proceeds (after deducting any applicable Securities
Intermediary and Trustee fees and charges) delivered to the Trustee in
accordance with Section 6.2 of the Security and Control Agreement (the
obligation to make such payment, the "Support Obligation").
(b) Limitation of Support Obligation. Notwithstanding the provisions
of clause (a) of this Section 2, the Sponsor shall have no obligation hereunder
to make any contribution to the Company in respect of any amount of the Support
Obligation that has been previously funded by any other Person.
Annex C-2-2
SECTION 3. ASSIGNMENT TO TRUSTEE. The Company hereby unconditionally
and irrevocably assigns, transfers, conveys, contributes, delivers and sets over
to the Trustee all right, title and interest of the Company in and to the
Support Obligation (the "Assignment"). The Assignment is an absolute assignment
and not a transfer for security. The Trustee hereby accepts the Assignment of
the Support Obligation. The Sponsor hereby consents to the Assignment. The
Assignment shall take effect as of the date hereof.
SECTION 4. OBLIGATIONS UNCONDITIONAL. The obligations of the Sponsor
under Section 2 hereof are absolute and unconditional, irrespective of the
value, genuineness, validity, regularity or enforceability of any of the
Transaction Documents, or any other agreement or instrument referred to therein,
or any substitution, release, impairment or exchange of any other guarantee of
or security for the Support Obligation, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever which might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of all parties that the Sponsor's Support
Obligation shall be absolute and unconditional under any and all circumstances.
With respect to its obligations hereunder, the Sponsor hereby waives
diligence, presentment, demand of payment, protest, all notices whatsoever, and
any requirement that the Trustee or Securities Intermediary exhaust any right,
power or remedy or proceed against any Person under any Transaction Document or
any other agreement or instrument referred to in the Transaction Documents, or
against any other Person under any other guarantee of, or security for, the
Support Obligation, except that upon closing of the Merger Sponsor shall be
released.
SECTION 5. REINSTATEMENT. Neither the Support Obligation nor any
remedy for the enforcement thereof shall be impaired, modified, changed or
released in any manner whatsoever by an impairment, modification, change,
release or limitation of the liability of the Company or any guarantor, by
reason of the Company's or any guarantor's bankruptcy or insolvency or by reason
of the invalidity or unenforceability of all or any portion of the Support
Obligation. The obligations of the Sponsor under this Agreement shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Support Obligation is rescinded or
must be otherwise restored by any holder of the Support Obligation, whether as a
result of any proceedings in bankruptcy or reorganization or otherwise.
SECTION 6. CERTAIN ADDITIONAL WAIVERS. The Sponsor agrees that this
Agreement may be enforced by the Trustee without the necessity of resorting to
or exhausting any other security or collateral and without the necessity at any
time of having recourse under the Indenture or any collateral securing the
Support Obligation or otherwise, and the Sponsor agrees not to assert any right
to require the Trustee proceed against the Company or any other Person or to
require the Trustee pursue any other remedy or enforce any other right. The
Sponsor further acknowledges and agrees that nothing contained in this Agreement
shall
Annex C-2-3
prevent the Trustee from suing any other Person in respect of the Support
Obligation, foreclosing on any security interest or lien on any collateral
securing the Support Obligation or from exercising any other right available to
the Trustee in respect of the Support Obligation, if the Sponsor does not timely
perform the Support Obligation. The exercise of any of such rights and
completion of any such foreclosure proceedings shall not constitute a discharge
of the Sponsor's obligations hereunder unless as a result thereof the Support
Obligation shall have been Fully Satisfied, it being all parties' purpose and
intent that the Support Obligation is absolute, irrevocable, independent and
unconditional under all circumstances, except as such obligations may be
terminated in accordance with the terms hereof.
SECTION 7. CALIFORNIA WAIVERS. For purposes of this Section 7 only,
references to the "principal" include the Sponsor and references to the
"creditor" includes the Trustee. In accordance with Section 2856 of the
California Civil Code, the Sponsor waives all rights and defenses (i) available
to it by reason of Sections 2787 through 2855, 2899, and 3433 of the California
Civil Code, including all rights or defenses it may have by reason of protection
afforded to the principal with respect to the Support Obligation, or to any
other person liable for the Support Obligation, in either case in accordance
with the antideficiency or other laws of the State of California limiting or
discharging the principal's Indebtedness or such person's obligations, including
Sections 580a, 580b, 580d and 726 of the California Code of Civil Procedure; and
(ii) arising out of an election of remedies by the creditor, even though such
election, such as a nonjudicial foreclosure with respect to security for Support
Obligation (or any obligation of any other person of the Support Obligation),
has destroyed the Sponsor's right of subrogation and reimbursement against the
principal (or such other person), by operation of Section 580d of the California
Code of Civil Procedure or otherwise. No other provision of this Agreement shall
be construed as limiting the generality of any of the covenants and waivers set
forth in this Section 7. As provided below, this Agreement shall be governed by,
and shall be construed and enforced in accordance with the laws of the State of
New York. This Section 7 is included solely out of an abundance of caution, and
shall not be construed to mean that any of the above-referenced provisions of
California law are in any way applicable to this Agreement or to the Support
Obligation.
SECTION 8. REPRESENTATIONS AND WARRANTIES. The Sponsor hereby
represents and warrants to the Trustee and the Company that:
(a) Existence and Power. The Sponsor is a limited partnership duly
formed, validly existing and in good standing under the laws of the British
Virgin Islands, is in good standing as a foreign limited partnership in each
other jurisdiction where ownership of its properties or the conduct of its
business requires it to be so (except to the extent that the failure to be in
good standing as a foreign limited partnership would not have a Material Adverse
Effect), and has all power and authority under such laws and the Limited
Partnership Agreement and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.
Annex C-2-4
(b) Authorization. The Sponsor has the power and authority to enter
into this Agreement, to perform its obligations hereunder and consummate the
transactions contemplated hereby and has by proper action duly authorized the
execution and delivery of this Agreement.
(c) No Conflicts or Consents. Neither the execution and delivery of
this Agreement, the consummation of the transactions contemplated herein, nor
the performance of and compliance with the terms and provisions hereof will (i)
violate or conflict with any provision of the Limited Partnership Agreement or
other governance document, (ii) violate any material law, regulation, order,
writ, judgment, injunction, decree or permit applicable to the Sponsor, (iii)
violate or materially conflict with material contractual provisions of, or cause
an event of default under, any indenture, loan agreement, mortgage, deed of
trust, contract or other agreement or instrument to which the Sponsor is a party
or by which it may be bound or (iv) result in or require the creation of any
material lien, security interest or other charge or encumbrance (other than
those contemplated in or in connection with this Agreement) upon or with respect
to the Sponsor's properties.
(d) Consents. No consent, approval, authorization or order of, or
filing, registration or qualification with, any Person which has not been
obtained is required in connection with the execution, delivery or performance
of this Agreement by the Sponsor.
(e) Enforceable Obligations. This Agreement has been duly executed
and delivered by the Sponsor and constitutes the legal, valid and binding
obligation of the Sponsor, enforceable in accordance with its respective terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
(i) Adequate Capital Commitments. The Sponsor has adequate capital
commitments from the Partners to satisfy its Support Obligations.
SECTION 9. COVENANTS. The Sponsor hereby covenants and agrees with
the Trustee that so long as this Agreement is in effect:
(a) Preservation of Existence and Franchises. The Sponsor will do,
or cause to be done, all things necessary to preserve and keep in full force and
effect its existence, material rights, material franchises and authority.
(b) Compliance with Law. The Sponsor will comply in all material
respects with all applicable laws, rules, regulations and orders of, and all
applicable restrictions imposed by, all applicable governmental bodies, foreign
or domestic, or authorities and agencies thereof (including quasi-governmental
authorities and agencies), in respect of the conduct of its business and the
ownership of its property (including applicable statutes, regulations, orders
and restrictions relating to environmental standards and controls).
Annex C-2-5
(c) Nature of Business. The Sponsor will not engage in any business
activity that is not permitted by its limited partnership agreement.
(d) Consolidation or Merger. The Sponsor will not dissolve,
liquidate in its entirety, or wind up its affairs, or enter into any transaction
of merger or consolidation.
(e) Adequate Capital Commitments. The Sponsor will cause the capital
commitments from the Partners at all times to be sufficient to satisfy its
Support Obligations.
(f) Requests for Capital Contributions. Upon the occurrence of a
Triggering Event, the General Partner to take all steps required to cause the
Partners to make capital contributions in an aggregate amount (taken together
with any corresponding capital contribution by the General Partner and any
amounts to be provided in respect of the Support Obligation by Persons other
than the Sponsor) at least equal to the Support Obligation no later than four
Business Days following the Triggering Event.
SECTION 10. ADDITIONAL LIABILITY OF THE SPONSOR. If the Sponsor is
or becomes liable for any indebtedness owing by the Company to the Trustee by
endorsement or otherwise other than under this Agreement, such liability shall
not be in any manner impaired or reduced hereby but shall have all and the same
force and effect it would have had if this Agreement had not existed and the
Sponsor's liability hereunder shall not be in any manner' impaired or reduced
thereby.
SECTION 11. NO WAIVER; CUMULATIVE RIGHTS. No failure or delay on the
part of the Trustee in exercising any right, power or privilege hereunder or
under any other Transaction Document and no course of dealing between the
Trustee and the Company or the Sponsor shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege hereunder
or under any other Transaction Document preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder or
thereunder. The rights and remedies provided herein are cumulative and not
exclusive of any rights or remedies which the Trustee would otherwise have. No
notice to or demand on the Company or the Sponsor in any case shall entitle
either of them to any other or further notice or demand in similar or other
circumstances or constitute a waiver of any rights of the Trustee.
SECTION 12. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
on and enforceable against the Sponsor and its successors and assigns. The
Sponsor may not assign or transfer any of its obligations hereunder without
prior written consent of the Trustee.
SECTION 13. MODIFICATIONS. This Agreement and the provisions hereof
may be amended, changed, waived, discharged or terminated only by an instrument
in writing signed by the Sponsor and the Trustee. Without limiting the
generality of the immediately preceding sentence, no action under and in
accordance with Article IX of the Indenture to effectuate any amendment, change,
waiver, discharge or termination in respect of any event or
Annex C-2-6
condition constituting a Default shall be effective to amend, change, waive,
discharge or terminate any provision of this Agreement.
SECTION 14. NOTICES. Except as otherwise expressly provided herein,
all notices and other communications shall have been duly given and shall be
effective (a) when delivered, (b) when transmitted via telecopy (or other
facsimile device) to the number set out below, (c) on the Business Day following
the day on which the same has been delivered prepaid to a reputable national
overnight air courier service, or (d) on the third Business Day following the
day on which the same is sent by certified or registered mail, postage prepaid,
in each case to the address set forth below or such other address as a party may
specify by written notice to the other parties hereto:
if to the Sponsor:
CCG Investments (BVI), L.P.
c/o Golden Gate Private Equity, Inc.
Xxx Xxxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxx
Telecopier: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxx
000 X. Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
Telecopier: (000) 000-0000
if to the General Partner:
Golden Gate Private Equity, Inc.
Xxx Xxxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxx
Telecopier: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxx
000 X. Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
Telecopier: (000) 000-0000
Annex C-2-7
if to the Company:
WH Acquisition Corp.
c/o Whitney Equity Partners V, LLC
000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: General Counsel
Telecopier: (000) 000-0000
with a copy to:
Xxxxxxxxxx & Xxxxx LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxx, Esq.
Telecopier: (000) 000-0000
if to the Trustee:
The Bank of New York
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Global Finance Unit
Telecopier: (000) 000-0000
SECTION 15. SEVERABILITY. If any provision of this Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provision.
SECTION 16. GOVERNING LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, INCLUDING, WITHOUT LIMITATION, SECTION 5-1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW.
SECTION 17. HEADINGS. The headings in this instrument are for
convenience of reference only and shall not limit or otherwise affect the
meaning of any provisions hereof.
Annex C-2-8
SECTION 18. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by different parties hereto on separate counterparts,
each constituting an original, but all together one and the same instrument.
Delivery by facsimile by any party hereto of an executed counterpart of this
Agreement shall be as effective as an original executed counterpart hereof and
shall be deemed a representation that an original executed counterpart hereof
will be delivered.
SECTION 19. TERM OF AGREEMENT. This Agreement shall continue in full
force and effect until the earlier of (i) the date upon which all of the Notes
are redeemed pursuant to Section 3.8 of the Indenture and (ii) the date the
Merger is consummated, and following any such termination, Sponsor shall have no
further liability hereunder.
Annex C-2-9
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed and delivered as of the day and year first above
written.
WH ACQUISITION CORP.
By: /s/
--------------------------------------
Name:
Title:
CCG INVESTMENTS (BVI), L.P.
By: GOLDEN GATE CAPITAL MANAGEMENT, L.L.C.
its General Partner
By: /s/
--------------------------------------
its Managing Member
By: /s/
--------------------------------------
Name:
Title:
GOLDEN GATE CAPITAL MANAGEMENT, L.L.C.
By: /s/
--------------------------------------
its Managing Member
By: /s/
--------------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as trustee
By: /s/
--------------------------------------
Name:
Title:
Annex C-2-10
