Exhibit 10.2

CREDIT AGREEMENT

Dated as of September 7, 2005

among

SOTHEBY’S, INC.,

as the Company,

SOTHEBY’S HOLDINGS, INC.,

as Holdings,

Certain U.K. Subsidiaries of Holdings named herein as the U.K. Borrowers,

BANK OF AMERICA, N.A.,

as Administrative Agent, Swing Line Lender and

L/C Issuer,

LASALLE BANK N.A.,

as Syndication Agent,

and

The Other Lenders Party Hereto

BANC OF AMERICA SECURITIES LLC

and

LASALLE BANK N.A.,

as Joint Lead Arrangers and Joint Book Managers

Sotheby’s Credit Agreement

 

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TABLE OF CONTENTS

 

Section

 

 

Page

 

 

 

 

 

 

ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS

 

 

 

 

 

1.01

 

Defined Terms

1

1.02

 

Other Interpretive Provisions

30

1.03

 

Accounting Terms

31

1.04

 

Rounding

31

1.05

 

Times of Day

32

1.06

 

Letter of Credit Amounts

32

1.07

 

Currency Equivalents Generally

32

1.08

 

Change of Currency

32

1.09

 

Alternative L/C Currencies

33

 

 

 

 

 

 

ARTICLE II
THE COMMITMENTS AND CREDIT EXTENSIONS

 

 

 

 

 

2.01

 

The Loans

33

2.02

 

Borrowings, Conversions and Continuations of Loans

34

2.03

 

Letters of Credit

36

2.04

 

Swing Line Loans

45

2.05

 

Prepayments

47

2.06

 

Termination or Reduction of Commitments

50

2.07

 

Repayment of Loans

50

2.08

 

Interest

51

2.09

 

Fees

51

2.10

 

Computation of Interest and Fees

52

2.11

 

Evidence of Debt

52

2.12

 

Payments Generally; Administrative Agent’s Clawback

53

2.13

 

Sharing of Payments by Lenders

55

2.14

 

Increase in Commitments

56

 

 

 

 

 

 

ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY

 

 

 

 

 

3.01

 

Taxes

57

3.02

 

Illegality

60

3.03

 

Inability to Determine Rates

60

3.04

 

Increased Costs

61

3.05

 

Compensation for Losses

62

3.06

 

Mitigation Obligations; Replacement of Lenders

63

3.07

 

Survival

63

 

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ARTICLE IV
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

 

 

 

 

 

4.01

 

Conditions of Initial Credit Extension

63

4.02

 

Conditions to Initial Credit Extension to U.K. Borrower

67

4.03

 

Conditions to all Credit Extensions

69

 

 

 

 

 

 

ARTICLE V
REPRESENTATIONS AND WARRANTIES

 

 

 

 

 

5.01

 

Corporate Existence and Good Standing

70

5.02

 

Corporate Power, Authorization and Compliance with the Law

70

5.03

 

Financial Statements; No Material Adverse Effect; No Internal Control Event

71

5.04

 

ERISA Compliance

72

5.05

 

Pensions

73

5.06

 

Environmental Matters

73

5.07

 

Litigation

73

5.08

 

Taxes

73

5.09

 

Investment Company Act

73

5.10

 

No Material Misstatements

73

5.11

 

Federal Reserve Regulations

74

5.12

 

Ownership of Property; Liens; Investments

74

5.13

 

No Default

74

5.14

 

Insurance

74

5.15

 

Subsidiaries; Equity Interests; Loan Parties

75

5.16

 

Compliance with Laws

75

5.17

 

Intellectual Property; Licenses, Etc.

75

5.18

 

Solvency

75

5.19

 

Casualty, Etc.

75

5.20

 

Exempt Subsidiaries

76

5.21

 

Immaterial Subsidiaries

76

5.22

 

Asset Value

76

 

 

 

 

 

 

ARTICLE VI
AFFIRMATIVE COVENANTS

 

 

 

 

 

6.01

 

Financial Statements

76

6.02

 

Certificates; Other Information

77

6.03

 

Notices

79

6.04

 

Payment of Obligations

80

6.05

 

Maintain Property and Insurance

80

6.06

 

Maintain Existence

81

6.07

 

Compliance with Laws

81

6.08

 

Inspection

81

6.09

 

Eligible Loans

81

6.10

 

Books and Records

81

6.11

 

Use of Proceeds

81

 

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6.12

 

Covenant to Guarantee Obligations and Give Security

81

6.13

 

Further Assurances

85

6.14

 

Post-Closing Obligations

85

 

 

 

 

 

 

ARTICLE VII
NEGATIVE COVENANTS

 

 

 

 

 

7.01

 

Liens

86

7.02

 

Indebtedness

88

7.03

 

Investments

89

7.04

 

Fundamental Changes

90

7.05

 

Dispositions

91

7.06

 

Restricted Payments

91

7.07

 

Change in Nature of Business

92

7.08

 

Transactions with Affiliates

92

7.09

 

Burdensome Agreements

92

7.10

 

Use of Proceeds

92

7.11

 

Financial Covenants

92

7.12

 

Capital Expenditures

93

7.13

 

Amendments of Organization Documents

93

7.14

 

Accounting Changes

93

7.15

 

Prepayments, Etc. of Indebtedness

93

7.16

 

Amendment, Etc. of the Senior Notes

93

7.17

 

Partnerships, Etc

93

7.18

 

SPTC Delaware

94

7.19

 

York Capital Lease

94

 

 

 

 

 

 

ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES

 

 

 

 

 

8.01

 

Events of Default

94

8.02

 

Remedies upon Event of Default

97

8.03

 

Application of Funds

97

 

 

 

 

 

 

ARTICLE IX
ADMINISTRATIVE AGENT

 

 

 

 

 

9.01

 

Appointment and Authority

98

9.02

 

Rights as a Lender

99

9.03

 

Exculpatory Provisions

99

9.04

 

Reliance by Administrative Agent

100

9.05

 

Delegation of Duties

100

9.06

 

Resignation of Administrative Agent

101

9.07

 

Non-Reliance on Administrative Agent and Other Lenders

101

9.08

 

No Other Duties, Etc.

102

9.09

 

Administrative Agent May File Proofs of Claim

102

9.10

 

Collateral and Guaranty Matters

103

 

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ARTICLE X
MISCELLANEOUS

 

 

 

 

 

10.01

 

Amendments, Etc.

103

10.02

 

Notices; Effectiveness; Electronic Communications

104

10.03

 

No Waiver; Cumulative Remedies

106

10.04

 

Expenses; Indemnity; Damage Waiver

107

10.05

 

Payments Set Aside

108

10.06

 

Successors and Assigns

109

10.07

 

Treatment of Certain Information; Confidentiality

113

10.08

 

Right of Setoff

114

10.09

 

Interest Rate Limitation

114

10.10

 

Counterparts; Integration; Effectiveness

114

10.11

 

Survival of Representations and Warranties

115

10.12

 

Severability

115

10.13

 

Replacement of Lenders

115

10.14

 

Pound and Euro L/C Issuers

116

10.15

 

Governing Law; Jurisdiction; Etc.

116

10.16

 

Waiver of Jury Trial

117

10.17

 

USA PATRIOT Act Notice

117

10.18

 

Know Your Customers

117

 

 

 

 

SIGNATURES

S-1

 

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SCHEDULES

 

 

 

 

 

 

 

1.01

 

Mandatory Cost Formulae

 

2.01

 

Commitments and Applicable Percentages

 

5.03

 

Supplement to Interim Financial Statements

 

5.12(b)

 

Existing Liens

 

5.12(c)

 

Existing Investments

 

5.15

 

Subsidiaries and Other Equity Investments; Loan Parties

 

5.17

 

Intellectual Property Matters

 

5.21

 

Immaterial Subsidiaries

 

6.12

 

Guarantors

 

7.02

 

Indebtedness

 

7.05

 

Permitted Dispositions

 

7.09

 

Burdensome Agreements

 

10.02

 

Administrative Agent’s Office, Certain Addresses for Notices

 

10.06

 

Processing and Recordation Fees

 

 

 

 

EXHIBITS

 

 

 

 

 

 

 

Form of

 

 

 

 

 

 

 

A

 

Committed Loan Notice

 

B

 

Swing Line Loan Notice

 

C-1

 

U.S. Note

 

C-2

 

U.K. Note

 

D

 

Assignment and Assumption

 

E-1

 

Domestic Guaranty

 

E-2

 

U.K. Guaranty

 

F

 

Security Agreement

 

G

 

Intellectual Property Security Agreement

 

H-1

 

Opinion Matters – Counsel to Loan Parties

 

H-2

 

Opinion Matters – Local Counsel to Loan Parties

 

I

 

L/C Issuer Joinder Agreement

 

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Sotheby’s Credit Agreement

 

 

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CREDIT AGREEMENT

This CREDIT AGREEMENT (“Agreement”) is entered into as of September 7, 2005,
among SOTHEBY’S HOLDINGS, INC., a Michigan corporation (“Holdings”), SOTHEBY’S,
INC., a New York corporation (the “Company” and, together with Holdings, the
“U.S. Borrowers”), OATSHARE LIMITED, a company registered in England and Wales
with registration number 01737495 (“Oatshare”), SOTHEBY’S, a company registered
in England and Wales with registration number 00874867 (“Sotheby’s” and,
together with Oatshare, the “U.K. Borrowers”, and collectively with the U.S.
Borrowers, the “Borrowers”), each lender from time to time party hereto
(collectively, the “Lenders” and individually, a “Lender”), BANK OF AMERICA,
N.A., as Administrative Agent, Swing Line Lender and L/C Issuer and LASALLE BANK
N.A, as Syndication Agent.

PRELIMINARY STATEMENTS:

Pursuant to the Transaction Agreement dated as of September 7, 2005 (the
“Transaction Agreement”) Holdings has agreed, among other things, to purchase
certain of its outstanding class “B” shares (the “Company Class B Shares”) from
existing holders thereof (the “Sellers”) (such redemption, the
“Recapitalization”).

The Borrowers have requested that (a) the Lenders lend funds to Holdings to pay
to the Sellers the cash consideration in respect of the Recapitalization and to
pay transaction fees and expenses and (b) from time to time, the Lenders lend to
the Borrowers and the L/C Issuer (as hereinafter defined) issue Letters of
Credit (as hereinafter defined) for the account of the Borrowers in order to
provide a revolving credit facility for the Borrowers and their Subsidiaries (as
hereinafter defined).

The Borrowers have requested that the Lenders provide a revolving credit
facility, and the Lenders have indicated their willingness to lend and the L/C
Issuer has indicated its willingness to issue Letters of Credit, in each case,
on the terms and subject to the conditions set forth herein.

In consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

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

“Administrative Agent” means Bank of America in its capacity as administrative
agent under any of the Loan Documents, or any successor administrative agent.

“Administrative Agent’s Office” means, with respect to any currency, the
Administrative Agent’s address and, as appropriate, account with respect to such
currency as set forth on Schedule 10.02 with respect to such currency, or such
other address or account with

 

Sotheby’s Credit Agreement

 

 

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respect to such currency as the Administrative Agent may from time to time
notify to the Borrowers and the Lenders.

“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

“Affiliate” means, with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified.

“Aggregate Commitments” means the Commitments of all the Lenders.

“Agreement” means this Credit Agreement.

“Alternative L/C Currency” means Canadian Dollars, Swiss Francs, Hong Kong
Dollars and any other currency approved by the L/C Issuer and the Administrative
Agent in accordance with Section 1.09 with respect to the incurrence of L/C
Obligations in such currency (other than Dollars, Pounds or Euros).

“Applicable Commitment Fee Percentage” means, at any time, in respect of the
Facility, (a) for the first six months following the Closing Date, 0.375% per
annum and (b) thereafter, a percentage per annum determined by reference to the
Consolidated Leverage Ratio as set forth in the most recent Compliance
Certificate received by the Administrative Agent pursuant to Section 6.02(b):

 

Applicable Commitment Fee Percentage
 

 

Pricing
Level

 

 

Consolidated
Leverage Ratio

 

 

Commitment
Fee

 

1

 

 

< 1.0:1

 

 

0.250%

 

2

 

 

> 1.0:1

 

 

0.375%

 

Any increase or decrease in the Applicable Commitment Fee Percentage resulting
from a change in the Consolidated Leverage Ratio shall become effective as of
the first Business Day immediately following the date a Compliance Certificate
is delivered pursuant to Section 6.02(b); provided, however, that if a
Compliance Certificate is not delivered when due in accordance with such
Section, then Pricing Level 2 shall apply as of the first Business Day after the
date on which such Compliance Certificate was required to have been delivered.

“Applicable Percentage” means, with respect to any Lender at any time, the
percentage (carried out to the ninth decimal place) of the Facility represented
by such Lender’s Commitment at such time. If the commitment of each Lender to
make Revolving Credit Loans and the obligation of the L/C Issuer to make L/C
Credit Extensions have been terminated pursuant to Section 8.02, or if the
Commitments have expired, then the Applicable Percentage of each Lender in
respect of the Facility shall be determined based on the Applicable Percentage
of such Lender in respect of the Facility most recently in effect, giving effect
to any subsequent assignments. The initial Applicable Percentage of each Lender
in respect of each Facility is set

 

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Sotheby’s Credit Agreement

 

 

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forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable.

“Applicable Rate” means (a) in the case of any Loan denominated in Dollars,
0.50% per annum for Base Rate Loans and 1.75% per annum for Eurocurrency Rate
Loans and (b) in the case of any Loan denominated in Euros or Pounds, 1.75% per
annum for Eurocurrency Rate Loans.

“Applicable Time” means, with respect to any borrowings and payments in any
Foreign Currency, the local time in the place of settlement for such Foreign
Currency as may be determined by the Administrative Agent or the L/C Issuer, as
the case may be, to be necessary for timely settlement on the relevant date in
accordance with normal banking procedures in the place of payment.

“Approved Fund” means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

“Arrangers” means Banc of America Securities LLC and LaSalle Bank N.A., in their
capacities as joint lead arrangers and joint book managers.

“Assignee Group” means two or more Eligible Assignees that are Affiliates of one
another or two or more Approved Funds managed by the same investment advisor.

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 10.06(b), and accepted by the Administrative Agent, in
substantially the form of Exhibit D or any other form approved by the
Administrative Agent.

“Attributable Indebtedness” means, on any date, (a) in respect of any
Capitalized Lease of any Person, the capitalized amount thereof that would
appear on a balance sheet of such Person prepared as of such date in accordance
with GAAP, (b) in respect of any Synthetic Lease Obligation, the capitalized
amount of the remaining lease or similar payments under the relevant lease or
other applicable agreement or instrument that would appear on a balance sheet of
such Person prepared as of such date in accordance with GAAP if such lease or
other agreement or instrument were accounted for as a Capitalized Lease and (c)
all Synthetic Debt of such Person.

“Audited Financial Statements” means the audited consolidated balance sheet of
Holdings and its Subsidiaries for the fiscal year ended December 31, 2004, and
the related consolidated statements of income or operations, shareholders’
equity and cash flows for such fiscal year of Holdings and its Subsidiaries,
including the notes thereto.

“Auto-Extension Letter of Credit” has the meaning specified in Section
2.03(b)(iii).

“Availability Period” means, the period from and including the Closing Date to
the earliest of (a) the Maturity Date for the Facility, (b) the date of
termination of the Commitments pursuant to Section 2.06, and (c) the date of
termination of the commitment of

 

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each Lender to make Revolving Credit Loans and of the obligation of the L/C
Issuer to make L/C Credit Extensions pursuant to Section 8.02.

“Bank of America” means Bank of America, N.A. and its successors.

“Base Rate” means for any day a fluctuating rate per annum equal to the higher
of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in
effect for such day as publicly announced from time to time by Bank of America
as its “prime rate.” The “prime rate” is a rate set by Bank of America based
upon various factors including Bank of America’s costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public announcement of such
change.

“Base Rate Loan” means a Revolving Credit Loan denominated in Dollars that bears
interest based on the Base Rate.

“Borrower Materials” has the meaning specified in Section 6.02.

“Borrowers” has the meaning specified in the introductory paragraph hereto.

“Borrowing” means a Revolving Credit Borrowing or a Swing Line Borrowing, as the
context may require.

“Borrowing Base” means, at any time, the sum of (a) the aggregate principal
amount of any Eligible Loans outstanding at such time, plus (b) an amount equal
to the excess of (i) 15% of Consolidated Net Tangible Assets as set forth on the
most recent balance sheet of Holdings and its Subsidiaries delivered to the
Administrative Agent pursuant to Section 6.01(a) or 6.01(b), over (ii) the sum
of (x) the aggregate principal amount of “Secured Debt” (as such term is defined
in the Senior Notes Indenture) outstanding at such time, plus (y) the aggregate
amount of all “Attributable Debt” (as such term is defined in the Senior Notes
Indenture) of Holdings and its Significant Subsidiaries (as such term is defined
in the Senior Notes Indenture) in respect of Sale and Lease-Back Transactions
(as such term is defined in the Senior Notes Indenture) which would not
otherwise be permitted but for the provisions of clause (b) of Section 4.04 of
the Senior Notes Indenture, in the case of clause (a), to the extent that the
Administrative Agent has a valid perfected security interest in such assets.

“Borrowing Base Certificate” means a certificate, duly executed by a Responsible
Officer of Holdings, setting forth evidence to support the amount of the
Borrowing Base as of the date of such certificate and such other matters as the
Administrative Agent may reasonably request, in form acceptable to the
Administrative Agent.

“Business Day” means any day other than (a) a Saturday, Sunday or other day on
which commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent’s Office is located, (b) if
such day relates to any Eurocurrency Rate Loan, a day on which banks are not
open for general business in London and (c) if such day relates to a Loan in
Euros, any day that is not a TARGET Day.

 

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“Canadian Dollars” means the lawful currency of Canada.

“Capital Expenditures” means, with respect to any Person for any period, any
cash expenditure in respect of the purchase or other acquisition of any fixed or
capital asset (excluding normal replacements and maintenance which are properly
charged to current operations). For purposes of this definition, the purchase
price of equipment that is purchased simultaneously with the trade- in of
existing equipment or with insurance proceeds shall be included in Capital
Expenditures only to the extent of the gross amount by which such purchase price
exceeds the credit granted by the seller of such equipment for the equipment
being traded in at such time or the amount of such insurance proceeds, as the
case may be.

“Capitalized Leases” means all leases that have been or should be, in accordance
with GAAP, recorded as capitalized leases.

“Cash Collateralize” has the meaning specified in Section 2.03(g).

“Cash Equivalents” means any of the following types of Investments, to the
extent owned by Holdings or any of its Subsidiaries free and clear of all Liens
(other than Liens created under the Collateral Documents and other Liens
permitted hereunder):

(a) readily marketable obligations issued or directly and fully guaranteed or
insured by the United States of America or any agency or instrumentality thereof
or, in the case of any Foreign Subsidiary, guaranteed by any other member
country of O.E.C.D. or any agency thereof, in each case having maturities of not
more than 360 days from the date of acquisition thereof; provided that the full
faith and credit of the United States of America or such other member country of
O.E.C.D, as the case may be, is pledged in support thereof;

(b) time deposits with, or insured certificates of deposit or bankers’
acceptances of, any commercial bank that (i) (A) is a Lender or (B) is organized
under the laws of the United States of America, any state thereof or the
District of Columbia or is the principal banking subsidiary of a bank holding
company organized under the laws of the United States of America, any state
thereof or the District of Columbia, and is a member of the Federal Reserve
System, or, in the case of any Foreign Subsidiary, under the laws of any other
member country of O.E.C.D., (ii) issues (or the parent of which issues)
commercial paper rated as described in clause (c) of this definition and (iii)
has combined capital and surplus of at least $1,000,000,000, in each case with
maturities of not more than 180 days from the date of acquisition thereof;

(c) commercial paper or other marketable debt securities in an aggregate amount
of no more than $15,000,000 per issuer outstanding at any time issued by any
Person organized under the laws of any state of the United States of America and
rated, in the case of commercial paper, at least “Prime-1” (or the then
equivalent grade) by Moody’s or at least “A-1” (or the then equivalent grade) by
S&P, and in the case of other debt securities, at least Aa (or the then
equivalent grade) by Moody’s or at least AA (or the then equivalent grade) by
S&P, in each case with maturities of not more than 180 days from the date of
acquisition thereof; and

 

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(d) Investments, classified in accordance with GAAP as current assets of the
Borrowers or any of their Subsidiaries, in money market investment programs
registered under the Investment Company Act of 1940, which are administered by
financial institutions that have the highest rating obtainable from either
Moody’s or S&P, and the portfolios of which are limited solely to Investments of
the character, quality and maturity described in clauses (a), (b) and (c) of
this definition.

“Cash Management Agreement” means any agreement to provide cash management
services, including treasury, depository, overdraft, credit or debit card,
electronic funds transfer and other cash management arrangements.

“Cash Management Bank” means any Person that, at the time it enters into a
Secured Cash Management Agreement, is a Lender or an Affiliate of a Lender, in
its capacity as a party to such Secured Cash Management Agreement.

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

“CERCLIS” means the Comprehensive Environmental Response, Compensation and
Liability Information System maintained by the U.S. Environmental Protection
Agency.

“CFC” means a Person that is a controlled foreign corporation under Section 957
of the Code.

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority.

“Change of Control” means an event or series of events by which:

(a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, but excluding any employee benefit plan
of such person or its subsidiaries, and any person or entity acting in its
capacity as trustee, agent or other fiduciary or administrator of any such plan)
becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, except that a person or group shall be deemed
to have “beneficial ownership” of all securities that such person or group has
the right to acquire (such right, an “option right”), whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of 35% or more of the equity securities of Holdings entitled to vote
for members of the board of directors or equivalent governing body of Holdings
on a fully diluted basis (and taking into account all such securities that such
“person” or “group” has the right to acquire pursuant to any option right); or

(b) during any period of 12 consecutive months, a majority of the members of the
board of directors or other equivalent governing body of Holdings cease to be
composed of individuals (i) who were members of that board or equivalent
governing

 

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body on the first day of such period, (ii) whose election or nomination to that
board or equivalent governing body was approved by individuals referred to in
clause (i) above constituting at the time of such election or nomination at
least a majority of that board or equivalent governing body or (iii) whose
election or nomination to that board or other equivalent governing body was
approved by individuals referred to in clauses (i) and (ii) above constituting
at the time of such election or nomination at least a majority of that board or
equivalent governing body (excluding, in the case of both clause (ii) and clause
(iii), any individual whose initial nomination for, or assumption of office as,
a member of that board or equivalent governing body occurs as a result of an
actual or threatened solicitation of proxies or consents for the election or
removal of one or more directors by any person or group other than a
solicitation for the election of one or more directors by or on behalf of the
board of directors); or

(c) any Person or two or more Persons acting in concert shall have acquired by
contract or otherwise, or shall have entered into a contract or arrangement
that, upon consummation thereof, will result in its or their acquisition of the
power to exercise, directly or indirectly, a controlling influence over the
management or policies of Holdings, or control over the equity securities of
Holdings entitled to vote for members of the board of directors or equivalent
governing body of Holdings on a fully diluted basis (and taking into account all
such securities that such “person” or “group” has the right to acquire pursuant
to any option right) representing 35% or more of the combined voting power of
such securities; or

(d) a “change of control” or any comparable term under, and as defined in, the
Senior Notes Documents shall have occurred.

“Closing Date” means the first date all the conditions precedent in Section 4.01
are satisfied or waived in accordance with Section 10.01.

“Code” means the Internal Revenue Code of 1986.

“Collateral” means all of the “Collateral” referred to in the Collateral
Documents and all of the other property that is or is intended under the terms
of the Collateral Documents to be subject to Liens in favor of the
Administrative Agent for the benefit of the Secured Parties.

“Collateral Documents” means, collectively, the Security Agreement, the
Intellectual Property Security Agreement, the Local Law Collateral Documents,
the U.K. Collateral Documents and each of the mortgages, collateral assignments,
Security Agreement Supplements, IP Security Agreement Supplements, security
agreements, pledge agreements or other similar agreements delivered to the
Administrative Agent pursuant to Section 6.12, and each of the other agreements,
instruments or documents that creates or purports to create a Lien in favor of
the Administrative Agent for the benefit of the Secured Parties.

“Commitment” means, as to each Lender, its obligation to (a) make Revolving
Credit Loans to the Borrowers pursuant to Section 2.01, (b) purchase
participations in L/C Obligations, and (c) purchase participations in Swing Line
Loans, in an aggregate principal amount at any one time outstanding not to
exceed the amount set forth opposite such Lender’s

 

 

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name on Schedule 2.01 under the caption “Commitment” or opposite such caption in
the Assignment and Assumption pursuant to which such Lender becomes a party
hereto, as applicable, as such amount may be adjusted from time to time in
accordance with this Agreement.

“Committed Loan Notice” means a notice of (a) a Revolving Credit Borrowing, (b)
in the case of Loans denominated in Dollars, a conversion of Loans from one Type
to the other, or (c) a continuation of Eurocurrency Rate Loans, pursuant to
Section 2.02(a), which, if in writing, shall be substantially in the form of
Exhibit A.

“Company” has the meaning specified in the recital of parties hereto.

“Company Class B Shares” has the meaning specified in the recital of parties
hereto.

“Compliance Certificate” means a certificate, duly executed by a Responsible
Officer of Holdings, demonstrating compliance with the terms of this Agreement
and such other matters as the Administrative Agent may reasonably request, in
form acceptable to the Administrative Agent.

“Consolidated EBITDA” means, at any date of determination, an amount equal to
Consolidated Net Income of Holdings and its Subsidiaries on a consolidated basis
for the most recently completed Measurement Period plus (a) the following to the
extent deducted in calculating such Consolidated Net Income: (i) Consolidated
Interest Charges, (ii) the provision for Federal, state, local and foreign
income taxes, (iii) depreciation and amortization expense, (iv) any such
deduction to Consolidated Net Income as a result of any grant of stock or
restricted stock and (v) other non-recurring expenses reducing such Consolidated
Net Income which either (A) do not represent a cash item in such period or any
future period (in each case of or by Holdings and its Subsidiaries for such
Measurement Period) or (B) do not exceed $10,000,000 in the aggregate (when
added to all other amounts determined under this subclause (B)) and minus (b)
the following to the extent included in calculating such Consolidated Net
Income: (i) Federal, state, local and foreign income tax credits and (ii) all
non-cash items increasing Consolidated Net Income (in each case of or by
Holdings and its Subsidiaries for such Measurement Period).

“Consolidated Funded Indebtedness” means, as of any date of determination, for
Holdings and its Subsidiaries on a consolidated basis, the sum of (a) the
outstanding principal amount of all obligations, whether current or long-term,
for borrowed money (including Obligations hereunder) and all obligations
evidenced by bonds, debentures, notes, loan agreements or other similar
instruments, (b) all purchase money Indebtedness, (c) all direct obligations
arising under letters of credit (including standby and commercial), bankers’
acceptances, bank guaranties, surety bonds and similar instruments to the extent
such obligations are considered funded debt in accordance with GAAP, (d) all
obligations in respect of the deferred purchase price of property or services
(other than trade accounts payable in the ordinary course of business), (e)
Attributable Indebtedness (other than with respect to the York Capital Lease and
Indebtedness permitted under Section 7.02(i)), (f) without duplication, all
Guarantees with respect to outstanding Indebtedness of the types specified in
clauses (a) through (e) above

 

 

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of Persons other than the Borrowers or any Subsidiary, and (g) all Indebtedness
of the types referred to in clauses (a) through (f) above of any partnership or
joint venture (other than a joint venture that is itself a corporation or
limited liability company) in which a Borrower or a Subsidiary is a general
partner or joint venturer, unless such Indebtedness is expressly made
non-recourse to such Borrower or such Subsidiary.

“Consolidated Interest Charges” means, for any Measurement Period, the sum of
(a) all interest, premium payments, debt discount, fees, charges and related
expenses in connection with borrowed money (excluding capitalized interest) or
in connection with the deferred purchase price of assets, in each case to the
extent treated as interest in accordance with GAAP and (b) the portion of rent
expense under Capitalized Leases that is treated as interest in accordance with
GAAP, in each case, of or by Holdings and its Subsidiaries on a consolidated
basis for the most recently completed Measurement Period.

“Consolidated Interest Coverage Ratio” means, as of any date of determination,
the ratio of (a) Consolidated EBITDA minus principal and interest expense
relating to the York Capital Lease to (b) Consolidated Interest Charges minus
the principal and interest expenses relating to the York Capital Lease, minus
any amounts included in Consolidated Interest Charges for such period in respect
of amortization of (i) discounts on the payment of settlements with the
Department of Justice and related anti-trust matters, (ii) discounts on the
existing Senior Notes, (iii) closing fees incurred in conjunction with the
amendments and restatements of the Existing Credit Agreement and this Agreement
(including any fee related to termination of the Existing Credit Agreement) and
(iv) interest accrued on amounts payable on the unfunded senior management
benefit plan of Holdings and its Subsidiaries, in each case, of or by Holdings
and its Subsidiaries on a consolidated basis for the most recently completed
Measurement Period.

“Consolidated Leverage Ratio” means, as of any date of determination, the ratio
of (a) Consolidated Funded Indebtedness as of such date (calculated in respect
of Loans hereunder on the average daily aggregate principal amount of such Loans
during such Measurement Period) to (b) Consolidated EBITDA for the most recently
completed Measurement Period.

“Consolidated Net Income” means, at any date of determination, the net income of
Holdings and its Subsidiaries (excluding extraordinary gains and extraordinary
losses) on a consolidated basis for the most recently completed Measurement
Period.

“Consolidated Net Tangible Assets” means, at any date of determination, the
aggregate amount of assets (less applicable reserves and other properly
deductible items) after deducting therefrom (a) all current liabilities, (b) all
goodwill, trade names, trademarks, patents, unamortized debt discount and
expense and other like intangibles, and (c) the aggregate principal amount of
any Eligible Loans included in the Borrowing Base, all as set forth on the books
and records of Holdings and its consolidated subsidiaries and computed in
accordance with GAAP at such date.

“Consolidated Net Worth” means at any date shareholders’ equity, as shown on a
consolidated balance sheet of Holdings and its Subsidiaries prepared in
accordance with GAAP at such date.

 

 

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

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

“Credit Extension” means each of the following: (a) a Borrowing and (b) an L/C
Credit Extension.

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all
other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, administration, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.

“Default” means any event or condition that constitutes an Event of Default or
that, with the giving of any notice, the passage of time, or both, would be an
Event of Default.

“Default Rate” means (a) when used with respect to Obligations other than Letter
of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the
Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2% per annum;
provided, however, that with respect to a Eurocurrency Rate Loan, the Default
Rate shall be an interest rate equal to the interest rate (including any
Applicable Rate and any Mandatory Cost) otherwise applicable to such Loan plus
2% per annum and (b) when used with respect to Letter of Credit Fees, a rate
equal to the Applicable Rate plus 2% per annum.

“Defaulting Lender” means any Lender that (a) has failed to fund any portion of
the Revolving Credit Loans, participations in L/C Obligations or participations
in Swing Line Loans required to be funded by it hereunder within one Business
Day of the date required to be funded by it hereunder, (b) has otherwise failed
to pay over to the Administrative Agent or any other Lender any other amount
required to be paid by it hereunder within one Business Day of the date when
due, unless the subject of a good faith dispute, or (c) has been deemed
insolvent or become the subject of a bankruptcy or insolvency proceeding.

“Disposition” or “Dispose” means the sale, transfer or other disposition
(including any sale and leaseback transaction) of any property by any Person (or
the granting of any option or other right to do any of the foregoing), including
any sale, assignment, transfer or other disposal, with or without recourse, of
any notes or accounts receivable or any rights and claims associated therewith.

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

“Domestic Guarantors” means, collectively, the Subsidiaries of Holdings listed
on Part I of Schedule 6.12 and each other Domestic Subsidiary of Holdings that
shall be required to execute and deliver a guaranty or guaranty supplement
pursuant to Section 6.12.

 

 

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“Domestic Guaranty” means, collectively, the Domestic Guaranty made by the
Domestic Guarantors in favor of the Secured Parties, substantially in the form
of Exhibit E-1, together with each other guaranty and guaranty supplement
delivered by a Domestic Subsidiary pursuant to Section 6.12.

“Domestic Subsidiary” means any Subsidiary that is organized under the laws of
any political subdivision of the United States.

“Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c) an
Approved Fund; and (d) any other Person (other than a natural person) approved
by (i) the Administrative Agent, (ii) in the case of any assignment of a
Revolving Commitment, the L/C Issuer and the Swing Line Lender, and (iii) unless
an Event of Default has occurred and is continuing, the Borrowers (each such
approval not to be unreasonably withheld or delayed); provided that
notwithstanding the foregoing, “Eligible Assignee” shall not include Holdings or
any of Holdings’ Affiliates or Subsidiaries; and provided further that an
Eligible Assignee shall only include a Lender, and Affiliate of a Lender or
another Person which, through its Lending Offices, is capable of lending the
applicable Foreign Currencies to the relevant Borrowers without the imposition
of any Taxes or additional Taxes, as the case may be.

“Eligible Loans” means notes made in favor of, or loan advances made by,
Holdings or any of its Subsidiaries in connection with Holdings’ or such
Subsidiary’s lending and financing activities; provided that no Lien shall be in
existence on such notes or loan advances, except for any Liens under the
Collateral Documents.

“EMU” means the economic and monetary union in accordance with the Treaty of
Rome 1957, as amended by the Single European Act 1986, the Maastricht Treaty of
1992 and the Amsterdam Treaty of 1998.

“EMU Legislation” means the legislative measures of the European Council for the
introduction of, changeover to or operation of a single or unified European
currency.

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon (a)
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.

“Equity Interests” means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including

 

 

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partnership, member or trust interests therein), whether voting or nonvoting,
and whether or not such shares, warrants, options, rights or other interests are
outstanding on any date of determination.

“Equivalent” in Dollars of any Foreign Currency on any date means the equivalent
in Dollars of such Foreign Currency as determined by the Administrative Agent or
the L/C Issuer, as the case may be, at such time on the basis of the Spot Rate
(determined in respect of the most recent Revaluation Date) for the purchase of
Dollars with such Foreign Currency and the “Equivalent” in any Foreign Currency
of Dollars on any date means the equivalent in such Foreign Currency of Dollars
as determined by the Administrative Agent or the L/C Issuer, as the case may be,
at such time on the basis of the Spot Rate (determined in respect of the most
recent Revaluation Date) for the purchase of such Foreign Currency with Dollars.

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

“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with a Borrower within the meaning of Section 414(b) or (c)
of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions
relating to Section 412 of the Code).

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by a Borrower or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by a Borrower or any ERISA Affiliate from a Multiemployer
Plan or notification that a Multiemployer Plan is in reorganization; (d) the
filing of a notice of intent to terminate, the treatment of a Plan amendment as
a termination under Sections 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e)
an event or condition which constitutes grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any Pension
Plan or Multiemployer Plan; (f) the imposition of any liability under Title IV
of ERISA, other than for PBGC premiums due but not delinquent under Section 4007
of ERISA, upon a Borrower or any ERISA Affiliate; or (g) any other event similar
to those described in clauses (a) through (f) above with respect to any Foreign
Plan.

“Euro” and “EUR” mean the lawful currency of the Participating Member States
introduced in accordance with the EMU Legislation.

“Eurocurrency Rate” means, for any Interest Period, with respect to a
Eurocurrency Rate Loan, the rate per annum (rounded upward, if necessary, to the
next 1/100th of 1%) determined by the Administrative Agent as follows:

 

 

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                     Eurocurrency Rate = 

 

Eurocurrency Base Rate

 

 

 

1.00 - Eurocurrency Reserve Percentage

 

 

 

 

 

Where,

 

 

 

“Eurocurrency Base Rate” means, for such Interest Period, the rate per annum
equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published
by Reuters (or other commercially available source providing quotations of BBA
LIBOR as designated by the Administrative Agent from time to time) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, for deposits in Dollars or Euros and at
approximately 11:00 a.m. London time on the first day of such Interest Period
for deposits in Pounds (in each case, for delivery on the first day of such
Interest Period) with a term equivalent to such Interest Period. If such rate is
not available at such time for any reason, then the “Eurocurrency Base Rate” for
such Interest Period shall be the rate per annum determined by the
Administrative Agent to be the rate at which deposits for delivery on the first
day of such Interest Period in same day funds in the approximate amount of the
Eurocurrency Rate Loan being made, continued or converted by Bank of America and
with a term equivalent to such Interest Period would be offered by Bank of
America’s London Branch to major banks in the London interbank eurocurrency
market at their request at approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period in the case of deposits in
Dollars or Euros and on the first day of such Interest Period for deposits in
Pounds.

“Eurocurrency Rate Loan” means a Revolving Credit Rate Loan that bears interest
at a rate based on the Eurocurrency Rate.

“Eurocurrency Reserve Percentage” means for any day during any Interest Period
the reserve percentage (expressed as a decimal, carried out to five decimal
places) in effect on such day, whether or not applicable to any Lender, under
regulations issued from time to time by the FRB for determining the maximum
reserve requirement (including any emergency, supplemental or other marginal
reserve requirement) with respect to Eurocurrency funding (currently referred to
as “Eurocurrency liabilities”). The Eurocurrency Rate for each outstanding
Eurocurrency Rate Loan shall be adjusted automatically as of the effective date
of any change in the Eurocurrency Reserve Percentage.

“Event of Default” has the meaning specified in Section 8.01.

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender,
the L/C Issuer or any other recipient of any payment to be made by or on account
of any obligation of the Borrowers hereunder, (a) taxes imposed on or measured
by its overall net income (however denominated), and franchise taxes imposed on
it (in lieu of net income taxes), by the jurisdiction (or any political
subdivision thereof) under the laws of which such recipient is organized or in
which its principal office is located or, in the case of any Lender, in which
its applicable Lending Office is located, (b) any branch profits taxes imposed
by the United States or any similar tax imposed by any other jurisdiction in
which a Borrower is located and (c) in the case of a Foreign Lender (other than
an assignee pursuant to a request by a Borrower under Section 10.13), any
withholding tax that is imposed on amounts payable to such Foreign Lender at the
time such Foreign Lender becomes a party hereto (or designates a new Lending
Office) or

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is attributable to such Foreign Lender’s failure or inability (other than as a
result of a Change in Law) to comply with Section 3.01(e), except to the extent
that such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new Lending Office (or assignment), to receive additional
amounts from a Borrower with respect to such withholding tax pursuant to Section
3.01(a).

“Exempt Subsidiaries” means the First-Tier Foreign CFC Subsidiaries (other than
Sotheby’s Hong Kong Ltd. and its Subsidiaries) the Equity Interests of which are
not subject to any Local Law Collateral Documents and their respective
Subsidiaries which are not party to any Collateral Documents.

“Existing Credit Agreement” means that certain Credit Agreement dated as of
March 4, 2004 among Holdings, the Company and certain of their subsidiaries as
borrowers, General Electric Capital Corporation, as agent, and a syndicate of
lenders as amended to the date hereof.

“Extraordinary Receipt” means any cash received by or paid to or for the account
of any Person not in the ordinary course of business, including pension plan
reversions, proceeds of insurance (other than proceeds of business interruption
insurance to the extent such proceeds constitute compensation for lost
earnings), condemnation awards (and payments in lieu thereof), indemnity
payments and any purchase price adjustments; provided, however, that an
Extraordinary Receipt shall not include cash receipts from proceeds of
insurance, condemnation awards (or payments in lieu thereof) or indemnity
payments to the extent that such proceeds, awards or payments (a) in respect of
loss or damage to equipment, fixed assets or real property are applied (or in
respect of which expenditures were previously incurred) to replace or repair the
equipment, fixed assets or real property in respect of which such proceeds were
received in accordance with the terms of Section 2.05(b)(iii) or (b) are
received by any Person in respect of any third party claim against such Person
and applied to pay (or to reimburse such Person for its prior payment of) such
claim and the costs and expenses of such Person with respect thereto.

“Facility” means, at any time, the aggregate amount of the Lenders’ Commitments
at such time.

“Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of
America on such day on such transactions as determined by the Administrative
Agent.

“Fee Letter” means collectively (a) the letter agreement, dated September 1,
2005 among Holdings, the Administrative Agent and the Arrangers and (b) the
letter agreement, dated

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September 1, 2005 among Holdings, the Administrative Agent and Banc of America
Securities LLC.

“First-Tier Foreign CFC Subsidiary” means a CFC that is directly owned by
Holdings or one or more Domestic Subsidiaries.

“Foreign Currency” means each of Euro and Pounds and each other currency that is
approved as an Alternative L/C Currency.

“Foreign Currency Sublimit” means an amount equal to the lesser of the
Commitments and $80,000,000. The Foreign Currency Sublimit is part of, and not
in addition to, the Commitments.

“Foreign Government Scheme or Arrangement” has the meaning specified in Section
5.04(d).

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

“Foreign Plan” has the meaning specified in Section 5.04(d).

“Foreign Subsidiary” means each Subsidiary of Holdings that is not a Domestic
Subsidiary.

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

“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

“GAAP” means generally accepted accounting principles in the United States set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.

“Governmental Authority” means the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra- national bodies such as the European Union or the European Central Bank).

“Granting Lender” has the meaning specified in Section 10.06(i).

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“Guarantee” means, as to any Person, any (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien). The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such Guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. The term “Guarantee” as a verb has a
corresponding meaning.

“Guarantors” means, collectively, the Domestic Guarantors and the U.K.
Guarantors.

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos-containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.

“Hedge Bank” means any Person that, at the time it enters into a Secured Hedge
Agreement, is a Lender or an Affiliate of a Lender, in its capacity as a party
to such Secured Hedge Agreement.

“Holdings” has the meaning specified in the introductory paragraph hereto.

“Hong Kong Dollars” means the lawful currency of the Hong Kong Special
Administrative Region of the People’s Republic of China.

“Immaterial Subsidiary” means any Domestic Subsidiary or any Foreign Subsidiary
organized under the laws of England, in each case listed on Schedule 5.21,
unless such entity shall have executed a Domestic Guaranty or a U.K. Guaranty,
as the case may be, and such other Collateral Documents as the Administrative
Agent shall reasonably request.

“Increase Effective Date” has the meaning specified in Section 2.14(d).

 

 

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“Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:

(a) all obligations of suc h Person for borrowed money and all obligations of
such Person evidenced by bonds, debentures, notes, loan agreements or other
similar instruments;

(b) the maximum amount of all direct or contingent obligations of such Person
arising under letters of credit (including standby and commercial), bankers’
acceptances, bank guaranties, surety bonds and similar instruments;

(c) net obligations of such Person under any Swap Contract;

(d) all obligations of such Person to pay the deferred purchase price of
property or services (other than trade accounts payable in the ordinary course
of business and not past due for more than 60 days after the date on which such
trade account was created);

(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on
property owned or being purchased by such Person (including indebtedness arising
under conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited in
recourse;

(f) all Attributable Indebtedness in respect of Capitalized Leases and Synthetic
Lease Obligations of such Person and all Synthetic Debt of such Person;

(g) all obligations of such Person to purchase, redeem, retire, defease or
otherwise make any payment in respect of any Equity Interest in suc h Person or
any other Person or any warrant, right or option to acquire such Equity
Interest, valued, in the case of a redeemable preferred interest, at the greater
of its voluntary or involuntary liquidation preference plus accrued and unpaid
dividends; and

(h) all Guarantees of such Person in respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date.

“Indemnified Taxes” means Taxes other than Excluded Taxes.

“Indemnitees” has the meaning specified in Section 10.04(b).

“Information” has the meaning specified in Section 10.07.

 

 

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“Information Memorandum” means the information memorandum used by the Arrangers
in connection with the syndication of the Commitments.

“Intellectual Property Security Agreement” has the meaning specified in Section
4.01(a)(iv).

“Interest Payment Date” means, (a) as to any Eurocurrency Rate Loan, the last
day of each Interest Period applicable to such Loan and the Maturity Date;
provided, however, that if any Interest Period for a Eurocurrency Rate Loan
exceeds three months, the respective dates that fall every three months after
the beginning of such Interest Period shall also be Interest Payment Dates; and
(b) as to any Base Rate Loan or Swing Line Loan, the last Business Day of each
March, June, September and December and the Maturity Date.

“Interest Period” means, as to each Eurocurrency Rate Loan, the period
commencing on the date such Eurocurrency Rate Loan is disbursed or converted to
or continued as a Eurocurrency Rate Loan and ending on the date one, two, three
or six months thereafter, as selected by the applicable Borrower in its
Committed Loan Notice; provided that:

(a) any Interest Period that would otherwise end on a day that is not a Business
Day shall be extended to the next succeeding Business Day unless such Business
Day falls in another calendar month, in which case such Interest Period shall
end on the next preceding Business Day;

(b) any Interest Period that begins on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last Business Day of
the calendar month at the end of such Interest Period; and

(c) no Interest Period shall extend beyond the Maturity Date.

“Internal Control Event“ means a material weakness in, or fraud that involves
management or other employees who have a significant role in, Holdings’ internal
controls over financial reporting, in each case as described in the Securities
Laws.

“Investment “ means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of Equity Interests of another Person, (b) a loan, advance or
capital contribution to, Guarantee or assumption of debt of, or purchase or
other acquisition of any other debt or interest in, another Person, or (c) the
purchase or other acquisition (in one transaction or a series of transactions)
of assets of another Person that constitute a business unit or all or a
substantial part of the business of, such Person. For purposes of covenant
compliance, the amount of any Investment shall be the amount actually invested,
without adjustment for subsequent increases or decreases in the value of such
Investment.

“IP Rights” has the meaning specified in Section 5.17.

“IP Security Agreement Supplement“ has the meaning specified in Section 10(g) of
the Security Agreement.

 

 

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“IRS” means the United States Internal Revenue Service.

“ISP” means, with respect to any Letter of Credit, the “International Standby
Practices 1998” published by the Institute of International Banking Law &
Practice (or such later version thereof as may be in effect at the time of
issuance).

“Issuer Documents” means with respect to any Letter of Credit, the Letter of
Credit Application, and any other document, agreement and instrument entered
into by the L/C Issuer and a Borrower (or any Subsidiary) or in favor the L/C
Issuer and relating to any such Letter of Credit.

“Laws” means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

“L/C Advance” means, with respect to each Lender, such Lender’s funding of its
participation in any L/C Borrowing in accordance with its Applicable Percentage.

“L/C Borrowing” means an extension of credit resulting from a drawing under any
Letter of Credit which has not been reimbursed on the date when made or
refinanced as a Revolving Credit Borrowing.

“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance
thereof or extension of the expiry date thereof, or the increase of the amount
thereof.

“L/C Issuer” means Bank of America in its capacity as issuer of Letters of
Credit hereunder, or any successor issuer of Letters of Credit hereunder, or,
with respect to Letters of Credit denominated in Pounds or Euros, any Eligible
Assignee that has been approved by the Administrative Agent as an L/C Issuer and
that has executed and delivered to the Administrative Agent an L/C Issuer
Joinder Agreement pursuant to Section 10.14, unless such Eligible Assignee has
been released from its obligation as an L/C Issuer pursuant to Section 10.14.

“L/C Issuer Joinder Agreement” means an agreement in substantially the form of
Exhibit I hereto.

“L/C Obligations” means, as at any date of determination, the aggregate amount
available to be drawn under all outstanding Letters of Credit plus the aggregate
of all Unreimbursed Amounts, including all L/C Borrowings. For purposes of
computing the amount available to be drawn under any Letter of Credit, the
amount of such Letter of Credit shall be determined in accordance with Section
1.06. For all purposes of this Agreement, if on any date of determination a
Letter of Credit has expired by its terms but any amount may still be drawn
thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of
Credit shall be deemed to be “outstanding” in the amount so remaining available
to be drawn.

 

 

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“Lender” has the meaning specified in the introductory paragraph hereto and, as
the context requires, includes the Swing Line Lender.

“Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other
office or offices as a Lender may from time to time notify the Borrowers and the
Administrative Agent.

“Letter of Credit” means any standby letter of credit, or similar instrument
customarily issued in the applicable Foreign Currency including, without
limitation, bank guaranties, issued hereunder.

“Letter of Credit Application” means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by the L/C Issuer.

“Letter of Credit Expiration Date” means the day that is seven days prior to the
Maturity Date then in effect for the Facility (or, if such day is not a Business
Day, the next preceding Business Day).

“Letter of Credit Fee” has the meaning specified in Section 2.03(i).

“Letter of Credit Sublimit” means an amount equal to $50,000,000. The Letter of
Credit Sublimit is part of, and not in addition to, the Facility.

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).

“Loan” means an extension of credit by a Lender to a Borrower under Article II
in the form of a Revolving Credit Loan or a Swing Line Loan.

“Loan Documents” means, collectively, (a) this Agreement, (b) the Notes, (c) the
Domestic Guaranty, (d) the U.K. Guaranty, (e) the Collateral Documents, (f) the
Fee Letter, (g) each Issuer Document, (h) each Secured Hedge Agreement and (i)
each Secured Cash Management Agreement; provided that for purposes of the
definition of “Material Adverse Effect” and Articles IV through IX, “Loan
Documents” shall not include Secured Hedge Agreements or Secured Cash Management
Agreements.

“Loan Parties” means, collectively, the Borrowers and each Guarantor.

“Local Law Collateral Documents” means, in respect of the Equity Interests in
any First-Tier Foreign CFC Subsidiaries contemplated to be pledged by the terms
hereof for the benefit of the Secured Parties, all documents necessary to grant
and perfect, under the laws of the jurisdiction of organization of such
First-Tier Foreign CFC Subsidiary, the security interest granted or contemplated
to be granted, pursuant to the Security Agreement, in the Equity

 

 

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Interests of such First-Tier Foreign CFC Subsidiary, together with an opinion of
local counsel qualified in such jurisdiction of organization in form and
substance satisfactory to the Administrative Agent.

“Master Subordination Agreement” has the meaning specified in Section 6.14.

“Mandatory Cost” means, with respect to any period, the percentage rate per
annum determined in accordance with Schedule 1.01.

“Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties, liabilities (actual
or contingent), condition (financial or otherwise) or prospects of Holdings and
its Subsidiaries taken as a whole; (b) a material impairment of the rights and
remedies of the Administrative Agent or any Lender under any Loan Document, or
of the ability of any Loan Party to perform its obligations under any Loan
Document to which it is a party; or (c) a material adverse effect upon the
legality, validity, binding effect or enforceability against any Loan Party of
any Loan Document to which it is a party.

“Maturity Date” means September 7, 2010; provided that in the event that any of
the Senior Notes are outstanding on July 1, 2008 and (i) the Borrowers shall not
have deposited cash and Cash Equivalents in an amount sufficient to redeem and
pay in full such Senior Notes in a deposit account under the sole dominion and
control of the Administrative Agent upon terms and conditions satisfactory to
the Administrative Agent or (ii) the Borrowers shall not have demonstrated their
ability to redeem and pay in full such Senior Notes in a manner satisfactory to
the Administrative Agent and the Lenders, then the Maturity Date shall be July
1, 2008.

“Measurement Period” means, at any date of determination, the most recently
completed four fiscal quarters of Holdings.

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which a Borrower or any ERISA Affiliate makes or
is obligated to make contributions, or during the preceding five plan years, has
made or been obligated to make contributions.

“Net Cash Proceeds” means:

(a) with respect to any Disposition by any Loan Party or any of its
Subsidiaries, or any Extraordinary Receipt received or paid to the account of
any Loan Party or any of its Subsidiaries, the excess, if any, of (i) the sum of
cash and Cash Equivalents received in connection with such transaction
(including any cash or Cash Equivalents received by way of deferred payment
pursuant to, or by monetization of, a note receivable or otherwise, but only as
and when so received) over (ii) the sum of (A) the principal amount of any
Indebtedness that is secured by the applicable asset and that is required to be
repaid in connection with such transaction (other than Indebtedness under the
Loan Documents), (B) the reasonable and customary out-of-pocket expenses
incurred by such Loan Party or such Subsidiary in connection with such
transaction and

 

 

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(C) income taxes reasonably estimated to be actually payable within two years of
the date of the relevant transaction as a result of any gain recognized in
connection therewith; provided that, if the amount of any estimated taxes
pursuant to subclause (C) exceeds the amount of taxes actually required to be
paid in cash in respect of such Disposition, the aggregate amount of such excess
shall constitute Net Cash Proceeds;

(b) with respect to the incurrence or issuance of any Indebtedness by any Loan
Party or any of its Subsidiaries, the excess of (i) the sum of the cash and Cash
Equivalents received in connection with such transaction over (ii) the
underwriting discounts and commissions, and other reasonable and customary
out-of-pocket expenses, incurred by such Loan Party or such Subsidiary in
connection therewith; and

(c) with respect to any license of intellectual property by any Loan Party or
any of its Subsidiaries, the amount of the cash and Cash Equivalents received in
connection with such transaction as an upfront one time payment (or a similar
payment or related payments) made in excess of scheduled royalty or similar
payments in connection with such license.

“Non-Extension Notice Date” has the meaning specified in Section 2.03(b)(iii).

“Note” means a promissory note made by the Borrowers in favor of a Lender
evidencing Revolving Credit Loans or Swing Line Loans, as the case may be, made
by such Lender, substantially in the form of Exhibit C-1 or Exhibit C-2, as
applicable.

“NPL” means the National Priorities List under CERCLA.

“Oatshare” has the meaning specified in the recital of parties hereto.

“Obligations” means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising under any Loan Document or
otherwise with respect to any Loan or Letter of Credit, whether direct or
indirect (including those acquired by assumption), absolute or contingent, due
or to become due, now existing or hereafter arising and including interest and
fees that accrue after the commencement by or against any Loan Party or any
Affiliate thereof of any proceeding under any Debtor Relief Laws naming such
Person as the debtor in such proceeding, regardless of whether such interest and
fees are allowed claims in such proceeding.

“Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction and,
with respect to corporations incorporated in the United Kingdom, certificates of
incorporation on any change of name); (b) with respect to any limited liability
company, the certificate or articles of formation or organization and operating
agreement; and (c) with respect to any partnership, joint venture, trust or
other form of business entity, the partnership, joint venture or other
applicable agreement of formation or organization and any agreement, instrument,
filing or notice with respect thereto filed in connection with its formation or
organization with the applicable Governmental Authority in the jurisdiction of
its formation or organization and, if applicable, any certificate or articles of
formation or organization of such entity.

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

“Outstanding Amount” means (a) with respect to Revolving Credit Loans and Swing
Line Loans on any date, the aggregate outstanding principal amount thereof
(calculated in respect of Loans denominated in a Foreign Currency or the
Equivalent thereof in Dollars at such time) after giving effect to any
borrowings and prepayments or repayments of Revolving Credit Loans and Swing
Line Loans, as the case may be, occurring on such date; and (b) with respect to
any L/C Obligations on any date, the amount (calculated in respect of Letters of
Credit denominated in a Foreign Currency or the Equivalent thereof in Dollars at
such time) of such L/C Obligations on such date after giving effect to any L/C
Credit Extension occurring on such date and any other changes in the aggregate
amount of the L/C Obligations as of such date, including as a result of any
reimbursements by the Borrowers of Unreimbursed Amounts.

“Overnight Rate” means, for any day, (a) with respect to any amount denominated
in Dollars, the greater of (i) the Federal Funds Rate and (ii) an overnight rate
determined by the Administrative Agent, the L/C Issuer, or the Swing Line
Lender, as the case may be, in accordance with banking industry rules on
interbank compensation, and (b) with respect to any amount denominated in a
Foreign Currency, the rate of interest per annum at which overnight deposits in
the applicable Foreign Currency, in an amount approximately equal to the amount
with respect to which such rate is being determined, would be offered for such
day by a branch or Affiliate of Bank of America in the applicable offshore
interbank market for such currency to major banks in such interbank market.

“Participant” has the meaning specified in Section 10.06(d).

“Participating Member State” means each state so described in any EMU
Legislation.

“PBGC” means the Pension Benefit Guaranty Corporation.

“Pension Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by a Borrower or any
ERISA Affiliate or to which a Borrower or any ERISA Affiliate contributes or has
an obligation to contribute, or in the case of a multiple employer or other plan
described in Section 4064(a) of ERISA, has made contributions at any time during
the immediately preceding five plan years.

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

“Plan” means any “employee benefit plan” (as such term is defined in Section
3(3) of ERISA) established by a Borrower or, with respect to any such plan that
is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.

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“Pledged Debt” has the meaning specified in Section 1(d)(iv) of the Security
Agreement.

“Pledged Equity” has the meaning specified in Section 1(d)(iii) of the Security
Agreement.

“Pounds” or “£” means lawful money of the United Kingdom.

“Recapitalization” has the meaning set forth in the Preliminary Statements
hereto.

“Register” has the meaning specified in Section 10.06(c).

“Registered Public Accounting Firm” has the meaning specified by the Securities
Laws and shall be independent of Holdings as prescribed by the Securities Laws.

“Related Documents” means the Transaction Agreement and such other documents
effecting the Recapitalization, if any.

“Related Parties” means, with respect to any Person, such Person’s Affiliates
and the partners, directors, officers, employees and agents of such Person and
of such Person’s Affiliates.

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.

“Request for Credit Extension” means (a) with respect to a Borrowing, conversion
or continuation of Revolving Credit Loans, a Committed Loan Notice, (b) with
respect to an L/C Credit Extension, a Letter of Credit Application, and (c) with
respect to a Swing Line Loan, a Swing Line Loan Notice.

“Required Lenders” means, as of any date of determination, Lenders holding more
than 50% of the sum of the (a) Total Outstandings (with the aggregate amount of
each Lender’s risk participation and funded participation in L/C Obligations and
Swing Line Loans being deemed “held” by such Lender for purposes of this
definition) and (b) aggregate unused Commitments; provided that the unused
Commitment of, and the portion of the Total Outstandings held or deemed held by,
any Defaulting Lender shall be excluded for purposes of making a determination
of Required Lenders.

“Responsible Officer” means, in the case of a Loan Party incorporated under the
Laws of England and Wales, a director of such U.K. Loan Party and, in the case
of any other Loan Party, the chief executive officer, president, chief financial
officer, treasurer or assistant treasurer of a Loan Party and any other officer
of the applicable Loan Party so designated by any of the foregoing officers in a
notice to the Administrative Agent. Any document delivered hereunder that is
signed by a Responsible Officer of a Loan Party shall be conclusively presumed
to have been authorized by all necessary corporate, partnership and/or other
action on the part of such Loan Party and such Responsible Officer shall be
conclusively presumed to have acted on behalf of such Loan Party.

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“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any capital stock or other Equity
Interest of any Person or any of its Subsidiaries, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, defeasance,
acquisition, cancellation or termination of any such capital stock or other
Equity Interest, or on account of any return of capital to any Person’s
stockholders, partners or members (or the equivalent of any thereof), or any
option, warrant or other right to acquire any such dividend or other
distribution or payment.

“Revaluation Date” means (a) with respect to any Loan, each of the following:
(i) each date of a Borrowing of a Eurocurrency Rate Loan denominated in a
Foreign Currency, (ii) each date of a continuation of a Eurocurrency Rate Loan
denominated in a Foreign Currency pursuant to Section 2.02, and (iii) such
additional dates as the Administrative Agent shall determine or the Required
Lenders shall require; and (b) with respect to any Letter of Credit, each of the
following: (i) each date of issuance of a Letter of Credit denominated in a
Foreign Currency, (ii) each date of an amendment of any such Letter of Credit
having the effect of increasing the amount thereof (solely with respect to the
increased amount), (iii) each date of any payment by the L/C Issuer under any
Letter of Credit denominated in a Foreign Currency, and (iv) such additional
dates as the Administrative Agent or the L/C Issuer shall determine or the
Required Lenders shall require.

“Revolving Credit Borrowing” means a borrowing consisting of simultaneous
Revolving Credit Loans of the same Type and, in the case of Eurocurrency Rate
Loans, having the same Interest Period made by each of the Lenders pursuant to
Section 2.01.

“Revolving Credit Loan” has the meaning specified in Section 2.01.

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw- Hill
Companies, Inc., and any successor thereto.

“Sarbanes-Oxley” means the Sarbanes-Oxley Act of 2002.

“SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.

“Secured Cash Management Agreement” means any Cash Management Agreement that is
entered into by and between any Borrower and any Cash Management Bank.

“Secured Hedge Agreement” means any interest rate Swap Contract permitted under
Article VI or VII that is entered into by and between any Borrower and any Hedge
Bank.

“Secured Parties” means, collectively, the Administrative Agent, the Lenders,
the L/C Issuer, the Hedge Banks, the Cash Management Banks, each co-agent or
sub-agent appointed by the Administrative Agent from time to time pursuant to
Section 9.05, and the other Persons the Obligations owing to which are or are
purported to be secured by the Collateral under the terms of the Collateral
Documents.

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“Securities Laws” means the Securities Act of 1933, the Securities Exchange Act
of 1934, Sarbanes-Oxley, and the applicable accounting and auditing principles,
rules, standards and practices promulgated, approved or incorporated by the SEC
or the Public Company Accounting Oversight Board.

“Security Agreement” has the meaning specified in Section 4.01(a)(iii).

“Security Agreement Supplement” has the meaning specified in Section 21(b) of
the Security Agreement.

“Sellers” has the meaning specified in the Preliminary Statements hereto.

“Senior Notes” means the 6? % senior notes of Holdings due 2009 in an aggregate
principal amount of $100,000,000 issued and sold pursuant to the Senior Notes
Documents.

“Senior Notes Documents” means the Senior Notes Indenture, the Senior Notes and
all other agreements, instruments and other documents pursuant to which the
Senior Notes have been or will be issued or otherwise setting forth the terms of
the Senior Notes.

“Senior Notes Indenture” means the Indenture dated as of June 17, 1998 and
entered into by Holdings and Chase Manhattan Bank, as trustee, as supplemented
by the Indenture dated as of February 5, 1999.

“Solvent “ and “Solvency” mean, with respect to any Person on any date of
determination, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including contingent
liabilities, of such Person, (b) the present fair salable value of the assets of
such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person’s ability to pay such debts and
liabilities as they mature, (d) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person’s property would constitute an unreasonably small capital and (e) in
the case of any Person which is a company incorporated under the laws of England
and Wales or Scotland, such company is not unable to pay its debts within the
meaning of Section 123 of the Insolvency Act 1986. The amount of contingent
liabilities at any time shall be computed as the amount that, in the light of
all the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability.

“Sotheby’s” has the meaning specified in the recital of parties hereto.

“SPC” has the meaning specified in Section 10.06(i).

“Spot Rate” for a currency means the rate determined by the Administrative Agent
or the L/C Issuer, as applicable, to be the rate quoted by the Person acting in
such capacity as the spot rate for the purchase by such Person of such currency
with another currency through its principal foreign exchange trading office at
approximately 11:00 a.m. on the date two Business Days prior to the date as of
which the foreign exchange computation is made; provided

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that the Administrative Agent or the L/C Issuer may obtain such spot rate from
another financial institution designated by the Administrative Agent or the L/C
Issuer if the Person acting in such capacity does not have as of the date of
determination a spot buying rate for any such currency; and provided further
that the L/C Issuer may use such spot rate quoted on the date as of which the
foreign exchange computation is made in the case of any Letter of Credit
denominated in a Foreign Currency.

“SPTC Delaware” means SPTC Delaware LLC, a Delaware limited liability company,
and each other “Eligible SPV” (as such term is defined in the Trademark License
Agreement).

“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
“Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of
Holdings.

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.

“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid- market or other readily available quotations provided by any
recognized dealer in such Swap Contracts (which may include a Lender or any
Affiliate of a Lender).

“Swiss Francs” means the lawful currency of Switzerland.

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“Swing Line” means the revolving credit facility made available by the Swing
Line Lender pursuant to Section 2.04.

“Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to
Section 2.04.

“Swing Line Lender” means Bank of America in its capacity as provider of Swing
Line Loans, or any successor swing line lender hereunder.

“Swing Line Loan” has the meaning specified in Section 2.04(a).

“Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to
Section 2.04(b), which, if in writing, shall be substantially in the form of
Exhibit B.

“Swing Line Sublimit” means an amount equal to the lesser of (a) $20,000,000 and
(b) the Facility. The Swing Line Sublimit is part of, and not in addition to,
the Facility.

“Synthetic Debt” means, with respect to any Person as of any date of
determination thereof, all obligations of such Person in respect of transactions
entered into by such Person that are intended to function primarily as a
borrowing of funds (including any minority interest transactions that function
primarily as a borrowing) but are not otherwise included in the definition of
“Indebtedness” or as a liability on the consolidated balance sheet of such
Person and its Subsidiaries in accordance with GAAP.

“Synthetic Lease Obligation” means the monetary obligation of a Person under (a)
a so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property (including sale and leaseback
transactions), in each case, creating obligations that do not appear on the
balance sheet of such Person but which, upon the application of any Debtor
Relief Laws to such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).

“TARGET Day” means any day on which the Trans-European Automated Real-time Gross
settlement Express Transfer payment system is open for the settlement of
payments in Euros.

“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental
Authority, including any interest, additions to tax or penalties applicable
thereto.

“Transaction Agreement” has the meaning set forth in the Preliminary Statements
hereto.

“Threshold Amount” means $10,000,000.

“Total Outstandings” means the aggregate Outstanding Amount of all Revolving
Credit Loans, Swing Line Loans and L/C Obligations.

 

 

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“Trademark License Agreement” means the Trademark License Agreement dated as of
February 17, 2004 and entered into by and among SPTC, Inc., as licensor,
Holdings, as guarantor, Monticello Licensee Corporation, as licensee, and
Cendant Corporation, as guarantor.

“Transaction” means, collectively, (a) the consummation of the Recapitalization,
(b) the entering into by the Loan Parties and their applicable Subsidiaries of
the Loan Documents and the Related Documents to which they are or are intended
to be a party, (c) the termination of all commitments with respect to the
Existing Credit Agreement and (d) the payment of the fees and expenses incurred
in connection with the consummation of the foregoing.

“Type” means, with respect to a Loan denominated in Dollars, its character as a
Base Rate Loan or a Eurocurrency Rate Loan.

“UCC” means the Uniform Commercial Code as in effect in the State of New York;
provided that, if perfection or the effect of perfection or non-perfection or
the priority of any security interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the State of
New York, “UCC” means the Uniform Commercial Code as in effect from time to time
in such other jurisdiction for purposes of the provisions hereof relating to
such perfection, effect of perfection or non-perfection or priority.

“U.K. Borrowers” has the meaning specified in the recital of parties hereto.

“U.K. Collateral Documents” means the U.K. Debenture and the U.K. Share Charges
executed by the U.K. Loan Parties and Local Law Collateral Documents in respect
of the Equity Interests of First-Tier Foreign CFC Subsidiaries that are U.K.
Subsidiaries pursuant to Section 4.02 and all similar agreements entered into by
the U.K. Loan Parties granting a Lien upon property of any U.K. Subsidiary as
security for payment of the Obligations of the U.K. Loan Parties pursuant to
Section 6.12.

“U.K. Debenture” means collectively, one or more debentures as amended,
supplemented or otherwise modified from time to time entered into by the U.K.
Loan Parties, in form and substance satisfactory to the Administrative Agent.

“U.K. Guarantors” means, collectively, the U.K. Subsidiaries of Holdings listed
on Part II of Schedule 6.12 and each other U.K. Subsidiary of Holdings that
shall be required to execute and deliver a guaranty or guaranty supplement
pursuant to Section 6.12.

“U.K. Guaranty” means, collectively, the U.K. Guaranty made by the U.K.
Guarantors and the Domestic Guarantors in favor of the Secured Parties,
substantially in the form of Exhibit E-2, together with each other guaranty and
guaranty supplement delivered by a Foreign Subsidiary pursuant to Section 6.12.

“U.K. Lender” means a Lender in respect of a Borrower incorporated in the United
Kingdom.

“U.K. Loan Parties” means, collectively, the U.K. Borrowers and the U.K.
Guarantors.

 

 

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“U.K. Share Charges” means (a) the share charge entered into by the Company over
the shares in Oatshare, and (b) the share charge entered into by Oatshare over
the shares of the Subsidiaries owned directly by Oatshare, in each case, in form
and substance satisfactory to the Administrative Agent.

“U.K. Subsidiary” means each Subsidiary of Holdings incorporated in the United
Kingdom.

“Unfunded Pension Liability” means the excess of a Pension Plan’s benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan’s assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.

“United States” and “U.S.” mean the United States of America.

“Unreimbursed Amount” has the meaning specified in Section 2.03(c)(i).

“U.S. Borrowers” has the meaning specified in the recital of parties hereto.

“U.S. Loan Parties” means, collectively, the U.S. Borrowers and the Domestic
Guarantors.

“York Avenue Property” means the land, building and improvements located at 1334
York Avenue, New York, New York.

“York Capital Lease” means the Lease dated February 7, 2003 and entered into by
and between 1334 York Avenue L.P., as landlord and Company, as tenant.

1.02 Other Interpretive Provisions. With reference to this Agreement and each
other Loan Document, unless otherwise specified herein or in such other Loan
Document:

(a) The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
“include,” “includes” and “including” shall be deemed to be followed by the
phrase “without limitation.” The word “will” shall be construed to have the same
meaning and effect as the word “shall.” Unless the context requires otherwise,
(i) any definition of or reference to any agreement, instrument or other
document (including any Organization Document) shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other Loan
Document), (ii) any reference herein to any Person shall be construed to include
such Person’s successors and assigns, (iii) the words “herein,” “hereof” and
“hereunder,” and words of similar import when used in any Loan Document, shall
be construed to refer to such Loan Document in its entirety and not to any
particular provision thereof, (iv) all references in a Loan Document to
Articles, Sections, Preliminary Statements, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Preliminary Statements,
Exhibits and Schedules to, the Loan Document in which such references

 

 

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appear, (v) any reference to any law shall include all statutory and regulatory
provisions consolidating, amending, replacing or interpreting such law and any
reference to any law or regulation shall, unless otherwise specified, refer to
such law or regulation as amended, modified or supplemented from time to time,
and (vi) the words “asset” and “property” shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets
and properties, including cash, securities, accounts and contract rights.

(b) In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including;” the words “to” and
“until” each mean “to but excluding;” and the word “through” means “to and
including.”

(c) Section headings herein and in the other Loan Documents are included for
convenience of reference only and shall not affect the interpretation of this
Agreement or any other Loan Document.

1.03 Accounting Terms. (a) Generally. All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, as in effect from time to
time, applied in a manner consistent with that used in preparing the Audited
Financial Statements, except as otherwise specifically prescribed herein.

(b) Changes in GAAP. If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, and either the Borrowers or the Required Lenders shall so request, the
Administrative Agent, the Lenders and the Borrowers shall negotiate in good
faith to amend such ratio or requirement to preserve the original intent thereof
in light of such change in GAAP (subject to the approval of the Required
Lenders); provided that, until so amended, (i) such ratio or requirement shall
continue to be computed in accordance with GAAP prior to such change therein and
(ii) the Borrowers shall provide to the Administrative Agent and the Lenders
financial statements and other documents required under this Agreement or as
reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect to
such change in GAAP.

(c) Consolidation of Variable Interest Entities. All references herein to
consolidated financial statements of Holdings and its Subsidiaries or to the
determination of any amount for Holdings and its Subsidiaries on a consolidated
basis or any similar reference shall, in each case, be deemed to include each
variable interest entity that Holdings is required to consolidate pursuant to
FASB Interpretation No. 46 – Consolidation of Variable Interest Entities: an
interpretation of ARB No. 51 (January 2003) as if such variable interest entity
were a Subsidiary as defined herein.

1.04 Rounding. Any financial ratios required to be maintained by the Borrowers
pursuant to this Agreement shall be calculated by dividing the appropriate
component by the other component, carrying the result to one place more than the
number of places by

 

 

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which such ratio is expressed herein and rounding the result up or down to the
nearest number (with a rounding- up if there is no nearest number).

1.05 Times of Day. Unless otherwise specified, all references herein to times of
day shall be references to Eastern time (daylight or standard, as applicable).

1.06 Letter of Credit Amounts. Unless otherwise specified herein, the amount of
a Letter of Credit at any time shall be deemed to be the stated amount of such
Letter of Credit in effect at such time; provided, however, that with respect to
any Letter of Credit that, by its terms or the terms of any Issuer Document
related thereto, provides for one or more automatic increases in the stated
amount thereof, the amount of such Letter of Credit shall be deemed to be the
maximum stated amount of such Letter of Credit after giving effect to all such
increases, whether or not such maximum stated amount is in effect at such time.

1.07 Currency Equivalents Generally. (a) The Administrative Agent or the L/C
Issuer, as applicable, shall determine the Spot Rates as of each Revaluation
Date to be used for calculating the Equivalent in Dollars of Credit Extensions
and Outstanding Amounts denominated in Foreign Currencies. Such Spot Rates shall
become effective as of such Revaluation Date and shall be the Spot Rates
employed in converting any amounts between the applicable currencies until the
next Revaluation Date to occur. Except for purposes of financial statements
delivered by Loan Parties hereunder or calculating financial covenants hereunder
or except as otherwise provided herein, the applicable amount of any currency
(other than Dollars) for purposes of the Loan Documents shall be such Equivalent
in Dollars as so determined by the Administrative Agent or the L/C Issuer, as
applicable.

(b) Wherever in this Agreement in connection with a Borrowing, conversion,
continuation or prepayment of a Eurocurrency Rate Loan or the issuance,
amendment or extension of a Letter of Credit, an amount, such as a required
minimum or multiple amount, is expressed in Dollars, but such Borrowing,
Eurocurrency Rate Loan or Letter of Credit is denominated in a Foreign Currency,
such amount shall be the Equivalent in the relevant Foreign Currency of such
Dollar amount (rounded to the nearest unit of such Foreign Currency, with 0.5 of
a unit being rounded upward), as determined by the Administrative Agent or the
L/C Issuer, as the case may be.

1.08 Change of Currency. (a) Each obligation of the Borrowers to make a payment
denominated in the national currency unit of any member state of the European
Union that adopts the Euro as its lawful currency after the date hereof shall be
redenominated into Euro at the time of such adoption (in accordance with the EMU
Legislation). If, in relation to the currency of any such member state, the
basis of accrual of interest expressed in this Agreement in respect of that
currency shall be inconsistent with any convention or practice in the London
interbank market for the basis of accrual of interest in respect of the Euro,
such expressed basis shall be replaced by such convention or practice with
effect from the date on which such member state adopts the Euro as its lawful
currency; provided that if any Borrowing in the currency of such member state is
outstanding immediately prior to such date, such replacement shall take effect,
with respect to such Borrowing, at the end of the then current Interest Period.

 

 

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(b) Each provision of this Agreement shall be subject to such reasonable changes
of construction as the Administrative Agent may from time to time specify to be
appropriate to reflect the adoption of the Euro by any member state of the
European Union and any relevant market conventions or practices relating to the
Euro.

(c) Each provision of this Agreement also shall be subject to such reasonable
changes of construction as the Administrative Agent may from time to time
specify to be appropriate to reflect a change in currency of any other country
and any relevant market conventions or practices relating to the change in
currency.

1.09 Alternative L/C Currencies. (a) The Borrowers may from time to time request
that Letters of Credit be issued in a currency other than Dollars, Pounds,
Euros, Canadian Dollars, Swiss Francs or Hong Kong Dollars; provided, that such
requested currency is a lawful currency that is readily available and freely
transferable and convertible into Dollars as determined by the L/C Issuer and
the Administrative Agent.

(b) Notwithstanding anything contained in Section 2.03(b) to the contrary, any
such request shall be made to the Administrative Agent not later than 11:00
a.m., five Business Days prior to the date of the desired L/C Advance (or such
other time or date as may be agreed by the Administrative Agent and the L/C
Issuer, in their sole discretion). In the case of any such request, the
Administrative Agent shall promptly notify the L/C Issuer thereof. The L/C
Issuer shall notify the Administrative Agent, not later than 11:00 a.m., three
Business Days after receipt of such request whether it consents, in its sole
discretion, to the issuance of Letters of Credit in such requested currency.

(c) Any failure by the L/C Issuer to respond to such request within the time
period specified in the preceding sentence shall be deemed to be a refusal by
the L/C Issuer to permit Letters of Credit to be issued in such requested
currency. If the Administrative Agent and the L/C Issuer consent to the issuance
of Letters of Credit in such requested currency, the Administrative Agent shall
so notify the applicable Borrower and such currency shall thereupon be deemed
for all purposes to be an “Alternative L/C Currency” hereunder. If the
Administrative Agent shall fail to obtain consent to any request for an
additional currency under this Section 1.09, the Administrative Agent shall
promptly so notify the applicable Borrower.

ARTICLE II

THE COMMITMENTS AND CREDIT EXTENSIONS

2.01 The Loans. Subject to the terms and conditions set forth herein, each
Lender severally agrees to make loans (each such loan, a “Revolving Credit
Loan”) (a) denominated in Dollars to the U.S. Borrowers, (b) denominated in
Pounds to the U.K. Borrowers and (c) denominated in Euros to the U.K. Borrowers,
in each case from time to time, on any Business Day during the Availability
Period in an aggregate amount not to exceed at any time outstanding the amount
of such Lender’s Commitment; provided, however, that after giving effect to any
Revolving Credit Borrowing, (i) the Total Outstandings shall not exceed the
Facility, (ii) the aggregate Outstanding Amount of the Revolving Credit Loans of
any Lender,

 

 

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plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C
Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount
of all Swing Line Loans shall not exceed such Lender’s Commitment and (iii) the
aggregate Outstanding Amount of the Revolving Credit Loans denominated in
Foreign Currencies plus the Outstanding Amount of all L/C Obligations in respect
of Letters of Credit denominated in Foreign Currencies will not exceed the
Foreign Currency Sublimit. Within the limits of each Lender’s Commitment, and
subject to the other terms and conditions hereof, the Borrowers may borrow under
this Section 2.01, prepay under Section 2.05, and reborrow under this Section
2.01. Revolving Credit Loans may be Base Rate Loans or Eurocurrency Rate Loans,
as further provided herein.

2.02 Borrowings, Conversions and Continuations of Loans. (a) Each Revolving
Credit Borrowing, each conversion of Revolving Credit Loans from one Type to the
other, and each continuation of Eurocurrency Rate Loans shall be made upon the
applicable Borrower’s (or Holdings on behalf of such Borrower) irrevocable
notice to the Administrative Agent, which may be given by telephone. Each such
notice must be received by the Administrative Agent not later than (i) 11:00
a.m. (New York City time) three Business Days prior to the requested date of any
Borrowing of, conversion to or continuation of Eurocurrency Rate Loans or of any
conversion of Eurocurrency Rate Loans to Base Rate Loans, (ii) 11:00 a.m.
(London time) one Business Day prior to the requested date of any Borrowing or
continuation of Eurocurrency Rate Loans in Pounds, (ii) 11:00 a.m. (local time)
three Business Day prior to the requested date of any Borrowing or continuation
of Eurocurrency Rate Loans in Euros, and (iv) 11:00 a.m. (New York City time) on
the requested date of any Borrowing of Base Rate Loans. Each telephonic notice
by any Borrower pursuant to this Section 2.02(a) must be confirmed promptly by
delivery to the Administrative Agent of a written Committed Loan Notice,
appropriately completed and signed by a Responsible Officer of such Borrower.
Each Borrowing of, conversion to or continuation of Eurocurrency Rate Loans
shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000
in excess thereof in the case of Loans denominated in Dollars, £3,000,000 or a
whole multiple of £1,000,000 in excess thereof in the case of Loans denominated
in Pounds and €5,000,000 or a whole multiple of €1,000,000 in excess thereof in
the case of Loans denominated in Euros. Except as provided in Sections 2.03(c)
and 2.04(c), each Borrowing of or conversion to Base Rate Loans shall be in a
principal amount of $500,000 or a whole multiple of $100,000 in excess thereof.
Each Committed Loan Notice (whether telephonic or written) shall specify (i) the
Borrower to which the Loans is to be made, (ii) the currency in which the Loan
is to be denominated, (iii) whether such Borrower is requesting a Revolving
Credit Borrowing, a conversion of Revolving Credit Loans denominated in Dollars
from one Type to the other, or a continuation of Eurocurrency Rate Loans, (iv)
the requested date of the Borrowing, conversion or continuation, as the case may
be (which shall be a Business Day), (v) the principal amount of Loans to be
borrowed, converted or continued, (vi) the Type of Loans to be borrowed or to
which existing Revolving Credit Loans are to be converted, and (vii) if
applicable, the duration of the Interest Period with respect thereto. If a
Borrower fails to specify a Type of Loan in a Committed Loan Notice in respect
of Loans denominated in Dollars or if a Borrower fails to give a timely notice
requesting a conversion or continuation, then the applicable Revolving Credit
Loans shall be made as, or converted to, Base Rate Loans in the case of Loans
denominated in Dollars, or Eurocurrency Loans with an Interest Period of 1
month, in the case of Loans denominated in Pounds or Euros. Any such automatic
conversion to Base Rate Loans or Eurocurrency Rate Loans with an Interest Period
of 1 month shall be effective as of the last day of the Interest Period then in
effect with respect to the

 

 

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applicable Eurocurrency Rate Loans. If a Borrower requests a Borrowing of,
conversion to, or continuation of Eurocurrency Rate Loans in any such Committed
Loan Notice, but fails to specify an Interest Period, it will be deemed to have
specified an Interest Period of one month. Notwithstanding anything to the
contrary herein, a Swing Line Loan may not be converted to a Eurocurrency Rate
Loan. No Loan may be converted into or continued as a Loan denominated in a
different currency, but instead must be prepaid in the original currency of such
Loan and reborrowed in the other currency.

(b) Following receipt of a Committed Loan Notice, the Administrative Agent shall
promptly notify each Lender of the amount of its Applicable Percentage of the
applicable Revolving Credit Loans, and if no timely notice of a conversion or
continuation is provided by a Borrower, the Administrative Agent shall notify
each Lender of the details of any automatic conversion to Base Rate Loans or
Eurocurrency Rate Loans with an Interest Period of 1 month described in Section
2.02(a). In the case of a Revolving Credit Borrowing, each Lender shall make the
amount of its Loan available to the Administrative Agent in immediately
available funds at the Administrative Agent’s Office not later than 10:00 a.m.
(applicable local time) on the Business Day specified in the applicable
Committed Loan Notice. Upon satisfaction of the applicable conditions set forth
in Section 4.03 (and, if such Borrowing is the initial Credit Extension, Section
4.01 or the initial Credit Extension to a U.K. Borrower, Section 4.02), the
Administrative Agent shall make all funds so received available to the
applicable Borrower in like funds as received by the Administrative Agent either
by (i) crediting the account of such Borrower on the books of Bank of America
with the amount of such funds or (ii) wire transfer of such funds, in each case
in accordance with instructions provided to (and reasonably acceptable to) the
Administrative Agent by such Borrower; provided, however, that if, on the date a
Committed Loan Notice with respect to a Revolving Credit Borrowing is given by a
Borrower, there are L/C Borrowings outstanding, then the proceeds of such
Revolving Credit Borrowing, first, shall be applied to the payment in full of
any such L/C Borrowings, and second, shall be made available to such Borrower as
provided above.

(c) Except as otherwise provided herein, a Eurocurrency Rate Loan may be
continued or converted only on the last day of an Interest Period for such
Eurocurrency Rate Loan. During the existence of a Default, no Loans denominated
in Dollars may be requested as, converted to or continued as Eurocurrency Rate
Loans and no Loans denominated in Euros or Pounds may be requested as or
continued as Eurocurrency Rate Loans with an Interest Period of greater than 1
month, in each case without the consent of the Required Lenders.

(d) The Administrative Agent shall promptly notify the applicable Borrower and
the Lenders of the interest rate applicable to any Interest Period for
Eurocurrency Rate Loans upon determination of such interest rate. At any time
that Base Rate Loans are outstanding, the Administrative Agent shall notify the
U.S. Borrowers and the Lenders of any change in Bank of America’s prime rate
used in determining the Base Rate promptly following the public announcement of
such change.

(e) After giving effect to all Revolving Credit Borrowings, all conversions of
Revolving Credit Loans from one Type to the other, and all continuations of
Revolving Credit Loans as the same Type, there shall not be more than 10
Interest Periods in effect in respect of the Facility.

 

 

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(f) Anything in this Section 2.02 to the contrary notwithstanding, the
applicable Borrowers may not select Interest Periods for Eurocurrency Rate Loans
that have a duration of more than one month during the period from the date
hereof until the earlier of 90 days thereafter or the completion of “successful
syndication” as defined in the Fee Letter (or such earlier date as shall be
specified by the Administrative Agent in a notice to the Borrowers and the
Lenders).

2.03 Letters of Credit. (a) The Letter of Credit Commitment. (i) Subject to the
terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance
upon the agreements of the Lenders set forth in this Section 2.03, (1) from time
to time on any Business Day during the period from the Closing Date until the
Letter of Credit Expiration Date, to issue Letters of Credit denominated in
Dollars (or, in accordance with Section 1.09, an Alternative L/C Currency) for
the account of the U.S. Borrowers or their Subsidiaries, and to amend Letters of
Credit denominated in Dollars (or an Alternative L/C Currency) previously issued
by it, in accordance with Section 2.03(b), (2) from time to time on any Business
Day during the period from the Closing Date until the Letter of Credit
Expiration Date, to issue Letters of Credit denominated in Euros or Pounds (or,
in accordance with Section 1.09, an Alternative L/C Currency) for the account of
the U.K. Borrowers or their Subsidiaries, and to amend Letters of Credit
denominated in Euros or Pounds (or an Alternative L/C Currency) previously
issued by it in accordance with Section 2.03(b), and (3) to honor drawings under
the Letters of Credit; and (B) the Lenders severally agree to participate in
Letters of Credit issued for the account of the Borrowers or their Subsidiaries
and any drawings thereunder; provided that after giving effect to any L/C Credit
Extension with respect to any Letter of Credit, (w) the Total Outstandings shall
not exceed the Facility, (x) the aggregate Outstanding Amount of the Revolving
Credit Loans of any Lender, plus such Lender’s Applicable Percentage of the
Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable
Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed
such Lender’s Commitment, (y) the Outstanding Amount of the L/C Obligations
shall not exceed the Letter of Credit Sublimit, and (z) the aggregate
Outstanding Amount of the Revolving Credit Loans denominated in Foreign
Currencies, plus the Outstanding Amount of all L/C Obligations in respect of
Letters of Credit denominated in Foreign Currencies shall not exceed the Foreign
Currency Sublimit. Each request by a Borrower for the issuance or amendment of a
Letter of Credit shall be deemed to be a representation by such Borrower that
the L/C Credit Extension so requested complies with the conditions set forth in
the proviso to the preceding sentence. Within the foregoing limits, and subject
to the terms and conditions hereof, the Borrowers’ ability to obtain Letters of
Credit shall be fully revolving, and accordingly the Borrowers may, during the
foregoing period, obtain Letters of Credit to replace Letters of Credit that
have expired or that have been drawn upon and reimbursed.

(ii) The L/C Issuer shall not issue any Letter of Credit if:

(A) the expiry date of such requested Letter of Credit would occur more than
twelve months after the date of issuance (without giving effect to any
Auto-Extension provision therein) unless the Required Lenders have approved such
expiry date; or

(B) the expiry date of such requested Letter of Credit would occur after the
Letter of Credit Expiration Date, unless all the Lenders have approved such
expiry date.

 

 

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(iii) The L/C Issuer shall not be under any obligation to issue any Letter of
Credit if:

(A) any order, judgment or decree of any Governmental Authority or arbitrator
shall by its terms purport to enjoin or restrain the L/C Issuer from issuing
such Letter of Credit, or any Law applicable to the L/C Issuer or any request or
directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over the L/C Issuer shall prohibit, or request that
the L/C Issuer refrain from, the issuance of letters of credit generally or such
Letter of Credit in particular or shall impose upon the L/C Issuer with respect
to such Letter of Credit any restriction, reserve or capital requirement (for
which the L/C Issuer is not otherwise compensated hereunder) not in effect on
the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss,
cost or expense which was not applicable on the Closing Date and which the L/C
Issuer in good faith deems material to it;

(B) the issuance of such Letter of Credit would violate one or more policies of
the L/C Issuer generally applicable to the issuance of letters of credit;

(C) except as otherwise agreed by the Administrative Agent and the L/C Issuer,
such Letter of Credit is in an initial stated amount less than the Equivalent of
$50,000;

(D) such Letter of Credit is to be denominated in a currency other than Dollars
or an Alternative L/C Currency;

(E) such Letter of Credit contains any provisions for automatic reinstatement of
the stated amount after any drawing thereunder;

(F) a default of any Lender’s obligations to fund under Section 2.03(c) exists
or any Lender is at such time a Defaulting Lender hereunder, unless the L/C
Issuer has entered into satisfactory arrangements with the Borrowers or such
Lender to eliminate the L/C Issuer’s risk with respect to such Lender; or

(G) the L/C Issuer does not as of the issuance date of such requested Letter of
Credit issue Letters of Credit in the requested currency.

(iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would
not be permitted at such time to issue such Letter of Credit in its amended form
under the terms hereof.

(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if
(A) the L/C Issuer would have no obligation at such time to issue such Letter of
Credit in its amended form under the terms hereof, or (B) the beneficiary of
such Letter of Credit does not accept the proposed amendment to such Letter of
Credit.

(vi) The L/C Issuer shall act on behalf of the Lenders with respect to any
Letters of Credit issued by it and the documents associated therewith, and the
L/C Issuer shall have all of the benefits and immunities (A) provided to the
Administrative Agent in Article IX

 

 

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with respect to any acts taken or omissions suffered by the L/C Issuer in
connection with Letters of Credit issued by it or proposed to be issued by it
and Issuer Documents pertaining to such Letters of Credit as fully as if the
term “Administrative Agent” as used in Article IX included the L/C Issuer with
respect to such acts or omissions, and (B) as additionally provided herein with
respect to the L/C Issuer.

(b) Procedures for Issuance and Amendment of Letters of Credit. (i) Each Letter
of Credit shall be issued or amended, as the case may be, upon the request of
the applicable Borrower (or Holdings on behalf of such Borrower) delivered to
the L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter
of Credit Application, appropriately completed and signed by a Responsible
Officer of such Borrower. Such Letter of Credit Application must be received by
the L/C Issuer and the Administrative Agent (x) not later than 11:00 a.m. at
least two Business Days prior to the proposed issuance date or date of
amendment, as the case may be, of any Letter of Credit denominated in Dollars,
and (y) not later than 11:00 a.m. at least two Business Days prior to the
proposed issuance date or date of amendment, as the case may be, of any Letter
of Credit denominated in a Foreign Currency; or in each case such later date and
time as the Administrative Agent and the L/C Issuer may agree in a particular
instance in their sole discretion. In the case of a request for an initial
issuance of a Letter of Credit, such Letter of Credit Application shall specify
in form and detail satisfactory to the L/C Issuer: (A) the proposed issuance
date of the requested Letter of Credit (which shall be a Business Day); (B) the
amount and currency thereof; (C) the expiry date thereof; (D) the name and
address of the beneficiary thereof; (E) the documents to be presented by such
beneficiary in case of any drawing thereunder; (F) the full text of any
certificate to be presented by such beneficiary in case of any drawing
thereunder; and (G) such other matters as the L/C Issuer may require. In the
case of a request for an amendment of any outstanding Letter of Credit, such
Letter of Credit Application shall specify in form and detail satisfactory to
the L/C Issuer (1) the Letter of Credit to be amended; (2) the proposed date of
amendment thereof (which shall be a Business Day); (3) the nature of the
proposed amendment; and (4) such other matters as the L/C Issuer may require.
Additionally, the applicable Borrower shall furnish to the L/C Issuer and the
Administrative Agent such other documents and information pertaining to such
requested Letter of Credit issuance or amendment, including any Issuer
Documents, as the L/C Issuer or the Administrative Agent may require.

(ii) Promptly after receipt of any Letter of Credit Application, the L/C Issuer
will confirm with the Administrative Agent (by telephone or in writing) that the
Administrative Agent has received a copy of such Letter of Credit Application
from the applicable Borrower and, if not, the L/C Issuer will provide the
Administrative Agent with a copy thereof. Unless the L/C Issuer has received
written notice from any Lender, the Administrative Agent or any Loan Party, at
least one Business Day prior to the requested date of issuance or amendment of
the applicable Letter of Credit, that one or more applicable conditions
contained in Article IV shall not then be satisfied, then, subject to the terms
and conditions hereof, the L/C Issuer shall, on the requested date, issue a
Letter of Credit for the account of the applicable Borrower (or the applicable
Subsidiary) or enter into the applicable amendment, as the case may be, in each
case in accordance with the L/C Issuer’s usual and customary business practices.
Immediately upon the issuance of each Letter of Credit, each Lender shall be
deemed to, and hereby irrevocably and unconditionally agrees to, purchase from
the L/C Issuer a risk participation in such Letter of

 

 

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Credit in an amount equal to the product of such Lender’s Applicable Percentage
times the amount of such Letter of Credit.

(iii) If the applicable Borrower so requests in any applicable Letter of Credit
Application, the L/C Issuer may, in its sole and absolute discretion, agree to
issue a Letter of Credit that has automatic extension provisions (each, an
“Auto- Extension Letter of Credit”); provided that any such Auto-Extension
Letter of Credit must permit the L/C Issuer to prevent any such extensions at
least once in each twelve-month period (commencing with the date of issuance o f
such Letter of Credit) by giving prior notice to the beneficiary thereof not
later than a day (the “Non-Extension Notice Date”) in each such twelve- month
period to be agreed upon at the time such Letter of Credit is issued. Unless
otherwise directed by the L/C Issuer, the applicable Borrower shall not be
required to make a specific request of the L/C Issuer for any such extension.
Once an Auto-Extension Letter of Credit has been issued, the Lenders shall be
deemed to have authorized (but may not require) the L/C Issuer to permit the
extension of such Letter of Credit at any time to an expiry date not later than
the Letter of Credit Expiration Date; provided, however, that the L/C Issuer
shall not permit any such extension if (A) the L/C Issuer has determined that it
would not be permitted, or would have no obligation, at such time to issue such
Letter of Credit in its revised form (as extended) under the terms hereof (by
reason of the provisions of clause (ii) or (iii) of Section 2.03(a) or
otherwise), or (B) it has received notice (which may be by telephone or in
writing) on or before the day that is a five Business Days before the
Non-Extension Notice Date (1) from the Administrative Agent that the Required
Lenders have elected not to permit such extension or (2) from the Administrative
Agent, any Lender or Holdings that one or more of the applicable conditions
specified in Section 4.03 is not then satisfied, and in each such case directing
the L/C Issuer not to permit such extension.

(iv) Promptly after its delivery of any Letter of Credit or any amendment to a
Letter of Credit to an advising bank with respect thereto or to the beneficiary
thereof, the L/C Issuer will also deliver to the applicable Borrower and the
Administrative Agent a true and complete copy of such Letter of Credit or
amendment.

(c) Drawings and Reimbursements; Funding of Participations. (i) Upon receipt
from the beneficiary of any Letter of Credit of any notice of a drawing under
such Letter of Credit, the L/C Issuer shall notify the applicable Borrower and
the Administrative Agent thereof. In the case of a Letter of Credit denominated
in a Foreign Currency, the applicable Borrower (on its or its applicable
Subsidiary’s behalf) shall reimburse the L/C Issuer in such Foreign Currency,
unless the applicable Borrower shall have notified the L/C Issuer promptly
following receipt of the notice of drawing that the applicable Borrower will
reimburse the L/C Issuer in Dollars. In the case of any such reimbursement in
Dollars of a drawing under a Letter of Credit denominated in a Foreign Currency,
the L/C Issuer shall notify the Company of the Dollar Equivalent of the amount
of the drawing promptly following the determination thereof. Not later than
11:00 a.m. on the date of any payment by the L/C Issuer under a Letter of Credit
to be reimbursed in Dollars, or the Applicable Time on the date of any payment
to the L/C Issuer under a Letter of Credit to be reimbursed in a Foreign
Currency (each such date, an “Honor Date”), such Borrower (on its or its
applicable Subsidiary’s behalf) shall reimburse the L/C Issuer through the
Administrative Agent in an amount equal to the amount of such drawing and in the
applicable currency. If the applicable Borrower fails to so reimburse the L/C
Issuer by such time, the Administrative Agent shall promptly notify each Lender
of the Honor Date, the amount of the

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unreimbursed drawing (expressed in Dollars in the amount of the Equivalent in
Dollars thereof in the case of a Letter of Credit denominated in a Foreign
Currency) (the “Unreimbursed Amount”), and the amount of such Lender’s
Applicable Percentage thereof. In such event, such Borrower shall be deemed to
have requested a Revolving Credit Borrowing of Base Rate Loans to be disbursed
on the Honor Date in an amount equal to the Unreimbursed Amount, without regard
to the minimum and multiples specified in Section 2.02 for the principal amount
of Base Rate Loans, but subject to the amount of the unutilized portion of the
Commitments and the conditions set forth in Section 4.03 (other than the
delivery of a Committed Loan Notice). Any notice given by the L/C Issuer or the
Administrative Agent pursuant to this Section 2.03(c)(i) may be given by
telephone if immediately confirmed in writing; provided that the lack of such an
immediate confirmation shall not affect the conclusiveness or binding effect of
such notice.

(ii) Each Lender shall upon any notice pursuant to Section 2.03(c)(i) make funds
available to the Administrative Agent for the account of the L/C Issuer, in
Dollars, at the Administrative Agent’s Office Dollar-denominated payments in an
amount equal to its Applicable Percentage of the Unreimbursed Amount not later
than 1:00 p.m. on the Business Day specified in such notice by the
Administrative Agent, whereupon, subject to the provisions of Section
2.03(c)(iii), each Lender that so makes funds available shall be deemed to have
made a Base Rate Loan to the applicable Borrower in such amount. The
Administrative Agent shall remit the funds so received to the L/C Issuer in
Dollars.

(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a
Revolving Credit Borrowing of Base Rate Loans because the conditions set forth
in Section 4.03 cannot be satisfied or for any other reason, the applicable
Borrower shall be deemed to have incurred from the L/C Issuer an L/C Borrowing
in the amount of the Unreimbursed Amount that is not so refinanced, which L/C
Borrowing shall be due and payable on demand (together with interest) and shall
bear interest at the Default Rate. In such event, each Lender’s payment to the
Administrative Agent for the account of the L/C Issuer pursuant to Section
2.03(c)(ii) shall be deemed payment in respect of its participation in such L/C
Borrowing and shall constitute an L/C Advance from such Lender in satisfaction
of its participation obligation under this Section 2.03.

(iv) Until each Lender funds its Revolving Credit Loan or L/C Advance pursuant
to this Section 2.03(c) to reimburse the L/C Issuer for any amount drawn under
any Letter of Credit, interest in respect of such Lender’s Applicable Percentage
of such amount shall be solely for the account of the L/C Issuer.

(v) Each Lender’s obligation to make Revolving Credit Loans or L/C Advances to
reimburse the L/C Issuer for amounts drawn under Letters of Credit, as
contemplated by this Section 2.03(c), shall be absolute and unconditional and
shall not be affected by any circumstance, including (A) any setoff,
counterclaim, recoupment, defense or other right which such Lender may have
against the L/C Issuer, the Borrowers or any other Person for any reason
whatsoever; (B) the occurrence or continuance of a Default, or (C) any other
occurrence, event or condition, whether or not similar to any of the foregoing;
provided, however, that each Lender’s obligation to make Revolving Credit Loans
pursuant to this Section 2.03(c) is subject to the conditions set forth in
Section 4.03 (other than delivery by the applicable Borrower of a Committed Loan
Notice ). No such making of an L/C Advance shall relieve or

 

 

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otherwise impair the obligation of the Borrowers to reimburse the L/C Issuer for
the amount of any payment made by the L/C Issuer under any Letter of Credit,
together with interest as provided herein.

(vi) If any Lender fails to make available to the Administrative Agent for the
account of the L/C Issuer any amount required to be paid by such Lender pursuant
to the foregoing provisions of this Section 2.03(c) by the time specified in
Section 2.03(c)(ii), the L/C Issuer shall be entitled to recover from such
Lender (acting through the Administrative Agent), on demand, such amount with
interest thereon for the period from the date such payment is required to the
date on which such payment is immediately available to the L/C Issuer at a rate
per annum equal to the applicable Overnight Rate from time to time in effect. A
certificate of the L/C Issuer submitted to any Lender (through the
Administrative Agent) with respect to any amounts owing under this Section
2.03(c)(vi) shall be conclusive absent manifest error.

(d) Repayment of Participations. (i) At any time after the L/C Issuer has made a
payment under any Letter of Credit and has received from any Lender such
Lender’s L/C Advance in respect of such payment in accordance with Section
2.03(c), if the Administrative Agent receives for the account of the L/C Issuer
any payment in respect of the related Unreimbursed Amount or interest thereon
(whether directly from the applicable Borrower or otherwise, including proceeds
of Cash Collateral applied thereto by the Administrative Agent), the
Administrative Agent will distribute to such Lender its Applicable Percentage
thereof (appropriately adjusted, in the case of interest payments, to reflect
the period of time during which such Lender’s L/C Advance was outstanding) in
Dollars and in the same funds as those received by the Administrative Agent.

(ii) If any payment received by the Administrative Agent for the account of the
L/C Issuer pursuant to Section 2.03(c)(i) is required to be returned under any
of the circumstances described in Section 10.05 (including pursuant to any
settlement entered into by the L/C Issuer in its discretion), each Lender shall
pay to the Administrative Agent for the account of the L/C Issuer its Applicable
Percentage thereof on demand of the Administrative Agent, plus interest thereon
from the date of such demand to the date such amount is returned by such Lender,
at a rate per annum equal to the applicable Overnight Rate from time to time in
effect. The obligations of the Lenders under this clause shall survive the
payment in full of the Obligations and the termination of this Agreement.

(e) Obligations Absolute. The obligation of each applicable Borrower to
reimburse the L/C Issuer for each drawing under each Letter of Credit and to
repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and
shall be paid strictly in accordance with the terms of this Agreement under all
circumstances, including the following:

(i) any lack of validity or enforceability of such Letter of Credit, this
Agreement, or any other Loan Document;

(ii) the existence of any claim, counterclaim, setoff, defense or other right
that any Borrower or any Subsidiary may have at any time against any beneficiary
or any transferee of such Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), the L/C Issuer or any other
Person, whether in connection

 

 

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with this Agreement, the transactions contemplated hereby or by such Letter of
Credit or any agreement or instrument relating thereto, or any unrelated
transaction;

(iii) any draft, demand, certificate or other document presented under such
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;
or any loss or delay in the transmission or otherwise of any document required
in order to make a drawing under such Letter of Credit;

(iv) any payment by the L/C Issuer under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of such Letter of Credit; or any payment made by the L/C Issuer under such
Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-
in-possession, assignee for the benefit of creditors, liquidator, receiver or
other representative of or successor to any beneficiary or any transferee of
such Letter of Credit, including any arising in connection with any proceeding
under any Debtor Relief Law;

(v) any adverse change in the relevant exchange rates or in the availability of
the relevant Foreign Currency to any Borrower or any Subsidiary or in the
relevant currency markets generally; or

(vi) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing, including any other circumstance that might otherwise
constitute a defense available to, or a discharge of, any Borrower or any of
their Subsidiaries.

Each Borrower shall promptly examine a copy of each Letter of Credit and each
amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with such Borrower’s instructions or other irregularity, such
Borrower will immediately notify the L/C Issuer. Each Borrower shall be
conclusively deemed to have waived any such claim against the L/C Issuer and its
correspondents unless such notice is given as aforesaid.

(f) Role of L/C Issuer. Each Lender and each Borrower agree that, in paying any
drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. None of the L/C Issuer,
the Administrative Agent, any of their respective Related Parties nor any
correspondent, participant or assignee of the L/C Issuer shall be liable to any
Lender for (i) any action taken or omitted in connection herewith at the request
or with the approval of the Lenders or the Required Revolving Lenders, as
applicable; (ii) any action taken or omitted in the absence of gross negligence
or willful misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or
Issuer Document. Each Borrower hereby assumes all risks of the acts or omissions
of any beneficiary or transferee with respect to its use of any Letter of
Credit; provided, however, that this assumption is not intended to, and shall
not, preclude the Borrowers’ pursuing such rights and remedies as it may have
against the beneficiary or transferee at law or under any other agreement. None
of the L/C Issuer, the Administrative Agent, any of their respective Related
Parties nor any correspondent, participant

 

 

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or assignee of the L/C Issuer shall be liable or responsible for any of the
matters described in clauses (i) through (vi) of Section 2.03(e); provided,
however, that anything in such clauses to the contrary notwithstanding, the
Borrowers may have a claim against the L/C Issuer, and the L/C Issuer may be
liable to the Borrowers, to the extent, but only to the extent, of any direct,
as opposed to consequential or exemplary, damages suffered by the Borrowers
which the Borrowers prove were caused by the L/C Issuer’s willful misconduct or
gross negligence or the L/C Issuer’s willful failure to pay under any Letter of
Credit after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of
Credit. In furtherance and not in limitation of the foregoing, the L/C Issuer
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary, and the L/C Issuer shall not be responsible for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.

(g) Cash Collateral. Upon the request of the Administrative Agent, (i) if the
L/C Issuer has honored any full or partial drawing request under any Letter of
Credit and such drawing has resulted in an L/C Borrowing, or (ii) if, as of the
Letter of Credit Expiration Date, any L/C Obligation for any reason remains
outstanding, the Borrowers shall, in each case, immediately Cash Collateralize
the then Outstanding Amount of all L/C Obligations. Sections 2.05 and 8.02(c)
set forth certain additional requirements to deliver Cash Collateral hereunder.
For purposes of this Section 2.03, Section 2.05 and Section 8.02(c), “Cash
Collateralize” means to pledge and deposit with or deliver to the Administrative
Agent, for the benefit of the L/C Issuer and the Lenders, as collateral for the
L/C Obligations, cash or deposit account balances pursuant to documentation in
form and substance satisfactory to the Administrative Agent and the L/C Issuer
(which documents are hereby consented to by the Lenders). Derivatives of such
term have corresponding meanings. The Borrowers hereby grant to the
Administrative Agent, for the benefit of the L/C Issuer and the Lenders, a
security interest in all such cash, deposit accounts and all balances therein
and all proceeds of the foregoing. Cash Collateral shall be maintained in
blocked, deposit accounts at Bank of America on the terms and conditions to be
mutually agreed. In addition, if the Administrative Agent notifies the Borrowers
at any time that the Outstanding Amount of all L/C Obligations at such time
exceeds 105% of the Letter of Credit Sublimit then in effect, then, within two
Business Days after receipt of such notice, the Borrowers shall Cash
Collateralize the L/C Obligations in an amount equal to the amount by which the
Outstanding Amount of all L/C Obligations exceeds the Letter of Credit Sublimit.
If at any time the Administrative Agent determines that any funds held as Cash
Collateral are subject to any right or claim of any Person other than the
Administrative Agent or that the total amount of such funds is less than the
aggregate Outstanding Amount of all L/C Obligations, the Borrowers will,
forthwith upon demand by the Administrative Agent, pay to the Administrative
Agent, as additional funds to be deposited as Cash Collateral, an amount equal
to the excess of (x) such aggregate Outstanding Amount over (y) the total amount
of funds, if any, then held as Cash Collateral that the Administrative Agent
determines to be free and clear of any such right and claim. Upon the drawing of
any Letter of Credit for which funds are on deposit as Cash Collateral, such
funds shall be applied, to the extent permitted under applicable Laws, to
reimburse the L/C Issuer.

 

 

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(h) Applicability of ISP. Unless otherwise expressly agreed by the L/C Issuer
and the applicable Borrower when a Letter of Credit is issued, the rules of the
ISP shall apply to each Letter of Credit.

(i) Letter of Credit Fees. The Borrowers shall pay to the Administrative Agent
for the account of each Lender in accordance with its Applicable Percentage, in
Dollars, a Letter of Credit fee (the “Letter of Credit Fee”) for each Letter of
Credit equal to 1.75% times the Equivalent in Dollars of the daily amount
available to be drawn under such Letter of Credit. For purposes of computing the
daily amount available to be drawn under any Letter of Credit, the amount of
such Letter of Credit shall be determined in accordance with Section 1.06.
Letter of Credit Fees shall be (A) computed on a quarterly basis in arrears and
(B) due and payable on the first Business Day after the end of each March, June,
September and December, commencing with the first such date to occur after the
issuance of such Letter of Credit, on the Letter of Credit Expiration Date and
thereafter on demand. If there is any change in the Applicable Rate during any
quarter, the daily amount available to be drawn under each Letter of Credit
shall be computed and multiplied by the Applicable Rate separately for each
period during such quarter that such Applicable Rate was in effect.
Notwithstanding anything to the contrary contained herein, upon the request of
the Required Revolving Lenders, while any Event of Default exists, all Letter of
Credit Fees shall accrue at the Default Rate.

(j) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer.
The applicable Borrower shall pay directly to the L/C Issuer for its own
account, in Dollars, a fronting fee with respect to each Letter of Credit, at a
rate of 0.125% per annum, computed on the Equivalent in Dollars of the daily
amount available to be drawn under such Letter of Credit on a quarterly basis in
arrears. Such fronting fee shall be due and payable on the tenth Business Day
after the end of each March, June, September and December in respect of the most
recently-ended quarterly period (or portion thereof, in the case of the first
payment), commencing with the first such date to occur after the issuance of
such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on
demand. For purposes of computing the daily amount available to be drawn under
any Letter of Credit, the amount of such Letter of Credit shall be determined in
accordance with Section 1.06. In addition, the applicable Borrower shall pay
directly to the L/C Issuer for its own account, in Dollars, the customary
issuance, presentation, amendment and other processing fees, and other standard
costs and charges, of the L/C Issuer relating to letters of credit as from time
to time in effect. Such customary fees and standard costs and charges are due
and payable on demand and are nonrefundable.

(k) Conflict with Issuer Documents. In the event of any conflict between the
terms hereof and the terms of any Issuer Document, the terms hereof shall
control.

(l) Letters of Credit Issued for Subsidiaries. Notwithstanding that a Letter of
Credit issued or outstanding hereunder is in support of any obligations of, or
is for the account of, a Subsidiary of a Borrower, the applicable Borrower shall
be obligated to reimburse the L/C Issuer hereunder for any and all drawings
under such Letter of Credit. Each Borrower hereby acknowledges that the issuance
of Letters of Credit for the account of the Subsidiaries of such Borrower inures
to the benefit of such Borrower, and that such Borrower’s business derives
substantial benefits from the businesses of such Subsidiaries.

 

 

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(m) Letter of Credit Reports. Each Issuing Bank shall furnish (i) to the
Administrative Agent on the first Business Day of each week a written report
summarizing issuance and expiration dates of Letters of Credit issued by such
Issuing Bank during the previous week and drawings during such week under all
Letters of Credit issued by such Issuing Bank, (ii) to each Lender on the first
Business Day of each month a written report summarizing issuance and expiration
dates of Letters of Credit issued by such Issuing Bank during the preceding
month and drawings during such month under all Letters of Credit issued by such
Issuing Bank and (iii) to the Administrative Agent and each Lender on the first
Business Day of each calendar quarter a written report setting forth the average
daily maximum amount available to be drawn under such Letters of Credit during
the preceding calendar quarter of all Letters of Credit issued by such Issuing
Bank.

2.04 Swing Line Loans. (a) The Swing Line. Subject to the terms and conditions
set forth herein, the Swing Line Lender agrees, in reliance upon the agreements
of the other Lenders set forth in this Section 2.04, to make loans denominated
in Dollars (each such loan, a “Swing Line Loan”) to the U.S. Borrowers from time
to time on any Business Day during the Availability Period in an aggregate
amount not to exceed at any time outstanding the amount of the Swing Line
Sublimit, notwithstanding the fact that such Swing Line Loans, when aggregated
with the Applicable Percentage of the Outstanding Amount of Revolving Credit
Loans and L/C Obligations of the Lender acting as Swing Line Lender, may exceed
the amount of such Lender’s Commitment; provided, however, that after giving
effect to any Swing Line Loan, (i) the Total Outstandings shall not exceed the
Facility at such time, and (ii) the aggregate Outstanding Amount of the
Revolving Credit Loans of any Lender at such time, plus such Lender’s Applicable
Percentage of the Outstanding Amount of all L/C Obligations at such time, plus
such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line
Loans at such time shall not exceed such Lender’s Commitment, and provided
further that the U.S. Borrowers shall not use the proceeds of any Swing Line
Loan to refinance any outstanding Swing Line Loan. Within the foregoing limits,
and subject to the other terms and conditions hereof, the U.S. Borrowers may
borrow under this Section 2.04, prepay under Section 2.05, and reborrow under
this Section 2.04. Each Swing Line Loan shall bear interest only at a rate based
on the Base Rate. Immediately upon the making of a Swing Line Loan, each Lender
shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the Swing Line Lender a risk participation in such Swing Line Loan
in an amount equal to the product of such Lender’s Applicable Percentage times
the amount of such Swing Line Loan.

(b) Borrowing Procedures. Each Swing Line Borrowing shall be made upon the U.S.
Borrower’s irrevocable notice to the Swing Line Lender and the Administrative
Agent, which may be given by telephone. Each such notice must be received by the
Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the
requested borrowing date, and shall specify (i) the amount to be borrowed, which
shall be a minimum of $500,000, and (ii) the requested borrowing date, which
shall be a Business Day. Each such telephonic notice must be confirmed promptly
by delivery to the Swing Line Lender and the Administrative Agent of a written
Swing Line Loan Notice, appropriately completed and signed by a Responsible
Officer of the applicable Borrower. Promptly after receipt by the Swing Line
Lender of any telephonic Swing Line Loan Notice, the Swing Line Lender will
confirm with the Administrative Agent (by telephone or in writing) that the
Administrative Agent has also received such Swing Line Loan Notice and, if not,
the Swing Line Lender will notify the Administrative Agent (by telephone or

 

 

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in writing) of the contents thereof. Unless the Swing Line Lender has received
notice (by telephone or in writing) from the Administrative Agent (including at
the request of any Lender) prior to 2:00 p.m. on the date of the proposed Swing
Line Borrowing (A) directing the Swing Line Lender not to make such Swing Line
Loan as a result of the limitations set forth in the proviso to the first
sentence of Section 2.04(a), or (B) that one or more of the applicable
conditions specified in Article IV is not then satisfied, then, subject to the
terms and conditions hereof, the Swing Line Lender will, not later than 3:00
p.m. on the borrowing date specified in such Swing Line Loan Notice, make the
amount of its Swing Line Loan available to the applicable U.S. Borrower.

(c) Refinancing of Swing Line Loans. (i) The Swing Line Lender at any time in
its sole and absolute discretion may request, on behalf of each of the U.S.
Borrowers (each of which hereby irrevocably authorizes the Swing Line Lender to
so request on its behalf), that each Lender make a Base Rate Loan to such U.S.
Borrower in an amount equal to such Lender’s Applicable Percentage of the amount
of Swing Line Loans then outstanding to such U.S. Borrower. Such request shall
be made in writing (which written request shall be deemed to be a Committed Loan
Notice for purposes hereof) and in accordance with the requirements of Section
2.02, without regard to the minimum and multiples specified therein for the
principal amount of Base Rate Loans, but subject to the unutilized portion of
the Facility and the conditions set forth in Section 4.03. The Swing Line Lender
shall furnish the applicable U.S. Borrower with a copy of the applicable
Committed Loan Notice promptly after delivering such notice to the
Administrative Agent. Each Lender shall make an amount equal to its Applicable
Percentage of the amount specified in such Committed Loan Notice available to
the Administrative Agent in immediately available funds for the account of the
Swing Line Lender at the Administrative Agent’s Office not later than 1:00 p.m.
on the day specified in such Committed Loan Notice, whereupon, subject to
Section 2.04(c)(ii), each Lender that so makes funds available shall be deemed
to have made a Base Rate Loan to the applicable U.S. Borrower in such amount.
The Administrative Agent shall remit the funds so received to the Swing Line
Lender.

(ii) If for any reason any Swing Line Loan cannot be refinanced by such a
Revolving Credit Borrowing in accordance with Section 2.04(c)(i), the request
for Base Rate Loans submitted by the Swing Line Lender as set forth herein shall
be deemed to be a request by the Swing Line Lender that each of the Lenders fund
its risk participation in the relevant Swing Line Loan and each Lender’s payment
to the Administrative Agent for the account of the Swing Line Lender pursuant to
Section 2.04(c)(i) shall be deemed payment in respect of such participation.

(iii) If any Lender fails to make available to the Administrative Agent for the
account of the Swing Line Lender any amount required to be paid by such Lender
pursuant to the foregoing provisions of this Section 2.04(c) by the time
specified in Section 2.04(c)(i), the Swing Line Lender shall be entitled to
recover from such Lender (acting through the Administrative Agent), on demand,
such amount with interest thereon for the period from the date such payment is
required to the date on which such payment is immediately available to the Swing
Line Lender at a rate per annum equal to the greater of the Federal Funds Rate
and a rate determined by the Swing Line Lender in accordance with banking
industry rules on interbank compensation. A certificate of the Swing Line Lender
submitted to any Lender (through the Administrative Agent)

 

 

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with respect to any amounts owing under this clause (iii) shall be conclusive
absent manifest error.

(iv) Each Lender’s obligation to make Revolving Credit Loans or to purchase and
fund risk participations in Swing Line Loans pursuant to this Section 2.04(c)
shall be absolute and unconditional and shall not be affected by any
circumstance, including (A) any setoff, counterclaim, recoupment, defense or
other right which such Lender may have against the Swing Line Lender, any
Borrower or any other Person for any reason whatsoever, (B) the occurrence or
continuance of a Default, or (C) any other occurrence, event or condition,
whether or not similar to any of the foregoing; provided, however, that each
Lender’s obligation to make Revolving Credit Loans pursuant to this Section
2.04(c) is subject to the conditions set forth in Section 4.03. No such funding
of risk participations shall relieve or otherwise impair the obligation of the
applicable U.S. Borrower to repay Swing Line Loans, together with interest as
provided herein.

(d) Repayment of Participations. (i) At any time after any Lender has purchased
and funded a risk participation in a Swing Line Loan, if the Swing Line Lender
receives any payment on account of such Swing Line Loan, the Swing Line Lender
will distribute to such Lender its Applicable Percentage of such payment
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Lender’s risk participation was funded) in the same
funds as those received by the Swing Line Lender.

(ii) If any payment received by the Swing Line Lender in respect of principal or
interest on any Swing Line Loan is required to be returned by the Swing Line
Lender under any of the circumstances described in Section 10.05 (including
pursuant to any settlement entered into by the Swing Line Lender in its
discretion), each Lender shall pay to the Swing Line Lender its Applicable
Percentage thereof on demand of the Administrative Agent, plus interest thereon
from the date of such demand to the date such amount is returned, at a rate per
annum equal to the Federal Funds Rate. The Administrative Agent will make such
demand upon the request of the Swing Line Lender. The obligations of the Lenders
under this clause shall survive the payment in full of the Obligations and the
termination of this Agreement.

(e) Interest for Account of Swing Line Lender. The Swing Line Lender shall be
responsible for invoicing the applicable U.S. Borrower for interest on the Swing
Line Loans. Until each Lender funds its Base Rate Loan or risk participation
pursuant to this Section 2.04 to refinance such Lender’s Applicable Percentage
of any Swing Line Loan, interest in respect of such Applicable Percentage shall
be solely for the account of the Swing Line Lender.

(f) Payments Directly to Swing Line Lender. Each U.S. Borrower shall make all
payments of principal and interest in respect of the Swing Line Loans borrowed
by such U.S. Borrower directly to the Swing Line Lender.

2.05 Prepayments. (a) Optional. (i) Each Borrower may, upon notice to the
Administrative Agent, at any time or from time to time voluntarily prepay
Revolving Credit Loans in whole or in part without premium or penalty; provided
that (A) such notice must be received by the Administrative Agent not later than
11:00 a.m. (1) three Business Days prior to any date of prepayment of
Eurocurrency Rate Loans, (2) three Business Days prior to any date of

 

 

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prepayment of Eurocurrency Rate Loans denominated in Foreign Currencies, and (3)
on the date of prepayment of Base Rate Loans; (B) any prepayment of Eurodollar
Rate Loans shall be in a principal amount of $5,000,000 or a whole multiple of
$1,000,000 in excess thereof; (C) any prepayment of Base Rate Loans shall be in
a principal amount of $500,000 or a whole multiple of $100,000 in excess
thereof; (D) any prepayment of Eurocurrency Rate Loans denominated in Pounds
shall be in a principal amount of £3,000,000 or a whole multiple of £1,000,000
in excess thereof; and (E) any prepayment of Eurocurrency Rate Loans denominated
in Euros shall be in a principal amount of €5,000,000 or a whole multiple of
€1,000,000 in excess thereof, or, in each case, if less, the entire principal
amount thereof then outstanding. Each such notice shall specify the date and
amount of such prepayment and the currency and, if applicable, Type(s) of Loans
to be prepaid. The Administrative Agent will promptly notify each Lender of its
receipt of each such notice, and of the amount of such Lender’s ratable portion
of such prepayment (based on such Lender’s Applicable Percentage in respect of
the relevant Facility). If such notice is given by a Borrower, such Borrower
shall make such prepayment and the payment amount specified in such notice shall
be due and payable on the date specified therein. Any prepayment of a
Eurocurrency Rate Loan shall be accompanied by all accrued interest on the
amount prepaid, together with any additional amounts required pursuant to
Section 3.05. Each such prepayment shall be paid to the Lenders in accordance
with their respective Applicable Percentages.

(ii) Each U.S. Borrower may, upon notice to the Swing Line Lender (with a copy
to the Administrative Agent), at any time or from time to time, voluntarily
prepay Swing Line Loans borrowed by such U.S. Borrower in whole or in part
without premium or penalty; provided that (A) such notice must be received by
the Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on
the date of the prepayment, and (B) any such prepayment shall be in a minimum
principal amount of $100,000. Each such notice shall specify the date and amount
of such prepayment. If such notice is given by an U.S. Borrower, such U.S.
Borrower shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein.

(b) Mandatory. (i) If any Loan Party or any of its Subsidiaries Disposes of any
property (other than any Disposition of any property permitted by Section
7.05(a), (b), (c), (d) or (e)) which results in the realization by such Person
of Net Cash Proceeds, Holdings shall prepay, or shall cause any other Borrower
to prepay, an aggregate principal amount of Loans equal to 100% of such Net Cash
Proceeds immediately upon receipt thereof by such Person; provided that no such
prepayment will be required in respect of such Dispositions for the first U.S.
$5,000,000 in the aggregate in any fiscal year of Net Cash Proceeds received
therefrom.

(ii) Upon the incurrence or issuance by any Loan Party or any of its
Subsidiaries of any Indebtedness (other than Indebtedness expressly permitted to
be incurred or issued pursuant to Section 7.02(a) through (i)), Holdings shall
prepay, or shall cause any other Borrower to prepay, an aggregate principal
amount of Loans equal to 100% of all Net Cash Proceeds received therefrom
immediately upon receipt thereof by such Loan Party or such Subsidiary.

(iii) Upon any Extraordinary Receipt received by or paid to or for the account
of any Loan Party or any of its Subsidiaries, and not otherwise included in
clause (i) or (ii) of this Section 2.05(b), Holdings shall prepay, or shall
cause any other Borrower to prepay, an

 

 

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aggregate principal amount of Loans equal to 100% of all Net Cash Proceeds
received therefrom immediately upon receipt thereof by such Loan Party or such
Subsidiary; provided, that such Net Cash Proceeds are in excess of $1,000,000 in
the aggregate per fiscal year, and provided further, that with respect to any
proceeds of insurance, condemnation awards (or payments in lieu thereof) or
indemnity payments, at the election of the Borrowers (as notified by the
Borrowers to the Administrative Agent on or prior to the date of receipt of such
insurance proceeds, condemnation awards or indemnity payments), and so long as
no Default shall have occurred and be continuing, such Loan Party or such
Subsidiary may, prior to or within 180 days after the receipt of such cash
proceeds, replace or repair the equipment, fixed assets or real property in
respect of which such cash proceeds were or will be received; and provided
further, however, that any cash proceeds not so applied shall be immediately
applied to the prepayment of the Loans as set forth in this Section
2.05(b)(iii).

(iv) If any Loan Party or any of its Subsidiaries licenses any intellectual
property that results in the realization by such Person of Net Cash Proceeds of
at least $25,000,000, Holdings shall prepay, or shall cause any other Borrower
to prepay, an aggregate principal amount of Loans equal to 100% of such Net Cash
Proceeds immediately upon receipt thereof by such Person.

(v) If for any reason the Total Outstandings at any time exceed the Borrowing
Base at such time, Holdings shall immediately prepay, or shall cause any other
Borrower to immediately prepay, Revolving Credit Loans, Swing Line Loans and L/C
Borrowings and/or to immediately terminate any L/C Obligations (other than the
L/C Borrowings) in an aggregate amount equal to such excess.

(vi) If for any reason the Total Outstandings at any time exceed the Facility at
such time, Holdings shall immediately prepay, or shall cause any other Borrower
to immediately prepay, Revolving Credit Loans, Swing Line Loans and L/C
Borrowings and/or Cash Collateralize the L/C Obligations (other than the L/C
Borrowings) in an aggregate amount equal to such excess.

(vii) If the Administrative Agent notifies the Borrowers at any time that the
Outstanding Amount of all Loans and L/C Obligations denominated in Foreign
Currencies at such time exceeds an amount equal to 105% of the Foreign Currency
Sublimit then in effect, then, within two Business Days after receipt of such
notice, the Borrowers shall prepay Loans and L/C Obligations in an aggregate
amount sufficient to reduce such Outstanding Amount as of such date of payment
to an amount not to exceed 100% of the Foreign Currency Sublimit then in effect.

(viii) Prepayments of the Facility made by any Borrower pursuant to this Section
2.05(b), first, shall be applied ratably to the L/C Borrowings and the Swing
Line Loans of such Borrower, second, shall be applied ratably to the outstanding
Revolving Credit Loans of such Borrower, and, third, if an Event of Default has
occurred and is continuing, shall be used to Cash Collateralize the remaining
L/C Obligations of such Borrower; and, the amount remaining, if any, after the
prepayment in full of all such L/C Borrowings, Swing Line Loans and Revolving
Credit Loans outstanding at such time and the Cash Collateralization of such
remaining L/C Obligations in full shall be applied to the prepayment and Cash
Collateralization of the Total

 

 

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Outstandings of the other Borrowers in the same order of priority and any
amounts remaining after such application may be retained by such Borrower for
use in the ordinary course of its business. Upon the drawing of any Letter of
Credit that has been Cash Collateralized, the funds held as Cash Collateral
shall be applied (without any further action by or notice to or from the
Borrowers or any other Loan Party) to reimburse the L/C Issuer or the Lenders,
as applicable.

(ix) Notwithstanding any other provision of this Section 2.05 or any other
provision herein or in any other Loan Document to the contrary, no U.K. Borrower
or U.K. Guarantor shall be liable for or required to repay any Obligation of the
U.S. Loan Parties under the Loan Documents.

2.06 Termination or Reduction of Commitments. (a) Optional. Holdings may, upon
notice to the Administrative Agent, terminate the Facility, the Letter of Credit
Sublimit, the Swing Line Sublimit or the Foreign Currency Sublimit, or from time
to time permanently reduce the Facility, the Letter of Credit Sublimit, the
Swing Line Sublimit or the Foreign Currency Sublimit; provided that (i) any such
notice shall be received by the Administrative Agent not later than 11:00 a.m.
five Business Days prior to the date of termination or reduction, (ii) any such
partial reduction shall be in an aggregate amount of $10,000,000 or any whole
multiple of $1,000,000 in excess thereof and (iii) Holdings shall not terminate
or reduce (A) the Facility if, after giving effect thereto and to any concurrent
prepayments hereunder, the Total Outstandings would exceed the Facility, (B) the
Letter of Credit Sublimit if, after giving effect thereto, the Outstanding
Amount of L/C Obligations not fully Cash Collateralized hereunder would exceed
the Letter of Credit Sublimit, (C) the Swing Line Sublimit if, after giving
effect thereto and to any concurrent prepayments hereunder, the Outstanding
Amount of Swing Line Loans would exceed the Letter of Credit Sublimit, or (D)
the Foreign Currency Sublimit if, after giving effect thereto and to any
concurrent prepayments hereunder, the Outstanding Amount of any Loans
denominated in Foreign Currencies together with the Outstanding Amount of any
L/C Obligations denominated in Foreign Currencies would exceed the Foreign
Currency Sublimit.

(b) Mandatory. If after giving effect to any reduction or termination of
Commitments under this Section 2.06, the Letter of Credit Sublimit, the Swing
Line Sublimit or the Foreign Currency Sublimit exceeds the Facility at such
time, the Letter of Credit Sublimit, the Swing Line Sublimit or the Foreign
Currency Sublimit, as the case may be, shall be automatically reduced by the
amount of such excess.

(c) Application of Commitment Reductions ; Payment of Fees. The Administrative
Agent will promptly notify the Lenders of any termination or reduction of the
Letter of Credit Sublimit, Swing Line Sublimit, Foreign Currency Sublimit or the
Commitments under this Section 2.06. Upon any reduction of the Commitments, the
Commitment of each Lender shall be reduced by such Lender’s Applicable
Percentage of such reduction amount. All fees in respect of the Facility accrued
until the effective date of any termination of the Facility shall be paid on the
effective date of such termination.

2.07 Repayment of Loans. (a) Revolving Credit Loans. Each Borrower shall repay
to the Lenders on the Maturity Date for the Facility the aggregate principal
amount of all Revolving Credit Loans made to such Borrower and outstanding on
such date.

 

 

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(b) Swing Line Loans. Each U.S. Borrower shall repay each Swing Line Loan made
to such U.S. Borrower on the earlier to occur of (i) the date ten Business Days
after such Loan is made and (ii) the Maturity Date for the Facility.

2.08 Interest. (a) Subject to the provisions of Section 2.08(b), (i) each
Eurocurrency Rate Loan shall bear interest on the outstanding principal amount
thereof for each Interest Period at a rate per annum equal to the Eurocurrency
Rate for such Interest Period plus the Applicable Rate plus (in the case of a
Eurocurrency Rate Loan of any Lender which is lent from a Lending Office in the
United Kingdom or a Participating Member State) the Mandatory Cost; (ii) each
Base Rate Loan shall bear interest on the outstanding principal amount thereof
from the applicable borrowing date at a rate per annum equal to the Base Rate
plus the Applicable Rate; and (iii) each Swing Line Loan shall bear interest on
the outstanding principal amount thereof from the applicable borrowing date at a
rate per annum equal to the Base Rate plus the Applicable Rate.

(b) (i) If any amount of principal of any Loan is not paid when due (without
regard to any applicable grace periods), whether at stated maturity, by
acceleration or otherwise, such amount shall thereafter bear interest at a
fluctuating interest rate per annum at all times equal to the Default Rate to
the fullest extent permitted by applicable Laws.

(ii) If any amount (other than principal of any Loan) payable by any Borrower
under any Loan Document is not paid when due (without regard to any applicable
grace periods), whether at stated maturity, by acceleration or otherwise, then
upon the request of the Required Lenders such amount shall thereafter bear
interest at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws.

(iii) Upon the request of the Required Lenders, while any Event of Default
exists, each Borrower shall pay interest on the principal amount of all
outstanding Obligations hereunder at a fluctuating interest rate per annum at
all times equal to the Default Rate to the fullest extent permitted by
applicable Laws.

(iv) Accrued and unpaid interest on past due amounts (including interest on past
due interest) shall be due and payable upon demand.

(c) Interest on each Loan shall be due and payable in arrears on each Interest
Payment Date applicable thereto and at such other times as may be specified
herein. Interest hereunder shall be due and payable in accordance with the terms
hereof before and after judgment, and before and after the commencement of any
proceeding under any Debtor Relief Law.

2.09 Fees. In addition to certain fees described in Sections 2.03(i) and (j):

(a) Commitment Fee. The Borrowers shall pay to the Administrative Agent for the
account of each Lender in accordance with its Applicable Percentage, a
commitment fee in Dollars equal to the Applicable Commitment Fee Percentage
times the actual daily amount by which the aggregate Commitments exceed the sum
of (i) the Outstanding Amount of Revolving Credit Loans plus (ii) the
Outstanding Amount of L/C Obligations. The commitment fee shall accrue at all
times during the Availability Period, including at any time during which one or

 

 

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more of the conditions in Article IV is not met, and shall be due and payable
quarterly in arrears on the last Business Day of each March, June, September and
December, commencing with the first such date to occur after the Closing Date,
and on the Maturity Date. The commitment fee shall be calculated quarterly in
arrears, and if there is any change in the Applicable Commitment Fee Percentage
during any quarter, the actual daily amount shall be computed and multiplied by
the Applicable Commitment Fee Percentage separately for each period during such
quarter that such Applicable Commitment Fee Percentage was in effect.

(b) Other Fees. (i) The Borrowers shall pay to the Arrangers and the
Administrative Agent for their own respective accounts, in Dollars, fees in the
amounts and at the times specified in the Fee Letter. Such fees shall be fully
earned when paid and shall not be refundable for any reason whatsoever.

(ii)     The Borrowers shall pay to the Lenders, in Dollars, such fees as sha ll
have been separately agreed upon in writing in the amounts and at the times so
specified. Such fees shall be fully earned when paid and shall not be refundable
for any reason whatsoever.

2.10 Computation of Interest and Fees. All computations of interest for Base
Rate Loans when the Base Rate is determined by Bank of America’s “prime rate”
shall be made on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed. All other computations of fees and interest shall be made
on the basis of a 360-day year and actual days elapsed (which results in more
fees or interest, as applicable, being paid than if computed on the basis of a
365-day year), or, in the case of interest in respect of Loans denominated in
Foreign Currencies as to whic h market practice differs from the foregoing, in
accordance with such market practice. Interest shall accrue on each Loan for the
day on which the Loan is made, and shall not accrue on a Loan, or any portion
thereof, for the day on which the Loan or such portion is paid, provided that
any Loan that is repaid on the same day on which it is made shall, subject to
Section 2.12(a), bear interest for one day. Each determination by the
Administrative Agent of an interest rate or fee hereunder shall be conclusive
and binding for all purposes, absent manifest error.

2.11Evidence of Debt. (a) The Credit Extensions made by each Lender shall be
evidenced by one or more accounts or records maintained by such Lender and by
the Administrative Agent in the ordinary course of business. The accounts or
records maintained by the Administrative Agent and each Lender shall be
conclusive absent manifest error of the amount of the Credit Extensions made by
the Lenders to the Borrowers and the interest and payments thereon. Any failure
to so record or any error in doing so shall not, however, limit or otherwise
affect the obligation of the Borrowers hereunder to pay any amount owing with
respect to the Obligations. In the event of any conflict between the accounts
and records maintained by any Lender and the accounts and records of the
Administrative Agent in respect of such matters, the accounts and records of the
Administrative Agent (set forth in the Register) shall control in the absence of
manifest error. Upon the request of any Lender made through the Administrative
Agent, the Borrowers shall execute and deliver to such Lender (through the
Administrative Agent) a Note, which shall evidence such Lender’s Loans in
addition to such accounts or records. Each Lender may attach schedules to its
Note and endorse thereon the date, Type (if applicable), amount, currency and
maturity of its Loans and payments with respect thereto.

 

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(b) In addition to the accounts and records referred to in Section 2.11(a), each
Lender and the Administrative Agent shall maintain in accordance with its usual
practice accounts or records evidencing the purchases and sales by such Lender
of participations in Letters of Credit and Swing Line Loans. In the event of any
conflict between the accounts and records maintained by the Administrative Agent
and the accounts and records of any Lender in respect of such matters, the
accounts and records of the Administrative Agent shall control in the absence of
manifest error.

2.12 Payments Generally; Administrative Agent’s Clawback. (a) General. Except as
otherwise expressly provided herein, all payments to be made by the Borrowers
shall be made without condition or deduction for any counterclaim, defense,
recoupment or setoff. Except as otherwise expressly provided herein, all
payments by the Borrowers hereunder shall be made to the Administrative Agent,
for the account of the respective Lenders to which such payment is owed, at the
Administrative Agent’s Office in Dollars or the applicable Foreign Currency and
in immediately available funds not later than 2:00 p.m. (New York time) on the
date specified herein. The Administrative Agent will promptly distribute to each
Lender its Applicable Percentage (or other applicable share as provided herein)
of such payment in like funds as received by wire transfer to such Lender’s
Lending Office. All payments received by the Administrative Agent after 2:00
p.m. (New York time) shall be deemed received on the next succeeding Business
Day and any applicable interest or fee shall continue to accrue. If any payment
to be made by a Borrower shall come due on a day other than a Business Day,
payment shall be made on the next following Business Day, and such extension of
time shall be reflected in computing interest or fees, as the case may be.

(b) (i) Funding by Lenders; Presumption by Administrative Agent. Unless the
Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing of Eurocurrency Rate Loans (or, in the case of
any Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such
Borrowing) that such Lender will not make available to the Administrative Agent
such Lender’s share of such Borrowing, the Administrative Agent may assume that
such Lender has made such share available on such date in accordance with
Section 2.02 (or, in the case of a Borrowing of Base Rate Loans, that such
Lender has made such share available in accordance with and at the time required
by Section 2.02) and may, in reliance upon such assumption, make available to
the applicable Borrower a corresponding amount. In such event, if a Lender has
not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrowers severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount in immediately available funds with interest thereon, for each day from
and including the date such amount is made available to the applicable Borrower
to but excluding the date of payment to the Administrative Agent, at (A) in the
case of a payment to be made by such Lender, at a rate per annum equal to the
applicable Overnight Rate from time to time in effect and (B) in the case of a
payment to be made by the Borrowers, the interest rate applicable to Base Rate
Loans (in the case of payments denominated in Dollars) or the interest rate
applicable to Eurocurrency Rate Loans with an interest period of one month (in
the case of payments denominated in a Foreign Currency). If a Borrower and such
Lender shall pay such interest to the Administrative Agent for the same or an
overlapping period, the Administrative Agent shall promptly remit to the
applicable Borrower the amount of such interest paid by such Borrower for such
period. If such Lender pays its share of the applicable Borrowing to the
Administrative Agent, then the amount so paid shall

 

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constitute such Lender’s Loan included in such Borrowing. Any payment by any
Borrower shall be without prejudice to any claim such Borrower may have against
a Lender that shall have failed to make such payment to the Administrative
Agent.

(ii) Payments by Borrowers; Presumptions by Administrative Agent. Unless the
Administrative Agent shall have received notice from a Borrower prior to the
time at which any payment is due by such Borrower to the Administrative Agent
for the account of the Lenders or the L/C Issuer hereunder that such Borrower
will not make such payment, the Administrative Agent may assume that such
Borrower has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the Lenders or the L/C Issuer, as
the case may be, the amount due. In such event, if the applicable Borrower has
not in fact made such payment, then each of the Lenders or the L/C Issuer, as
the case may be, severally agrees to repay to the Administrative Agent forthwith
on demand the amount so distributed to such Lender or the L/C Issuer, in
immediately available funds with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at a rate per annum equal to the applicable
Overnight Rate from time to time in effect.

A notice of the Administrative Agent to any Lender or any Borrower with respect
to any amount owing under this subsection (b) shall be conclusive, absent
manifest error.

(c) Failure to Satisfy Conditions Precedent. If any Lender makes available to
the Administrative Agent funds for any Loan to be made by such Lender as
provided in the foregoing provisions of this Article II, and such funds are not
made available to the applicable Borrower by the Administrative Agent because
the conditions to the applicable Credit Extension set forth in Article IV are
not satisfied or waived in accordance with the terms hereof, the Administrative
Agent shall return such funds (in like funds as received from such Lender) to
such Lender, without interest.

(d) Obligations of Lenders Several. The obligations of the Lenders hereunder to
make Revolving Credit Loans, to fund participations in Letters of Credit and
Swing Line Loans and to make payments pursuant to Section 10.04(c) are several
and not joint. The failure of any Lender to make any Loan, to fund any such
participation or to make any payment under Section 10.04(c) on any date required
hereunder shall not relieve any other Lender of its corresponding obligation to
do so on such date, and no Lender shall be responsible for the failure of any
other Lender to so make its Loan, to purchase its participation or to make its
payment under Section 10.04(c).

(e) Funding Source. Nothing herein shall be deemed to obligate any Lender to
obtain the funds for any Loan in any particular place or manner or to constitute
a representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.

(f) Insufficient Payment. Whenever any payment received by the Administrative
Agent under this Agreement or any of the other Loan Documents is insufficient to
pay in full all amounts due and payable to the Administrative Agent and the
Lenders under or in respect of this Agreement and the other Loan Documents on
any date, such payment shall be distributed by the

 

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Administrative Agent and applied by the Administrative Agent and the Lenders in
the order of priority set forth in Section 8.03.

(g) To the extent that the Administrative Agent receives funds for application
to the amounts owing by any Borrower under or in respect of this Agreement in
currencies other than the currency or currencies required to enable the
Administrative Agent to distribute funds to the Lenders in accordance with the
terms of this Agreement, the Administrative Agent shall be entitled to convert
or exchange such funds into Dollars or into a Foreign Currency or from Dollars
to a Foreign Currency or from a Foreign Currency to Dollars, as the case may be,
to the extent necessary to enable the Administrative Agent to distribute such
funds in accordance with the terms of this Agreement; provided that each
Borrower and each of the Lenders hereby agree that the Administrative Agent
shall not be liable or responsible for any loss, cost or expense suffered by
such Borrower or such Lender as a result of any conversion or exchange of
currencies affected pursuant to this Section 2.12(g) or as a result of the
failure of the Administrative Agent to effect any such conversion or exchange;
and provided further that each applicable Borrower agrees to indemnify the
Administrative Agent and each Lender, and hold the Administrative Agent and each
Lender harmless, for any and all losses, costs and expenses incurred by the
Administrative Agent or any Lender for any conversion or exchange of currencies
(or the failure to convert or exchange any currencies) or which result in the
Administrative Agent or the Lenders receiving a lower amount that they would
have received had such currency not been required to be so converted or
exchanged, in accordance with this Section 2.12(g).

2.13 Sharing of Payments by Lenders. If any Lender shall, by exercising any
right of setoff or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of the Loans made by it, or the participations
in L/C Obligations or in Swing Line Loans held by it resulting in such Lender’s
receiving payment of a proportion of the aggregate amount of such Loans or
participations and accrued interest thereon greater than its pro rata share
thereof of the Facility as provided herein, then the Lender receiving such
greater proportion shall (a) notify the Administrative Agent of such fact, and
(b) purchase (for cash at face value) participations in the Loans and
subparticipations in L/C Obligations and Swing Line Loans of the other Lenders,
or make such other adjustments as shall be equitable, so that the benefit of all
such payments shall be shared by the Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective Loans
and other amounts owing them under the Facility, provided that:

(i) if any such participations or subparticipations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations or
subparticipations shall be rescinded and the purchase price restored to the
extent of such recovery, without interest; and

(ii)  the provisions of this Section shall not be construed to apply to (A) any
payment made by the Borrowers pursuant to and in accordance with the express
terms of this Agreement or (B) any payment obtained by a Lender as consideration
for the assignment of or sale of a participation in any of its Loans or
subparticipations in L/C Obligations or Swing Line Loans to any assignee or
participant, other than to a Borrower or any Subsidiary thereof (as to which the
provisions of this Section shall apply).

 

 

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Each Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against such
Borrower rights of setoff and counterclaim with respect to such participation as
fully as if such Lender were a direct creditor of such Borrower in the amount of
such participation.

2.14 Increase in Commitments. (a) Request for Increase. Provided there exists no
Default, upon notice to the Administrative Agent (which shall promptly notify
the Lenders), Holdings may on a one-time basis, request an increase in the
Commitments by an amount not exceeding $50,000,000; provided that any such
request for an increase shall be in a minimum amount of $10,000,000. At the time
of sending such notice, Holdings (in consultation with the Administrative Agent)
shall specify the time period within which each Lender is requested to respond
(which shall in no event be less than ten Business Days from the date of
delivery of such notice to the Lenders).

(b) Lender Elections to Increase. Each Lender shall notify the Administrative
Agent within such time period whether or not it agrees to increase its
Commitment and, if so, whether by an amount equal to, greater than, or less than
its Applicable Percentage of such requested increase. Any Lender not responding
within such time period shall be deemed to have declined to increase its
Commitment.

(c) Notification by Administrative Agent; Additional Lenders. The Administrative
Agent shall notify Holdings and each Lender of the Lenders’ responses to each
request made hereunder. To achieve the full amount of a requested increase, and
subject to the approval of the Administrative Agent and the L/C Issuer (which
approvals shall not be unreasonably withheld), Holdings may also invite
additional Eligible Assignees to become Lenders pursuant to a joinder agreement
in form and substance satisfactory to the Administrative Agent and its counsel.

(d) Effective Date and Allocations. If the Commitments are increased in
accordance with this Section, the Administrative Agent and Holdings shall
determine the effective date (the “Increase Effective Date”) and the final
allocation of such increase. The Administrative Agent shall promptly notify
Holdings and the Revolving Credit Lenders of the final allocation of such
increase and the Increase Effective Date.

(e) Conditions to Effectiveness of Increase. As a condition precedent to such
increase, Holdings shall deliver to the Administrative Agent a certificate of
each Loan Party dated as of the Increase Effective Date (in sufficient copies
for each Lender) signed by a Responsible Officer of such Loan Party (i)
certifying and attaching the resolutions adopted by such Loan Party approving or
consenting to such increase, and (ii) in the case of each Borrower, certifying
that, before and after giving effect to such increase, (A) the representations
and warranties contained in Article V and the other Loan Documents are true and
correct on and as of the Increase Effective Date, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they are true and correct as of such earlier date, and except that for
purposes of this Section 2.14, the representations and warranties contained in
clauses (a) and (b) of Section 5.03 shall be deemed to refer to the most recent
statements furnished pursuant to clauses (a) and (b), respectively, of Section
6.01, and (B) no Default exists.

 

 

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The Borrowers shall prepay any Loans outstanding on the Increase Effective Date
(and pay any additional amounts required pursuant to Section 3.05) to the extent
necessary to keep the outstanding Loans ratable with any revised Applicable
Percentages arising from any nonratable increase in the Commitments under this
Section.

(f) Conflicting Provisions. This Section shall supersede any provisions in
Sections 2.13 or 10.01 to the contrary.

ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY1

3.01 Taxes. (a) Payments Free of Taxes. Any and all payments by or on account of
any obligation of any Loan Party hereunder or under any other Loan Document
shall be made free and clear of and without reduction or withholding for any
Indemnified Taxes (including any Other Taxes), provided that if any Loan Party
shall be required by applicable law to deduct any Indemnified Taxes (including
any Other Taxes) from such payments, then (i) the sum payable shall be increased
as necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) the Administrative
Agent, any Lender or the L/C Issuer, as the case may be, receives an amount
equal to the sum it would have received had no such deductio ns been made, (ii)
such Loan Party shall make such deductions and (iii) such Loan Party shall
timely pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.

(b) Payment of Other Taxes by the Loan Parties. Without limiting the provisions
of subsection (a) above, the Loan Parties shall timely pay any Other Taxes to
the relevant Governmental Authority in accordance with applicable law.

(c) Indemnification by the Loan Parties. The Loan Parties shall, jointly and
severally, indemnify the Administrative Agent, each Lender and the L/C Issuer,
within 10 days after demand therefor, for the full amount of any Indemnified
Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section) paid by the
Administrative Agent, such Lender or the L/C Issuer, as the case may be, and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to a Loan
Party by a Lender or the L/C Issuer (with a copy to the Administrative Agent),
or by the Administrative Agent on its own behalf or on behalf of a Lender or the
L/C Issuer, shall be conclusive absent manifest error.

(d) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by any Loan Party to a Governmental Authority,
such Loan Party shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued

______________

 

1

Subject to review by U.K. Counsel.

 

 

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by such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.

(e) Status of Lenders. Any Foreign Lender or any U.K. Lender that is entitled to
an exemption from or reduction of withholding tax under the law of the
jurisdiction in which the relevant Borrower with respect to that Foreign Lender
or U.K. Lender is resident for tax purposes, or any treaty to which such
jurisdiction is a party, with respect to payments hereunder or under any other
Loan Document shall deliver to such Borrower or the relevant Governmental
Authority (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law or reasonably requested by such Borrower or the
Administrative Agent, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate of withholding. In addition, any Lender, if
requested by a Borrower or the Administrative Agent, shall deliver such other
documentation prescribed by applicable law or reasonably requested by such
Borrower or the Administrative Agent as will enable such Borrower or the
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements.

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

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

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

(iii) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Code, (A) a certificate to the
effect that such Foreign Lender is not (1) a “bank” within the meaning of
section 881(c)(3)(A) of the Code, (2) a “10 percent shareholder” of any Borrower
within the meaning of section 881(c)(3)(B) of the Code, or (3) a “controlled
foreign corporation” described in section 881(c)(3)(C) of the Code and (B) duly
completed copies of Internal Revenue Service Form W-8BEN, or

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

(f) Treatment of Certain Refunds. If the Administrative Agent, any Lender or the
L/C Issuer determines, in its sole discretion, that it has received a refund of
any Taxes or Other Taxes as to which it has been indemnified by a Loan Party or
with respect to which a Loan Party

 

 

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has paid additional amounts pursuant to this Section, it shall pay to such Loan
Party an amount equal to such refund (but only to the extent of indemnity
payments made, or additional amounts paid, by such Loan Party under this Section
with respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Administrative Agent, such Lender or the L/C
Issuer, as the case may be, and without interest (other than any interest paid
by the relevant Governmental Authority with respect to such refund), provided
that each Loan Party, upon the request of the Administrative Agent, such Lender
or the L/C Issuer, agrees to repay the amount paid over to such Loan Party (plus
any penalties, interest or other charges imposed by the relevant Governmental
Authority) to the Administrative Agent, such Lender or the L/C Issuer if the
Administrative Agent, such Lender or the L/C Issuer is required to repay such
refund to such Governmental Authority. This subsection shall not be construed to
require the Administrative Agent, any Lender or the L/C Issuer to make available
its tax returns (or any other information relating to its taxes that it deems
confidential) to any Loan Party or any other Person.

(g) U.K. Lenders. A Loan Party is not required to pay additional amounts to a
Lender (other than an assignee pursuant to a request by a Borrower under Section
10.13) pursuant to Section 3.01(a) in respect of any Indemnified Tax that is
required by the United Kingdom to be withheld from a payment of interest on a
loan made to a Borrower incorporated in the United Kingdom if at the time that
that withholding is made: (i) the relevant Lender is not a U.K. Lender and that
Indemnified Tax would not have been required to be withheld had that Lender been
a U.K. Lender unless the reason that that Lender is not a U.K. Lender is a
change after the date on which it became a Lender under this Agreement in (or in
the interpretation, administration or application of) any law or double taxation
agreement or any published practice or published concession of any relevant Tax
authority; or (ii) the relevant Lender is a Treaty Lender (as defined below) and
the relevant Loan Party is able to demonstrate that that Indemnified Tax is
required to be withheld as a result of the failure of the relevant Lender to
comply with its obligations under Section 3.01(e); and for purposes of this
Section 3.01(g) “U.K. Lender” means a Lender which is beneficially entitled to
interest payable to that Lender in respect of a loan made under this Agreement
to a Borrower incorporated in the United Kingdom and which Lender is either:

(i) a Lender:

 

(A)

which is a bank (as defined for the purposes of Section 349 of the UK Income and
Corporation Taxes Act 1988) making an advance under this Agreement; or

 

(B)

in respect of an advance made under this Agreement by a person that was a bank
(as defined for the purposes of Section 349 of the UK Income and Corporation
Taxes Act 1988) at the time that the advance was made,

and in either case is within the charge to UK corporation tax as respects any
payment of interest made in respect of that advance; or

(ii) a Lender which is treated as resident (for the purposes of the relevant
double taxation agreement) in a jurisdiction having a double taxation agreement
with the

 

 

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United Kingdom which makes provision for full exemption from Tax imposed by the
United Kingdom on interest and does not carry on business in the United Kingdom
through a permanent establishment with which that Lender’s participation in that
loan is effectively connected (a “Treaty Lender”).

3.02 Illegality. If any Lender determines that any Law has made it unlawful, or
that any Governmental Authority has asserted that it is unlawful, for any Lender
or its applicable Lending Office to make, maintain or fund Eurocurrency Rate
Loans, or to determine or charge interest rates based upon the Eurocurrency
Rate, or any Governmental Authority has imposed material restrictions on the
authority of such Lender to purchase or sell, or to take deposits of, Dollars,
Euros or Pounds in the London interbank market, then, on notice thereof by such
Lender to the Borrowers through the Administrative Agent, any obligation of such
Lender to make or continue Eurocurrency Rate Loans or to convert Base Rate Loans
to Eurocurrency Rate Loans, shall be suspended until such Lender notifies the
Administrative Agent and the Borrowers that the circumstances giving rise to
such determination no longer exist. Upon receipt of such notice, the Borrowers
shall, upon demand from such Lender (with a copy to the Administrative Agent),
(a) with respect to Loans denominated in Dollars prepay or, if applicable,
convert all Eurocurrency Rate Loans of such Lender to Base Rate Loans, and (b)
with respect to Loans denominated in Euros or Pounds, exchange all such Loans
into the Equivalent thereof in Dollars and convert such Loans to Base Rate
Loans, in each case either on the last day of the Interest Period therefor, if
such Lender may lawfully continue to maintain such Eurocurrency Rate Loans to
such day, or immediately, if such Lender may not lawfully continue to maintain
such Eurocurrency Rate Loans. Upon any such prepayment or conversion, the
Borrowers shall also pay accrued interest on the amount so prepaid or converted.

3.03 Inability to Determine Rates. If the Required Lenders determine that for
any reason in connection with any request for a Eurocurrency Rate Loan or a
conversion to or continuation thereof that (a) Dollar, Pound or Euro deposits
are not being offered to banks in the London interbank eurodollar market for the
applicable amount and Interest Period of such Eurocurrency Rate Loan, (b)
adequate and reasonable means do not exist for determining the Eurocurrency Rate
for any requested Interest Period with respect to a proposed Eurocurrency Rate
Loan, or (c) the Eurocurrency Rate for any requested Interest Period with
respect to a proposed Eurocurrency Rate Loan does not adequately and fairly
reflect the cost to such Lenders of funding such Loan, the Administrative Agent
will promptly so notify the Borrowers and each Lender. Thereafter, the
obligation of the Lenders to make or maintain Eurocurrency Rate Loans shall be
suspended until the Administrative Agent (upon the instruction of the Required
Lenders) revokes such notice. Upon receipt of such notice, the Borrowers may
revoke any pending request for a Borrowing of, conversion to or continuation of
Eurocurrency Rate Loans or, failing that (x) in the case of requests for
Borrowings denominated in Dollars, will be deemed to have converted such request
into a request for a Committed Borrowing of Base Rate Loans in the amount
specified therein and (y) in the case of requests for Borrowings of Loans
denominated in Pounds or Euros, will be deemed to have revoked such request.

 

 

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3.04 Increased Costs. (a) Increased Costs Generally. If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or credit extended or participated in by, any Lender
(except (A) any reserve requirement reflected in the Eurocurrency Rate and (B)
the requirements of the Bank of England and the Financial Services Authority or
the European Central Bank reflected in the Mandatory Cost, other than as set
forth below) or the L/C Issuer;

(ii) subject any Lender or the L/C Issuer to any tax of any kind whatsoever with
respect to this Agreement, any Letter of Credit, any participation in a Letter
of Credit or any Eurocurreny Rate Loan made by it, or change the basis of
taxation of payments to such Lender or the L/C Issuer in respect thereof (except
for Indemnified Taxes or Other Taxes covered by Section 3.01 and the imposition
of, or any change in the rate of, any Excluded Tax payable by such Lender or the
L/C Issuer);

(iii) shall cause the Mandatory Cost, as calculated hereunder, not to represent
the cost to any Lender of complying with the requirements of the Bank of England
and/or the Financial Services Authority or the European Central Bank in relation
to its making, funding or maintaining Eurocurrency Rate Loans; or

(iv) impose on any Lender or the L/C Issuer or the London interbank market any
other condition, cost or expense affecting this Agreement or Eurocurrency Rate
Loans made by such Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurocurrency Rate Loan (or of maintaining
its obligation to make any such Loan), or to increase the cost to such Lender or
the L/C Issuer of participating in, issuing or maintaining any Letter of Credit
(or of maintaining its obligation to participate in or to issue any Letter of
Credit), or to reduce the amount of any sum received or receivable by such
Lender or the L/C Issuer hereunder (whether of principal, interest or any other
amount) then, upon request of such Lender or the L/C Issuer, the Borrowers will
pay to such Lender or the L/C Issuer, as the case may be, such additional amount
or amounts as will compensate such Lender or the L/C Issuer, as the case may be,
for such additional costs incurred or reduction suffered.

(b) Capital Requirements. If any Lender or the L/C Issuer determines that any
Change in Law affecting such Lender or the L/C Issuer or any Lending Office of
such Lender or such Lender’s or the L/C Issuer’s holding company, if any,
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender’s or the L/C Issuer’s capital or on the capital of such
Lender’s or the L/C Issuer’s holding company, if any, as a consequence of this
Agreement, the Commitments of such Lender or the Loans made by, or
participations in Letters of Credit held by, such Lender, or the Letters of
Credit issued by the L/C Issuer, to a level below that which such Lender or the
L/C Issuer or such Lender’s or the L/C Issuer’s holding company could have
achieved but for such Change in Law (taking into consideration such Lender’s or
the L/C Issuer’s policies and the policies of such Lender’s or the L/C Issuer’s
holding company with respect to capital adequacy), then from time to time the
Borrowers will

 

 

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pay to such Lender or the L/C Issuer, as the case may be, such additional amount
or amounts as will compensate such Lender or the L/C Issuer or such Lender’s or
the L/C Issuer’s holding company for any such reduction suffered.

(c) Certificates for Reimbursement. A certificate of a Lender or the L/C Issuer
setting forth the amount or amounts necessary to compensate such Lender or the
L/C Issuer or its holding company, as the case may be, as specified in
subsection (a) or (b) of this Section and delivered to the Borrowers shall be
conclusive absent manifest error. The Borrowers shall pay such Lender or the L/C
Issuer, as the case may be, the amount shown as due on any such certificate
within 10 days after receipt thereof.

(d) Delay in Requests. Failure or delay on the part of any Lender or the L/C
Issuer to demand compensation pursuant to the foregoing provisions of this
Section shall not constitute a waiver of such Lender’s or the L/C Issuer’s right
to demand such compensation, provided that the Borrowers shall not be required
to compensate a Lender or the L/C Issuer pursuant to the foregoing provisions of
this Section for any increased costs incurred or reductions suffered more than
nine months prior to the date that such Lender or the L/C Issuer, as the case
may be, notifies the Borrowers of the Change in Law giving rise to such
increased costs or reductions and of such Lender’s or the L/C Issuer’s intention
to claim compensation therefor (except that, if the Change in Law giving rise to
such increased costs or reductions is retroactive, then the nine-month period
referred to above shall be extended to include the period of retroactive effect
thereof).

3.05 Compensation for Losses. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrowers shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:

(a) any continuation, conversion, payment or prepayment of any Loan other than a
Base Rate Loan on a day other than the last day of the Interest Period for such
Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or
otherwise);

(b) any failure by the Borrowers (for a reason other than the failure of such
Lender to make a Loan) to prepay, borrow, continue or convert any Loan other
than a Base Rate Loan on the date or in the amount notified by any Borrower;

(c) any failure by any Borrower to make payment of any Loan or drawing under any
Letter of Credit (or interest due thereon) denominated in a Foreign Currency on
its scheduled due date or any payment thereof in a different currency; or

(d) any assignment of a Eurocurrency Rate Loan on a day other than the last day
of the Interest Period therefor as a result of a request by any Borrower
pursuant to Section 10.13;

including any loss of anticipated profits, any foreign exchange losses and any
loss or expense arising from the liquidation or reemployment of funds obtained
by it to maintain such Loan, from fees payable to terminate the deposits from
which such funds were obtained or from the

 

 

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performance of any foreign exchange contract. The Borrowers shall also pay any
customary administrative fees charged by such Lender in connection with the
foregoing.

For purposes of calculating amounts payable by the Borrowers to the Lenders
under this Section 3.05, each Lender shall be deemed to have funded each
Eurocurrency Rate Loan made by it at the Eurocurrency Base Rate used in
determining the Eurocurrency Rate for such Loan by a matching deposit or other
borrowing in the London interbank eurodollar market for such currency for a
comparable amount and for a comparable period, whether or not such Eurocurrency
Rate Loan was in fact so funded.

3.06 Mitigation Obligations; Replacement of Lenders. (a) Designation of a
Different Lending Office. If any Lender requests compensation under Section
3.04, or the Borrowers are required to pay any additional amount to any Lender
or any Governmental Authority for the account of any Lender pursuant to Section
3.01, or if any Lender gives a notice pursuant to Section 3.02, then such Lender
shall use reasonable efforts to designate a different Lending Office for funding
or booking its Loans hereunder or to assign its rights and obligations hereunder
to another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 3.01 or 3.04, as the case may be, in the future, or
eliminate the need for the notice pursuant to Section 3.02, as applicable, and
(ii) in each case, would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrowers
hereby agree to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.

(b) Replacement of Lenders. If any Lender requests compensation under Section
3.04, or if the Borrowers are required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 3.01, the Borrowers may replace such Lender in accordance with Section
10.13.

3.07 Survival. All of the Borrowers’ obligations under this Article III shall
survive termination of the Aggregate Commitments and repayment of all other
Obligations hereunder.

ARTICLE IV

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

4.01 Conditions of Initial Credit Extension. The obligation of the L/C Issuer
and each Lender to make its initial Credit Extension hereunder is subject to
satisfaction of the following conditions precedent:

(a) The Administrative Agent’s receipt of the following, each of which shall be
originals or telecopies (followed promptly by originals) unless otherwise
specified, each properly executed by a Responsible Officer of the signing Loan
Party, each dated the Closing Date (or, in the case of certificates of
governmental officials, a recent date before the Closing Date) and each in form
and substance satisfactory to the Administrative Agent and each of the Lenders:

 

 

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(i) executed counterparts of this Agreement, the Domestic Guaranty, sufficient
in number for distribution to the Administrative Agent, each Lender and
Holdings;

(ii) a Note executed by each Borrower in favor of each Lender requesting a Note;

(iii) a security agreement, in substantially the form of Exhibit F (together
with each other security agreement and security agreement supplement delivered
pursuant to Section 6.12, in each case as amended, the “Security Agreement”),
duly executed by each U.S. Loan Party, together with:

(A) certificates representing the Pledged Equity referred to therein accompanied
by undated stock powers executed in blank and instruments evidencing the Pledged
Debt indorsed in blank,

(B) proper Financing Statements in form appropriate for filing under the Uniform
Commercial Code of all jurisdictions that the Administrative Agent may deem
necessary or desirable in order to perfect the Liens created under the Security
Agreement, covering the Collateral described in the Security Agreement,

(C) completed requests for information, dated on or before the date of the
initial Credit Extension, listing all effective financing statements filed in
the jurisdictions referred to in clause (B) above that name any Loan Party as
debtor, together with copies of such other financing statements,

(D) evidence of the completion of all other actions, recordings and filings of
or with respect to the Security Agreement that the Administrative Agent may deem
necessary or desirable in order to perfect the Liens created thereby, and

(E) evidence that all other action that the Administrative Agent may deem
necessary or desirable in order to perfect the Liens created under the Security
Agreement has been taken (including receipt of duly executed payoff letters and
UCC-3 termination statements);

(iv) an intellectual property security agreement, in substantially the form of
Exhibit G (together with each other intellectual property security agreement and
intellectual property security agreement supplement delivered pursuant to
Section 6.12, in each case as amended, the “Intellectual Property Security
Agreement”), duly executed by each U.S. Loan Party, together with evidence that
all action that the Administrative Agent may deem necessary or desirable in
order to perfect the Liens created under the Intellectual Property Security
Agreement has been taken;

 

 

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(v) (A) such certificates of resolutions or other action, incumbency
certificates and/or other certificates of Responsible Officers of each U.S. Loan
Party as the Administrative Agent may require evidencing the identity, authority
and capacity of each Responsible Officer thereof authorized to act as a
Responsible Officer in connection with this Agreement and the other Loan
Documents to which such Loan Party is a party or is to be a party and (B) a copy
of a certificate of the appropriate Governmental Authority of the jurisdiction
of incorporation of each U.S. Loan Party certifying (1) as to a true or correct
and up to date copy of the Organization Documents of such Loan Party and each
amendment thereto on file in the office of such Governmental Authority and (2)
that such amendments are the only amendments to such Loan Party’s Organization
Documents on file in such office;

(vi) such documents and certifications as the Administrative Agent may
reasonably require to evidence that each U.S. Loan Party is duly organized or
formed, and that each U.S. Loan Party is validly existing, in good standing and
qualified to engage in business in the jurisdiction of its organization;

(vii) a favorable opinion of Weil, Gotshal & Manges LLP, counsel to the Loan
Parties, addressed to the Administrative Agent and each Lender, as to the
matters set forth in Exhibit H-1 and such other matters concerning the Loan
Parties and the Loan Documents as the Required Lenders may reasonably request;

(viii) a favorable opinion of local counsel to the Loan Parties in Michigan and
Nevada, in each case addressed to the Administrative Agent and each Lender, as
to the matters set forth in Exhibit H-2 and such other matters concerning the
Loan Parties and the Loan Documents as the Required Lenders may reasonably
request;

(ix) a certificate of a Responsible Officer of each U.S. Loan Party either (A)
attaching copies of all consents, licenses and approvals required in connection
with the execution, delivery and performance by such Loan Party and the validity
against such Loan Party of the Loan Documents to which it is a party, and such
consents, licenses and approvals shall be in full force and effect, or (B)
stating that no such consents, licenses or approvals are so required;

(x) a certificate signed by a Responsible Officer of Holdings certifying (A)
that the conditions specified in Sections 4.03(a) and (b) have been satisfied,
and (B) that there has been no event or circumstance since the date of the
Audited Financial Statements that has had or could be reasonably expected to
have, either individually or in the aggregate, a Material Adverse Effect;

(xi) certificates attesting to the Solvency of each Loan Party and of Holdings
and its Subsidiaries, taken as a whole, before and after giving effect to the
Transaction, from the chief financial officer of Holdings;

 

 

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(xii) evidence that all insurance required to be maintained pursuant to the Loan
Documents has been obtained and is in effect, together with the certificates of
insurance, naming the Administrative Agent, on behalf of the Lenders, as an
additional insured or loss payee, as the case may be, under all insurance
policies maintained with respect to the assets and properties of the Loan
Parties that constitute Collateral;

(xiii) certified copies of each of the Related Documents, duly executed by the
parties thereto and in form and substance satisfactory to the Lenders, together
with all agreements, instruments and other documents delivered in connection
therewith as the Administrative Agent shall request;

(xiv) a Borrowing Base Certificate duly certified by a Responsible Officer of
Holdings relating to the initial Credit Extension (calculated solely in respect
of clause (b) of the definition of “Borrowing Base” as of the end of July 2005,
with such adjustments as have been approved by the Arrangers, in their sole
discretion);

(xv) a duly completed Compliance Certificate as of the last day of the fiscal
quarter of Holdings ended June 30, 2005, signed by a Responsible Officer of
Holdings;

(xvi) evidence that the Existing Credit Agreement has been, or concurrently with
the Closing Date is being, terminated and all Liens securing obligations under
the Existing Credit Agreement have been, or concurrently with the Closing Date
are being, released;

(xvii) unaudited consolidated and consolidating balance sheets of Holdings and
its Subsidiaries dated June 30, 2005 for the fiscal quarter ended on that date
and pro forma consolidated financial statements as to Holdings and its
Subsidiaries, in each case in form satisfactory to the Lenders; and

(xxi) such other assurances, certificates, documents, consents or opinions as
the Administrative Agent, the L/C Issuer, the Swing Line Lender or any Lender
reasonably may require.

(b) All fees required to be paid to the Administrative Agent, the Arrangers and
the Lenders on or before the Closing Date shall have been paid.

(c) Unless waived by the Administrative Agent, the Borrowers shall have paid all
fees, charges and disbursements of counsel to the Administrative Agent to the
extent invoiced prior to or on the Closing Date, plus such additional amounts of
such fees, charges and disbursements as shall constitute its reasonable estimate
of such fees, charges and disbursements incurred or to be incurred by it through
the closing proceedings (provided that such estimate shall not thereafter
preclude a final settling of accounts between the Borrowers and the
Administrative Agent).

(d) The Transaction Agreement shall be in full force and effect.

 

 

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(e) The Recapitalization shall have been consummated in accordance with the
terms of the Transaction Agreement, without any waiver or amendment adverse to
the Lenders not consented to by the Lenders of any material term, provision or
condition set forth therein, and in compliance with all applicable requirements
of Law.

(f) After giving effect to the Transaction, including all Credit Extensions made
in connection therewith, the amount by which (A) the lesser of (i) the Facility
and (ii) the Borrowing Base exceeds (B) the sum of (i) the Outstanding Amount of
Revolving Credit Loans and Swing Line Loans and (ii) the Outstanding Amount of
L/C Obligations, shall be no less than $25 million.

Without limiting the generality of the provisions of Section 9.04, for purposes
of determining compliance with the conditions specified in this Section 4.01,
each Lender that has signed this Agreement shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.

4.02 Conditions to Initial Credit Extension to U.K. Borrower. The obligation of
each Lender to make its initial Credit Extension to a U.K. Borrower is subject
to the Administrative Agent’s receipt from each U.K. Loan Party of the
following, each in form and substance satisfactory to the Administrative Agent
and each of the Lenders:

(a) the U.K. Collateral Documents duly executed by each U.K. Loan Party,
together with:

(i) all share certificates (including the Equity Interests of each First-Tier
Foreign CFC Subsidiary that is a U.K. Subsidiary) and stock transfer forms
executed in blank and any other documents of title to be provided under the U.K.
Collateral Documents;

(ii) signed notices in respect of the charges over insurances and intra-group
loans to be provided under the U.K. Collateral Documents; and

(iii) all third party consents required in connection with the creation or
registration of any security interest contained in the U.K. Collateral
Documents; including releases for the U.K. Loan Parties if registers show
charges are outstanding plus a section 403 certificate (release of security) and
the return of title deeds and share certificates;

(b) the U.K. Guaranty duly executed by each U.K. Guarantor;

(c) a directors’ certificate signed by two authorized directors certifying:

(i) that attached thereto is a true, complete and up-to-date copy of (A) its
certificate of incorporation, (B) all certificates of incorporation on any
change of its name, and (C) its constitutional documents consisting of its
memorandum of association and articles of association;

 

 

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(ii) that attached thereto is a true and complete extract from the minutes of a
meeting of its board of directors duly convened and held (during which a quorum
was present throughout) recording resolutions passed at such meeting (which
resolutions are in full force and effect and have not been rescinded or varied)
and which approve its entering into the Loan Documents to which it is a party;

(iii) that attached thereto is a true and complete copy of a resolution of its
shareholder(s) unanimously passed authorizing and directing the performance by
it of the Loan Documents to which it is a party;

(iv) the specimen signature of each director or officer authorized to execute
the Loan Documents to which it is a party on its behalf;

(v) that neither the borrowings nor the grant of the guaranty and security will
breach any borrowing, guaranty, security or other limit binding on it;

(d) a copy of its constitutional documents including its certificate of
incorporation, any certificate of incorporation on a change of its name and its
memorandum of association and articles of association;

(e) a copy of a resolution of its board of directors (A) approving the terms of
and the transactions contemplated by the Loan Documents to which it is a party
and resolving that it execute those documents, (B) authorizing a specified
person or persons to execute the Loan Documents to which it is a party on its
behalf, and (C) authorizing a specified person or persons on its behalf to sign
and/or dispatch all other documents and notices (including, if it is a Borrower,
any Credit Extension) to be signed and/or dispatched by it under or in
connection with the Loan Documents;

(f) a specimen signature of each person authorized by the resolution referred to
in paragraph (d) above;

(g) a copy of a resolution signed by all the holders of its issued shares
approving the terms of, and the transactions contemplated by, the Loan Documents
and any related document to which it will be a party;

(h) a search at the Companies Registry or other applicable commercial register
showing, to the extent a search showing such information is available, inter
alia, no Lien over any of its assets (other than as permitted under the terms of
this Agreement) and no appointment of a receiver, liquidator or administrator or
the presentation of any petition or application in respect of the same (or
equivalent);

(i) official priority searches relating to properties charged under the U.K.
Collateral Documents in favor of the Collateral Agent in respect of any
registered and unregistered titles giving a sufficient period of priority and
showing that no adverse entry exists;

(j) a supplement to Schedule 5.12(b) that sets forth a complete and accurate
list of all Liens on the property or assets of each U.K. Loan Party and each
U.K. Subsidiary, showing

 

 

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as of the date of such supplement the lienholder thereof, the principal amount
of the obligations secured thereby and the property or assets of such Loan Party
or such Subsidiary subject thereto.

(k) a favorable opinion of U.K. counsel to the Loan Parties addressed to the
Administrative Agent and each Lender, as to such matters concerning the U.K.
Loan Parties and the U.K. Collateral Documents that the Administrative Agent and
the Required Lenders may reasonably request;

(l) the appointment of a U.S. process agent for each U.K. Loan Party in respect
of each U.S. Law governed Loan Document to which a U.K. Loan Party is a party;
and

(m) such other assurances, certificates, documents, consents or opinions as the
Administrative Agent or any Lender may reasonably request.

4.03 Conditions to all Credit Extensions. The obligation of each Lender to honor
any Request for Credit Extension (other than a Committed Loan Notice requesting
only a conversion of Loans denominated in Dollars to the other Type, or a
continuation of Eurocurrency Rate Loans) is subject to the following conditions
precedent:

(a) The representations and warranties of the Borrowers and each other Loan
Party contained in Article V or any other Loan Document, or which are contained
in any document furnished at any time under or in connection herewith or
therewith, shall be true and correct in all material respects on and as of the
date of such Credit Extension, except to the extent that such representations
and warranties specifically refer to an earlier date, in which case they shall
be true and correct as of such earlier date, and except that for purposes of
this Section 4.03, the representations and warranties contained in Sections
5.03(a) and (b) shall be deemed to refer to the most recent statements furnished
pursuant to Sections 6.01(a) and (b), respectively.

(b) No Default shall exist, or would result from such proposed Credit Extension
or from the application of the proceeds thereof.

(c) The Administrative Agent and, if applicable, the L/C Issuer or the Swing
Line Lender shall have received a Request for Credit Extension in accordance
with the requirements hereof.

(d) The Administrative Agent shall have received such other approvals, opinions
or documents as any Lender through the Administrative Agent may reasonably
request.

(e) the Borrowing Base exceeds the Outstanding Amount of the Revolving Credit
Loans, Swing Line Loans and L/C Obligations at such time, after giving effect to
such Credit Extension.

Each Request for Credit Extension (other than a Committed Loan Notice requesting
only a conversion of Loans denominated in Dollars to the other Type or a
continuation of Eurocurrency Rate Loans) submitted by a Borrower shall be deemed
to be a representation and warranty that the conditions specified in Sections
4.03(a) and (b) have been satisfied on and as of the date of the applicable
Credit Extension.

 

 

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ARTICLE V

REPRESENTATIONS AND WARRANTIES

Each Borrower represents and warrants to the Administrative Agent and the
Lenders that:

5.01 Corporate Existence and Good Standing. Each Loan Party and each of its
Subsidiaries: (a) is a corporation, partnership or other entity duly organized
or formed, 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 has all material governmental licenses, authorizations,
consents and approvals, necessary to own or lease its assets and carry on its
business as now being or as proposed to be conducted; 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 so
to qualify or to be in good standing could reasonably be expected to (either
individually or in the aggregate) result in a Material Adverse Effect.

5.02 Corporate Power, Authorization and Compliance with the Law. (a) The
execution, delivery and performance by each Loan Party of each Loan Document and
Related Documents to which they are or are to be party are within their
respective corporate powers, have been duly authorized by all necessary
corporate action and will not violate any provision of law of or their articles
of incorporation, by-laws or memoranda or articles of association, or result in
the breach of or constitute a default under or require any consent under any
indenture or other material agreement or instrument to which such Person is a
party or by which such Person or any Subsidiary or their respective properties
may be bound or affected, or cause any of its properties to become subject to
any Lien; this Agreement has been, and each other Loan Document, when delivered
hereunder, will have been duly executed and delivered by each Loan Party that is
party thereto; this Agreement and each other Loan Document constitutes the
legal, valid and binding obligation of each Loan Party party thereto enforceable
against such Person in accordance with its terms.

(b) The conduct by Holdings and its Subsidiaries of their respective businesses
as they are presently operated does not violate any material provision of law or
material rule or regulation of any Governmental Authority in a manner which,
when taken together with all other such violations, could reasonably be expected
to result in a Material Adverse Effect; and Holdings and its Subsidiaries have
obtained all material consents and approvals of Governmental Authorities
required to conduct their respective businesses as they are presently operated,
except to the extent that failure to obtain any such consents or approvals could
not reasonably be expected to result in a Material Adverse Effect.

(c) No approval, consent, exemption, authorization, or other action by, or
notice to, or filing with, any Governmental Authority or any other Person is
necessary or required in connection with (a) the execution, delivery or
performance by, or enforcement against, any Loan Party of this Agreement or any
other Loan Document or Related Document, or for the consummation of the
Transaction, (b) the grant by any Loan Party of the Liens granted by it pursuant
to the Collateral Documents, (c) except as specifically contemplated herein or
by the Collateral Documents, the perfection or maintenance of the Liens created
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Documents (including the first priority nature thereof) or (d) the exercise by
the Administrative Agent or any Lender of its rights under the Loan Documents or
the remedies in respect of the Collateral pursuant to the Collateral Documents.
All applicable waiting periods in connection with the Transaction have expired
without any action having been taken by any Governmental Authority restraining,
preventing or imposing materially adverse conditions upon the Transaction or the
rights of the Loan Parties or their Subsidiaries freely to transfer or otherwise
dispose of, or to create any Lien on, any properties now owned or hereafter
acquired by any of them. The Recapitalization has been, or concurrently with the
Closing Date is being, consummated in accordance with the Transaction Agreement.

5.03 Financial Statements; No Material Adverse Effect; No Internal Control
Event. (a) The Audited Financial Statements (i) were prepared in accordance with
GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; (ii) fairly present the financial condition
of Holdings and its Subsidiaries as of the date thereof and their results of
operations for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; and (iii) show all material indebtedness and other liabilities,
direct or contingent, of Holdings and its Subsidiaries as of the date thereof,
including liabilities for taxes, material commitments and Indebtedness.

(b) The unaudited consolidated and consolidating balance sheets of Holdings and
its Subsidiaries dated June 30, 2005, and the related consolidated and
consolidating statements of income or operations and consolidated shareholders’
equity and cash flows for the fiscal quarter ended on that date (i) were
prepared in accordance with GAAP consistently applied throughout the period
covered thereby, except as otherwise expressly noted therein, and (ii) fairly
present the financial condition of Holdings and its Subsidiaries as of the date
thereof and their results of operations for the period covered thereby, subject,
in the case of clauses (i) and (ii), to the absence of footnotes and to normal
year-end audit adjustments. Schedule 5.03 sets forth all material indebtedness
of Holdings and its consolidated Subsidiaries as of the date of such financial
statements.

(c) Since the date of the Audited Financial Statements, there has been no event
or circumstance, either individually or in the aggregate, that has had or could
reasonably be expected to have a Material Adverse Effect. Since the date of the
Audited Financial Statements, no Internal Control Event has occurred.

(d) The consolidated pro forma balance sheets of Holdings and its Subsidiaries
as at June 30, 2005, certified by a Responsible Officer of Holdings, copies of
which have been furnished to each Lender, fairly present the consolidated pro
forma financial condition of Holdings and its Subsidiaries as at such date and
the consolidated pro forma results of operations of Holdings and its
Subsidiaries for the period ended on such date, in each case giving effect to
the Transaction, all in accordance with GAAP.

(e) The consolidated forecasted balance sheets, statements of income and cash
flows of Holdings and its Subsidiaries delivered pursuant to Section 4.01 or
Section 6.01 were prepared in good faith on the basis of the assumptions stated
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fair in light of the conditions existing at the time of delivery of such
forecasts, and represented, at the time of delivery, the Holdings’ best estimate
of its future financial performance.

5.04 ERISA Compliance. (a) Each Plan is in compliance in all material respects
with the applicable provisions of ERISA, the Code and other Federal or state
Laws. Each Plan that is intended to qualify under Section 401(a) of the Code has
received a favorable determination letter from the IRS or an application for
such a letter is currently being processed by the IRS with respect thereto and,
to the best knowledge of the Borrowers, nothing has occurred which would
prevent, or cause the loss of, such qualification. Each of the Borrowers and
each ERISA Affiliate have made all required contributions to each Plan subject
to Section 412 of the Code, and no application for a funding waiver or an
extension of any amortization period pursuant to Section 412 of the Code has
been made with respect to any Plan.

(b) There are no pending or, to the best knowledge of the Borrowers, threatened
claims, actions or lawsuits, or action by any Governmental Authority, with
respect to any Plan that could reasonably be expected to have a Material Adverse
Effect. There has been no prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan that has resulted or could
reasonably be expected to result in a Material Adverse Effect.

(c) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no
Pension Plan has any Unfunded Pension Liability; (iii) none of the Borrowers and
none of the ERISA Affiliates has incurred, or reasonably expects to incur, any
liability under Title IV of ERISA with respect to any Pension Plan (other than
premiums due and not delinquent under Section 4007 of ERISA); (iv) none of the
Borrowers and none of the ERISA Affiliates has incurred, or reasonably expects
to incur, any liability (and no event has occurred which, with the giving of
notice under Section 4219 of ERISA, would result in such liability) under
Sections 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v)
none of the Borrowers and none of the ERISA Affiliates has engaged in a
transaction that could be subject to Sections 4069 or 4212(c) of ERISA.

(d) With respect to each scheme or arrangement mandated by a government other
than the United States (a “Foreign Government Scheme or Arrangement”) and with
respect to each employee benefit plan maintained or contributed to by any Loan
Party or any Subsidiary of any Loan Party that is not subject to United States
law (a “Foreign Plan”):

(i) any employer and employee contributions required by law or by the terms of
any Foreign Government Scheme or Arrangement or any Foreign Plan have been made,
or, if applicable, accrued, in accordance with normal accounting practices;

(ii) the fair market value of the assets of each funded Foreign Plan, the
liability of each insurer for any Foreign Plan funded through insurance or the
book reserve established for any Foreign Plan, together with any accrued
contributions, is sufficient to procure or provide for the accrued benefit
obligations, as of the date hereof, with respect to all current and former
participants in such Foreign Plan according to the actuarial assumptions and
valuations most recently used to account for such obligations in accordance with
applicable generally accepted accounting principles; and

 

 

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(iii) each Foreign Plan required to be registered has been registered and has
been maintained in good standing with applicable regulatory authorities.

5.05 Pensions. In the case of the U.K. Loan Parties, the pension schemes are
funded to the extent required by law or otherwise to comply with the
requirements of any material law applicable in the jurisdiction in which the
relevant pension’s charge is maintained, in each case where failure to do so
would have a Material Adverse Effect.

5.06 Environmental Matters. The Borrowers are aware of no events, conditions or
circumstances involving environmental pollution or contamination or employee
health or safety that could reasonably be expected to result in a Material
Adverse Change.

5.07 Litigation. There are no suits, investigations or proceedings pending or,
to the best of its knowledge, threatened against or affecting Holdings or the
Subsidiaries which call into question the validity of, or purport to affect,
this Agreement, any other Loan Document, any Related Document or the
consummation of the Transaction or could reasonably be expected to result in a
Material Adverse Effect.

5.08 Taxes. Holdings and its Subsidiaries have filed all Federal and other
material tax returns required to be filed and paid all Federal and other
material taxes, assessments and other governmental charges levied or imposed
upon them or their properties, income or assets otherwise due and payable,
including interest and penalties, except for taxes which are being contested in
good faith and by applicable proceedings, and for which Holdings and its
Subsidiaries have made adequate reserves on the books of Holdings and its
Subsidiaries. There is no proposed tax assessment against any Borrower or any
Subsidiary that would, if made, have a Material Adverse Effect. Neither any Loan
Party nor any Subsidiary thereof is party to any tax sharing agreement.

5.09 Investment Company Act. Neither Holdings nor any Subsidiary (a) is or is
required to be registered as an “investment company,” or a company “controlled”
by an “investment company,” within the meaning of the Investment Company Act of
1940, as amended or (b) is a “holding company,” or a “subsidiary company” of a
“holding company” or an “affiliate” of a “holding company” or of a “subsidiary
company” of a “holding company” within the meaning of the Public Utility Holding
Company Act of 1935.

5.10 No Material Misstatements. No information, report, financial statement,
exhibit or schedule furnished by or on behalf of any Borrower to the
Administrative Agent or any Lender in connection with this Agreement or included
herein or delivered pursuant hereto (including, without limitation, the
Information Memorandum (upon completion)) contained or contains any material
misstatement of fact or omitted or omits any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, or are made, not misleading. The Borrowers have disclosed to the
Administrative Agent and the Lenders all agreements, instruments and corporate
or others restrictions to which it or they or any of their Subsidiaries are
subject, and all other matters known to them, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.

 

 

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5.11 Federal Reserve Regulations. (a) Neither Holdings nor any of its
Subsidiaries is engaged principally, or as one if its important activities, in
the business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulation U issued by the FRB).

(b) No part of the proceeds of any Loan will be used, whether directly or
indirectly, and whether immediately, incidentally or ultimately, (i) to purchase
or carry margin stock, or (ii) for any purpose which entails a violation of the
provisions of the Regulations of the Board, including Regulation U or X.

5.12 Ownership of Property; Liens; Investments. (a) Each Loan Party and each of
its Subsidiaries has good record and marketable title in fee simple to, or valid
leasehold interests in, all real property necessary or used in the ordinary
conduct of its business, except for such defects in title as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

(b) Schedule 5.12(b) sets forth a complete and accurate list of all Liens on the
property or assets of each Loan Party and each of its Subsidiaries (other than
the U.K. Loan Parties and the U.K. Subsidiaries), showing as of the date hereof
the lienholder thereof, the principal amount of the obligations secured thereby
and the property or assets of such Loan Party or such Subsidiary subject
thereto. Upon delivery of the supplement to Schedule 5.12(b) pursuant to Section
4.02, such supplement to Schedule 5.12(b) sets forth a complete and accurate
list of all Liens on the property or assets of each U.K. Loan Party and each
U.K. Subsidiary, showing as of the date of such supplement the lienholder
thereof, the principal amount of the obligations secured thereby and the
property or assets of such Loan Party or such Subsidiary subject thereto. The
property of each Loan Party and each of its Subsidiaries (other than the U.K.
Loan Parties and the U.K. Subsidiaries) is subject to no Liens, other than Liens
set forth on such supplement to Schedule 5.12(b), and as otherwise permitted by
Section 7.01. Upon delivery of the supplement to Schedule 5.12(b) pursuant to
Section 4.02, the property of each U.K. Loan Party and each U.K. Subsidiary is
subject to no Liens, other than Liens set forth on such supplement to Schedule
5.12(b), and as otherwise permitted by Section 7.01.

(c) Schedule 5.12(c) sets forth a complete and accurate list of all Investments
held by any Loan Party or any Subsidiary of a Loan Party on the date hereof,
showing as of the date hereof the amount, obligor or issuer and maturity, if
any, thereof.

5.13 No Default. None of the Loan Parties nor any Subsidiary is in default under
or with respect to, or a party to, any Contractual Obligation that could, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. No Default has occurred and is continuing or would result from
the consummation of the transactions contemplated by this Agreement or any other
Loan Document.

5.14 Insurance. The properties of the Borrowers and their Subsidiaries are
insured with financially sound and reputable insurance companies, in such
amounts, with such deductibles and covering such risks as are customarily
carried by companies engaged in similar businesses and owning similar properties
in localities where the applicable Borrower or the applicable Subsidiary
operates.

 

 

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5.15 Subsidiaries; Equity Interests; Loan Parties. As of the Closing Date, no
Loan Party has any Subsidiaries other than those specifically disclosed in Part
(a) of Schedule 5.15, and all of the outstanding Equity Interests in such
Subsidiaries have been validly issued, are fully paid and non-assessable and are
owned by a Loan Party in the amounts specified on Part (a) of Schedule 5.15 free
and clear of all Liens except those created under the Collateral Documents. No
Loan Party has any equity investments in any other corporation or entity other
than those specifically disclosed in Part (b) of Schedule 5.15. Set forth on
Part (c) of Schedule 5.15 is a complete and accurate list of all Loan Parties,
showing as of the Closing Date (as to each Loan Party) the jurisdiction of its
organization, the address of its principal place of business and its U.S.
taxpayer identification number or, in the case of a U.K. Loan Party, its
registered number at Companies House or, in the case of any non-U.S. Loan Party
that does not have a U.S. taxpayer identification number, its unique
identification number issued to it by the jurisdiction of its incorporation. The
copy of the Organization Documents of each Loan Party and each amendment thereto
provided pursuant to Section 4.01(a)(v) is a true and correct copy of each such
document, each of which is valid and in full force and effect.

5.16 Compliance with Laws. Each Loan Party and each of its Subsidiaries is in
compliance in all material respects with the requirements of all Laws and all
orders, writs, injunctions and decrees applicable to it or to its properties,
except in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted or (b) the failure to comply therewith, either individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.

5.17 Intellectual Property; Licenses, Etc. Each Loan Party and each of its
Subsidiaries own, or possess the right to use, all of the trademarks, service
marks, trade names, copyrights, patents, patent rights, franchises, licenses and
other intellectual property rights (collectively, “IP Rights”) that are
reasonably necessary for the operation of their respective businesses, without
conflict with the rights of any other Person, and Schedule 5.17 sets forth a
complete and accurate list of all such IP Rights owned or used by each Loan
Party and each of its Subsidiaries. To the best knowledge of Holdings, no slogan
or other advertising device, product, process, method, substance, part or other
material now employed, or now contemplated to be employed, by any Loan Party or
any of its Subsidiaries infringes upon any rights held by any other Person. No
claim or litigation regarding any of the foregoing is pending or, to the best
knowledge of the Borrowers, threatened, which, either individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.

5.18 Solvency. Each Loan Party is, individually and together with its
Subsidiaries, Solvent. In the case of any Loan Party incorporated under the laws
of England and Wales, no administrator, receiver, liquidator or similar officer
has been appointed with respect to it or any of its Subsidiaries or any of its
respective assets nor (so far it is aware) is any petition or proceedings or
application for any such appointment pending nor has any resolution for such
appointment been passed or notice of intention to make such appointment been
delivered.

5.19 Casualty, Etc. Neither the businesses nor the properties of any Loan Party
or any of its Subsidiaries are affected by any fire, explosion, accident,
strike, lockout or other labor dispute, drought, storm, hail, earthquake,
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other casualty (whether or not covered by insurance) that, either individually
or in the aggregate, could reasonably be expected to have a Material Adverse
Effect.

5.20 Exempt Subsidiaries. The Exempt Subsidiaries shall not have assets in an
amount in excess of 10% of the consolidated assets of Holdings and its
Subsidiaries as of the last day of the most recently completed fiscal quarter
for which the Lenders have received financial statements of Holdings and its
Subsidiaries pursuant to Section 6.01(a) or 6.01(b).

5.21 Immaterial Subsidiaries. Each Immaterial Subsidiary (i) owns assets having
a book value of which the Dollar Equivalent is less than $100,000 and (ii) had
earnings during the most recently ended fiscal year of which the Dollar
Equivalent was less than $100,000.

5.22 Asset Value. The U.S. Loan Parties and the U.K Loan Parties shall have
assets having a book value in an amount equal to at least 70% of the
consolidated assets of Holdings and its Subsidiaries as of the last day of the
most recently completed fiscal quarter for which the Lenders have received
financial statements of Holdings and its Subsidiaries pursuant to Section
6.01(a) or 6.01(b).

ARTICLE VI

AFFIRMATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, each Borrower shall, and shall (except in the case of
the covenants set forth in Sections 6.01, 6.02, 6.03 and 6.11) cause each
Subsidiary to:

6.01 Financial Statements. Deliver to the Administrative Agent on behalf of each
Lender (and, with respect to paragraph (c) below, in form and detail
satisfactory to the Administrative Agent):

(a) as soon as available, but in any event within 90 days after the end of each
fiscal year of Holdings, a consolidated and consolidating balance sheet of
Holdings and its Subsidiaries as at the end of such fiscal year, and the related
consolidated and consolidating statements of income or operations and
consolidated shareholders’ equity and cash flows for such fiscal year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all in reasonable detail and prepared in accordance with GAAP, such consolidated
statements to be audited and accompanied by (i) a report and opinion of a
Registered Public Accounting Firm of nationally recognized standing reasonably
acceptable to the Required Lenders, which report and opinion shall be prepared
in accordance with generally accepted auditing standards and applicable
Securities Laws and shall not be subject to any “going concern” or like
qualification or exception or any qualification or exception as to the scope of
such audit and (ii) an attestation report of such Registered Public Accounting
Firm as to Holdings’ internal controls pursuant to Section 404 of Sarbanes-Oxley
expressing an adverse conclusion to which the Required Lenders do not reasonably
object, and such consolidating statements to be certified by a Responsible
Officer of Holdings to the effect that such statements are

 

 

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fairly stated in all material respects when considered in relation to the
consolidated financial statements of Holdings and its Subsidiaries;

(b) as soon as available, but in any event within 45 days after the end of each
of the first three fiscal quarters of each fiscal year of Holdings (commencing
with the fiscal quarter ended September 30, 2005), a consolidated and
consolidating balance sheet of Holdings and its Subsidiaries as at the end of
such fiscal quarter, and the related consolidated and consolidating statements
of income or operations and consolidated shareholders’ equity and cash flows for
such fiscal quarter and for the portion of Holdings’ fiscal year then ended,
setting forth in each case in comparative form the figures for the corresponding
fiscal quarter of the previous fiscal year and the corresponding portion of the
previous fiscal year, all in reasonable detail, such consolidated statements to
be certified by a Responsible Officer of Holdings as fairly presenting the
financial condition, results of operations, shareholders’ equity and cash flows
of Holdings and its Subsidiaries in accordance with GAAP, subject only to normal
year-end audit adjustments and the absence of footnotes and such consolidating
statements to be certified by a Responsible Officer of Holdings to the effect
that such statements are fairly stated in all material respects when considered
in relation to the consolidated financial statements of Holdings and its
Subsidiaries; and

(c) as soon as available, but in any event at least 30 days after the end of
each fiscal year of Holdings, forecasts prepared by management of Holdings, in
form satisfactory to the Administrative Agent and the Required Lenders, of
consolidated balance sheets and statements of income or operations and cash
flows of Holdings and its Subsidiaries on a quarterly basis for the immediately
following fiscal year.

As to any information contained in materials furnished pursuant to Section
6.02(d), the Borrowers shall not be separately required to furnish such
information under Sections 6.01(a) or (b) above, but the foregoing shall not be
in derogation of the obligation of the Borrowers to furnish the information and
materials described in Sections 6.01(a) and (b) above at the times specified
therein.

6.02 Certificates; Other Information. Deliver to the Administrative Agent on
behalf of each Lender, in form and detail satisfactory to the Administrative
Agent and the Required Lenders:

(a) concurrently with the delivery of the financial statements referred to in
Section 6.01(a), a certificate of its independent certified public accountants
certifying such financial statements and stating that in making the examination
necessary therefor no knowledge was obtained of any Default under the financial
covenants set forth herein or, if any such Default shall exist, stating the
nature and status of such event;

(b) concurrently with the delivery of the financial statements referred to in
Sections 6.01(a) and (b), (i) a duly completed Compliance Certificate signed by
a Responsible Officer of Holdings and (ii) a copy of management’s discussion and
analysis with respect to such financial statements;

 

 

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(c) promptly after any request by the Administrative Agent or any Lender, copies
of any detailed audit reports, management letters or recommendations submitted
to the board of directors (or the audit committee of the board of directors) of
any Loan Party by independent accountants in connection with the accounts or
books of any Loan Party or any of its Subsidiaries, or any audit of any of them,
except to the extent such accountants shall restrict the ability of Holdings to
deliver such documents to the Administrative Agent or such Lender, as the case
may be;

(d) copies of all annual, regular, periodic and special reports and registration
statements which Holdings may file or be required to file with the SEC under
Section 13 or 15(d) of the Securities Exchange Act of 1934, or with any national
securities exchange, and in any case not otherwise required to be delivered to
the Administrative Agent pursuant hereto;

(e) as soon as available, but in any event within 30 days after the end of each
fiscal year of Holdings, a report summarizing the material insurance coverage
(specifying type, amount and carrier) in effect for each Loan Party and its
Subsidiaries;

(f) promptly, and in any event within five Business Days after receipt thereof
by any Loan Party or any Subsidiary thereof, copies of each notice or other
correspondence received from the SEC (or comparable agency in any applicable
non-U.S. jurisdiction) concerning any investigation or possible investigation or
other inquiry by such agency regarding financial or other operational results of
any Loan Party or any Subsidiary thereof;

(g) as soon as available, but in any event within 15 days (or if the 15th day of
such month is not a Business Day, the next succeeding Businesses Day) after the
end of each (i) month (if there are Revolving Loans outstanding) or (ii) fiscal
quarter (if there are no Revolving Loans outstanding), a Borrowing Base
Certificate, as at the end of such month or fiscal quarter, duly certified by a
Responsible Officer of Holdings;

(h) promptly, such additional information regarding the business, financial,
legal or corporate affairs of any Loan Party or any Subsidiary thereof, or
compliance with the terms of the Loan Documents, as the Administrative Agent or
any Lender may from time to time reasonably request;

(i) in the case of a U.K. Loan Party, promptly notify the Administrative Agent
of any change of name, change of office address or change its center of main
interests; and

(j) in addition to the requirements of Section 10.18, in the case of any Loan
Party, promptly after any request by the Administrative Agent or the Lender,
supply or procure the supply of such documentation in order for the
Administrative Agent, such Lender or any prospective lender to carry out and be
satisfied with the results of any necessary “know your customer checks” or other
checks in relation to any person that it is required by directive or law in
relation to the transactions contemplated by the Agreement.

 

 

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Documents required to be delivered pursuant to Section 6.01(a) or (b) or Section
6.02(d) (to the extent any such documents are included in materials otherwise
filed with the SEC) may be delivered electronically and if so delivered, shall
be deemed to have been delivered on the date (i) on which the Borrowers post
such documents, or provides a link thereto on the Company’s website on the
Internet at the website address listed on Schedule 10.02; or (ii) on which such
documents are posted on the Borrowers’ behalf on an Internet or intranet
website, if any, to which each Lender and the Administrative Agent have access
(whether a commercial, third-party website or whether sponsored by the
Administrative Agent); provided that the Borrowers shall notify the
Administrative Agent and each Lender (by telecopier or electronic mail) of the
posting of any such documents and provide to the Administrative Agent by
electronic mail electronic versions (i.e., soft copies) of such documents.
Notwithstanding anything contained herein, in every instance the Borrowers shall
be required to provide paper copies of the Compliance Certificates required by
Section 6.02(b) to the Administrative Agent. Except for such Compliance
Certificates, the Administrative Agent shall have no obligation to request the
delivery or to maintain copies of the documents referred to above, and in any
event shall have no responsibility to monitor compliance by the Borrowers with
any such request for delivery, and each Lender shall be solely responsible for
requesting delivery to it or maintaining its copies of such documents.

The Borrowers hereby acknowledges that (a) the Administrative Agent and/or the
Arrangers will make available to the Lenders and the L/C Issuer materials and/or
information provided by or on behalf of the Borrowers hereunder (collectively,
“Borrower Materials”) by posting the Borrower Materials on IntraLinks or another
similar electronic system (the “Platform”) and (b) certain of the Lenders may be
“public-side” Lenders (i.e., Lenders that do not wish to receive material
non-public information with respect to Holdings or its securities) (each, a
“Public Lender”). Each of the Borrowers hereby agrees that it will use
commercially reasonable efforts to identify that portion of the Borrower
Materials that may be distributed to the Public Lenders and that (w) all such
Borrower Materials shall be clearly and conspicuously marked “PUBLIC” which, at
a minimum, shall mean that the word “PUBLIC” shall appear prominently on the
first page thereof; (x) by marking Borrower Materials “PUBLIC,” the Borrowers
shall be deemed to have authorized the Administrative Agent, the Arrangers, the
L/C Issuer and the Lenders to treat such Borrower Materials as either publicly
available information or not material information (although it may be sensitive
and proprietary) with respect to Holdings or its securities for purposes of
United States Federal and state securities laws; (y) all Borrower Materials
marked “PUBLIC” are permitted to be made available through a portion of the
Platform designated “Public Investor;” and (z) the Administrative Agent and the
Arrangers shall be entitled to treat any Borrower Materials that are not marked
“PUBLIC” as being suitable only for posting on a portion of the Platform not
designated “Public Investor.”

6.03 Notices. Promptly notify the Administrative Agent and each Lender:

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

(b) of any matter that has resulted or could reasonably be expected to result in
a Material Adverse Effect, including (i) breach or non-performance of, or any
default under, a Contractual Obligation of any Loan Party or any Subsidiary
thereof; (ii) any dispute, litigation, investigation, proceeding or suspension
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any Subsidiary thereof and any Governmental Authority; or (iii) the commencement
of, or any material development in, any litigation or proceeding affecting any
Loan Party or any Subsidiary thereof;

(c) of the occurrence of any ERISA Event;

(d) of any material change in accounting policies or financial reporting
practices by any Loan Party or any Subsidiary thereof;

(e) of the occurrence of any Internal Control Event; and

(f) of the (i) occurrence of any Disposition of property or assets for which a
Borrower is required to make a mandatory prepayment pursuant to Section
2.05(b)(ii), (ii) occurrence of any sale of capital stock or other Equity
Interests for which a Borrower is required to make a mandatory prepayment
pursuant to Section 2.05(b)(iii), (iii) incurrence or issuance of any
Indebtedness for which a Borrower is required to make a mandatory prepayment
pursuant to Section 2.05(b)(v), (iv) receipt of any Extraordinary Receipt for
which a Borrower is required to make a mandatory prepayment pursuant to Section
2.05(b)(vi) and (v) effectiveness of any merger of Holdings pursuant to Section
7.04(f).

Each notice pursuant to Section 6.03(a), (b), (c) or (d) shall be accompanied by
a statement of a Responsible Officer of the applicable Borrower setting forth
details of the occurrence referred to therein and stating what action such
Borrower has taken and proposes to take with respect thereto. Each notice
pursuant to Section 6.03(a) shall describe with particularity any and all
provisions of this Agreement and any other Loan Document that have been
breached.

6.04 Payment of Obligations. Pay and discharge or cause to be paid and
discharged promptly when due, all its obligations and liabilities, including (a)
all material and lawful taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits or in respect of its property,
before the same shall become in default, as well as all material and lawful
claims which, if unpaid, might become a lien or charge upon such properties or
any part thereof; provided, however, that neither Holdings nor any of the
Subsidiaries shall be required to pay and discharge or to cause to be paid and
discharged any such tax, assessment, charge, levy or claim so long as the
validity, applicability or amount thereof shall be contested in good faith by
applicable proceedings and Holdings or such Subsidiary, as the case may be,
shall have set aside on its books reserves reasonably deemed adequate by it with
respect thereto, (b) all unlawful claims which, if unpaid, would by law become a
Lien upon its property and (c) all Indebtedness as and when due and payable, but
subject to any subordination provisions contained in any instrument or agreement
evidencing such Indebtedness.

6.05 Maintain Property and Insurance. (a) Maintain and preserve all material
properties which are used in the conduct of the business of Holdings and its
Subsidiaries in good working order and condition, ordinary wear and tear
excepted, and (b) maintain in respect of the assets of Holdings and its
Subsidiaries, insurance in such amounts and against such risks as is

 

 

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generally maintained by companies operating similar businesses in the same
general area. All insurance policies hereunder shall be maintained with sound
and reputable insurance carriers of recognized standing.

6.06 Maintain Existence. Preserve, maintain or renew (a) the legal existence and
good standing of Holdings and its Subsidiaries except in a transaction permitted
by Section 7.04 or 7.05, (b) all the material rights, privileges and franchises
necessary and desirable in the normal conduct of the business of Holdings and
its Subsidiaries, except to the extent failure to do so could not reasonably be
expected to have a Material Adverse Effect and (c) all of its registered
patents, trademarks, tradenames and service marks, the non-preservation of which
could reasonably be expected to have a Material Adverse Effect.

6.07 Compliance with Laws. Comply with the requirements of all applicable laws
(including ERISA), regulations and orders of any Governmental Authority, a
violation of which would materially affect the business or financial condition
of Holdings and its Subsidiaries taken as a whole, except any such law,
regulation or order which is being contested by Holdings or any Subsidiary in
good faith by applicable proceedings.

6.08 Inspection. Give, upon the request of any Lender upon reasonable advance
notice, any representative of such Lender access during normal business hours to
inspect, and permit such representative to inspect, all properties belonging to
it and permit such representative to examine, copy and make extracts from,
corporate, financial and operating records relating to its affairs, at the
expense of the Borrowers and as such representative may reasonably require.

6.09 Eligible Loans. Cause each Subsidiary, in connection with each Eligible
Loan made or to be made by it, to apply credit standards and loan to collateral
value requirements, and to follow practices with respect to documentation and
the perfection of security interests, not less strict than those generally
applied and followed in the Subsidiaries’ art lending business prior to the
Closing Date.

6.10 Books and Records. Maintain proper books of record and account, in which
full, true and correct entries in conformity with GAAP consistently applied
shall be made of all financial transactions and matters involving the assets and
business of such Borrower or such Subsidiary, as the case may be.

6.11 Use of Proceeds. Use the proceeds of the Credit Extensions for general
corporate purposes not in contravention of any Law or of any Loan Document.

6.12 Covenant to Guarantee Obligations and Give Security. (a) Upon the formation
or acquisition of any new direct or indirect Subsidiary (other than any CFC or a
Subsidiary that is held directly or indirectly by a CFC) by any U.S. Loan Party,
then such Loan Party shall, at its expense:

(i) within 10 days after such formation or acquisition, cause such Subsidiary,
and cause each direct and indirect parent of such Subsidiary (if it has not
already done so), to duly execute and deliver to the Administrative Agent a
Domestic Guaranty or supplement to the Domestic Guaranty, in form and substance
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Administrative Agent, guaranteeing the other Loan Parties’ obligations under the
Loan Documents,

(ii) within 15 days after such formation or acquisition, cause such Subsidiary
and each direct and indirect parent of such Subsidiary (if it has not already
done so) to duly execute and deliver to the Administrative Agent, Security
Agreement Supplements, IP Security Agreement Supplements and other security and
pledge agreements, as specified by and in form and substance satisfactory to the
Administrative Agent (including delivery of all pledged Equity Interests in and
of such Subsidiary, and other instruments of the type specified in Section
4.01(a)(iii)), securing payment of all the Obligations of such Subsidiary or
such parent, as the case may be, under the Loan Documents and constituting Liens
on all such personal properties,

(iii) within 30 days after such formation or acquisition, cause such Subsidiary
and each direct and indirect parent of such Subsidiary (if it has not already
done so) to take whatever action (including the filing of Uniform Commercial
Code financing statements and the giving of notices) may be necessary or
advisable in the opinion of the Administrative Agent to vest in the
Administrative Agent (or in any representative of the Administrative Agent
designated by it) valid and subsisting Liens on the properties purported to be
subject to the Security Agreement Supplements, IP Security Agreement Supplements
and security and pledge agreements delivered pursuant to this Section 6.12(a),
enforceable against all third parties in accordance with their terms, and

(iv) within 60 days after such formation or acquisition, deliver to the
Administrative Agent, upon the request of the Administrative Agent in its sole
discretion, a signed copy of a favorable opinion, addressed to the
Administrative Agent and the other Secured Parties, of counsel for the U.S. Loan
Parties acceptable to the Administrative Agent as to the matters contained in
clauses (i), (iii) and (iv) above, and as to such other matters as the
Administrative Agent may reasonably request.

(b) Upon the formation or acquisition of any new direct or indirect U.K.
Subsidiary by any U.K. Loan Party, then such Loan Party shall, at its expense:

(i) within 10 days after such formation or acquisition, cause such Subsidiary,
and cause each direct and indirect parent of such Subsidiary which is also a
U.K. Subsidiary (if it has not already done so), to duly execute and deliver to
the Administrative Agent a U.K. Guaranty or supplement to the U.K. Guaranty, in
form and substance satisfactory to the Administrative Agent, guaranteeing the
other U.K. Loan Parties’ obligations under the Loan Documents,

(ii) within 15 days after such formation or acquisition, cause such Subsidiary
and each direct and indirect parent of such Subsidiary which is also a U.K.
Subsidiary (if it has not already done so) to duly execute and deliver to the
Administrative Agent, supplements to any U.K. Collateral Documents and other
security and pledge agreements, as specified by and in form and substance
satisfactory to the Administrative Agent (including delivery of all pledged
Equity Interests in and of such Subsidiary, and other instruments of the type
specified in Section 4.02(a)), securing payment of all the

 

 

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Obligations of the U.K. Loan Parties under the Loan Documents and constituting
Liens on all such personal properties,

(iii) within 30 days after such formation or acquisition (or such earlier period
as may be required by law), cause such Subsidiary and each direct and indirect
parent of such Subsidiary which is also a U.K. Subsidiary (if it has not already
done so) to take whatever action (including the giving of notices) may be
necessary or advisable in the opinion of the Administrative Agent to vest in the
Administrative Agent (or in any representative of the Administrative Agent
designated by it) valid and subsisting Liens on the properties purported to be
subject to any such supplements to any U.K. Collateral Documents and security
and pledge agreements delivered pursuant to this Section 6.12(b), enforceable
against all third parties in accordance with their terms, and

(iv) within 60 days after such formation or acquisition, deliver to the
Administrative Agent, upon the request of the Administrative Agent in its sole
discretion, a signed copy of a favorable opinion, addressed to the
Administrative Agent and the other Secured Parties, of counsel for the U.K. Loan
Parties acceptable to the Administrative Agent as to the matters contained in
clauses (i), (iii) and (iv) above, and as to such other matters as the
Administrative Agent may reasonably request.

(c) Upon the acquisition of any material property (other than real property) by
any Loan Party, if such property, in the reasonable judgment of Holdings, shall
not already be subject to a perfected first priority security interest in favor
of the Administrative Agent for the benefit of the Secured Parties, then the
Borrowers shall, at the Borrowers’ expense:

(i) within 10 days after such acquisition, furnish to the Administrative Agent a
description of the property so acquired in detail satisfactory to the
Administrative Agent,

(ii) within 15 days after such acquisition, cause the applicable Loan Party to
duly execute and deliver to the Administrative Agent Security Agreement
Supplements, IP Security Agreement Supplements, supplements to any U.K.
Collateral Documents and other security and pledge agreements, as specified by
and in form and substance satisfactory to the Administrative Agent, securing
payment of all the Obligations of the applicable Loan Party under the Loan
Documents and constituting Liens on all such properties,

(iii) within 30 days after such acquisition, cause the applicable Loan Party to
take whatever action (including the filing of Uniform Commercial Code financing
statements and the giving of notices, but excluding taking possession) may be
necessary or advisable in the opinion of the Administrative Agent to vest in the
Administrative Agent (or in any representative of the Administrative Agent
designated by it) valid and subsisting Liens on such property, enforceable
against all third parties, and

(iv) within 60 days after such acquisition, deliver to the Administrative Agent,
upon the request of the Administrative Agent in its sole discretion, a signed
copy of a favorable opinion, addressed to the Administrative Agent and the other
Secured Parties,

 

 

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of counsel for the applicable Loan Parties acceptable to the Administrative
Agent as to the matters contained in clauses (ii) and (iii) above and as to such
other matters as the Administrative Agent may reasonably request.

(d) Upon the request of the Administrative Agent following the occurrence and
during the continuance of an Event of Default, the Borrowers shall, at the
Borrowers’ expense:

(i) within 30 days after such request, furnish to the Administrative Agent a
description of the real and personal properties of the Loan Parties and their
respective Subsidiaries in detail satisfactory to the Administrative Agent,

(ii) within 60 days after such request, duly execute and deliver, and cause each
Subsidiary (other than any CFC or a Subsidiary that is held directly or
indirectly by a CFC) of a Borrower (if it has not already done so) to duly
execute and deliver, to the Administrative Agent deeds of trust, trust deeds,
mortgages, leasehold mortgages, leasehold deeds of trust, Security Agreement
Supplements, IP Security Agreement Supplements and other security and pledge
agreements, as specified by and in form and substance satisfactory to the
Administrative Agent (including delivery of all Pledged Equity and Pledged Debt
in and of such Subsidiary, and other instruments of the type specified in
Section 4.01(a)(iii)), securing payment of all the Obligations of such
Subsidiary under the Loan Documents and constituting Liens on all such
properties,

(iii) within 75 days after such request, take, and cause each Subsidiary (other
than any CFC or a Subsidiary that is held directly or indirectly by a CFC) of a
Borrower to take, whatever action (including the recording of mortgages, the
filing of Uniform Commercial Code financing statements, the giving of notices
and the endorsement of notices on title documents) may be necessary or advisable
in the opinion of the Administrative Agent to vest in the Administrative Agent
(or in any representative of the Administrative Agent designated by it) valid
and subsisting Liens on the properties purported to be subject to the deeds of
trust, trust deeds, mortgages, leasehold mortgages, leasehold deeds of trust,
Security Agreement Suppleme nts, IP Security Agreement Supplements and security
and pledge agreements delivered pursuant to this Section 6.12, enforceable
against all third parties in accordance with their terms,

(iv) within 90 days after such request, deliver to the Administrative Agent,
upon the request of the Administrative Agent in its sole discretion, a signed
copy of a favorable opinion, addressed to the Administrative Agent and the other
Secured Parties, of counsel for the Loan Parties acceptable to the
Administrative Agent as to the matters contained in clauses (ii) and (iii)
above, and as to such other matters as the Administrative Agent may reasonably
request, and

(v) as promptly as practicable after such request, deliver, upon the request of
the Administrative Agent in its sole discretion, to the Administrative Agent
with respect to each parcel of real property owned or held by the Borrowers and
their Subsidiaries, title reports, surveys and engineering, soils and other
reports, and environmental assessment reports, each in scope, form and substance
satisfactory to the Administrative Agent, provided, however, that to the extent
that any Loan Party or any of its Subsidiaries

 

 

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shall have otherwise received any of the foregoing items with respect to such
real property, such items shall, promptly after the receipt thereof, be
delivered to the Administrative Agent.

(e) If at any time the representation and warranty set forth in Section 5.20
shall be incorrect, within 30 days after the date thereof, the Borrowers shall
enter into Local Law Collateral Documents with respect to the Equity Interests
of one or more First Tier Foreign CFC Subsidiaries so that after delivery of
such Local Law Collateral Documents, such representation and warranty shall be
true and correct (it being understood and agreed that no Local Law Collateral
Documents shall be required in respect of Sotheby’s Hong Kong Ltd. or any of its
Subsidiaries).

(f) At any time upon request of the Administrative Agent, promptly execute and
deliver any and all further instruments and documents and take all such other
action as the Administrative Agent may deem necessary or desirable in obtaining
the full benefits of, or (as applicable) in perfecting and preserving the Liens
of, such guaranties, Security Agreement Supplements, IP Security Agreement
Supplements and other security and pledge agreements.

6.13 Further Assurances. Promptly upon request by the Administrative Agent, or
any Lender through the Administrative Agent, (a) correct any material defect or
error that may be discovered in any Loan Document or in the execution,
acknowledgment, filing or recordation thereof, and (b) do, execute, acknowledge,
deliver, record, re-record, file, re-file, register and re-register any and all
such further acts, deeds, certificates, assurances and other instruments as the
Administrative Agent, or any Lender through the Administrative Agent, may
reasonably require from time to time in order to (i) carry out more effectively
the purposes of the Loan Documents, (ii) to the fullest extent permitted by
applicable law, subject any Loan Party’s or any of its Subsidiaries’ properties,
assets, rights or interests to the Liens now or hereafter intended to be covered
by any of the Collateral Documents, (iii) perfect and maintain the validity,
effectiveness and priority of any of the Collateral Documents and any of the
Liens intended to be created thereunder and (iv) assure, convey, grant, assign,
transfer, preserve, protect and confirm more effectively unto the Secured
Parties the rights granted or now or hereafter intended to be granted to the
Secured Parties under any Loan Document or under any other instrument executed
in connection with any Loan Document to which any Loan Party or any of its
Subsidiaries is or is to be a party, and cause each of its Subsidiaries to do
so.

6.14 Post-Closing Obligations.

(a) On or prior to the 90th day following the Closing Date (or such date 30 days
later as may be agreed to by the Administrative Agent in its sole discretion),
deliver to the Administrative Agent a duly executed master subordination
agreement (the “Master Subordination Agreement”) entered into by Holdings and
each of its wholly owned Subsidiaries whereby Holdings and each such Subsidiary
subordinates, upon terms and conditions acceptable to the Administrative Agent,
its intercompany obligations to the payment of the Obligations.

(b) On or prior to the 30th day following the Closing Date, deliver to the
Administrative Agent U.K. Collateral Documents executed by each U.K. Loan Party
and

 

 

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in respect of the Equity Interests of each First-Tier Foreign CFC Subsidiary
that is a U.K. Subsidiary, each properly executed by a Responsible Officer of
the signing Loan Party and each in form and substance satisfactory to the
Administrative Agent, together with all deliveries, filings, registrations and
other actions required to be made or taken pursuant thereto and with a favorable
opinion of U.K. counsel to the Loan Parties addressed to the Administrative
Agent and each Lender, as to such matters concerning the U.K. Loan Parties and
the U.K. Collateral Documents that the Administrative Agent and the Required
Lenders may reasonably request.

(c) Upon the reasonable request of the Administrative Agent, and at the expense
of the Loan Parties, within 20 days after such request, furnish to the
Administrative Agent proper termination statements on Form UCC-3 covering such
financing statements as the Administrative Agent may reasonably request.

ARTICLE VII

NEGATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, each Borrower shall not, nor shall it permit any
Subsidiary to, directly or indirectly, and solely in the case of Section 7.18
SPTC Delaware shall not, nor shall Holdings permit SPTC Delaware to:

7.01 Liens. Create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired, or sign
or file or suffer to exist under the Uniform Commercial Code of any jurisdiction
a financing statement that names any Borrower or any of their Subsidiaries as
debtor, or assign any accounts or other right to receive income, other than the
following:

(a) Liens incurred or pledges and deposits made in connection with workmen’s
compensation, unemployment insurance, old-age pensions, social security and
public liability and similar legislation;

(b) Liens securing the performance of bids, tenders, leases, contracts (other
than for the repayment of borrowed money), statutory obligations, surety and
appeal bonds and other obligations of like nature, incurred incident to and in
the ordinary course of business;

(c) statutory Liens of landlords and other Liens imposed by law, such as
carriers’, warehousemen’s, mechanics’, materialmen’s and vendors’ Liens,
incurred in good faith in the ordinary course of business, including but not
limited to those relating to the construction of the York Avenue Property;

(d) Liens securing the payment of taxes, assessments and governmental charges or
levies, either (i) not delinquent or (ii) being contested in good faith by
appropriate proceedings with adequate reserves;

 

 

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(e) zoning restrictions, easements, licenses, reservations, restrictions on the
use of real property or minor irregularities incident thereto which do not in
the aggregate materially detract from the value of the property or assets of
Holdings and its Subsidiaries taken as a whole or materially impair the
operation of the business of Holdings and its Subsidiaries taken as a whole;

(f) Liens incurred in the ordinary course of business provided that these liens
are not given as security for Indebtedness;

(g) Liens on property or assets of any Subsidiary securing Indebtedness of such
Subsidiary to Holdings or to a Loan Party;

(h) Liens for judgments or awards, so long as the finality of such judgment or
award is being contested in good faith and execution thereof is stayed; provided
that the aggregate amount of Liens permitted by this clause may not exceed the
Threshold Amount;

(i) any Lien existing on any property or assets of any corporation at the time
it becomes a Subsidiary of Holdings, or existing prior to the time of
acquisition upon any property or assets acquired by Holdings or any of its
Subsidiaries through purchase, merger or consolidation or otherwise, whether or
not assumed by Holdings or such Subsidiary; provided that such Liens were not
created in contemplation of such acquisition, purchase, merger, consolidation or
investment and do not extend to any assets other than those of the Person merged
into or consolidated with Holdings or such Subsidiary or organized, purchased or
invested in by Holdings or such Subsidiary;

(j) any Lien placed upon property or assets within 90 days of the time of
acquisition of such property or assets by Holdings or any of its Subsidiaries to
secure all or a portion of (or to secure Indebtedness incurred to pay all or a
portion of) the purchase price thereof; provided that any such Lien shall not
encumber any other property or assets of Holdings or any Subsidiary;

(k) Liens, other than the liens permitted by clauses (a) through (j) above
(including any such Liens in existence as of the date hereof), existing as of
the date hereof and set forth on Schedule 5.12(b); provided, however, that no
such Lien shall be permitted under this clause (k) if it extends to property
other than the property subject to such Lien on the date hereof;

(l) any Lien renewing, extending or refunding any Lien permitted by clause (i),
(j) or (k) above, provided that (i) the principal amount secured is not
increased, and the Lien is not extended to other property and (ii) any renewal,
extension or refunding of the obligations secured or benefited thereby is
permitted by this Agreement; and

(m) Liens created under the Loan Documents;

provided, that notwithstanding anything proved for in this Section 7.01, (x)
Liens on assets and property of Sotheby’s Hong Kong Ltd. and its Subsidiaries
securing Indebtedness at any one time outstanding shall not exceed $8,000,000
and (y) Liens on assets and property of Exempt

 

 

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Subsidiaries securing Indebtedness at any one time outstanding shall not exceed
$5,000,000, provided that no such Lien shall extend to or cover any Collateral.

7.02 Indebtedness. Create, incur, assume or suffer to exist any Indebtedness,
except:

(a) obligations (contingent or otherwise) existing or arising under any Swap
Contract, provided that (i) such obligations are (or were) entered into by such
Person in the ordinary course of business for the purpose of directly mitigating
risks associated with liabilities, commitments, investments, assets, or property
held or reasonably anticipated by such Person, or changes in the value of
securities issued by such Person, and not for purposes of speculation or taking
a “market view;” and (ii) such Swap Contract does not contain any provision
exonerating the non-defaulting party from its obligation to make payments on
outstanding transactions to the defaulting party;

(b) Indebtedness evidenced by the Senior Notes;

(c) Indebtedness of any Subsidiary the proceeds of which are used by such
Subsidiary to make secured loans to consignors, dealers or clients in the
ordinary course of business of the Borrowers and their Subsidiaries and in a
manner that is consistent with established practices pursuant to the auction
finance business of the Borrowers and their Subsidiaries;

(d) Indebtedness of any Subsidiary or available to any Subsidiary, not in excess
of $20,000,000 in the aggregate with respect to all Subsidiaries;

(e) Indebtedness of a Subsidiary of any Borrower owed to such Borrower or a
wholly owned Subsidiary of such Borrower, which Indebtedness shall (i) in the
case of Indebtedness owed to a Loan Party, constitute “Pledged Debt” under the
Security Agreement, (ii) be subject to the provisions of the Master
Subordination Agreement and (iii) be otherwise permitted under the provisions of
Section 7.03;

(f) Indebtedness under the Loan Documents;

(g) Indebtedness outstanding on the date hereof and listed on Schedule 7.02 and
any refinancings, refundings, renewals or extensions thereof; provided that the
amount of such Indebtedness is not increased at the time of such refinancing,
refunding, renewal or extension except by an amount equal to a reasonable
premium or other reasonable amount paid, and fees and expenses reasonably
incurred, in connection with such refinancing and by an amount equal to any
existing commitments unutilized thereunder and the direct or any contingent
obligor with respect thereto is not changed, as a result of or in connection
with such refinancing, refunding, renewal or extension; and provided still
further that the terms relating to principal amount, amortization, maturity,
collateral (if any) and subordination (if any), and other material terms taken
as a whole, of any such refinancing, refunding, renewing or extending
Indebtedness, and of any agreement entered into and of any instrument issued in
connection therewith, are no less favorable in any material respect to the Loan
Parties or the Lenders than the terms of any agreement or instrument governing
the Indebtedness being refinanced, refunded, renewed or

 

 

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extended and the interest rate applicable to any such refinancing, refunding,
renewing or extending Indebtedness does not exceed the then applicable market
interest rate;

(h) Guarantees of any Borrower or any Guarantor in respect of Indebtedness
otherwise permitted hereunder of such Borrower or any other Guarantor;

(i) Indebtedness in respect of Capitalized Leases, Synthetic Lease Obligations
and purchase money obligations for fixed or capital assets within the
limitations set forth in Section 7.01(j); provided, however, that the aggregate
amount of all such Indebtedness at any one time outstanding shall not exceed
$5,000,000;

(j) unsecured Indebtedness in an aggregate principal amount not to exceed 10% of
Consolidated Net Worth at any time outstanding; and

(k) Indebtedness in respect of letters of credit in an aggregate amount at any
one time outstanding not to exceed $10,000,000;

; provided, that notwithstanding anything provided for in this Section 7.02, (x)
Indebtedness of Sotheby’s Hong Kong Ltd. and its Subsidiaries at any one time
outstanding shall not exceed $8,000,000 and (y) Indebtedness of Exempt
Subsidiaries at any one time outstanding shall not exceed $5,00,000.

7.03 Investments. Make or hold any Investments, except:

(a) Investments held by the Borrowers and their Subsidiaries in the form of Cash
Equivalents;

(b) advances to officers, directors and employees of the Borrowers and
Subsidiaries in an aggregate amount not to exceed $2,000,000 at any time
outstanding, for travel, entertainment, relocation and analogous ordinary
business purposes;

(c) (i) Investments by the Borrowers and their Subsidiaries in their respective
Subsidiaries outstanding on the date hereof, (ii) additional Investments by the
Borrowers and their Subsidiaries in Loan Parties, (iii) additional Investments
by Subsidiaries of the Borrowers that are not Loan Parties in other Subsidiaries
that are not Loan Parties and (iv) so long as no Default has occurred and is
continuing or would result from such Investment, additional Investments by the
Loan Parties in Subsidiaries that are not Loan Parties (other than any
Immaterial Subsidiary) in an aggregate amount invested from the date hereof not
to exceed $20,000,000;

(d) Investments consisting of extensions of credit in the nature of accounts
receivable or notes receivable arising from the grant of trade credit in the
ordinary course of business, and Investments received in satisfaction or partial
satisfaction thereof from financially troubled account debtors to the extent
reasonably necessary in order to prevent or limit loss;

(e) Guarantees permitted by Section 7.02;

 

 

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(f) Investments existing on the date hereof (other than those referred to in
Section 7.03(c)) and set forth on Schedule 5.12(c);

(g) Investments by any Borrower in Swap Contracts permitted under Section
7.02(a);

(h) Investments consisting of Eligible Loans; and

(i) other Investments not exceeding $15,000,000 in the aggregate in any fiscal
year of Holdings (other than in any Immaterial Subsidiary).

7.04 Fundamental Changes. Merge, dissolve, liquidate, consolidate with or into
another Person, or Dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person, except that, so long as no
Default exists or would result therefrom:

(a) any Subsidiary may merge with (i) any Borrower, provided that such Borrower
shall be the continuing or surviving Person, or (ii) any one or more other
Subsidiaries, provided that (x) when any U.S. Loan Party (other than Holdings)
is merging with another Subsidiary, such Loan Party shall be the continuing or
surviving Person and (y) when any U.K. Loan Party is merging with another
Subsidiary, such U.K. Loan Party shall be the continuing or surviving Person and
such merger could not reasonably be expected to have a Material Adverse Effect;

(b) (x) any U.S. Loan Party may Dispose of all or substantially all of its
assets (upon voluntary liquidation or otherwise) to any U.S. Borrower or to
another U.S. Loan Party and (y) any U.K. Loan Party may Dispose of all or
substantially all of its assets (upon voluntary liquidation or otherwise) to any
U.K. Borrower or to another U.K. Loan Party;

(c) any Subsidiary that is not a Loan Party may dispose of all or substantially
all its assets to a Loan Party or another Subsidiary that is not a Loan Party;

(d) in connection with any acquisition permitted under Section 7.03, any
Subsidiary of a Borrower may merge into or consolidate with any other Person or
permit any other Person to merge into or consolidate with it; provided that the
Person surviving such merger shall be a wholly owned Subsidiary of a Borrower;

(e) each Borrower and any of its Subsidiaries may merge into or consolidate with
any other Person or permit any other Person to merge into or consolidate with
it; provided, however, that in each case, immediately after giving effect
thereto (i) in the case of any such merger to which a Borrower is a party, such
Borrower is the surviving corporation (ii) in the case of any such merger to
which any U.S. Loan Party (other than a U.S. Borrower) is a party, such U.S.
Loan Party is the surviving corporation and (iii) in the case of any such merger
in which any U.K. Loan Party (other than a U.K. Borrower) is a party, such U.K.
Loan Party is the surviving corporation; and

 

 

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(f) Holdings may merge with any Subsidiary or any other Person in order to
reincorporate under the laws of Delaware; provided, that the surviving
corporation assumes all of the obligations of Holdings under this Agreement and
under each of the other Loan Documents to which Holdings is a party.

7.05 Dispositions. Make any Disposition or enter into any agreement to make any
Disposition, except:

(a) Dispositions of obsolete or worn out property, whether now owned or
hereafter acquired, in the ordinary course of business;

(b) Dispositions in the ordinary course of business;

(c) Dispositions of equipment or real property to the extent that (i) such
property is exchanged for credit against the purchase price of similar
replacement property or (ii) the proceeds of such Disposition are reasonably
promptly applied to the purchase price of such replacement property;

(d) Dispositions of property by any Subsidiary to any Borrower or to a wholly
owned Subsidiary; provided that if the transferor of such property is a
Guarantor, the transferee thereof must either be a Borrower or a Guarantor;

(e) Dispositions permitted by Section 7.04;

(f) Dispositions by the Borrowers and their Subsidiaries not otherwise permitted
under this Section 7.05; provided that (i) at the time of such Disposition, no
Default shall exist or would result from such Disposition, (ii) the aggregate
book value of all property Disposed of in reliance on this clause (f) in any
fiscal year shall not exceed $15,000,000, (iii) except for up to $2,500,000 in
the aggregate in any fiscal year, the purchase price for such asset shall be
paid to such Borrower or such Subsidiary solely in cash, and (iv) any
Disposition pursuant to this Section 7.05(f) shall be for fair market value; and

(g) Dispositions set forth on Schedule 7.05.

7.06 Restricted Payments. Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
or issue or sell any Equity Interests or accept any capital contributions,
except that, so long as no Default shall have occurred and be continuing at the
time of any action described below or would result therefrom:

(a) each Subsidiary may make Restricted Payments to Holdings, any Subsidiaries
of Holdings that are Borrowers or Guarantors and any other Person that owns a
direct Equity Interest in such Subsidiary, ratably according to their respective
holdings of the type of Equity Interest in respect of which such Restricted
Payment is being made;

(b) each Borrower and each Subsidiary may declare and make dividend payments or
other distributions payable solely in the common stock or other common Equity
Interests of such Person;

 

 

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(c) each Borrower and each Subsidiary may purchase, redeem or otherwise acquire
its common Equity Interests with the proceeds received from the substantially
concurrent issue of new common Equity Interests;

(d) Holdings may (i) declare or pay cash dividends to its stockholders and (ii)
purchase, redeem or otherwise acquire shares of its capital stock or warrants,
rights or options to acquire any such shares solely out of 40% of net income of
Holdings and its Subsidiaries arising after June 30, 2005 and computed on a
cumulative consolidated basis; and

(e) Holdings may consummate the Recapitalization.

7.07 Change in Nature of Business. Engage in any material line of business
substantially different from those lines of business conducted by Holdings and
its Subsidiaries on the date hereof or any business substantially related or
incidental thereto.

7.08 Transactions with Affiliates. Enter into any transaction of any kind with
any Affiliate of Holdings, whether or not in the ordinary course of business,
other than on fair and reasonable terms substantially as favorable to such
Borrower or such Subsidiary as would be obtainable by such Borrower or such
Subsidiary at the time in a comparable arm’s length transaction with a Person
other than an Affiliate; provided that the foregoing restriction shall not apply
to transactions between or among the Loan Parties otherwise permitted hereunder.

7.09 Burdensome Agreements. Enter into or permit to exist any Contractual
Obligation (other than this Agreement or any other Loan Document) that (a)
limits the ability (i) of any Subsidiary to make Restricted Payments to any
Borrower or any Guarantor or to otherwise transfer property to or invest in any
Borrower or any Guarantor, except for any agreement in effect (A) on the date
hereof and set forth on Schedule 7.09 or (B) at the time any Subsidiary becomes
a Subsidiary of a Borrower, so long as such agreement was not entered into
solely in contemplation of such Person becoming a Subsidiary of such Borrower,
(ii) of any Subsidiary to Guarantee the Indebtedness of the Borrowers or (iii)
of any Borrower or any Subsidiary to create, incur, assume or suffer to exist
Liens on property of such Person; provided, however, that this clause (iii)
shall not prohibit any negative pledge incurred or provided in favor of any
holder of Indebtedness permitted under Section 7.02(i) solely to the extent any
such negative pledge relates to the property financed by or the subject of such
Indebtedness; or (b) requires the grant of a Lien to secure an obligation of
such Person if a Lien is granted to secure another obligation of such Person,
except as set forth in the Senior Notes Indenture or any refinancing thereof.

7.10 Use of Proceeds. Use the proceeds of any Credit Extension, whether directly
or indirectly, and whether immediately, incidentally or ultimately, to purchase
or carry margin stock (within the meaning of Regulation U of the FRB).

7.11 Financial Covenants. (a) Consolidated Interest Coverage Ratio. Permit the
Consolidated Interest Coverage Ratio as of the end of any fiscal quarter of
Holdings to be less than 2.0:1.0:

 

 

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(b) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio at any
time during any period of four fiscal quarters of Holdings set forth below to be
greater than the ratio set forth below opposite such period:

 

Four Fiscal Quarter Periods Ending

Maximum Consolidated Leverage Ratio

September 30, 2005 through September 30, 2006

4.0:1.0

December 31, 2006 through September 30, 2007

3.5:1.0

December 31, 2007 and each fiscal quarter thereafter

3.0:1.0

7.12 Capital Expenditures. Make or become legally obligated to make any Capital
Expenditure not exceeding, in the aggregate for Holdings and its Subsidiaries
during each fiscal year set forth below, the amount set forth opposite such
fiscal year:

 

Fiscal Year

Amount

2005

$ 15,000,000

2006

$ 15,000,000

2007

$ 15,000,000

2008

$ 20,000,000

2009

$ 20,000,000

2010

$ 20,000,000

; provided, however, that so long as no Default has occurred and is continuing
or would result from such expenditure, (a) any portion of any amount set forth
above, if not expended in the fiscal year for which it is permitted above, may
be carried over for expenditure in the next following fiscal year and (b) up to
an additional $10,000,000 in the aggregate may be used by the Borrowers to
purchase real property located in England.

7.13 Amendments of Organization Documents. Amend any of its Organization
Documents in a manner adverse to Holdings and its Subsidiaries, the
Administrative Agent or the Lenders.

7.14 Accounting Changes. Make any change in (a) accounting policies or reporting
practices, except as required by GAAP, or (b) fiscal year.

7.15 Prepayments, Etc. of Indebtedness. Prepay, redeem, purchase, defease or
otherwise satisfy prior to the scheduled maturity thereof in any manner, the
Senior Notes, other than (i) repurchases in an aggregate amount not to exceed
$20,000,000 and (ii) any refinancing, refunding, renewal or extension in
accordance with Section 7.02(g).

7.16 Amendment, Etc. of the Senior Notes. Amend, modify or change in any manner
any term or condition of the Senior Notes, except for any refinancing,
refunding, renewal or extension thereof permitted by Section 7.02(g).

7.17 Partnerships, Etc. Become a gene ral partner in any general or limited
partnership or joint venture, except that any Subsidiary the sole assets of
which consist of its interest in a partnership or joint venture may become a
general partner in such partnership or joint venture.

 

 

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7.18 SPTC Delaware. Permit SPTC Delaware to enter into a Guarantee (other than a
Guarantee of the Obligations of the Loan Parties) or create, incur, assume or
suffer to exist any Lien upon any of its property, assets or revenues, whether
now owned or hereafter acquired, or sign or file or suffer to exist under the
Uniform Commercial Code of any jurisdiction a financing statement that names
SPTC Delaware as debtor, or assign any accounts or other rights to receive
income, except as contemplated by Section 6.12(d).

7.19 York Capital Lease. Change or amend any document related to the York
Capital Lease in a manner adverse to the interests of the Administrative Agent
and the Lenders in any material respect.

ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES

8.01 Events of Default. Any of the following shall constitute an Event of
Default:

(a) Non-Payment. Any Borrower or any other Loan Party fails to (i) pay when and
as required to be paid herein, any amount of principal of any Loan or any L/C
Obligation or deposit any funds as Cash Collateral in respect of L/C
Obligations, or (ii) pay within three days after the same becomes due, any
interest on any Loan or on any L/C Obligation, or any fee due hereunder, or
(iii) pay within five days after the same becomes due, any other amount payable
hereunder or under any other Loan Document; or

(b) Specific Covenants. Any Loan Party fails to perform or observe any term,
covenant or agreement contained in any of Section 6.01, 6.02, 6.03, 6.06, 6.08,
6.12, or Article VII; or

(c) Other Defaults. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in Section 8.01(a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for 30 days; or

(d) Representations and Warranties. Any representation, warranty, certification
or statement of fact made or deemed made by or on behalf of any Borrower or any
other Loan Party herein, in any other Loan Document, or in any document
delivered in connection herewith or therewith shall be incorrect or misleading
when made or deemed made; or

(e) Cross-Default. (i) Any Loan Party or any Subsidiary thereof (A) fails to
make any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee
(other than Indebtedness hereunder and Indebtedness under Swap Contracts) having
an aggregate principal amount (including undrawn committed or available amounts
and including amounts owing to all creditors under any combined or syndicated
credit arrangement) of more than the Threshold Amount, or (B) fails to observe
or perform any

 

 

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other agreement or condition relating to any such Indebtedness or Guarantee or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event occurs, the effect of which default or other event
is to cause, or to permit the holder or holders of such Indebtedness or the
beneficiary or beneficiaries of such Guarantee (or a trustee or agent on behalf
of such holder or holders or beneficiary or beneficiaries) to cause, with the
giving of notice if required, such Indebtedness to be demanded or to become due
or to be repurchased, prepaid, defeased or redeemed (automatically or
otherwise), or an offer to repurchase, prepay, defease or redeem such
Indebtedness to be made, prior to its stated maturity, or such Guarantee to
become payable or cash collateral in respect thereof to be demanded; or (ii)
there occurs under any Swap Contract an Early Termination Date (as defined in
such Swap Contract) resulting from (A) any event of default under such Swap
Contract as to which a Loan Party or any Subsidiary thereof is the Defaulting
Party (as defined in such Swap Contract) or (B) any Termination Event (as so
defined) under such Swap Contract as to which a Loan Party or any Subsidiary
thereof is an Affected Party (as so defined) and, in either event, the Swap
Termination Value owed by such Loan Party or such Subsidiary as a result thereof
is greater than the Threshold Amount; or

(f) Insolvency Proceedings, Etc. (i) Any Loan Party or any Subsidiary thereof
institutes or consents to the institution of any proceeding under any Debtor
Relief Law, or makes an assignment for the benefit of creditors; or applies for
or consents to the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer for it or for all or any material
part of its property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without the
application or consent of such Person and the appointment continues undischarged
or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law
relating to any such Person or to all or any material part of its property is
instituted without the consent of such Person and continues undismissed or
unstayed for 60 calendar days, or an order for relief is entered in any such
proceeding or (ii) in the case of any U.K. Loan Party or any of its
Subsidiaries, any corporate action, legal proceedings or other procedure or step
is taken in relation to:

 

1.

the suspension of payments, a moratorium of any indebtedness, winding up,
dissolution, administration or reorganization (by way of voluntary arrangement,
scheme of arrangement or otherwise) of any such Person other than a solvent
liquidation or reorganization permitted under this Agreement which is not in
respect of a Borrower;

 

2.

a composition, compromise, assignment or arrangement with any creditor of any
such Person;

 

3.

the appointment of a liquidator (other than in respect of a solvent liquidation
of any such Person permitted under this Agreement which is not in respect of a
Borrower) receiver, administrative receiver, administrator, compulsory manager
or other similar officer in respect of any such Person or any of its assets or
the passing of a resolutions for filing of a petition or application for

 

 

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such appointment or the delivery of a notice of intention to make such an
appointment;

 

4.

enforcement of any Lien over any assets of any such Person; or

 

5.

any winding up petition presented by a creditor (other than a petition which is
frivolous or vexatious and is contested in good faith and with diligence and is
discharged, stayed or dismissed within 60 days of commencement or, if earlier,
the date on which it is advertised); or

(g) Inability to Pay Debts; Attachment. (i) Any Loan Party or any Subsidiary
thereof admits in writing its inability to pay its debts as they become due, or
(ii) any writ or warrant of attachment or execution or similar process is issued
or levied against all or any material part of the property of any such Person
and is not released, vacated or fully bonded within 30 days after its issue or
levy or (iii) or in the case of any U.K. Loan Party, is deemed unable to pay its
debts within the meaning of section 123(1) of the Insolvency Act 1986; or

(h) Judgments. There is entered against any Loan Party or any Subsidiary thereof
(i) a final judgment or order for the payment of money in an aggregate amount
exceeding the Threshold Amount (to the extent not covered by independent
third-party insurance as to which the insurer is rated at least “A” by A.M. Best
Company, has been notified of the potential claim and does not dispute
coverage), or (ii) any one or more non-monetary final judgments that have, or
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect and, in either case, (A) enforcement proceedings are
commenced by any creditor upon such judgment or order, or (B) there is a period
of 30 consecutive days during which a stay of enforcement of such judgment, by
reason of a pending appeal or otherwise, is not in effect; or

(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of Holdings under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC or similar liabilities of any Loan Party under a
Foreign Plan, in each case in an aggregate amount in excess of the Threshold
Amount, or (ii) a Borrower or any ERISA Affiliate fails to pay when due, after
the expiration of any applicable grace period, any installment payment with
respect to its withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan, or a similar event occurs with respect to any Foreign Plan
or the U.K. Pensions Regulators (being the body corporate established as such
under Part 1 of the Pensions Act 2004) issues a financial support direction
under section 43 of the Pensions Act 2004 or a contribution notice under section
38 or 47 of the Pensions Act 2004 to Holdings or any of its Subsidiaries, in
each case in or in respect of an aggregate amount in excess of the Threshold
Amount; or

(j) Invalidity of Loan Documents. Any provision of any Loan Document, at any
time after its execution and delivery and for any reason other than as expressly
permitted hereunder or thereunder or satisfaction in full of all the
Obligations, ceases to be in full force and effect; or any Loan Party or any
other Person contests in any manner the

 

 

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validity or enforceability of any provision of any Loan Document; or any Loan
Party denies that it has any or further liability or obligation under any
provision of any Loan Document, or purports to revoke, terminate or rescind any
provision of any Loan Document; or

(k) Change of Control. There occurs any Change of Control; or

(l) Collateral Documents. Any Collateral Document after delivery thereof
pursuant to Section 4.01 or 6.12 shall for any reason (other than pursuant to
the terms thereof) cease to create a valid and perfected first priority Lien
(subject to Liens permitted by Section 7.01) on the Collateral purported to be
covered thereby.

8.02 Remedies upon Event of Default. If any Event of Default occurs and is
continuing, the Administrative Agent shall, at the request of, or may, with the
consent of, the Required Lenders, take any or all of the following actions:

(a) declare the commitment of each Lender to make Loans and any obligation of
the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such
commitments and obligation shall be terminated;

(b) declare the unpaid principal amount of all outstanding Loans, all interest
accrued and unpaid thereon, and all other amounts owing or payable hereunder or
under any other Loan Document to be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrowers;

(c) require that the Borrowers Cash Collateralize the L/C Obligations (in an
amount equal to the then Outstanding Amount thereof); and

(d) exercise on behalf of itself, the Lenders and the L/C Issuer all rights and
remedies available to it and the Lenders under the Loan Documents;

provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to any U.S. Borrower under the Bankruptcy Code of
the United States or under any Debtor Relief Law with respect to any other
Borrower, the obligation of each Lender to make Loans and any obligation of the
L/C Issuer to make L/C Credit Extensions shall automatically terminate, the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable, and the
obligation of the Borrowers to Cash Collateralize the L/C Obligations as
aforesaid shall automatically become effective, in each case without further act
of the Administrative Agent or any Lender.

8.03 Application of Funds. After the exercise of remedies provided for in
Section 8.02 (or after the Loans have automatically become immediately due and
payable and the L/C Obligations have automatically been required to be Cash
Collateralized as set forth in the proviso to Section 8.02), any amounts
received on account of the Obligations shall be applied by the Administrative
Agent in the following order:

 

 

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First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including fees, charges and
disbursements of counsel to the Administrative Agent and amounts payable under
Article III) payable to the Administrative Agent in its capacity as such;

Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal, interest and Letter of
Credit Fees) payable to the Lenders and the L/C Issuer (including fees, charges
and disbursements of counsel to the respective Lenders and the L/C Issuer and
amounts payable under Article III, ratably among them in proportion to the
respective amounts described in this clause Second payable to them;

Third, to payment of that portion of the Obligations constituting accrued and
unpaid Letter of Credit Fees and interest on the Loans, L/C Borrowings and other
Obligations, ratably among the Lenders and the L/C Issuer in proportion to the
respective amounts described in this clause Third payable to them;

Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans, L/C Borrowings and amounts owing under Secured Hedge
Agreements and Secured Cash Management Agreements, ratably among the Lenders,
the L/C Issuer, the Hedge Banks and the Cash Management Banks in proportion to
the respective amounts described in this clause Fourth held by them;

Fifth, to the Administrative Agent for the account of the L/C Issuer, to Cash
Collateralize that portion of L/C Obligations comprised of the aggregate undrawn
amount of Letters of Credit; and

Last, the balance, if any, after all of the Obligations have been indefeasibly
paid in full, to the Borrowers or as otherwise required by Law.

Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fifth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.

ARTICLE IX

ADMINISTRATIVE AGENT

9.01 Appointment and Authority. (a) Each of the Lenders and the L/C Issuer
hereby irrevocably appoints Bank of America to act on its behalf as the
Administrative Agent hereunder and under the other Loan Documents and authorizes
the Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental
thereto. The provisions of this Article are solely for the benefit of the
Administrative Agent, the Lenders and the L/C Issuer, and the Borrowers shall
not have rights as a third party beneficiary of any of such provisions.

 

 

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(b) The Administrative Agent shall also act as the “collateral agent” under the
Loan Documents, and each of the Lenders (in its capacities as a Lender, Swing
Line Lender (if applicable), potential Hedge Bank and potential Cash Management
Banks) and the L/C Issuer hereby irrevocably appoints and authorizes the
Administrative Agent to act as the agent and trustee of such Lender and the L/C
Issuer for purposes of acquiring, holding and enforcing any and all Liens on
Collateral granted by any of the Loan Parties to secure any of the Obligations,
together with such powers and discretion as are reasonably incidental thereto.
In this connection, the Administrative Agent, as “collateral agent” and any
co-agents, sub-agents and attorneys -in- fact appointed by the Administrative
Agent pursuant to Section 9.05 for purposes of holding or enforcing any Lien on
the Collateral (or any portion thereof) granted under the Collateral Documents,
or for exercising any rights and remedies thereunder at the direction of the
Administrative Agent), shall be entitled to the benefits of all provisions of
this Article IX and Article X (including Section 10.04(c), as though such
co-agents, sub-agents and attorneys- in- fact were the “collateral agent” under
the Loan Documents) as if set forth in full herein with respect thereto.

9.02 Rights as a Lender. The Person serving as the Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the
Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its individual capacity. Such
Person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in
any kind of business with any Borrower or any Subsidiary or other Affiliate
thereof as if such Person were not the Administrative Agent hereunder and
without any duty to account therefor to the Lenders.

9.03 Exculpatory Provisions. The Administrative Agent shall not have any duties
or obligations except those expressly set forth herein and in the other Loan
Documents. Without limiting the generality of the foregoing, the Administrative
Agent:

(a) shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing;

(b) shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Administrative Agent
is required to exercise as directed in writing by the Required Lenders (or such
other number or percentage of the Lenders as shall be expressly provided for
herein or in the other Loan Documents), provided that the Administrative Agent
shall not be required to take any action that, in its opinion or the opinion of
its counsel, may expose the Administrative Agent to liability or that is
contrary to any Loan Document or applicable law; and

(c) shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to Holdings or any of its Affiliates that is
communicated to or obtained by the Person serving as the Administrative Agent or
any of its Affiliates in any capacity.

 

 

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The Administrative Agent shall not be liable for any action taken or not taken
by it (i) with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence of
its own gross negligence or willful misconduct. The Administrative Agent shall
be deemed not to have knowledge of any Default unless and until notice
describing such Default is given to the Administrative Agent by any Borrower, a
Lender or the L/C Issuer.

The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document, or the creation,
perfection or priority of any Lien purported to be created by the Collateral
Documents, (v) the value or the sufficiency of any Collateral, or (vi) the
satisfaction of any condition set forth in Article IV or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.

9.04 Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document or other
writing (including any electronic message, Internet or intranet website posting
or other distribution) believed by it to be genuine and to have been signed,
sent or otherwise authenticated by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to have been made by the proper Person, and shall not incur any liability
for relying thereon. In determining compliance with any condition hereunder to
the making of a Loan, or the issuance of a Letter of Credit, that by its terms
must be fulfilled to the satisfaction of a Lender or the L/C Issuer, the
Administrative Agent may presume that such condition is satisfactory to such
Lender or the L/C Issuer unless the Administrative Agent shall have received
notice to the contrary from such Lender or the L/C Issuer prior to the making of
such Loan or the issuance of such Letter of Credit. The Administrative Agent may
consult with legal counsel (who may be counsel for the Borrowers), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.

9.05 Delegation of Duties. The Administrative Agent may perform any and all of
its duties and exercise its rights and powers hereunder or under any other Loan
Document by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of this
Article shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.

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9.06 Resignation of Administrative Agent. The Administrative Agent may at any
time give notice of its resignation to the Lenders, the L/C Issuer and the
Borrowers. Upon receipt of any such notice of resignation, the Required Lenders
shall have the right, in consultation with the Borrowers, to appoint a
successor, which shall be a bank with an office in the United States, or an
Affiliate of any such bank with an office in the United States. If no such
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative Agent
gives notice of its resignation, then the retiring Administrative Agent may on
behalf of the Lenders and the L/C Issuer, appoint a successor Administrative
Agent meeting the qualifications set forth above; provided that if the
Administrative Agent shall notify the Borrowers and the Lenders that no
qualifying Person has accepted such appointment, then such resignation shall
nonetheless become effective in accordance with such notice and (a) the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents (except that in the case of any
collateral security held by the Administrative Agent on behalf of the Lenders or
the L/C Issuer under any of the Loan Documents, the retiring Administrative
Agent shall continue to hold such collateral security until such time as a
successor Administrative Agent is appointed) and (b) all payments,
communications and determinations provided to be made by, to or through the
Administrative Agent shall instead be made by or to each Lender and the L/C
Issuer directly, until such time as the Required Lenders appoint a successor
Administrative Agent as provided for above in this Section. Upon the acceptance
of a successor’s appointment as Administrative Agent hereunder, such successor
shall succeed to and become vested with all of the rights, powers, privileges
and duties of the retiring (or retired) Administrative Agent, and the retiring
Administrative Agent shall be discharged from all of its duties and obligations
hereunder or under the other Loan Documents (if not already discharged therefrom
as provided above in this Section). The fees payable by the Borrowers to a
successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrowers and such successor.
After the retiring Administrative Agent’s resignation hereunder and under the
other Loan Documents, the provisions of this Article and Section 10.04 shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while the retiring Administrative Agent
was acting as Administrative Agent.

Any resignation by Bank of America as Administrative Agent pursuant to this
Section shall also constitute its resignation as L/C Issuer and Swing Line
Lender. Upon the acceptance of a successor’s appointment as Administrative Agent
hereunder, (i) such successor shall succeed to and become vested with all of the
rights, powers, privileges and duties of the retiring L/C Issuer and Swing Line
Lender, (ii) the retiring L/C Issuer and Swing Line Lender shall be discharged
from all of their respective duties and obligations hereunder or under the other
Loan Documents, and (iii) the successor L/C Issuer shall issue letters of credit
in substitution for the Letters of Credit, if any, outstanding at the time of
such succession or make other arrangements satisfactory to the retiring L/C
Issuer to effectively assume the obligations of the retiring L/C Issuer with
respect to such Letters of Credit.

9.07 Non-Reliance on Administrative Agent and Other Lenders. Each Lender and the
L/C Issuer acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such

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documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender and the L/C
Issuer also acknowledges that it will, independently and without reliance upon
the Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or any related
agreement or any document furnished hereunder or thereunder.

9.08 No Other Duties, Etc. Anything herein to the contrary notwithstanding, none
of the Bookrunners or Arrangers listed on the cover page hereof shall have any
powers, duties or responsibilities under this Agreement or any of the other Loan
Documents, except in its capacity, as applicable, as the Administrative Agent, a
Lender or the L/C Issuer hereunder.

9.09 Administrative Agent May File Proofs of Claim. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
any Loan Party, the Administrative Agent (irrespective of whether the principal
of any Loan or L/C Obligation shall then be due and payable as herein expressed
or by declaration or otherwise and irrespective of whether the Administrative
Agent shall have made any demand on the Borrowers) shall be entitled and
empowered, by intervention in such proceeding or otherwise.

(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans, L/C Obligations and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Lenders, the L/C
Issuer and the Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Lenders, the L/C
Issuer and the Administrative Agent and their respective agents and counsel and
all other amounts due the Lenders, the L/C Issuer and the Administrative Agent
under Sections 2.03(i) and (j), 2.09) allowed in such judicial proceeding; and

(b) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and the L/C Issuer to make such payments to the Administrative Agent
and, if the Administrative Agent shall consent to the making of such payments
directly to the Lenders and the L/C Issuer, to pay to the Administrative Agent
any amount due for the reasonable compensation, expenses, disbursements and
advances of the Administrative Agent and its agents and counsel, and any other
amounts due the Administrative Agent under Sections 2.09.

Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender or the L/C
Issuer any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or to authorize the
Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding.

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9.10 Collateral and Guaranty Matters. The Lenders and the L/C Issuer irrevocably
authorize the Administrative Agent, at its option and in its discretion,

(a) to release any Lien on any property granted to or held by the Administrative
Agent under any Loan Document (i) upon termination of the Aggregate Commitments
and payment in full of all Obligations (other than contingent indemnification
obligations) and the expiration or termination of all Letters of Credit, (ii)
that is sold or to be sold as part of or in connection with any sale permitted
hereunder or under any other Loan Document, or (iii) if approved, authorized or
ratified in writing in accordance with Section 10.01;

(b) to release any Guarantor from its obligations under the U.K. Guaranty or the
Domestic Guaranty, as the case may be, if such Person ceases to be a Subsidiary
as a result of a transaction permitted hereunder; and

(c) to subordinate or release any Lien on any property granted to or held by the
Administrative Agent under any Loan Document to the holder of any Lien on such
property that is permitted by Section 7.01(i) or 7.01(j).

Upon request by the Administrative Agent at any time, the Required Lenders will
confirm in writing the Administrative Agent’s authority to release or
subordinate its interest in particular types or items of property, or to release
any Guarantor from its obligations under the U.K. Guaranty or the Domestic
Guaranty, as the case may be, pursuant to this Section 9.10. In each case as
specified in this Section 9.10, the Administrative Agent will, at the Borrowers’
expense, execute and deliver to the applicable Loan Party such documents as such
Loan Party may reasonably request to evidence the release of such item of
Collateral from the assignment and security interest granted under the
Collateral Documents or to subordinate its interest in such item, or to release
such Guarantor from its obligations under the U.K. Guaranty or the Domestic
Guaranty, in each case in accordance with the terms of the Loan Documents and
this Section 9.10.

ARTICLE X

MISCELLANEOUS

10.01 Amendments, Etc. No amendment or waiver of any provision of this Agreement
or any other Loan Document, and no consent to any departure by any Borrower or
any other Loan Party therefrom, shall be effective unless in writing signed by
the Required Lenders and the Borrower, or the applicable Loan Party, as the case
may be, and acknowledged by the Administrative Agent, and each such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such amendment, waiver or
consent shall:

(a) waive any condition set forth in Section 4.01(a), or, in the case of the
initial Credit Extension, Section 4.03, without the written consent of each
Lender;

(b) extend or increase the Commitment of any Lender (or reinstate any Commitment
terminated pursuant to Section 8.02) without the written consent of such Lender;

 

 

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(c) postpone any date fixed by this Agreement or any other Loan Document for any
payment (excluding mandatory prepayments) of principal, interest, fees or other
amounts due to the Lenders (or any of them) hereunder or under such other Loan
Document without the written consent of each Lender entitled to such payment;

(d) reduce the principal of, or the rate of interest specified herein on, any
Loan or L/C Borrowing, or (subject to clause (iv) of the second proviso to this
Section 10.01) any fees or other amounts payable hereunder or under any other
Loan Document without the written consent of each Lender entitled to such
amount; provided, however, that only the consent of the Required Lenders shall
be necessary to amend the definition of “Default Rate” or to waive any
obligation of the Borrowers to pay interest or Letter of Credit Fees at the
Default Rate;

(e) change Section 8.03 in a manner that would alter the pro rata sharing of
payments required thereby without the written consent of each Lender;

(f) change any provision of this Section 10.01 or the definition of “Required
Lenders” or any other provision hereof specifying the number or percentage of
Lenders required to amend, waive or otherwise modify any rights hereunder or
make any determination or grant any consent hereunder, without the written
consent of each Lender;

(g) release all or substantially all of the Collateral in any transaction or
series of related transactions, without the written consent of each Lender; or

(h) release all or substantially all of the value of the Domestic Guaranty and
the U.K. Guaranty, without the written consent of each Lender;

and provided further that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above,
affect the rights or duties of the L/C Issuer under this Agreement or any Issuer
Document relating to any Letter of Credit issued or to be issued by it; (ii) no
amendment, waiver or consent shall, unless in writing and signed by the Swing
Line Lender in addition to the Lenders required above, affect the rights or
duties of the Swing Line Lender under this Agreement; (iii) no amendment, waiver
or consent shall, unless in writing and signed by the Administrative Agent in
addition to the Lenders required above, affect the rights or duties of the
Administrative Agent under this Agreement or any other Loan Document; (iv) the
Fee Letter may be amended, or rights or privileges thereunder waived, in a
writing executed only by the parties thereto; and (v) Section 10.06(i) may not
be amended, waived or otherwise modified without the consent of each Granting
Lender all or any part of whose Loans are being funded by an SPC at the time of
such amendment, renewal or other modification. Notwithstanding anything to the
contrary herein, no Defaulting Lender shall have any right to approve or
disapprove any amendment, waiver or consent hereunder, except that the
Commitment of such Lender may not be increased or extended without the consent
of such Lender.

10.02 Notices; Effectiveness; Electronic Communications. (a) Notices Generally.
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given by telephone (and except as provided in subsection (b) below), all notices
and other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopier as follows, and all notices and other
communications expressly permitted hereunder to be given by telephone shall be
made to the applicable telephone number, as follows:

(i) if to Holdings, the Borrowers, the Administrative Agent, the L/C Issuer or
the Swing Line Lender, to the address, telecopier number, electronic mail
address or telephone number specified for such Person on Schedule 10.02; and

(ii) if to any other Lender, to the address, telecopier number, electronic mail
address or telephone number specified in its Administrative Questionnaire.

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient). Notices delivered through electronic communications to the extent
provided in subsection (b) below shall be effective as provided in such
subsection (b).

(b) Electronic Communications. Notices and other communications to the Lenders
and the L/C Issuer hereunder may be delivered or furnished by electronic
communication (including e-mail and Internet or intranet websites) pursuant to
procedures approved by the Administrative Agent, provided that the foregoing
shall not apply to notices to any Lender or the L/C Issuer pursuant to Article
II if such Lender or the L/C Issuer, as applicable, has notified the
Administrative Agent that it is incapable of receiving notices under such
Article by electronic communication. The Administrative Agent or any Borrower
may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it,
provided that approval of such procedures may be limited to particular notices
or communications.

Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

(c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT
PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE
BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY

 

 

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OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT
PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event
shall the Administrative Agent or any of its Related Parties (collectively, the
“Agent Parties”) have any liability to any Borrower, any Lender, the L/C Issuer
or any other Person for losses, claims, damages, liabilities or expenses of any
kind (whether in tort, contract or otherwise) arising out of the Borrower’s or
the Administrative Agent’s transmission of Borrower Materials through the
Internet, except to the extent that such losses, claims, damages, liabilities or
expenses are determined by a court of competent jurisdiction by a final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Agent Party; provided, however, that in no event shall any
Agent Party have any liability to any Borrower, any Lender, the L/C Issuer or
any other Person for indirect, special, incidental, consequential or punitive
damages (as opposed to direct or actual damages).

(d) Change of Address, Etc. Each of Holdings, each Borrower, the Administrative
Agent, the L/C Issuer and the Swing Line Lender may change its address,
telecopier or telephone number for notices and other communications hereunder by
notice to the other parties hereto. Each other Lender may change its address,
telecopier or telephone number for notices and other communications hereunder by
notice to the Borrower, the Administrative Agent, the L/C Issuer and the Swing
Line Lender. In addition, each Lender agrees to notify the Administrative Agent
from time to time to ensure that the Administrative Agent has on record (i) an
effective address, contact name, telephone number, telecopier number and
electronic mail address to which notices and other communications may be sent
and (ii) accurate wire instructions for such Lender.

(e) Reliance by Administrative Agent, L/C Issuer and Lenders. The Administrative
Agent, the L/C Issuer and the Lenders shall be entitled to rely and act upon any
notices (including telephonic Committed Loan Notices and Swing Line Loan
Notices) purportedly given by or on behalf of a Borrower even if (i) such
notices were not made in a manner specified herein, were incomplete or were not
preceded or followed by any other form of notice specified herein, or (ii) the
terms thereof, as understood by the recipient, varied from any confirmation
thereof. Each Borrower shall indemnify the Administrative Agent, the L/C Issuer,
each Lender and the Related Parties of each of them from all losses, costs,
expenses and liabilities resulting from the reliance by such Person on each
notice purportedly given by or on behalf of the Borrower. All telephonic notices
to and other telephonic communications with the Administrative Agent may be
recorded by the Administrative Agent, and each of the parties hereto hereby
consents to such recording.

10.03 No Waiver; Cumulative Remedies. No failure by any Lender, the L/C Issuer
or the Administrative Agent to exercise, and no delay by any such Person in
exercising, any right, remedy, power or privilege hereunder or under any other
Loan Document shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided,

 

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and provided under each other Loan Document, are cumulative and not exclusive of
any rights, remedies, powers and privileges provided by law.

10.04 Expenses; Indemnity; Damage Waiver. (a) Costs and Expenses. The Borrowers
shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates (including the reasonable fees, charges
and disbursements of counsel for the Administrative Agent), in connection with
the syndication of the credit facilities provided for herein, the preparation,
negotiation, execution, delivery and administration of this Agreement and the
other Loan Documents or any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket
expenses incurred by the L/C Issuer in connection with the issuance, amendment,
renewal or extension of any Letter of Credit or any demand for payment
thereunder and (iii) all out-of-pocket expenses incurred by the Administrative
Agent, any Lender or the L/C Issuer (including the fees, charges and
disbursements of any counsel for the Administrative Agent, any Lender or the L/C
Issuer) (A) in connection with this Agreement and the other Loan Documents,
including its rights under this Section, or (B) in connection with Loans made or
Letters of Credit issued hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
Loans or Letters of Credit.

(b) Indemnification by the Borrowers. Each Borrower shall indemnify the
Administrative Agent (and any sub-agent thereof), each Lender and the L/C
Issuer, and each Related Party of any of the foregoing Persons (each such Person
being called an “Indemnitee”) against, and hold each Indemnitee harmless from,
any and all losses, claims, damages, liabilities and related expenses (including
the fees, charges and disbursements of any counsel for any Indemnitee), and
shall indemnify and hold harmless each Indemnitee from all fees and time charges
and disbursements for attorneys who may be employees of any Indemnitee, incurred
by any Indemnitee or asserted against any Indemnitee by any third party or by
any Borrower or any other Loan Party arising out of, in connection with, or as a
result of (i) the execution or delivery of this Agreement, any other Loan
Document or any agreement or instrument contemplated hereby or thereby, the
performance by the parties hereto of their respective obligations hereunder or
thereunder or the consummation of the transactions contemplated hereby or
thereby, or, in the case of the Administrative Agent (and any sub-agent thereof)
and its Related Parties only, the administration of this Agreement and the other
Loan Documents, (ii) any Loan or Letter of Credit or the use or proposed use of
the proceeds therefrom (including any refusal by the L/C Issuer to honor a
demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such Letter
of Credit), (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by any Borrower or any of
its Subsidiaries, or any Environmental Liability related in any way to any
Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory, whether brought by a third
party or by any Borrower or any other Loan Party or any of the Borrower’s or
such Loan Party’s directors, shareholders or creditors, and regardless of
whether any Indemnitee is a party thereto; provided that such indemnity shall
not, as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses (x) are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
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misconduct of such Indemnitee or (y) result from a claim brought by any Borrower
or any other Loan Party against an Indemnitee for breach in bad faith of such
Indemnitee’s obligations hereunder or under any other Loan Document, if such
Borrower or such Loan Party has obtained a final and nonappealable judgment in
its favor on such claim as determined by a court of competent jurisdiction.

(c) Reimbursement by Lenders. To the extent that the Borrowers for any reason
fail to indefeasibly pay any amount required under subsection (a) or (b) of this
Section to be paid by them to the Administrative Agent (or any sub-agent
thereof), the L/C Issuer or any Related Party of any of the foregoing, each
Lender severally agrees to pay to the Administrative Agent (or any such
sub-agent), the L/C Issuer or such Related Party, as the case may be, such
Lender’s Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount,
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent (or any such sub-agent) or the L/C Issuer in
its capacity as such, or against any Related Party of any of the foregoing
acting for the Administrative Agent (or any such sub-agent) or L/C Issuer in
connection with such capacity. The obligations of the Lenders under this
subsection (c) are subject to the provisions of Section 2.12(d).

(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable law, each Borrower shall not assert, and hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement, any other
Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or Letter of Credit or the
use of the proceeds thereof. No Indemnitee referred to in subsection (b) above
shall be liable for any damages arising from the use by unintended recipients of
any information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or the other Loan Documents or the transactions contemplated hereby or
thereby.

(e) Payments. All amounts due under this Section shall be payable not later than
ten Business Days after demand therefor.

(f) Survival. The agreements in this Section shall survive the resignation of
the Administrative Agent and the L/C Issuer, the replacement of any Lender, the
termination of the Aggregate Commitments and the repayment, satisfaction or
discharge of all the other Obligations.

10.05 Payments Set Aside. To the extent that any payment by or on behalf of the
Borrowers is made to the Administrative Agent, the L/C Issuer or any Lender, or
the Administrative Agent, the L/C Issuer or any Lender exercises its right of
setoff, and such payment or the proceeds of such setoff or any part thereof is
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required (including pursuant to any settlement entered into by the
Administrative Agent, the L/C Issuer or such Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
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Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such setoff had not occurred, and (b) each Lender and the L/C Issuer severally
agrees to pay to the Administrative Agent upon demand its applicable share
(without duplication) of any amount so recovered from or repaid by the
Administrative Agent, plus interest thereon from the date of such demand to the
date such payment is made at a rate per annum equal to the Overnight Rate from
time to time in effect. The obligations of the Lenders and the L/C Issuer under
clause (b) of the preceding sentence shall survive the payment in full of the
Obligations and the termination of this Agreement.

10.06 Successors and Assigns. (a) Successors and Assigns Generally. The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby,
except that none of the Borrowers may assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of the
Administrative Agent and each Lender and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an Eligible
Assignee in accordance with the provisions of Section 10.06(b), (ii) by way of
participation in accordance with the provisions of Section 10.06(d), (iii) by
way of pledge or assignment of a security interest subject to the restrictions
of Section 10.06(f), or (iv) to an SPC in accordance with the provisions of
Section 10.06(i) (and any other attempted assignment or transfer by any party
hereto shall be null and void). Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby, Participants to the
extent provided in subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the L/C Issuer and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.

(b) Assignments by Lenders. Any Lender may at any time assign to one or more
Eligible Assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans (including
for purposes of this Section 10.06(b), participations in L/C Obligations and in
Swing Line Loans) at the time owing to it); provided that

(i) except in the case of an assignment of the entire remaining amount of the
assigning Lender’s Commitment and the Loans at the time owing to it or in the
case of an assignment to a Lender or an Affiliate of a Lender or an Approved
Fund with respect to a Lender, the aggregate amount of the Commitment (which for
this purpose includes Loans outstanding thereunder) or, if the applicable
Commitment is not then in effect, the principal outstanding balance of the Loans
of the assigning Lender subject to each such assignment, determined as of the
date the Assignment and Assumption with respect to such assignment is delivered
to the Administrative Agent or, if “Trade Date” is specified in the Assignment
and Assumption, as of the Trade Date, shall not be less than $5,000,000, unless
each of the Administrative Agent and, so long as no Event of Default has
occurred and is continuing, Holdings otherwise consents (each such consent not
to be unreasonably withheld or delayed); provided, however, that concurrent
assignments to members of an Assignee Group and concurrent assignments from
members of an Assignee Group to a single Eligible Assignee (or to an Eligible
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its Assignee Group) will be treated as a single assignment for purposes of
determining whether such minimum amount has been met;

(ii) each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement
with respect to the Loans or the Commitment assigned, except that this clause
(ii) shall not (A) apply to rights in respect of Swing Line Loans or (B)
prohibit any Lender from assigning all or a portion of its rights and
obligations among separate Facilities on a non-pro rata basis;

(iii) any assignment of a Commitment must be approved by the Administrative
Agent, the L/C Issuer and the Swing Line Lender unless the Person that is the
proposed assignee is itself a Lender (whether or not the proposed assignee would
otherwise qualify as an Eligible Assignee);

(iv) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee in the amount, if any, required as set forth in Schedule
10.06, and the Eligible Assignee, if it shall not be a Lender, shall deliver to
the Administrative Agent an Administrative Questionnaire

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the Eligible Assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 3.01, 3.04, 3.05 and 10.04 with
respect to facts and circumstances occurring prior to the effective date of such
assignment). Upon request, each Borrower (at its expense) shall execute and
deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
Section 10.06(d).

(c) Register. The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at the Administrative Agent’s Office a
copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Loans and L/C Obligations owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The entries in
the Register shall be conclusive, and the Borrowers, the Administrative Agent
and the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by each of the Borrowers and the L/C Issuer at any
reasonable time and from time to time upon reasonable prior notice. In addition,
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any time that a request for a consent for a material or substantive change to
the Loan Documents is pending, any Lender may request and receive from the
Administrative Agent a copy of the Register.

(d) Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrowers or the Administrative Agent, sell participations to any
Person (other than a natural person or any Borrowers or any of the Borrowers’
Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such
Lender’s rights and/or obligations under this Agreement (including all or a
portion of its Commitment and/or the Loans (including such Lender’s
participations in L/C Obligations and/or Swing Line Loans) owing to it);
provided that (i) such Lender’s obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrowers, the
Administrative Agent, the Lenders and the L/C Issuer shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, waiver or other modification
described in the first proviso to Section 10.01 that affects such Participant.
Subject to subsection (e) of this Section, the Borrowers agree that each
Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to Section 10.06(b). To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 10.08 as though it
were a Lender, provided such Participant agrees to be subject to Section 2.13 as
though it were a Lender.

(e) Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Section 3.01 or 3.04 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with Holdings’ prior written consent. A Participant that
would be a Foreign Lender or a U.K. Lender if it were a Lender shall not be
entitled to the benefits of Section 3.01 unless the Borrowers are notified of
the participation sold to such Participant and such Participant agrees, for the
benefit of the Borrowers, to comply with Section 3.01(e) as though it were a
Lender.

(f) Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Note, if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided
that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

(g) Electronic Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any

 

 

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applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.

(h) Resignation as L/C Issuer or Swing Line Lender after Assignment.
Notwithstanding anything to the contrary contained herein, if at any time Bank
of America assigns all of its Commitments and Revolving Credit Loans pursuant to
Section 10.06(b), Bank of America may, (i) upon 30 days’ notice to the Borrowers
and the Lenders, resign as L/C Issuer and/or (ii) upon 30 days’ notice to the
Borrowers, resign as Swing Line Lender. In the event of any such resignation as
L/C Issuer or Swing Line Lender, the Borrowers shall be entitled to appoint from
among the Lenders a successor L/C Issuer or Swing Line Lender hereunder;
provided, however, that no failure by the Borrowers to appoint any such
successor shall affect the resignation of Bank of America as L/C Issuer or Swing
Line Lender, as the case may be. If Bank of America resigns as L/C Issuer, it
shall retain all the rights, powers, privileges and duties of the L/C Issuer
hereunder with respect to all Letters of Credit outstanding as of the effective
date of its resignation as L/C Issuer and all L/C Obligations with respect
thereto (including the right to require the Lenders to make Base Rate Loans or
fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c)).
If Bank of America resigns as Swing Line Lender, it shall retain all the rights
of the Swing Line Lender provided for hereunder with respect to Swing Line Loans
made by it and outstanding as of the effective date of such resignation,
including the right to require the Lenders to make Base Rate Loans or fund risk
participations in outstanding Swing Line Loans pursuant to Section 2.04(c). Upon
the appointment of a successor L/C Issuer and/or Swing Line Lender, (a) such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring L/C Issuer or Swing Line Lender, as the
case may be, and (b) the successor L/C Issuer shall issue letters of credit in
substitution for the Letters of Credit, if any, outstanding at the time of such
succession or make other arrangements satisfactory to Bank of America to
effectively assume the obligations of Bank of America with respect to such
Letters of Credit.

(i) Special Purpose Funding Vehicles. Notwithstanding anything to the contrary
contained herein, any Lender (a “Granting Lender”) may grant to a special
purpose funding vehicle identified as such in writing from time to time by the
Granting Lender to the Administrative Agent and the Borrowers (an “SPC”) the
option to provide all or any part of any Loan that such Granting Lender would
otherwise be obligated to make pursuant to this Agreement; provided that (i)
nothing herein shall constitute a commitment by any SPC to fund any Loan, and
(ii) if an SPC elects not to exercise such option or otherwise fails to make all
or any part of such Loan, the Granting Lender shall be obligated to make such
Loan pursuant to the terms hereof or, if it fails to do so, to make such payment
to the Administrative Agent as is required under Section 2.12(b)(ii). Each party
hereto hereby agrees that (A) neither the grant to any SPC nor the exercise by
any SPC of such option shall increase the costs or expenses or otherwise
increase or change the obligations of the Borrowers under this Agreement
(including its obligations under Section 3.04), (B) no SPC shall be liable for
any indemnity or similar payment obligation under this Agreement for which a
Lender would be liable, and (C) the Granting Lender shall for all purposes,
including the approval of any amendment, waiver or other modification of any
provision of any Loan Document, remain the lender of record hereunder. The
making of a Loan by an SPC hereunder shall utilize the Commitment of the
Granting Lender to the same extent, and as if, such Loan were made by such
Granting Lender.

 

 

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In furtherance of the foregoing, each party hereto hereby agrees (which
agreement shall survive the termination of this Agreement) that, prior to the
date that is one year and one day after the payment in full of all outstanding
commercial paper or other senior debt of any SPC, it will not institute against,
or join any other Person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency, or liquidation proceeding under the
laws of the United States or any State thereof. Notwithstanding anything to the
contrary contained herein, any SPC may (1) with notice to, but without prior
consent of any Borrower and the Administrative Agent and with the payment of a
processing fee of $2,500, assign all or any portion of its right to receive
payment with respect to any Loan to the Granting Lender and (2) disclose on a
confidential basis any non-public information relating to its funding of Loans
to any rating agency, commercial paper dealer or provider of any surety or
Guarantee or credit or liquidity enhancement to such SPC.

10.07 Treatment of Certain Information; Confidentiality. Each of the
Administrative Agent, the Lenders and the L/C Issuer agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective
partners, directors, officers, employees, agents, advisors and representatives
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent requested by any regulatory
authority purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party hereto, (e) in connection with the
exercise of any remedies hereunder or under any other Loan Document or any
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to (i)
any assignee of or Participant in, or any prospective assignee of or Participant
in, any of its rights or obligations under this Agreement or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction
relating to the Borrowers and their obligations, (g) with the consent of
Holdings or (h) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section or (ii) becomes available to
the Administrative Agent, any Lender, the L/C Issuer or any of their respective
Affiliates on a nonconfidential basis from a source other than a Borrower.

For purposes of this Section, “Information” means all information received from
any Loan Party or any Subsidiary thereof relating to any Loan Party or any
Subsidiary thereof or their respective businesses, other than any such
information that is available to the Administrative Agent, any Lender or the L/C
Issuer on a nonconfidential basis prior to disclosure by any Loan Party or any
Subsidiary thereof, provided that, in the case of information received from a
Loan Party or any such Subsidiary after the date hereof, such information is
clearly identified at the time of delivery as confidential. Any Person required
to maintain the confidentiality of Information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.

 

 

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Each of the Administrative Agent, the Lenders and the L/C Issuer acknowledges
that (a) the Information may include material non-public information concerning
a Borrower or a Subsidiary, as the case may be, (b) it has developed compliance
procedures regarding the use of material non-public information and (c) it will
handle such material non-public information in accordance with applicable Law,
including Federal and state securities Laws.

10.08 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender, the L/C Issuer and each of their respective Affiliates
is hereby authorized at any time and from time to time to the fullest extent
permitted by applicable law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final, in whatever currency) at any
time held and other obligations (in whatever currency) at any time owing by such
Lender, the L/C Issuer or any such Affiliate to or for the credit or the account
of any Borrower against any and all of the obligations of such Borrower now or
hereafter existing under this Agreement or any other Loan Document to such
Lender or the L/C Issuer, irrespective of whether or not such Lender or the L/C
Issuer shall have made any demand under this Agreement or any other Loan
Document and although such obligations of the Borrowers may be contingent or
unmatured or are owed to a branch or office of such Lender or the L/C Issuer
different from the branch or office holding such deposit or obligated on such
indebtedness. The rights of each Lender, the L/C Issuer and their respective
Affiliates under this Section are in addition to other rights and remedies
(including other rights of setoff) that such Lender, the L/C Issuer or their
respective Affiliates may have. Each Lender and the L/C Issuer agrees to notify
the Borrowers and the Administrative Agent promptly after any such setoff and
application, provided that the failure to give such notice shall not affect the
validity of such setoff and application.

10.09 Interest Rate Limitation. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or
any Lender shall receive interest in an amount that exceeds the Maximum Rate,
the excess interest shall be applied to the principal of the Loans or, if it
exceeds such unpaid principal, refunded to the Borrowers. In determining whether
the interest contracted for, charged, or received by the Administrative Agent or
a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or unequal parts the total amount of interest throughout the contemplated
term of the Obligations hereunder.

10.10 Counterparts; Integration; Effectiveness. This Agreement may be executed
in counterparts (and by different parties hereto in different counterparts),
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement and the other Loan Documents
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. Except as provided in Section
4.01, this Agreement shall become effective when it shall have been executed by
the Administrative Agent and when the Administrative Agent shall have received
counterparts hereof that, when taken together, bear the signatures of each of
the other parties hereto. Delivery

 

 

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of an executed counterpart of a signature page of this Agreement by telecopy
shall be effective as delivery of a manually executed counterpart of this
Agreement.

10.11 Survival of Representations and Warranties. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Credit Extension, and shall continue in full
force and effect as long as any Loan or any other Obligation hereunder shall
remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

10.12 Severability. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

10.13 Replacement of Lenders. If any Lender requests compensation under Section
3.04, or if the Borrowers are required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 3.01, or if any Lender is a Defaulting Lender, then the Borrowers may,
at their sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Section 10.06), all of its interests, rights and
obligations under this Agreement and the related Loan Documents to an assignee
that shall assume such obligations (which assignee may be another Lender, if a
Lender accepts such assignment), provided that:

(a) the Borrowers shall have paid to the Administrative Agent the assignment fee
specified in Section 10.06(b);

(b) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and L/C Advances, accrued interest thereon,
accrued fees and all other amounts payable to it hereunder and under the other
Loan Documents (including any amounts under Section 3.05) from the assignee (to
the extent of such outstanding principal and accrued interest and fees) or the
Borrowers (in the case of all other amounts);

(c) in the case of any such assignment resulting from a claim for compensation
under Section 3.04 or payments required to be made pursuant to Section 3.01,
such assignment will result in a reduction in such compensation or payments
thereafter; and

 

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(d) such assignment does not conflict with applicable Laws.

A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling a Borrower to require such assignment and delegation
cease to apply.

10.14 Pound and Euro L/C Issuers. Each Eligible Assignee who agrees to become an
L/C Issuer in respect of Letters of Credit denominated in Pounds or Euros
hereunder, shall execute and deliver to the Administrative Agent an L/C Issuer
Joinder Agreement hereunder prior to issuing any Letters of Credit at the
request or for the benefit of the U.K. Borrowers. Upon execution and delivery of
such L/C Issuer Joinder Agreement, such Eligible Assignee shall become a party
to this Agreement and shall have all rights and obligations of the L/C Issuer as
set forth herein with respect to Letters of Credit denominated in Pounds and
Euros. Any such Eligible Assignee may be released from its obligations hereunder
as an L/C Issuer upon notice to the Administrative Agent.

10.15 Governing Law; Jurisdiction; Etc. (a) GOVERNING LAW. THIS AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.

(b) SUBMISSION TO JURISDICTION. EACH BORROWER IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED
STATES DISTRICT COURT OF THE FOR THE SOUTHERN DISTRICT OF NEW YORK, AND ANY
APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE
PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN
ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT,
ANY LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY
BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

(c) WAIVER OF VENUE. EACH BORROWER IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY

 

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COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.

(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW

10.16 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

10.17 USA PATRIOT Act Notice. Each Lender that is subject to the Act (as
hereinafter defined) and the Administrative Agent (for itself and not on behalf
of any Lender) hereby notifies the Borrowers that pursuant to the requirements
of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”), it is required to obtain, verify and record information that
identifies each Loan Party, which information includes the name and address of
each Loan Party and other information that will allow such Lender or the
Administrative Agent, as applicable, to identify each Loan Party in accordance
with the Act.

10.18 Know Your Customers. (a) Borrower Information. If:

(i) any change in applicable law;

(ii) any change in the status of any Borrower after the date of this Agreement;
or

(iii) a proposed assignment or transfer by a Lender of any of its rights and
obligations under this Agreement to a party that is not a Lender prior to such
assignment or transfer,

requires the Administrative Agent or any Lender (or, in the case of paragraph
(iii) above, any prospective new Lender) to comply with “know your customer” or
similar identification procedures in circumstances where the necessary
information is not already available to it, each

 

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Borrower shall promptly upon the request of the Administrative Agent or any
Lender supply, or procure the supply of, such documentation and other evidence
as is reasonably requested by the Administrative Agent (for itself or on behalf
of any Lender) or such Lender (for itself or, in the case of the event described
in paragraph (iii) above, on behalf of any prospective new Lender) in order for
the Administrative Agent, such Lender or, in the case of the event described in
paragraph (iii) above, such prospective new Lender to carry out and be satisfied
it has complied with all necessary “know your customer” or similar checks under
all applicable laws in connection with the transactions contemplated by the Loan
Documents.

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

(c) Additional Loan Parties. Following the acquisition or formation of any new
direct or indirect Subsidiary that will become a Loan Party pursuant to Section
6.12, if the accession of such Subsidiary requires any Lender to comply with
“know your customer” or similar identifications procedures in circumstances
where the necessary information is not already available to it, Holdings shall
promptly upon the request of such Lender supply, or procure the supply of, such
documentation and other evidence as is reasonably requested by such Lender (for
itself or on behalf of any prospective new Lender) in order for such Lender (or
such prospective new Lender) to carry out and be satisfied it has complied with
the results of all necessary “know your customer” or other similar checks under
all applicable laws in connection with the accession of such Subsidiary as a
Loan Party.

(d) Limitation on Assignments. Notwithstanding Section 10.06, an assignment will
only be effective on performance by the Administrative Agent of all “know your
customer” or other checks that is required to carry out with respect to any
Person in connection with such assignment, the completion of which the
Administrative Agent shall promptly notify to the assigning Lender and the
applicable Assignee.

(e) Lender Responsibility. Nothing in this Agreement shall require the
Administrative Agent or the Arrangers to carry out any “know your customer” or
other checks in relation to any Person on behalf of any Lender, and each Lender
confirms to the Administrative Agent and the Arrangers that it is solely
responsible for any such checks it is required to carry out and that it may not
rely on any statement in relation to such checks made by the Administrative
Agent or the Arrangers.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

 

 

SOTHEBY’S HOLDINGS, INC.

 

By: 

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Name:

 

 

 

Title:

 

 

 

 

SOTHEBY’S, INC.

 

By: 

[img1.jpg]

 

 

Name:

 

 

 

Title:

 

 

 

 

OATSHARE LIMITED

 

By: 

[img1.jpg]

 

 

Name:

 

 

 

Title:

 

 

 

 

SOTHEBY’S

 

By: 

[img1.jpg]

 

 

Name:

 

 

 

Title:

 

 

 

Sotheby’s Credit Agreement

 

 

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BANK OF AMERICA, N.A., as
Administrative Agent, L/C Issuer, Swing Line
Lender and Lender

 

By: 

[img5.jpg]

 

 

Name:

John Walkiewiez

 

 

Title:

Vice President

 

 

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Sotheby’s Credit Agreement

 

 

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LASALLE BANK N.A., as Lender

 

By: 

[img6.jpg]

 

 

Name:

THOMAS J. BRENNAN

 

 

Title:

FIRST VICE PRESIDENT

 

 

Sotheby’s Credit Agreement

 

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SCHEDULE 1.01

MANDATORY COST FORMULAE

1.

The Mandatory Cost (to the extent applicable) is an addition to the interest
rate to compensate Lenders for the cost of compliance with:

 

(a)

the requirements of the Bank of England and/or the Financial Services Authority
(or, in either case, any other authority which replaces all or any of its
functions); or

 

(b)

the requirements of the European Central Bank.

2.

On the first day of each Interest Period (or as soon as practicable thereafter)
the Administrative Agent shall calculate, as a percentage rate, a rate (the
“Additional Cost Rate”) for each Lender, in accordance with the paragraphs set
out below. The Mandatory Cost will be calculated by the Administrative Agent as
a weighted average of the Lenders’ Additional Cost Rates (weighted in proportion
to the percentage participation of each Lender in the relevant Loan) and will be
expressed as a percentage rate per annum. The Administrative Agent will, at the
request of any Borrower or any Lender, deliver to such Borrower or such Lender
as the case may be, a statement setting forth the calculation of any Mandatory
Cost.

3.

The Additional Cost Rate for any Lender lending from a Lending Office in a
Participating Member State will be the percentage notified by that Lender to the
Administrative Agent. This percentage will be certified by such Lender in its
notice to the Administrative Agent as the cost (expressed as a percentage of
such Lender’s participation in all Loans made from such Lending Office) of
complying with the minimum reserve requirements of the European Central Bank in
respect of Loans made from that Lending Office.

4.

The Additional Cost Rate for any Lender lending from a Lending Office in the
United Kingdom will be calculated by the Administrative Agent as follows:

 

(a)

in relation to any Loan in Pounds:

 

AB+C(B-D)+E x 0.01

 

100 - (A+C)

per cent per annum

 

 

(b)

in relation to any Loan in any currency other than Pounds:

 

E x 0.01

per cent per annum

300

Where:

 

“A”

is the percentage of Eligible Liabilities (assuming these to be in excess of any
stated minimum) which that Lender is from time to time required to maintain as

 

 

Schedule 1.01

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an interest free cash ratio deposit with the Bank of England to comply with cash
ratio requirements.

 

“B”

is the percentage rate of interest (excluding the Applicable Rate, the Mandatory
Cost and any interest charged on overdue amounts pursuant to the first sentence
of Section 2.08(b) and, in the case of interest (other than on overdue amounts)
charged at the Default Rate, without counting any increase in interest rate
effected by the charging of the Default Rate) payable for the relevant Interest
Period of such Loan.

 

“C”

is the percentage (if any) of Eligible Liabilities which that Lender is required
from time to time to maintain as interest bearing Special Deposits with the Bank
of England.

 

“D”

is the percentage rate per annum payable by the Bank of England to the
Administrative Agent on interest bearing Special Deposits.

 

“E”

is designed to compensate Lenders for amounts payable under the Fees Regulations
and is calculated by the Administrative Agent as being the average of the most
recent rates of charge supplied by the Lenders to the Administrative Agent
pursuant to paragraph 7 below and expressed in pounds per £1,000,000.

5.

For the purposes of this Schedule:

 

(a)

“Eligible Liabilities” and “Special Deposits” have the meanings given to them
from time to time under or pursuant to the Bank of England Act 1998 or (as may
be appropriate) by the Bank of England;

 

(b)

“Fees Regulations” means the FSA Supervision Manual or such other law or
regulation as may be in force from time to time in respect of the payment of
fees for the acceptance of deposits;

 

(c)

“Fee Tariffs” means the fee tariffs specified in the Fees Regulations under the
activity group A.1 Deposit acceptors (ignoring any minimum fee or zero rated fee
required pursuant to the Fees Regulations but taking into account any applicable
discount rate); and

 

(d)

“Tariff Base” has the meaning given to it in, and will be calculated in
accordance with, the Fees Regulations.

6.

In application of the above formulae, A, B, C and D will be included in the
formulae as percentages (i.e. 5% will be included in the formula as 5 and not as
0.05). A negative result obtained by subtracting D from B shall be taken as
zero. The resulting figures shall be rounded to four decimal places.

7.

If requested by the Administrative Agent or any Borrower, each Lender with a
Lending Office in the United Kingdom or a Participating Member State shall, as
soon as practicable after publication by the Financial Services Authority,
supply to the

 

 

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Administrative Agent and such Borrower, the rate of charge payable by such
Lender to the Financial Services Authority pursuant to the Fees Regulations in
respect of the relevant financial year of the Financial Services Authority
(calculated for this purpose by such Lender as being the average of the Fee
Tariffs applicable to such Lender for that financial year) and expressed in
pounds per £1,000,000 of the Tariff Base of such Lender.

8.

Each Lender shall supply any information required by the Administrative Agent
for the purpose of calculating its Additional Cost Rate. In particular, but
without limitation, each Lender shall supply the following information in
writing on or prior to the date on which it becomes a Lender:

 

(a)

its jurisdiction of incorporation and the jurisdiction of the Lending Office out
of which it is making available its participation in the relevant Loan; and

 

(b)

any other information that the Administrative Agent may reasonably require for
such purpose.

Each Lender shall promptly notify the Administrative Agent in writing of any
change to the information provided by it pursuant to this paragraph.

9.

The percentages or rates of charge of each Lender for the purpose of A, C and E
above shall be determined by the Administrative Agent based upon the information
supplied to it pursuant to paragraphs 7 and 8 above and on the assumption that,
unless a Lender notifies the Administrative Agent to the contrary, each Lender’s
obligations in relation to cash ratio deposits, Special Deposits and the Fees
Regulations are the same as those of a typical bank from its jurisdiction of
incorporation with a Lending Office in the same jurisdiction as such Lender’s
Lending Office.

10.

The Administrative Agent shall have no liability to any Person if such
determination results in an Additional Cost Rate which over- or
under-compensates any Lender and shall be entitled to assume that the
information provided by any Lender pursuant to paragraphs 3, 7 and 8 above is
true and correct in all respects.

11.

The Administrative Agent shall distribute the additional amounts received as a
result of the Mandatory Cost to the Lenders on the basis of the Additional Cost
Rate for each Lender based on the information provided by each Lender pursuant
to paragraphs 3, 7 and 8 above.

12.

Any determination by the Administrative Agent pursuant to this Schedule in
relation to a formula, the Mandatory Cost, an Additional Cost Rate or any amount
payable to a Lender shall, in the absence of manifest error, be conclusive and
binding on all parties hereto.

13.

The Administrative Agent may from time to time, after consultation with the
Company and the Lenders, determine and notify to all parties any amendments
which are required to be made to this Schedule in order to comply with any
change in law, regulation or any requirements from time to time imposed by the
Bank of England, the Financial Services Authority or the European Central Bank
(or, in any case, any other authority which

 

 

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replaces all or any of its functions) and any such determination shall, in the
absence of manifest error, be conclusive and binding on all parties hereto.

 

 

Schedule 1.01

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