Document:

Exhibit 4.11

RESTATED
AGREEMENT

€1,130,000,000 AND
US$325,000,000

FACILITIES AGREEMENT

Dated 3 June 2004

for

LUXOTTICA GROUP S.p.A.

AND

LUXOTTICA U.S. HOLDINGS CORP.

arranged by

ABN AMRO BANK N.V., BANC OF AMERICA SECURITIES LIMITED, BANCA

INTESA S.p.A., CALYON S.A., SUCCURSALE DI MILANO, CALYON NEW YORK

BRANCH, CAPITALIA S.p.A., CITIGROUP GLOBAL MARKETS LIMITED,

MEDIOBANCA - BANCA DI CREDITO FINANZIARIO S.p.A., THE ROYAL BANK OF

SCOTLAND PLC AND

UNICREDIT BANCA MOBILIARE S.p.A.

with

BANC OF AMERICA
SECURITIES LIMITED, CITIGROUP GLOBAL MARKETS

LIMITED, THE ROYAL BANK OF SCOTLAND PLC AND UNICREDIT BANCA

MOBILIARE S.p.A.

acting as Bookrunners

with

UNICREDITO
ITALIANO S.p.A., NEW YORK BRANCH

UNICREDIT BANCA D’IMPRESA S.p.A.

acting as Agents

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MULTICURRENCY TERM AND REVOLVING FACILITIES

  	
   

  
	
   

  	
  AGREEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 

CONTENTS

	
  CLAUSE

  	
   

  
	
  1.

  	
  DEFINITIONS
  AND INTERPRETATION

  	
   

  
	
  2.

  	
  THE
  FACILITIES

  	
   

  
	
  3.

  	
  PURPOSE

  	
   

  
	
  4.

  	
  CONDITIONS
  OF UTILISATION

  	
   

  
	
  5.

  	
  UTILISATION

  	
   

  
	
  6.

  	
  UNAVAILABILITY
  OF CURRENCY

  	
   

  
	
  7.

  	
  REPAYMENT

  	
   

  
	
  8.

  	
  PREPAYMENT
  AND CANCELLATION

  	
   

  
	
  9.

  	
  INTEREST

  	
   

  
	
  10.

  	
  INTEREST
  PERIODS

  	
   

  
	
  11.

  	
  CHANGES
  TO THE CALCULATION OF INTEREST

  	
   

  
	
  12.

  	
  FEES

  	
   

  
	
  13.

  	
  TAX
  GROSS-UP AND INDEMNITIES

  	
   

  
	
  14.

  	
  INCREASED
  COSTS

  	
   

  
	
  15.

  	
  OTHER
  INDEMNITIES

  	
   

  
	
  16.

  	
  MITIGATION
  BY THE LENDERS

  	
   

  
	
  17.

  	
  COSTS
  AND EXPENSES

  	
   

  
	
  18.

  	
  GUARANTEE
  AND INDEMNITY

  	
   

  
	
  19.

  	
  REPRESENTATIONS

  	
   

  
	
  20.

  	
  INFORMATION
  UNDERTAKINGS

  	
   

  
	
  21.

  	
  FINANCIAL
  COVENANTS

  	
   

  
	
  22.

  	
  GENERAL
  UNDERTAKINGS

  	
   

  
	
  23.

  	
  EVENTS
  OF DEFAULT

  	
   

  
	
  24.

  	
  CHANGES
  TO THE LENDERS

  	
   

  
	
  25.

  	
  CONFIDENTIALITY

  	
   

  
	
  26.

  	
  CHANGES
  TO THE OBLIGORS

  	
   

  
	
  27.

  	
  ROLE
  OF THE AGENT AND THE MANDATED LEAD ARRANGER

  	
   

  
	
  28.

  	
  CONDUCT
  OF BUSINESS BY THE FINANCE PARTIES

  	
   

  
	
  29.

  	
  SHARING
  AMONG THE FINANCE PARTIES

  	
   

  
	
  30.

  	
  PAYMENT
  MECHANICS

  	
   

  
	
  31.

  	
  SET-OFF

  	
   

  
	
  32.

  	
  NOTICES

  	
   

  
	
  33.

  	
  CALCULATIONS
  AND CERTIFICATES

  	
   

  
	
  34.

  	
  PARTIAL
  INVALIDITY

  	
   

  

 

 i
 

 

CONTENTS

	
  CLAUSE

  	
   

  
	
  35.

  	
  REMEDIES
  AND WAIVERS

  	
   

  
	
  36.

  	
  AMENDMENTS
  AND WAIVERS

  	
   

  
	
  37.

  	
  COUNTERPARTS

  	
   

  
	
  38.

  	
  GOVERNING
  LAW

  	
   

  
	
  39.

  	
  ENFORCEMENT

  	
   

  

 

 ii

 

 

THIS AGREEMENT is made in London on 3 June 2004
(as amended and restated in Lugano on 10 March 2006) and between:

(1)                                        LUXOTTICA GROUP S.p.A., as borrower (the “Italian Borrower”);

(2)                                        LUXOTTICA U.S. HOLDINGS CORP., as borrower
(the “US Borrower” and, together
with the Italian Borrower, the “Borrowers”);

(3)                                        LUXOTTICA GROUP S.p.A., LUXOTTICA S.r.l. and LUXOTTICA
U.S. HOLDINGS CORP. as original guarantors (the “Original Guarantors”);

(4)                                        ABN AMRO BANK N.V., BANC OF AMERICA SECURITIES
LIMITED, BANCA INTESA S.p.A., CALYON S.A., SUCCURSALE DI MILANO, CALYON NEW
YORK BRANCH, CAPITALIA S.p.A., CITIGROUP GLOBAL MARKETS LIMITED, MEDIOBANCA -
BANCA DI CREDITO FINANZIARIO S.p.A., THE ROYAL BANK OF SCOTLAND PLC AND
UNICREDIT BANCA MOBILIARE S.p.A. as mandated lead arrangers (whether
acting individually or together, the “Mandated
Lead Arranger”);

(5)                                        BANC OF AMERICA SECURITIES LIMITED, CITIGROUP GLOBAL
MARKETS LIMITED, THE ROYAL BANK OF SCOTLAND PLC AND UNICREDIT BANCA MOBILIARE
S.p.A., as bookrunners (whether acting individually or together, the
“Bookrunner”);

(6)                                        THE FINANCIAL INSTITUTIONS listed in Part II,
Part III and Part IV of Schedule 1 (The
Parties) as lenders (the “Lenders”);

(7)                                        UNICREDIT BANCA D’IMPRESA S.p.A., as agent
of the other Finance Parties, under Facility A and Facility C (in so far as the
currency specified in any Facility C Utilisation Request is the Base Currency
(as such terms are defined below)) (the “Italian
Agent”); and

(8)                                        UNICREDITO ITALIANO S.p.A., NEW YORK BRANCH,
as agent of the other Finance Parties under Facility B and under Facility C (in
so far as the currency specified in any Facility C Utilisation Request is the
Optional Currency (as such terms are defined below)) (the “US Agent” and, together with the Italian
Agent, the “Agents”)).

IT IS AGREED as follows:

SECTION 1

INTERPRETATION

1.                                       DEFINITIONS
AND INTERPRETATION

1.1.                              Definitions

In this Agreement:

“Accession Letter” means a
document substantially in the form set out in part 2 of Schedule 12 (Additional Guarantors).

“Acquisition” means the
acquisition by the US Borrower (directly or indirectly through the SPV) of the
Target.

 1
 

 

 

“Acquisition Documents”
means all documents setting out the agreement between the US Borrower or, as
the case may be SPV with respect to the Acquisition.

“Additional Cost Rate” has
the meaning given to it in Schedule 4 (Mandatory
Cost formulae).

“Additional Guarantor”
means any member of the Group which becomes a Guarantor in accordance with
Clause 18.11 (Additional Guarantors)

“Affiliate” means, in
relation to any person, a Subsidiary of that person or a Holding Company of
that person or any other Subsidiary of that Holding Company.

“Agency Fee Letters” means
each of (i) the letter dated on or about the date of this Agreement
between the Italian Borrower and the Italian Agent relating to the payment by
the Italian Borrower of the agency fee to the Italian Agent as set out in such
letter and (ii) the letter dated on or about the date of this agreement
between the US Borrower and the US Agent relating to the payment by the US
Borrower of the agency fee as set out in such letter.

“Agent’s Spot Rate of Exchange”
means (in relation to Facility C) the spot rate of exchange on a particular day
for the purchase of the Optional Currency with the Base Currency quoted by the European
Central Bank on Reuters’ page ECB37 or, if such page or such service
shall cease to be available, such other page or such other service for the
purpose of displaying an average rate of exchange as the Agent after
consultation with the Lenders and the Borrower, shall select.

“Agreed Exceptions” means
with respect to any action, proceeding or procedure referred to in Clause 23.7
(Insolvency Proceedings) and
Clause 23.8 (Creditor’s Process and final
judgment) (each a “relevant
procedure”):

(a)                                  the
relevant procedure is discharged within 30 days of its commencement; or

(b)                                 on
or prior to the end of the 30 day period mentioned in (a) above it is
demonstrated to the satisfaction of the Majority Lenders (in their discretion
but acting in good faith) that:

(i)                                     the
relevant procedure is frivolous and vexatious and is being duly defended in
good faith and by appropriate proceedings; or

(ii)                                  the
relevant procedure is being duly defended in good faith and by appropriate
proceedings and any Borrower or the relevant Obligor has sufficient funds to
meet the maximum potential liability which may result from such proceedings,

and (in any event) within 60 days of the end of the 30 day period
mentioned in (a) above, the relevant procedure is discharged.

“Amendment and Restatement Agreement”
means the amendment and restatement agreement entered into with respect to this
Agreement on or about 10 March 2006.

“Amendment and Restatement Date”
means as defined in the Amendment and Restatement Agreement.

“Authorisation” means an
authorisation, consent, approval, resolution, licence, exemption, filing,
notarisation or registration.

 2
 

 

 

“Authorised Signatory”
means the persons listed in Schedule 10 (Authorised
Signatories) and any other person authorised to execute any document
on behalf of the Italian Borrower and/or the US Borrower (as the case may be),
as is from time to time communicated by the Italian Borrower in writing to each
of the Italian Agent and the US Agent.

“Availability Period”
means:

(a)                                  in
relation to Facility A, the period from and including the date of this
Agreement to and including the date falling 60 days from the date of this
Agreement;

(b)                                 in
relation to Facility B, the period from and including the date of this
Agreement to and including 31 January 2005; and

(c)                                  in
relation to Facility C, the period from and including the date of this
Agreement to and including the date falling one month before the Termination
Date.

“Available Commitment”
means, in relation to a Facility, a Lender’s Commitment under that Facility
minus:

(a)                                  the
Base Currency Amount of its participation in any outstanding Loans under that
Facility; and

(b)                                 in
relation to any proposed Utilisation, the Base Currency Amount of its
participation in any Loans (other than any Loan which is the subject of the
relevant Utilisation Request) that are due to be made under that Facility on or
before the proposed Utilisation Date,

other than, in relation to any proposed Utilisation under Facility C
only, that Lender’s participation in any Facility C Loans that are due to be
repaid or prepaid on or before the proposed Utilisation Date.

“Available Facility”
means, in relation to a Facility, the aggregate for the time being of each
Lender’s Available Commitment in respect of that Facility.

“Bank Guarantee” means any
guarantees or performance bonds required to be issued by an Eligible Deposit
Bank in the ordinary course of either of the Borrower’s business and upon terms
usual for such business.

“Base Currency” means:

(a)                                  in
relation to Facility A and Facility C, euro; and

(b)                                 in
relation to Facility B, US$.

“Base Currency Amount”
means, in relation to a Loan, the amount specified in the Utilisation Request
delivered by a Borrower for that Loan (or, in relation to Facility C, if the
amount requested is denominated in the Optional Currency, that amount converted
into the Base Currency at the Agent’s Spot Rate of Exchange on the date which
is four Business Days before the Utilisation Date or, if later, on the date the
Agent receives the Utilisation Request) adjusted to reflect any repayment,
prepayment, consolidation or division of the Loan.

 3
 

 

 

“Break Costs” means the amount (if any) by
which:

(a)                                  the
interest (excluding any Margin) which a Lender should have received for the
period from the date of receipt of all or any part of its participation in a
Loan or Unpaid Sum to the last day of the current Interest Period in respect of
that Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been
paid on the last day of that Interest Period;

exceeds:

(b)                                 the
amount which that Lender would be able to obtain by placing an amount equal to
the principal amount or Unpaid Sum received by it on deposit with a leading
bank in the Relevant Interbank Market for a period starting on the Business Day
following receipt or recovery and ending on the last day of the current
Interest Period.

“Business Day” means a day (other than a
Saturday or Sunday) which is not a public holiday and on which banks are open
for general business in New York, London and Milan and:

(a)                                  
(in relation to a date for payment or purchase of any sum denominated in a
currency other than the euro) the principal financial centre of the country of
such currency; or

(b)                                 
(in relation to any date for payment or purchase of a sum denominated in the
euro) on which TARGET is open for settlement in euro.

“Cash” has the meaning
given to it in FAS95.

“Cash Equivalent Investments”
has the meaning given to it in FAS95.

“Code” means, at any date,
the U.S. Internal Revenue Code of 1986 (or any successor legislation thereto)
as amended from time to time, and the regulations promulgated and rulings
issued thereunder, all as the same may be in effect at such date.

“Commitment” means a
Facility A Commitment, a Facility B Commitment or a Facility C Commitment.

“Compliance Certificate”
means a certificate substantially in the form set out in Schedule 6 (Form of Compliance Certificate).

“Confidentiality Undertaking”
means a confidentiality undertaking substantially in a recommended form of the
LMA as set out in Schedule 8 (Confidentiality
Undertaking) or in any other form agreed between the Italian
Borrower and the Italian Agent.

“Consolidated Equity”
means, with respect to the Group, the Shareholders’ Equity as evidenced in the
latest published Consolidated Financial Statements or Consolidated Quarterly
Financial Statements (as the case may be).

“Consolidated Financial Statements”
means, with respect to the Group, the latest published audited consolidated
financial statements of the Group prepared in accordance with GAAP in respect
of its financial year.

 4
 

 

 

“Consolidated Pro-Forma Financial
Statements” means, during the Pro-Forma Relevant Period and with
respect to the Group, the latest published audited consolidated financial
statements of the Group prepared in accordance with GAAP in respect of its
financial year, including, on a pro-forma basis, the relevant results of: (i) Target
and its Subsidiaries; and (ii) any other company acquired by a member of
the Group and the Subsidiaries of such company.

“Consolidated Total Assets”
means, with respect to the Group, the total assets as evidenced in the latest
published Consolidated Financial Statements or Consolidated Quarterly Financial
Statements (as the case may be).

“Consolidated Quarterly Financial
Statements” means, with respect to the Group, the latest quarterly
financial statements of the Group in respect of each of its financial quarters
(other than the last quarter in each financial year).

“Consolidated Quarterly Pro-Forma
Financial Statements” means, during the Pro-Forma Relevant Period
with respect to the Group, the latest quarterly financial statements of the
Group in respect of each of its financial quarters (other than the last quarter
in each financial year), including, on a pro-forma basis, the relevant results
of: (i) Target and its Subsidiaries; and (ii) any other company
acquired by a member of the Group and the Subsidiaries of such company.

“Default” means an Event
of Default or any event or circumstance specified in Clause 23 (Events of Default) which would (with the
expiry of a grace period, the giving of notice, the making of any determination
under the Finance Documents or any combination of any of the foregoing) be an
Event of Default.

“Documento di Sintesi” has
the meaning given to such expression in the Bank of Italy’s 9th update of the Istruzioni di Vigilanza in force from 1 October 2003.

“Eligible Deposit Bank”
means any bank or financial institution with a short-term rating of at least Al
granted by Standard & Poor’s Corporation or Pl granted by Moody’s
Investors Services, Inc.

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

“Environmental Claim”
means any claim, proceeding or investigation by any person in respect of any Environmental
Law.

“Environmental Law” means
any applicable law in any jurisdiction in which any member of the Group
conducts business which relates to the pollution or protection of the
environment or harm to or the protection of human health or the health of
animals or plants, including, without limitation, the National Environmental
Policy Act (42 U.S.C. §4321 et seq.), the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (42 U.S.C. §9601 et seq.), as amended by
the Superfund Amendments and Reauthorization Act of 1986, the Resource
Conservation and Recovery Act (42 U.S.C. §6901 et seq.), as amended by the
Hazardous and Solid Waste Amendments of 1984, the Hazardous Materials Transport
Act (49 U.S.C. §1801 et seq.), the Toxic Substances Control Act (15 U.S.C.
§2601 et seq.), the Clean Water Act (33 U.S.C. §1321 et seq.), the Clean Air
Act (42 U.S.C. §7401 et seq.), the Occupational Safety and

 5
 

 

Health Act (29 U.S.C. §651 et seq.), the Federal Water Pollution
Control Act (33 U.S.C. §1251 et seq.), the Safe Drinking Water Act (42 U.S.C.
§3808 et seq.), and any similar federal, state or local laws, ordinances or
regulations implementing such laws.

“Environmental Permits”
means any permit, licence, consent, approval and other authorisation and the
filing of any notification, report or assessment required under any
Environmental Law for the operation of the business of any member of the Group
conducted on or from the properties owned or used by the relevant member of the
Group.

“ERISA” means, at any
date, the United States Employee Retirement Income Security Act of 1974 (or any
successor legislation thereto) as amended from time to time, and the
regulations promulgated and rulings issued thereunder, all as the same may be
in effect at such date.

“ERISA Affiliate” means
any person that for purposes of Title I and Title IV of ERISA and Section 412
of the Code would be deemed at any relevant time to be a single employer with a
U.S. Group Company, pursuant to Section 414 (b), (c), (m) or (o) of
the Code or Section 4001 of ERISA.

“ERISA Event” means within
the past six years: (i) any reportable event, as defined in Section 4043
of ERISA, with respect to an Employee Plan, as to which PBGC has not by
regulation waived the requirement of Section 4043 (a) of ERISA that
it be notified of such event; (ii) the filing of a notice of intent to
terminate any Employee Plan, if such termination would require material
additional contributions in order to be considered a standard termination
within the meaning of Section 4041 (b) of ERISA, the filing under Section 4041
(c) of ERISA of a notice of intent to terminate any Employee Plan or the
termination of any Employee Plan under Section 4041 (c) of ERISA; (iii) the
institution of proceedings under Section 4042 of ERISA by the PBGC for the
termination of, or the appointment of a trustee to administer, any Employee
Plan; (iv) the failure to make a required contribution to any Employee
Plan that would result in the imposition of an encumbrance under Section 412
of the Code or Section 302 of ERISA or the filing of any request for a
minimum funding waiver under Section 412 of the Code with respect to any
Employee Plan or to its knowledge a Multiemployer Plan; (v) an engagement
in a non-exempt prohibited transaction within the meaning of Section 4975
of the Code or Section 406 of ERISA that would have a Material Adverse
Effect; (vi) the complete or partial withdrawal of any U.S. Group Company
or any ERISA Affiliate from a Multiemployer Plan; and (vii) an Obligor or
an ERISA Affiliate incurring any liability under Title IV of ERISA with respect
to any Employee Plan (other than premiums due and not delinquent under Section 4007
of ERISA) that would have a Material Adverse Effect.

“EURIBOR”
means, in relation to any Loan in euro:

(a)                                  the
applicable Screen Rate; or

(b)                                 (if
no Screen Rate is available for the Interest Period of that Loan) the
arithmetic mean of the rates (rounded upwards to four decimal places) as
supplied to the Italian Agent at its request quoted by the Reference Banks to
leading banks in the European interbank market;

as of the Specified Time on the Quotation Day for the offering of
deposits in euro for a period comparable to the Interest Period of the relevant
Loan.

 6
 

 

 

“Event of Default” means
any event or circumstance specified as such in Clause 23 (Events of Default).

“Existing Indebtedness”
means the financial indebtedness of the Italian Borrower set out in Schedule 11
(Existing Indebtedness), which
shall be refinanced in part with the amounts borrowed under Facility A.

“Facility” means Facility
A, Facility B or Facility C.

“Facility A” means the
term loan facility made available under this Agreement as described in Clause 2
(The Facilities).

“Facility A Commitment” means:

(a)                                  in
relation to a Lender, the amount in euro set opposite its name under the
heading “Facility A Commitment” in Part II of Schedule 1 (The Parties) and the amount of any other
Facility A Commitment transferred to it under this Agreement; and

(b)                                 in
relation to any other Lender, the amount in euro of any Facility A Commitment
transferred to it under this Agreement,

to the extent not cancelled, reduced (other than, for
the avoidance of doubt, by way of Utilisation) or transferred by it under this
Agreement.

“Facility A Lender” means:

(a)                                  a
Lender listed in Part II of Schedule 1 (The
Parties); and

(b)                                 any
bank or financial institution which has become a Lender under Facility A in
accordance with Clause 24 (Changes to the
Lenders).

“Facility A Loan” means a
loan made or to be made under Facility A or the principal amount outstanding
for the time being of that loan.

“Facility A Repayment Date”
means each of the dates specified in Clause 7.1 (Repayment of Facility A Loans) as Facility A Repayment
Dates, but if any such date is not a Business Day, then that Facility A
Repayment Date shall be deemed to be the immediately succeeding Business Day.

“Facility B” means the
term loan facility made available under this Agreement as described in Clause 2
(The Facilities).

“Facility B Commitment” means:

(a)                                  in
relation to a Lender, the amount in US$ set opposite its name under the heading
“Facility B Commitment” in Part III of Schedule 1 (The Parties) and the amount of any other
Facility B Commitment transferred to it under this Agreement; and

(b)                                 in
relation to any other Lender, the amount in US$ of any Facility B Commitment
transferred to it under this Agreement, to the extent not cancelled, reduced
(other than, for the avoidance of doubt, by way of Utilisation) or transferred
by it under this Agreement.

 7
 

 

 

“Facility B Lender”
means:

(a)                                  a
Lender listed in Part III of Schedule 1 (The
Parties); and

(b)                                 any
bank or financial institution which has become a Lender under Facility B in
accordance with Clause 24 (Changes to the
Lenders).

“Facility B Loan” means a
loan made or to be made under Facility B or the principal amount outstanding
for the time being of that loan.

“Facility C” means the
revolving loan facility made available under this Agreement as described in
Clause 2 (The Facilities).

“Facility C Commitment” means:

(a)                                  in
relation to a Lender, the amount in the Base Currency set opposite its name
(and, as the case may be the name of its branch) under the heading “Facility C
Commitment” in Part IV of Schedule 1 (The
Parties) and the amount of any other Facility C Commitment
transferred to it under this Agreement; and

(b)                                 in
relation to any other Lender, the amount in the Base Currency of any Facility C
Commitment transferred to it under this Agreement.

to the extent not cancelled, reduced (other than, for
the avoidance of doubt, by way of Utilisation) or transferred by it under this
Agreement.

“Facility C Lender” means:

(a)                                  a
Lender listed in Part IV of Schedule 1 (The
Parties); and

(b)                                 any
bank or financial institution which has become a Lender under Facility C in
accordance with Clause 24 (Changes to the
Lenders).

“Facility C Loan” means a
loan made or to be made under Facility C or the principal amount outstanding
for the time being of that loan.

“Facility Fee Letter”
means the facility fee letter dated on or about the date of this Agreement
between the Mandated Lead Arranger, the Italian Borrower and the US Borrower
setting out any of the fees referred to in Clause 12 (Fees).

“Facility Office” means

(a)                                  in
relation to an existing Lender, the office or offices notified by that Lender
to the Agent in writing by not less than five Business Days` notice as the
office or offices through which it will perform its obligations under this
Agreement; and

(b)                                 in
relation to a New Lender (as defined in Clause 24.1 (Assignments and transfers by the Lenders)), the office or
offices notified by the New Lender to the Agent in the Transfer Certificate
completed pursuant to Clause 24.5 (Procedure
for Transfer) as the office or offices through which it will perform
its obligations under this Agreement.

 8
 

 

 

“FAS95” means Financial
Accounting Standards (FAS) Statement of Standard No. 95 “Statement of
Cashflows” as amended by other GAAP standards.

“Finance Document” means
this Agreement, the Facility Fee Letter, the Agency Fee Letters and any other
document designated as such by the Agent and the Italian Borrower.

“Finance Lease Debt” means
any Financial Indebtedness falling within paragraph (d) of the definition
of Financial Indebtedness.

“Finance Party” means any
of the Agents, the Mandated Lead Arranger or a Lender.

“Financial Indebtedness” means any
indebtedness for or in respect of:

(a)                                  moneys
borrowed (excluding, for the avoidance of doubt, any unutilised commitment of
whatsoever nature in respect of moneys to be borrowed);

(b)                                 any
amount raised by acceptance under any acceptance credit facility or
dematerialised equivalent;

(c)                                  any
amount raised pursuant to any note purchase facility or the issue of bonds,
notes, debentures, loan stock or any similar instrument;

(d)                                 the
amount of any liability in respect of any lease or hire purchase contract which
would, in accordance with GAAP, be treated as a finance or capital lease;

(e)                                  receivables
sold or discounted (other than any receivables to the extent they are sold on a
non-recourse basis);

(f)                                    any
amount raised under any other transaction (including any forward sale or
purchase agreement) having the commercial effect of a borrowing;

(g)                                 any
derivative transaction entered into in connection with protection against or
benefit from fluctuation in any rate or price (and, when calculating the value
of any derivative transaction, only the marked to market value shall be taken
into account) only to the extent such derivative transactions are recorded in
the balance sheet of any member of the Group in accordance with GAAP;

(h)                                 any
counter-indemnity obligation in respect of a guarantee, indemnity, bond,
standby or documentary letter of credit or any other instrument issued by a
bank or financial institution;

(i)                                     any
amount raised by the issue of redeemable shares;

(j)                                     any
amount of any liability under an advance or deferred purchase agreement if one
of the primary reasons behind the entry into this agreement is to raise
finance; and

(k)                                  (without
double counting) the amount of any liability in respect of any guarantee or
indemnity for any of the items referred to in paragraphs (a) to (j) above.

“GAAP” means, (in the case
of the Borrowers) US GAAP or any other generally accepted accounting principles
as in effect from time to time in the United States of America including the
International Accounting Standards and IFRS or (in the case of Luxottica
S.r.l.) Italian GAAP or

 9
 

 

any other generally accepted accounting principles as in effect from
time to time in the Republic of Italy including the International Accounting
Standards and IFRS.

“Guarantor” means each
Original Guarantor and any Additional Guarantor.

“Group” means the Italian
Borrower and its Subsidiaries for the time being (and, for the avoidance of
doubt, following the Acquisition “Group”
shall include Target and its Subsidiaries for the time being).

“Holding Company” means,
in relation to a company or corporation, any other company or corporation in
respect of which it is a Subsidiary.

“Indebtedness for Borrowed Money”
means Financial Indebtedness save for any indebtedness for or in respect of
paragraphs (g), (h) and (k) of the definition of “Financial Indebtedness”.

“Intellectual Property”
means all patents, trade marks, service marks, designs, models, business names,
copyrights, design rights, inventions, confidential information, know-how and
other intellectual property rights and interests, whether registered or
unregistered, and the benefit of all licences, applications, rights to use and
monies deriving from any such intellectual property now or hereafter belonging
to any member of the Group.

“Interest Period” means,
in relation to a Loan, each period determined in accordance with Clause 10 (Interest Periods) and, in relation to an
Unpaid Sum, each period determined in accordance with Clause 9.3 (Default interest).

“IRS” means the United
States Internal Revenue Service or any successor thereto.

“Italian Civil Code” means
the Civil Code enacted by Royal Decree No. 262 of 6 March 1942, as in
full force and effect at any relevant time in the Republic of Italy.

“Italian GAAP” means
generally accepted accounting principles in Italy.

“Italian Obligor” means
Luxottica Group S.p.A. or Luxottica S.r.l.

“Lender” means a Facility
A Lender, a Facility B Lender or a Facility C Lender which in each case has not
ceased to be a Party in accordance with the terms of this Agreement.

“LIBOR” means, in relation
to any Loan in US$:

(a)                                  the
applicable Screen Rate; or

(b)                                 (if
no Screen Rate is available for the currency or Interest Period of that Loan)
the arithmetic mean of the rates (rounded upwards to four decimal places) as
supplied to the Agent at its request quoted by the Reference Banks to leading
banks in the London interbank market,

as of the Specified Time on the Quotation Day for the offering of
deposits in US$ and for a period comparable to the Interest Period for that
Loan.

“LMA” means the Loan
Market Association.

“Loan” means a Facility A
Loan, a Facility B Loan or a Facility C Loan.

 10

 

 

“Majority Lenders” means:

(a)                                  if
there are no Loans then outstanding, a Lender or Lenders whose Commitments
aggregate more than 66 and 2/3 per cent. of the Total Commitments (or, if the
Total Commitments have been reduced to zero, aggregated more than 66 and 2/3
per cent. of the Total Commitments immediately prior to the redaction); or

(b)                                 at
any other time, a Lender or Lenders whose participations in the Loans then
outstanding aggregate more than 66 and 2/3 per cent. of all the Loans then
outstanding.

“Mandatory Cost” means the
percentage rate per annum calculated by the Agent, in accordance with Schedule
4 (Mandatory Cost formulae).

“Margin” means:

(a)                                  0.50
per cent. per annum from the date hereof subject to paragraph (b) below;

(b)                                 if
the ratio of Consolidated Total Net Debt to Consolidated EBITDA, as set out at
any time other than during the Relevant Pro-Forma Period in the Consolidated
Financial Statements or in the Consolidated Quarterly Financial Statements (as
the case may be) or during the Pro-Forma Relevant Period as set out in the
Consolidated Pro-Forma Financial Statements or in the Consolidated Quarterly
Pro-Forma Financial Statements (as the case may be), in each case, most
recently delivered in accordance with Clause 20.1 (Financial Statements) of this Agreement (including for the
avoidance of doubt the Consolidated Quarterly Financial Statements for the
quarter ending 31 March 2004), is within the range set out below,
then the Margin shall be the percentage per annum set out opposite such range in
the margin grid table below:

	
  

  	
  Margin Grid Table

  
	
   

  	
     Ratio of Consolidated Net Debt to

     Consolidated EBITDA

  	
  (per cent. per annum)

  
	
   

  	
     Equal to
  or greater than 3.0x

  	
  0.40

  
	
   

  	
     Equal to
  or greater than 2.5x but lower than 3.0x

  	
  0.35

  
	
   

  	
     Equal to
  or greater than 2.0x but lower than 2.5x

  	
  0.30

  
	
   

  	
     Equal to
  or greater than 1.5x but lower than 2.0x

  	
  0.25

  
	
   

  	
     Lower
  than 1.5x

  	
  0.20

  

 

(and any reduction or increase in the Margin
pursuant to this paragraph (b) shall take effect in relation to any Loan,
5 Business Days after receipt by the Italian Agent of the Compliance
Certificate in respect of such financial statements pursuant to Clause 20.2 (Compliance Certificate));

(c)                                  if
at any time an Event of Default has occurred and is continuing the Margin shall
be 0.40 per cent. per annum;

(d)                                 the
change to the Margin set out in paragraph (c) above shall apply from and
including the date on which an Event of Default has occurred or come into
existence until but excluding the date on which such Event of Default is no
longer continuing.

 11
 

 

 

“Material Adverse Effect” means a material
adverse effect on:

(a)                                  the
business, or financial condition of the Group taken as a whole;

(b)                                 the
ability of an Obligor to perform its payment obligations under the Finance
Documents; or

(c)                                  the
validity or enforceability of the Finance Documents or the rights or remedies
of any Finance Party under the Finance Documents.

“Material Subsidiary”
means, at any time, a Subsidiary of the Italian Borrower whose total assets or
turnover (excluding intra-Group items) then equal or exceed five per cent. (5%)
of the Consolidated Total Assets or turnover of the Group. For this purpose:

(a)                                  the
total assets or turnover of a Subsidiary of the Italian Borrower will be
determined from its financial statements (consolidated if it has subsidiaries)
upon which the latest audited financial statements of the Group have been
based;

(b)                                 if
a Subsidiary of the Italian Borrower becomes a member of the Group after the
date on which the latest Consolidated Financial Statements or the Consolidated
Quarterly Financial Statements (as the case may be) of the Group have been
prepared, the total assets or turnover of that Subsidiary will be determined
from its latest financial statements;

(c)                                  the
Consolidated Total Assets or turnover of the Group will be determined from the
latest Consolidated Financial Statements or Consolidated Quarterly Financial
Statements (as the case may be), adjusted on any Quarter Date (where
appropriate) to reflect the total assets or turnover of any company or business
subsequently acquired or disposed of; and

(d)                                 if
a Material Subsidiary disposes of all or substantially all of its assets to
another Subsidiary of the Italian Borrower, it will immediately cease to be a
Material Subsidiary and the other Subsidiary (if it is not already) will
immediately become a Material Subsidiary; the subsequent financial statements
of those Subsidiaries and the Group will be used to determine whether those
Subsidiaries are Material Subsidiaries or not.

If there is a dispute as to whether or not a company is a Material
Subsidiary, a certificate of the auditors of the Italian Borrower will be, in
the absence of manifest error, conclusive.

“Month” means a period
starting on one day in a calendar month and ending on the numerically
corresponding day in the next calendar month, except that:

(a)                                  if
the numerically corresponding day is not a Business Day, that period shall end
on the next Business Day in that calendar month in which that period is to end
if there is one, or if there is not, on the immediately preceding Business Day;

(b)                                 if
there is no numerically corresponding day in the calendar month in which that
period is to end, that period shall end on the last Business Day in that
calendar month.

The above rules will only apply to the last Month of any period.

 12
 

 

 

“Multiemployer Plan” means
a “multiemployer plan” (as defined
in Section (3) (37) of ERISA) contributed to for any employees of a
U.S. Group Company or any ERISA Affiliate.

“Obligor” means a Borrower
or a Guarantor.

“Optional Currency” means,
in relation to Facility C only and subject to Clause 4.3 (Conditions relating to the Optional Currency),
US$.

“Original Financial Statements”
means:

(a)                                  in
relation to the Italian Borrower, the audited Consolidated Financial Statements
for its financial year ended 31 December 2003;

(b)                                 in
relation to the US Borrower, its audited financial statements for its financial
year ended 31 December 2003; and

(c)                                  in
relation to Luxottica S.r.l., its financial statements for its financial year
ended 31 December 2003.

“Participating Member State”
means any member state of the European Communities that adopts or has adopted
the euro as its lawful currency in accordance with legislation of the European
Community relating to Economic and Monetary Union.

“Party” means a party to
this Agreement.

“PBGC” means the U.S.
Pension Benefit Guaranty Corporation, or any entity succeeding to all or any of
its functions under ERISA.

“Permitted Security” means
any of the Security listed in paragraph (c)(i) to (vii) of Clause
22.3 (Negative Pledge).

“Pro-Forma Relevant Period”
means the period from the date the Acquisition is completed and ending on the
Business Day immediately preceding the Quarter Date falling not less than twelve
Months after the date on which the Acquisition is completed.

“Qualifying Lender” means:

(a)                                  in
relation to Facility A and Facility C (with respect to Loans made or to be made
to the Italian Borrower), a bank or financial institution which, at the date of
this Agreement or, in the case of an assignee or transferee under Clause 24 (Changes to the Lenders), at the date of
such assignment or (as the case may be) at the date of the relevant Transfer
Certificate:

(i)                                     (A) is
entitled to receive all payments under this Agreement free of any withholding
tax on account of income tax in Italy; and

(B) is
acting through a Facility Office in Italy; or

(ii)                                  is
incorporated or resident in a country which has a double taxation treaty with
Italy pursuant to which no withholding on account of income tax is required to
be made on any payments under this Agreement with respect to Facility A and
Facility C.

 13
 

 

 

(b)                                 in
relation to Facility B and Facility C (with respect to Loans made or to be made
to the US Borrower), a bank or financial institution which, at the date of this
Agreement or, in the case of assignee or transferee under Clause 24 (Changes to the Lenders), at the date of
such assignment or (as the case may be) at the date of the relevant Transfer
Certificate:

	
   

  	
  (i)

  	
  is entitled to receive all payments under this
  Agreement free of any withholding tax on account of income tax in the United
  States of America; or

  
	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
  is resident (as such term is defined in the appropriate
  convention (a “Double Taxation Treaty”)
  between the government of the United States of America and any other
  government for the avoidance of double taxation and prevention of fiscal
  evasion with respect to taxes on income and capital gains in a country with
  which the United States of America has an appropriate Double Taxation Treaty
  giving residents in that country full exemption from income tax on interest
  in the United States of America, is eligible for full exemption from income
  tax on all payments received or to be received under this Agreement under
  such double taxation treaty and participating through a Facility Office that
  entitles it to receive all payments under this Agreement free of any
  withholding tax on account of income tax in the United States of America; and

  
	
   

  	
   

  	
   

  
	
   

  	
  (iii)

  	
  has delivered to the Obligor (a) two original
  copies of the United States Internal Revenue Service Form

  W-8BEN (or any successor form) certifying that it is a resident of a
  foreign country with which the United States has an income tax treaty and
  that it is entitled to exemption from United States withholding tax with
  respect to all payments to be made to the Lender under the Finance Documents
  under such treaty, (b) two original copies of the United States Internal
  Revenue Service Form W-8ECI (or any successor form) certifying
  that the payments made pursuant to the Finance Documents are effectively
  connected with the conduct by the Lender of a trade or business within the
  United States, (c) two original copies of the United States Internal
  Revenue Service Form W-9 (or any successor form) certifying that
  the Lender is a United States person for United States federal income tax
  purposes or, (d) any other applicable form prescribed by the Internal
  Revenue Service certifying as to the Lender’s entitlement to exemption from
  United States withholding tax with respect to all payments to be made to the
  Lender under the Finance Documents.

  
	
   

  	
   

  	
   

  

“Qualifying Shareholder”
means:

(a)                                  Leonardo
Del Vecchio and any person with whom he is connected (as that term is defined
in Sections 839 (2), (6) and (7) of the Income and Corporation Taxes
Act 1988 of England and Wales) (together a “Qualifying
Shareholder”);

(b)                                 any
company controlled by a Qualifying Shareholder; or

(c)                                  any
trust or other similar entity in which a Qualifying Shareholder whether alone
or together with one or more other Qualifying Shareholders has all or
substantially all of the beneficial interests.

“Quarter Date” means each
31 March, 30 June, 30 September and 31 December.

“Quotation Day” means, in
relation to any period for which an interest rate is to be determined:

 14
 

 

 

(a)                                  (if
the currency is euro) two TARGET Days before the first day of that period
unless market practice differs in the Relevant Interbank Market, in which case
the Quotation Day will be determined by the Italian Agent in accordance with
market practice in the Relevant Interbank Market (and if quotations would
normally be given by leading banks in the European interbank market on more
than one day, the Quotation Day will be the last of those days); or

(b)                                 (if
the currency is US$) two Business Days (with respect to London and New York)
before the first day of that period unless market practice differs in the
Relevant Interbank Market, in which case the Quotation Day will be determined
by the US Agent in accordance with market practice in the Relevant Interbank
Market (and if quotations would normally be given by leading banks in the
Relevant Interbank Market on more than one day, the Quotation Day will be the
last of those days).

“Reference Banks” means,
in relation to LIBOR the principal London offices of ABN AMRO, Banca Intesa
S.p.A. and Citibank, N.A. and, in relation to EURIBOR, the principal office in
Milan of ABN AMRO, Banca Intesa S.p.A. and Citibank, N.A. or such other banks
as may be appointed by the Italian Agent in consultation with the Italian
Borrower.

“Relevant Interbank Market”
means in relation to euro, the European interbank market, and, in relation to
US$, the London interbank market.

“Relevant Period” means
each period of twelve months ending on the last day of the Italian Borrower’s
financial year and each period of twelve months ending on the last day of each
quarter of the Italian Borrower’s financial year.

“Repayment Instalment”
means each instalment for repayment of the Facility A Loans referred to in
Clause 7.1 (Repayment of Facility A Loans).

“Repeating Representations”
means each of the representations set out in Clauses 19.1 (Status) to 19.6 (Governing law and enforcement) and Clause
19.9 (No Default) to Clause 19.21
(ERISA and Multiemployer Plans)
other than sub-clause (b) of Clause 19.9 (No
Default), Clause 19.10 (No
misleading information) and sub-clause (c) of Clause 19.11 (Financial Statements).

“Rollover Loan” means one or more Facility C
Loans:

(a)                                  made
or to be made on the same day that a maturing Facility C Loan is due to be
repaid;

(b)                                 the
aggregate amount of which is equal to or less than the maturing Facility C Loan
(or to the extent such Loan is denominated in an Optional Currency, the
aggregate Base Currency Amount of such Loan is equal to or less than the
Optional Currency Amount outstanding as calculated at the Agent’s Spot Rate of
Exchange applicable to the relevant Utilisation Request);

(c)                                  in
the same currency as the maturing Facility C Loan (unless it arose as a result
of the operation of Clause 6 (Unavailability
of currency)); and

(d)                                 made
or to be made to the same Borrower for the purpose of refinancing a maturing
Facility C Loan.

 15
 

 

 

“Screen Rate” means:

(a)                                  in
relation to EURIBOR, the percentage rate per annum determined by the Banking
Federation of the European Union for the relevant period; and

(b)                                 in
relation to LIBOR, the British Bankers’ Association Interest Settlement Rate
for the relevant currency and period; and

in each case displayed on the appropriate page of the Telerate
screen. If the agreed page is replaced or service ceases to be available,
the Agent may specify another page or service displaying the appropriate
rate after consultation with the Italian Borrower and the Lenders.

“Security” means a
mortgage, charge, pledge, lien or other security interest securing any
obligation of any person or any other agreement or arrangement having a similar
effect.

“Selection Notice” means a
notice substantially in the form set out in Part II of Schedule 3 (Requests) given in accordance with Clause
10 (Interest Periods) in relation
to Facility A or, as the case may be, Facility B.

“Specified Time” means a
time determined in accordance with Schedule 9 (Timetables).

“SPV” means Colorado
Acquisition Corp., a company incorporated under the laws of Delaware whose
share capital is 100 per cent. owned and controlled, directly or indirectly by
the US Borrower.

“Subsidiary” means in relation to any
company or corporation, a company or corporation:

(a)                                  which
is controlled, directly or indirectly, by the first mentioned company or
corporation;

(b)                                 more
than half the issued share capital of which is beneficially owned, directly or
indirectly by the first mentioned company or corporation; or

(c)                                  which
is a Subsidiary of another Subsidiary of the first mentioned company or
corporation,

and for this purpose, a company or corporation shall be treated as
being controlled by another if that other company or corporation is able to
direct its affairs and/or to control the composition of its board of directors
or equivalent body.

“Target” means Cole
National Corporation, a company incorporated under the laws of Delaware, United
States of America.

“TARGET” means
Trans-European Automated Real-time Gross Settlement Express Transfer payment
system.

“TARGET Day” means any day
on which TARGET is open for the settlement of payments in euro.

“Tax” means any tax, levy,
impost, duty or other charge or withholding of a similar nature (including any
penalty or interest payable in connection with any failure to pay or any delay
in paying any of the same).

 16
 

 

 

“Termination Date” means: (i) for
each Lender in respect of Facility A, the date falling 5 years from the date of
this Agreement; and (ii) for each Lender in respect of Facility B and
Facility C, the date falling 5 years from the Amendment and Restatement Date
subject to Clause 7.4 (Extension of
Termination Date), provided that if such day is not a Business Day,
it shall be the immediately preceding Business Day.

“Total Commitments” means
the aggregate of the Total Facility A Commitments, the Total Facility B
Commitments and the Total Facility C Commitments, being €1,130,000,000 and
US$325,000,000 at the date of this Agreement.

“Total Consideration”
means the purchase price of Target payable pursuant to the Acquisition
Documents.

“Total Facility A Commitments”
means the aggregate of the Facility A Commitments, being €405,000,000 at the
date of this Agreement.

“Total Facility B Commitments”
means the aggregate of the Facility B Commitments, being US$325,000,000 at the
date of this Agreement.

“Total Facility C Commitments”
means the aggregate of the Facility C Commitments being €725,000,000 at the
date of this Agreement.

“Transfer Certificate”
means a certificate substantially in the form set out in Schedule 5 (Form of Transfer Certificate) or any
other form agreed between the Agent and the Italian Borrower.

“Transfer Date” means, in
relation to a transfer, the later of:

(a)                                  the
proposed Transfer Date specified in the Transfer Certificate; and

(b)                                 the
date on which the Agent executes the Transfer Certificate.

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

“Unpaid Sum” means any sum
due and payable but unpaid by an Obligor under the Finance Documents.

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

“U.S. Group Company” means
any member of the Group incorporated in any State of the United States of
America.

“Utilisation” means a
utilisation of a Facility.

“Utilisation Date” means
the date of a Utilisation, being the date on which the relevant Loan is to be
made.

“Utilisation Request”
means a notice substantially in the form set out in Part I of Schedule 3 (Requests).

 17
 

 

 

“VAT” means value added
tax as provided for in the Value Added Tax Act 1994 and any other tax of a
similar nature.

1.2.                              Construction

(a)                                  Unless
a contrary indication appears any reference in this Agreement to:

(i)                                     the
“Agent” shall be construed as a
reference to (in relation to Facility A and Facility C (in so far as the
currency specified in any Facility C Utilisation Request is the Base Currency)
the Italian Agent and (in relation to Facility B and in relation to Facility C
(in so far as the currency specified in any Facility C Utilisation Request is
the Optional Currency)) the US Agent;

(ii)                                  the
“Agent”, the “Mandated
Lead Arranger”, any “Finance Party”,
any “Lender”, any “Obligor”
or any “Party” shall be construed so as to
include its successors in title, permitted assigns and permitted transferees;

(iii)                               the
“Borrower” shall be construed as a
reference to (in relation to Facility A and Facility C) the Italian Borrower
and (in relation to Facility B and Facility C) the US Borrower;

(iv)                              “assets” includes present and future properties, revenues and
rights of every description;

(v)                                 a
“Finance Document” or any other
agreement or instrument is a reference to that Finance Document or other
agreement or instrument as amended or novated;

(vi)                              “indebtedness” includes any obligation (whether incurred as
principal or as surety) for the payment or repayment of money, whether present
or future, actual or contingent;

(vii)                           a “person” includes any person, firm, company, corporation,
government, state or agency of a state or any association, trust or partnership
(whether or not having separate legal personality) of two or more of the
foregoing;

(viii)                        a “regulation” includes any regulation, rule, official
directive, request or guideline (whether or not having the force of law) of any
governmental, intergovernmental or supranational body, agency, department or
regulatory, self-regulatory or other authority or organisation;

(ix)                                a
provision of law is a reference to that provision as amended or reenacted;

(x)                                   a
time of day is a reference to Milan time; and

(xi)                                “the
date hereof” or “the date of this Agreement” shall be construed as a reference
to 3 June 2004.

(b)                                 Section,
Clause and Schedule headings are for ease of reference only.

 18
 

 

 

(c)                                  Unless
a contrary indication appears, a term used in any other Finance Document or in
any notice given under or in connection with any Finance Document has the same
meaning in that Finance Document or notice as in this Agreement.

(d)                                 A
Default (other than an Event of Default) is “continuing” if it has not been
remedied or waived and an Event of Default is continuing if it has not been
waived.

1.3.                              Currency
Symbols and Definitions

“US$” and “USD” denote lawful currency of the United
States of America and “EM”, “€” and “euro”
means the single currency unit of the Participating Member States.

1.4.                              Third
party rights

(a)                                  Unless
expressly provided to the contrary in a Finance Document, a person who is not a
Party has no right under the Contracts (Rights
of Third Parties) Act 1999 to enforce or to enjoy the benefit of any
term of this Agreement.

(b)                                 Notwithstanding
any term of any Finance Document, the consent of any person who is not a Party
is not required to rescind or vary this Agreement at any time.

SECTION 2

THE FACILITIES

2.                                       THE
FACILITIES

2.1.                              The
Facilities

Subject to the terms of this Agreement:

(a)                                  the
Facility A Lenders make available to the Italian Borrower a euro term loan
facility in an aggregate amount equal to the Total Facility A Commitments;

(b)                                 the
Facility B Lenders make available to the US Borrower a USD term loan facility
in an aggregate amount equal to the Total Facility B Commitments; and

(c)                                  the
Facility C Lenders make available to the Borrowers a euro and USD multicurrency
revolving loan facility in an aggregate amount equal to the Total Facility C
Commitments.

2.2.                              Finance
Parties’ rights and obligations

(a)                                  The
obligations of each Finance Party under the Finance Documents are several.
Failure by a Finance Party to perform its obligations under the Finance
Documents does not affect the obligations of any other Party under the Finance
Documents. No Finance Party is responsible for the obligations of any other
Finance Party under the Finance Documents.

(b)                                 The
rights of each Finance Party under or in connection with the Finance Documents
are separate and independent rights and any debt arising under the Finance
Documents to a Finance Party from an Obligor shall be a separate and
independent debt.

 19
 

 

 

(c)                                  A
Finance Party may, except as otherwise stated in the Finance Documents,
separately enforce its rights under the Finance Documents.

3.                                       PURPOSE

3.1.                              Purpose

(a)                                  The
Italian Borrower shall apply all amounts borrowed by it under Facility A
towards funding general corporate purposes including towards refinancing the
Existing Indebtedness as and when it falls due and payable;

(b)                                 The
US Borrower shall apply all amounts borrowed by it under Facility B towards
funding directly or indirectly the Total Consideration and any related
transaction fees and costs;

(c)                                  Each
Borrower shall apply all amounts borrowed by it under Facility C for the
general corporate purpose of the Group.

3.2.                              Monitoring

No Finance Party is bound to monitor or verify the application of any
amount borrowed pursuant to this Agreement.

4.                                       CONDITIONS
OF UTILISATION

4.1.                              Initial
conditions precedent

(a)                                  The
Italian Borrower may not deliver a Utilisation Request under Facility A and no
Borrower may deliver a Utilisation Request under Facility C unless the Agent
has received all of the documents and other evidence listed in Part I of
Schedule 2 (Conditions precedent)
in form and substance satisfactory to the Agent acting reasonably. The Agent
shall notify the Borrowers and the Lenders promptly upon being so satisfied.

(b)                                 The
US Borrower may not deliver a Utilisation Request under Facility B unless the
US Agent has received all of the documents and other evidence listed in Part I
and Part II of Schedule 2 (Conditions
Precedent) in form and substance satisfactory to the US Agent acting
reasonably. The US Agent shall notify the US Borrower and the Facility B
Lenders promptly upon being so satisfied.

4.2.                              Further
conditions precedent

The Lenders will only be obliged to comply with Clause 5.4 (Lenders’ participation) if on the date of
the Utilisation Request and on the proposed Utilisation Date:

(a)                                  in
the case of a Rollover Loan, no Event of Default is continuing or would result
from the proposed Loan and, in the case of any other Loan, no Default is
continuing or would result from the proposed Loan; and

(b)                                 the
Repeating Representations to be made by each Obligor are true in all material
respects.

 20

 

4.3.                  Conditions relating to the Optional Currency

US$ will constitute an Optional Currency in relation to a Facility C
Loan if US$ are readily available in the amount required and freely convertible
into the Base Currency in the Relevant Interbank Market on the Quotation Day
and the Utilisation Date for that Loan.

4.4.                              Maximum number of Loans

(a)                                  A
Borrower may not deliver a Utilisation Request if as a result of the proposed
Utilisation:

(i)                                     3
or more Facility A Loans would be outstanding; or

(ii)                                  3
or more Facility B Loans would be outstanding; or

(iii)                               7
or more Facility C Loans would be outstanding.

(b)                                 The
Italian Borrower may not request that a Facility A Loan be divided if, as a
result of the proposed division, 6 or more Facility A Loans would be outstanding.

(c)                                  The
US Borrower may not request that a Facility B Loan be divided if, as a result
of the proposed division, more than 6 Facility B Loans would be outstanding.

(d)                                 Any
Loan made by a single Lender under Clause 6 (Unavailability
of currency) shall not be taken into account in this Clause 4.4.

SECTION 3

UTILISATION

5.                                       UTILISATION

5.1.                              Delivery of a Utilisation Request

A Borrower may utilise a Facility by delivery to the Agent of a duly
completed Utilisation Request not later than the Specified Time.

5.2.                              Completion of a Utilisation Request

(a)                                  Each
Utilisation Request is irrevocable and will not be regarded as having been duly
completed unless:

(i)                                     it
identifies the Facility to be utilised;

(ii)                                  the
proposed Utilisation Date is a Business Day within the Availability Period
applicable to that Facility;

(iii)                               the
currency and amount of the Utilisation comply with Clause 5.3 (Currency and amount); and

(iv)                              the
proposed Interest Period complies with Clause 10 (Interest
Periods).

 21
 

 

(b)                                 Only
one Loan may be requested in each Utilisation Request.

5.3.                  Currency and amount

(a)                                  The
currency specified in a Utilisation Request must be the Base Currency or (in
the case of Facility C) the Base Currency or the Optional Currency.

(b)                                 The
amount of the proposed Loan must be:

(i)                                     in
the case of Facility A, a minimum of €25,000,000 or, if less, the Available
Facility; or

(ii)                                  in
the case of Facility B a minimum of US$25,000,000 or, if less, the Available
Facility; or

(iii)                               in
the case of Facility C:

(1)                                  if
the currency selected is the Base Currency, a minimum of €15,000,000; or

(2)                                  if
the currency selected is the Optional Currency, a minimum of US$15,000,000,

or if less,
the Available Facility; and

(iv)                              in
any event such that its Base Currency Amount is less than or equal to the
Available Facility.

5.4.                              Lenders’ participation

(a)                                  If
the conditions set out in this Agreement have been met, each Lender shall make
its participation (if any) in each Loan available by the Utilisation Date
through its Facility Office.

(b)                                 The
amount of each Lender’s participation in each Loan will be equal to the
proportion borne by its Available Commitment in respect of the relevant
Facility to the Available Facility of such Facility immediately prior to making
the Loan.

(c)                                  The
US Agent shall determine the Base Currency Amount of each Facility C Loan which
is to be made in the Optional Currency and shall notify each Facility C Lender
of the amount, and the Base Currency Amount of each Facility C Loan and the
amount of its participation in that Facility C Loan, in each case by the
Specified Time.

6.                                       UNAVAILABILITY OF CURRENCY

6.1.                              If before
the Specified Time on any Quotation Day:

(a)                                  a
Facility C Lender notifies the US Agent that the Optional Currency (if
requested) is not readily available to it in the amount required; or

 22
 

 

(b)                                 a
Facility C Lender notifies the US Agent that compliance with its obligation to
participate in a Facility C Loan in the Optional Currency (if requested) would
contravene a law or regulation applicable to it,

the Agent will give notice to the relevant Borrower to that effect by
the Specified Time on that day. In this event, any Facility C Lender that gives
notice pursuant to this Clause 6 will be required to participate in the Loan in
the Base Currency (in an amount equal to that Lender’s proportion of the Base
Currency Amount, or in respect of a Rollover Loan, an amount equal to that
Lender’s proportion of the Base Currency Amount of the Rollover Loan that is
due to be made) and its participation will be treated as a separate Loan
denominated in the Base Currency during that Interest Period.

SECTION 4

REPAYMENT, PREPAYMENT AND CANCELLATION

7.                                       REPAYMENT

7.1.                              Repayment
of Facility A Loans

(a)                                  The
Italian Borrower shall repay any Facility A Loan made to it in instalments by
repaying on each Facility A Repayment Date the portion of such Facility A Loans
set out opposite each Facility A Repayment Date below:

	
  

  	
  Facility A Repayment Date

  	
   

  	
   

  	
  Portion of the aggregate of the 

  original principal amount of the

  Facility A Loans to be repaid

  
	
  4 June 2007

  	
   

  	
  1/9th

  
	
  3 September 2007

  	
   

  	
  1/9th

  
	
  3 December 2007

  	
   

  	
  1/9th

  
	
  3 March 2008

  	
   

  	
  1/9th

  
	
  3 June 2008

  	
   

  	
  1/9th

  
	
  3 September 2008

  	
   

  	
  1/9th

  
	
  3 December 2008

  	
   

  	
  1/9th

  
	
  3 March 2009

  	
   

  	
  1/9th

  
	
  Termination Date

  	
   

  	
  1/9th

  

 

(b)                                 The
Italian Borrower shall repay any other amounts outstanding under Facility A on
the Termination Date.

(c)                                  If,
in relation to any Facility A Repayment Date, the aggregate amount of the
Facility A Loans made to the Italian Borrower exceeds the Repayment Instalment to
be repaid by the Italian Borrower, the Italian Borrower may, if it gives the
Agent not less than five Business Days’ prior notice, select which of those
Facility A Loans will be wholly or partially repaid so that the Repayment
Instalment is repaid on the relevant Facility A 

 23
 

 

Repayment Date
in full. The Italian Borrower may not make a selection if as a result more than
one Facility A Loan will be partially repaid.

(d)                                 If
the Italian Borrower fails to deliver a notice to the Agent in accordance with
paragraph (b) above, the Agent shall select the Facility A Loans to be
wholly or partially repaid.

(e)                                  The
Italian Borrower may not reborrow any part of Facility A which is repaid.

7.2.                              Repayment of Facility B Loans

The US Borrower shall repay any Facility B Loan made to it in full on
the Termination Date.

7.3.                              Repayment of Facility C Loans

Each Borrower which has drawn a Facility C Loan shall repay that Loan
on the last day of its Interest Period.

7.4.                              Extension of Termination Date

(a)                                  The
Italian Borrower may request that the Termination Date for Facility B and
Facility C be extended upon giving notice to the Agent no less than 45 days and
no more than 60 days prior to: (i) the first anniversary (a “First Anniversary Request”); and (ii) the second
anniversary (a “Second Anniversary Request”) of
the Amendment and Restatement Date.

(b)                                 Subject
to Clause 7.5 (Extension fee)
below, following a request from the Italian Borrower pursuant to paragraph (a) above,
the Termination Date for a Lender’s Facility B Commitment and, as the case may
be, Facility C Commitment shall automatically be extended upon obtaining the
consent of a Facility B Lender and, as the case may be, Facility C Lender (each
a “Consenting Lender”):

(i)                                     to
a First Anniversary Request, by a period of one year (the “First
Extension Period”) starting on the original Termination Date; and

(ii)                                  to
a Second Anniversary Request, by an additional period of one year following the
expiry of the relevant First Extension Period provided that a Facility B Lender
and a Facility C Lender may not consent to a Second Anniversary Request if it
has not consented to a First Anniversary Request in respect of the relevant
Facility,

in each case such
Lender’s consent to have been provided no later than the date falling 30 days
prior to the first or, as applicable, second anniversary of the Amendment and
Restatement Date.

(c)                                  In
the event that a Facility B Lender and, as the case may be, a Facility C Lender
does not consent to a First Anniversary Request or, following its consent to a
First Anniversary Request, does not consent a Second Anniversary Request, or,
alternatively does not provide its consent by the date falling 30 days prior to
the first or, as applicable, the second anniversary of the Amendment and
Restatement Date (each a “Dissenting Lender”):

 24
 

 

(i)                                     the
Borrowers shall repay in full the portion of any Dissenting Lender’s
outstanding Facility B Loans and, as the case may be, Facility C Loans; and

(ii)                                  the
Facility B Available Commitment and, as the case may be, Facility C Available
Commitment of such Dissenting Lender shall automatically be cancelled in full,

in relation to a First Anniversary Request,
upon the original Termination Date and in relation to a Second Anniversary
Request, upon the expiry of the First Extension Period, in each case pursuant
to paragraph (b) above.

(d)                                 The
Italian Borrower shall only make one First Anniversary Request or, as the case
may be, one Second Anniversary Request in respect of both Facility B and
Facility C and a Lender which is a Facility B Lender and a Facility C Lender
may only consent to such First Anniversary Request or, as the case may be, such
Second Anniversary Request in respect of both Facility B and Facility C.

(e)                                  The
Agent shall notify the Italian Borrower in writing the names of the Consenting
Lenders and/or the Dissenting Lenders, as the case may be.

7.5.                              Extension fee

(a)                                  Following
a Lender’s consent to the extension of the Termination Date for Facility B and
Facility C pursuant to paragraph (b) of Clause 7.4 (Extension of Termination Date) above, the
Borrowers shall pay to the Agent (for the account of such Consenting Lender) an
extension fee in an aggregate amount equal to 0.025 per cent. of the portion of
such Lender’s Facility B Commitment and, as the case may be, Facility C
Commitment for which the Lender’s Termination Date shall be extended.

(b)                                 Such
extension fee shall be payable in full, with respect to a First Anniversary
Request or, as the case may be, a Second Anniversary Request the next Business
Day following the date upon which the Agent confirms to the Italian Borrower
pursuant to Clause 7.4(e) above that consent has been obtained from all
the Consenting Lenders to such First Anniversary Request or, as the case may
be, such Second Anniversary Request and that the extension of the Termination
Date for Facility B and C has become effective with respect to each of the
Consenting Lenders.

8.                                       PREPAYMENT AND CANCELLATION

8.1.                              Illegality

If, at any time, it is or it becomes unlawful in any applicable
jurisdiction for a Lender to perform any of its obligations as contemplated by
this Agreement or to fund or maintain its participation in any Loan:

(a)                                  that
Lender shall promptly notify the Agent upon becoming aware of that event;

(b)                                 upon
the Agent notifying the Italian Borrower, the Commitment of that Lender will be
immediately cancelled; and

 25
 

 

(c)                                  each
Borrower shall repay that Lender’s participation in the Loans made to that
Borrower on the last day of the Interest Period for each Loan occurring after
the Agent has notified the Italian Borrower or, if earlier, the date specified
by the Lender in the notice delivered to the Agent which shall not be earlier
than the last date as determined by applicable law or regulation for the
repayment of any such Loan.

8.2.                              Change of control

(a)                                  If
(1) any person or group of persons (acting in concert) other than a
Qualifying Shareholder (the “New Shareholder(s)”)
has gained control of the Italian Borrower (a “Control
Event”) or (2) circumstances exist that might reasonably give
rise to the occurrence of a Control Event, the Italian Borrower shall, to the
extent it can do so without breaching any applicable law or regulation or
contract and subject always to Clause 25 (Confidentiality),
promptly notify the Agent upon becoming aware of that event.

(b)                                 If
within 20 days of receiving the notice referred to in Sub clause (a) the
Majority Lenders:

(i)                                     determine,
acting reasonably and in good faith, that the New Shareholder(s) are of a
reputation that gives the Majority Lenders reason to believe that any amounts
due under the Finance Documents will not be repaid as and when they become due;
and

(ii)                                  deliver
a written notice through the Italian Agent to the Italian Borrower to this
effect,

then upon the later of (i) the receipt of the notice pursuant to
paragraph (b) above and (ii) the occurrence of the Control Event the
Agent shall, by not less than 45 days’ notice to the Borrowers (by means of a
notice in addition to the one specified in b(ii) above), cancel the Total
Commitments and declare all outstanding Loans, together with accrued interest,
and all other amounts accrued under the Finance Documents immediately due and
payable, whereupon the Total Commitments will be cancelled and all outstanding
amounts will become immediately due and payable.

(c)                                  For
the purposes of this Clause 8.2 “control” shall
be construed in accordance with the first and second paragraphs of Article 2359
of the Italian Civil Code and Article 93 of Legislative Decree No. 58
of 24 February 1998 (as subsequently amended or supplemented).

8.3.                              Acquisition Documents

If any party to the Acquisition Documents rescinds or repudiates any of
those agreements or instruments in whole or in part and following such
rescission or repudiation, the consideration paid by a member of the Group for
Target is repaid to such Group member, if the Majority Lenders, acting
reasonably and in good faith, confirm to the Italian Borrower in writing
through the Italian Agent that such rescission or repudiation is likely to have
a material adverse effect on the interests of the Lenders under the Finance
Documents, then the Agent shall, by not less than 30 days’ notice to the US
Borrower, require the repayment of the Facility B Loans, together with accrued
interest on Facility B on the last day of the Interest Period falling not less
than 30 days after the receipt of such notice.

 26
 

 

8.4.                              Voluntary cancellation

Each Borrower may, if it gives the Agent not less than 10 Business Days’
(or such shorter period as the Majority Lenders may agree) prior notice, cancel
the whole or any part (being a minimum amount of €10,000,000 with respect to
Facility A or Facility C, and US$10,000,000 with respect to Facility B) of an
Available Facility. Any cancellation under this Clause 8.4 shall reduce the
Commitments of the Facility A Lenders or, as the case may be, Facility B Lenders
or, as the case may be, Facility C Lenders rateably under that Facility.

8.5.                              Cancellation of Facility B

The whole of the Available Facility with respect to Facility B shall
automatically be cancelled upon receipt by the Agent of written confirmation
(by way of a written notice to the Agent from a Borrower) by a Borrower that it
does not intend to proceed with the Acquisition.

8.6.                              Voluntary prepayment of Facility A Loans

(a)                                  The
Italian Borrower may, if it gives the Agent not less than 10 Business Days’ (or
such shorter period as the Majority Lenders may agree) prior notice, prepay the
whole or any part of any Facility A Loan (but, if in part, being a minimum
amount of  €10,000,000).

(b)                                 A
Facility A Loan may only be prepaid after the last day of the Availability
Period for Facility A (or, if earlier, the day on which the applicable
Available Facility is zero).

(c)                                  Any
prepayment under this Clause 8.6 shall satisfy the obligations under Clause 7.1
(Repayment of Facility A Loans)
pro-rata across all Facility A repayment instalments set out at Clause 7.1 (Repayment of Facility A Loans).

8.7.                              Voluntary Prepayment of Facility B Loans

(a)                                  The
US Borrower may, if it gives the Agent not less than 10 Business Days’ (or such
shorter period as the Majority Lenders may agree) prior notice, prepay the
whole or any part of any Facility B Loan (but if in part, being on a minimum
amount of US$10,000,000).

(b)                                 A
Facility B Loan may only be prepaid after the last day of the Availability
Period for Facility B (or, if earlier, the day on which the applicable
Available Facility is zero).

8.8.                              Voluntary Prepayment of Facility C Loans

A Borrower to which a Facility C Loan has been made may, if it gives
the Agent not less than 10 Business Days’ (or such shorter period as the Majority
Lenders may agree) prior notice, prepay the whole or any part of a Facility C
Loan (but if in part, being an amount that reduces the Base Currency Amount of
the Facility C Loan by a minimum amount of €10,000,000).

8.9.                              Right of repayment and cancellation in relation to a
single Lender

(a)                                  If:

(i)                                     any
sum payable to any Lender by an Obligor is required to be increased under
paragraph (c) of Clause 13.2 (Tax gross-up);
or

 27
 

 

(ii)                                  any
Lender claims indemnification from either Borrower under Clause 13.3 (Tax indemnity) or Clause 14.1 (Increased
costs); or

(iii)                               any
Lender notifies the Agent of its Additional Cost Rate under paragraph 3 of
Schedule 4 (Mandatory Cost formulae),

the Italian Borrower may, whilst (in the case of paragraphs (i) and
(ii) above) the circumstance giving rise to the requirement or
indemnification continues or (in the case of paragraph (iii) above) the
Additional Cost Rate is greater than zero, give the Agent notice of
cancellation of the Commitment of that Lender and its intention to procure the
repayment of that Lender’s participation in the Loans.

(b)                                 On
receipt of a notice referred to in paragraph (a) above, the Commitment of
that Lender shall immediately be reduced to zero.

(c)                                  On
the last day of each Interest Period which ends after the Italian Borrower has
given notice under paragraph (a) above (or, if earlier, the date specified
by the Italian Borrower in that notice), each Borrower in relation to which a
Loan is outstanding shall repay that Lender’s participation in that Loan.

8.10.                        Restrictions

(a)                                  Any
notice of cancellation or prepayment given by any Party under this Clause 8
shall be irrevocable and, unless a contrary indication appears in this
Agreement, shall specify the date or dates upon which the relevant cancellation
or prepayment is to be made and the amount of that cancellation or prepayment.

(b)                                 Any
prepayment under this Agreement shall be made together with accrued interest on
the amount prepaid and, subject to any Break Costs (other than in the case of
prepayment under Clause 8.1 (Illegality)
in respect of which no Break Costs shall be payable), without premium or
penalty.

(c)                                  No
Borrower may reborrow any part of Facility A or Facility B which is prepaid.

(d)                                 Unless
a contrary indication appears in this Agreement, any part of Facility C which
is prepaid may be reborrowed in accordance with the terms of this Agreement.

(e)                                  The
Borrowers shall not repay or prepay all or any part of the Loans or cancel all
or any part of the Commitments except at the times and in the manner expressly
provided for in this Agreement.

(f)                                    No
amount of the Total Commitments cancelled under this Agreement may be
subsequently reinstated.

(g)                                 If
an Agent receives a notice under this Clause 8 it shall promptly forward a copy
of that notice to either the affected Borrower or the affected Lender, as
appropriate.

 28
 

 

SECTION 5

COSTS OF
UTILISATION

9.                                       INTEREST

9.1.                              Calculation of interest

The rate of interest on each Loan for each Interest Period is the
percentage rate per annum which is the aggregate of the applicable:

(a)                                  Margin;

(b)                                 in
relation to any Loan in euro, EURIBOR or, in relation to any Loan made in USD,
LIBOR; and

(c)                                  Mandatory
Cost, if any.

9.2.                              Payment of interest

The Borrower to which a Loan has been made shall pay accrued interest
on that Loan on the last day of each Interest Period.

9.3.                              Default interest

(a)                                  If
an Obligor fails to pay any amount (other than interest) payable by it under a
Finance Document on its due date, interest shall accrue on the overdue amount
from the due date up to the date of actual payment (both before and after
judgment) at a rate which, subject to paragraph (b) below, is one per
cent, per annum higher than the rate which would have been payable if the
overdue amount had, during the period of non-payment, constituted a Loan in the
currency of the overdue amount for successive Interest Periods, each of a
duration selected by the Agent (acting reasonably). Any interest accruing under
this Clause 9.3 shall be immediately payable by the Obligor on demand by an
Agent.

(b)                                 If
any overdue amount consists of all or part of a Loan which became due on a day
which was not the last day of an Interest Period relating to that Loan:

(i)                                     the
first Interest Period for that overdue amount shall have a duration equal to
the unexpired portion of the current Interest Period relating to that Loan; and

(ii)                                  the
rate of interest applying to the overdue amount during that first Interest
Period shall be one per cent. per annum higher than the rate which would have
applied if the overdue amount had not become due.

(c)                                  Default
interest (if unpaid) arising on an overdue amount will not be compounded with
the overdue amount at the end of each Interest Period and will remain
immediately due and payable.

9.4.                              Notification of rates of interest

The Agent shall promptly notify the Lenders and the relevant Borrower
of the determination of a rate of interest under this Agreement.

 29
 

 

 

10.                                 INTEREST
PERIODS

10.1.                        Selection of Interest Periods

(a)                                  A
Borrower may select an Interest Period for a Loan in the Utilisation Request
for that Loan or (if the Loan has already been borrowed) in a Selection Notice.

(b)                                 Each
Selection Notice for a Facility A Loan and for a Facility B Loan is irrevocable
and must be delivered to the Agent by the Italian Borrower and the US Borrower
respectively, not later than the Specified Time.

(c)                                  If
a Borrower fails to deliver a Selection Notice to the Agent in accordance with
paragraph (b) above, the relevant Interest Period will, subject to Clause
10.2 (Changes to Interest Periods),
be three Months.

(d)                                 Subject
to this Clause 10, a Borrower may select an Interest Period of one, two, three
or six Months or any other period agreed between a Borrower and the Agent
acting on the instructions of all the Lenders. In addition, the Italian Borrower
may select an Interest Period of (in relation to Facility A) a period of not
being one, two, three or six months, (but in any event not greater than six
months), if necessary to ensure that there are sufficient Facility A Loans
which have an Interest Period ending on a Facility A Repayment Date for the
Italian Borrower to make the Repayment Instalment due on that date.

(e)                                  An
Interest Period for a Loan shall not extend beyond the Termination Date
applicable to its Facility.

(f)                                    Each
Interest Period for a Facility A Loan or a Facility B Loan shall start on the
Utilisation Date or (if already made) on the last day of the relevant preceding
Interest Period.

(g)                                 A
Facility C Loan has one Interest Period only.

10.2.                        Changes to Interest Periods

(a)                                  Prior
to determining the interest rate for a Facility A Loan, the Agent may shorten
an Interest Period for any Facility A Loan to ensure there are sufficient
Facility A Loans which have an Interest Period ending on a Facility A Repayment
Date for the Italian Borrower to make the Repayment Instalment due on that
date.

(b)                                 If
the Agent makes a change to an Interest Period referred to in paragraph (a) above,
it shall promptly notify the Italian Borrower and the Lenders.

10.3.                        Non-Business Days

If an Interest Period would otherwise end on a day which is not a
Business Day, that Interest Period will instead end on the next Business Day in
that calendar month (if there is one) or the preceding Business Day (if there
is not).

 

 30

 

10.4.                        Consolidation and division of Facility A Loans and of
Facility B Loans

(a)                                  Subject
to paragraph (b) below, if two or more Interest Periods:

(i)                                     relate
to Facility A Loans; and

(ii)                                  end
on the same date,

those Facility A Loans will, unless that Borrower specifies to the
contrary in the Selection Notice for the next Interest Period, be consolidated
into, and treated as, a single Facility A Loan on the last day of the Interest
Period.

(b)                                 Subject
to Clause 4.4 (Maximum number of Loans)
and Clause 5.3 (Currency and amount),
if the Italian Borrower requests in a Selection Notice that a Facility A Loan
be divided into two or more Facility A Loans, that Facility A Loan will, on the
last day of its Interest Period, be so divided in the amounts specified in that
Selection Notice, being an aggregate amount equal to the amount of the Facility
A Loan immediately before its division.

(c)                                  Subject
to paragraph (d) below, if two Interest Periods:

(i)                                     relate
to Facility B Loans; and

(ii)                                  end
on the same date,

those Facility B Loans, will, unless the US Borrower specifies to the
contrary in the Selection Notice for the next Interest Period, be consolidated
into, and treated as, a single Facility B Loan on the last day of the Interest
Period.

(d)                                 Subject
to Clause 4.4 (Maximum number of Loans)
and Clause 5.3 (Currency and amount),
if the US Borrower requests in a Selection Notice that a Facility B Loan be
divided into two Facility B Loans, that Facility B Loan will, on the last day
of its Interest Period, be so divided in the amounts specified in that
Selection Notice, being an aggregate amount equal to the amount of the Facility
B Loan immediately before its division.

11.                                 CHANGES TO
THE CALCULATION OF INTEREST

11.1.                        Absence of quotations

Subject to Clause 11.2 (Market disruption),
if EURIBOR or, if applicable, LIBOR is to be determined by reference to the
Reference Banks but a Reference Bank does not supply a quotation by the
Specified Time on the Quotation Day, the applicable EURIBOR or LIBOR shall be
determined on the basis of the quotations of the remaining Reference Banks.

11.2.                        Market disruption

(a)                                  If
a Market Disruption Event occurs in relation to a Loan for any Interest Period,
then the rate of interest on each Lender’s share of that Loan for the Interest
Period shall be the rate per annum which is the sum of:

(i)                                     the
Margin;

 31
 

 

(ii)                                  the
rate notified to the Agent by that Lender as soon as practicable and in any
event before interest is due to be paid in respect of that Interest Period, to
be that which expresses as a percentage rate per annum the cost to that Lender
of funding its participation in that Loan from whatever source it may
reasonably select; and

(iii)                               the
Mandatory Cost, if any, applicable to that Lender’s participation in the Loan.

(b)                                 In
this Agreement “Market Disruption Event” means:

(i)                                     at
or about noon on the Quotation Day for the relevant Interest Period the Screen
Rate is not available and none or only one of the Reference Banks supplies a
rate to the Agent to determine EURIBOR or, if applicable, LIBOR for the
relevant currency and Interest Period; or

(ii)                                  before
close of business in Milan on the Quotation day for the relevant Interest
Period, the Agent receives notifications from a Lender or Lenders (whose
participations in a Loan exceed 60 per cent. of that Loan) that the cost to it
of obtaining matching deposits in the Relevant Interbank Market would be in
excess of EURIBOR or, if applicable, LIBOR.

11.3.                        Alternative basis of interest or funding

(a)                                  If
a Market Disruption Event occurs and the Agent or the Italian Borrower so
requires, the Agent and the Italian Borrower shall enter into negotiations (for
a period of not more than thirty days) with a view to agreeing a substitute
basis for determining the rate of interest.

(b)                                 Any
alternative basis agreed pursuant to paragraph (a) above shall, with the
prior consent of all the Lenders and the Italian Borrower, be binding on all
Parties.

11.4.                        Break Costs

(a)                                  Subject
to Clause 8.10(b), each Borrower shall, within five Business Days of demand by
a Finance Party, pay to that Finance Party its Break Costs attributable to all
or any part of a Loan or Unpaid Sum being paid by that Borrower on a day other
than the last day of an Interest Period for that Loan or Unpaid Sum.

(b)                                 Each
Lender shall, as soon as reasonably practicable after a demand by the Agent,
provide a certificate confirming the amount of its Break Costs for any Interest
Period in which they accrue.

12.                                 FEES

12.1.                        Commitment fee

(a)                                  The
Borrowers shall pay to the Agent (for the account of each Lender) an aggregate
fee:

(i)                                     (from
the date falling 60 days from the date of this Agreement) in USD computed at
the rate of 0.1 per cent. per annum on that Lender’s Available Commitment under
Facility B for the Availability Period applicable to Facility B; and

 32
 

 

(ii)                                  in
euro computed at the rate of 30 per cent. per annum of the then applicable
Margin on that Lender’s Available Commitment over the preceding three month
period under Facility C.

(b)                                 The
accrued commitment fee is payable in arrears on the last day of each successive
period of three Months which ends during the relevant Availability Period, on
the last day of the Availability Period and, if cancelled in full, on the
cancelled amount of the relevant Lender’s Commitment at the time the
cancellation is effective.

12.2.                        Facility fee

The Borrowers shall pay to the Mandated Lead Arranger a facility fee in
the amount and at the times agreed in the Facility Fee Letter.

12.3.                        Agency fee

The Borrowers shall pay to the Agent (for its own account) an agency
fee in the amount and at the times agreed in the Agency Fee Letters.

SECTION 6

ADDITIONAL PAYMENT OBLIGATIONS

13.                                 TAX
GROSS-UP AND INDEMNITIES

13.1.                        Definitions

(a)                                  In
this Agreement:

“Protected Party” means a
Finance Party which is or will be subject to any liability, or required to make
any payment, for or on account of Tax in relation to a sum received or
receivable (or any sum deemed for the purposes of Tax to be received or
receivable) under a Finance Document.

“Tax Credit” means a
credit against, relief or remission for, or repayment of any Tax.

“Tax Deduction” means a
deduction or withholding for or on account of Tax from a payment under a
Finance Document.

“Tax Payment” means either
the increase in a payment made by an Obligor to a Finance Party under Clause
13.2 (Tax gross-up) or a payment
under Clause 13.3 (Tax indemnity).

“Treaty Lender” means a
Lender, described in paragraphs (a)(ii) and (b)(ii) of the definition
of Qualifying Lender.

(b)                                 Unless
a contrary indication appears, in this Clause a reference to “determines” or “determined”
means a determination made in the absolute discretion of the person making the
determination acting reasonably and in good faith.

 33
 

 

13.2.                        Tax gross-up

(a)                                  Each
Obligor shall make all payments to be made by it under the Agreement without
any Tax Deduction, unless a Tax Deduction is required by law.

(b)                                 The
Italian Borrower shall promptly upon becoming aware that an Obligor must make a
Tax Deduction (or that there is any change in the rate or the basis of a Tax
Deduction) notify the Agent accordingly. Similarly, a Lender shall notify the
Agent on becoming so aware in respect of a payment payable to that Lender. If
the Agent receives such notification from a Lender it shall notify the Italian
Borrower and that Obligor.

(c)                                  Except
as provided below in sub-clauses (d) and (g), if a Tax Deduction is
required by law to be made by an Obligor or the Agent, the amount of the
payment due from that Obligor shall be increased to an amount which (after
making any Tax Deduction) leaves an amount equal to the payment which would
have been due if no Tax Deduction had been required.

(d)                                 An
Obligor is not required to make an increased payment to a Lender under
paragraph (c) above for a Tax Deduction in respect of tax imposed by the
Republic of Italy or, as the case may be, United States of America from any
payment under this Agreement, if on the date on which the payment falls due:

(i)                                     the
payment could have been made to the relevant Lender without a Tax Deduction if
it was a Qualifying Lender, but on that date that Lender is not or has ceased
to be a Qualifying Lender other than (a) as a result of any change after
the date it became a Lender under this Agreement in (or in the interpretation,
administration, or application) of any law, treaty, or any published practice
or concession of any relevant taxing authority; or (b) as a result of the
action or omission to act by an Obligor including but not limited to the
failure to deliver any relevant tax certificates; or

(ii)                                  the
relevant Lender is a Treaty Lender and the Obligor making the payment is able
to demonstrate that the payment could have been made to the Lender without the
Tax Deduction had that Lender complied with its obligations under paragraph (h) below.

(e)                                  If
an Obligor is required to make a Tax Deduction, that Obligor shall make that
Tax Deduction and any payment required in connection with that Tax Deduction
within the time allowed and in the minimum amount required by law.

(f)                                    Within
thirty days of making either a Tax Deduction or any payment required in
connection with that Tax Deduction, the Obligor making that Tax Deduction shall
deliver to the Agent for the Finance Party entitled to the payment evidence
reasonably satisfactory to that Finance Party that the Tax Deduction has been
made or (as applicable) any appropriate payment paid to   the relevant taxing authority.

(g)                                 If
a Tax Deduction is required by law to be made by an Obligor or the Agent and
such Tax Deduction results from a transfer by a Lender of its interest in a
Facility or arises on account of Tax under legislation in force on the date of
this Agreement and the Lender did not comply with its obligations to complete
any procedural formalities necessary for that Obligor to obtain authorisation
to make that payment without a Tax Deduction, an

 34
 

 

Obligor shall not be obligated to pay any
additional amounts in respect of any such Tax Deduction pursuant to sub-clause
(c).

(h)                                 A
Treaty Lender and each Obligor which makes a payment to which that Treaty
Lender is entitled shall co-operate in completing any procedural formalities
necessary for that Obligor to obtain authorisation to make that payment without
a Tax Deduction.

(i)                                     Each
Lender confirms to the Borrower that at the date hereof it is a Qualifying
Lender and hereby agrees that it shall promptly notify the Obligors and the
relevant Agent if at any time from the date hereof it ceases to be a Qualifying
Lender.

13.3.                        Tax indemnity

(a)                                  The
Borrowers shall (within five Business Days of demand by the Agent) pay to a
Protected Party an amount equal to the loss, liability or cost which that
Protected Party determines (provided that such Protected Party provides the
Italian Borrower with written evidence of the loss, liability or cost so
determined) will be or has been (directly or indirectly) suffered for or on
account of Tax by that Protected Party in respect of a Finance Document other
than any such loss, liability or cost that results from a transfer by a Lender
of its interest in the Facilities or that arises on account of Tax under legislation
in force on the date of this Agreement.

(b)                                 Paragraph
(a) above shall not apply:

(i)                                     with
respect to any Tax assessed on a Finance Party:

(1)                                  under
the law of the jurisdiction in which that Finance Party is incorporated or, if
different, the jurisdiction (or jurisdictions) in which that Finance Party is
treated as resident for tax purposes; or

(2)                                  under
the law of the jurisdiction in which that Finance Party’s Facility Office is
located in respect of amounts received or receivable in that jurisdiction,

if that Tax is imposed on or calculated by reference to the net income
received or receivable or attributable to an equivalent aggregate income tax
base as defined in the relevant income tax provisions (but not any sum deemed
to be received or receivable including any amount treated as income but not
actually received by the Finance Party, such as a Tax Deduction) by that
Finance Party; or

(ii)                                  to
the extent a loss, liability or cost:

(1)                                  is
compensated for by an increased payment under Clause 13.2 (Tax gross-up); or

(2)                                  would
have been compensated for by an increased payment under Clause 13.2 (Tax gross-up) but was not so compensated
solely because one of the exclusions in paragraph (d) or (g) of
Clause 13.2 (Tax gross-up)
applied.

 35
 

 

(c)                                  A
Protected Party making, or intending to make a claim under paragraph (a) above
shall promptly notify the Agent of the event which will give, or has given,
rise to the claim, following which the Agent shall promptly notify the
Borrowers.

(d)                                 A
Protected Party shall, on receiving a payment from an Obligor under this
Clause, notify the Agent.

13.4.                        Tax Credit

If an Obligor makes a Tax Payment and the relevant Finance Party
determines that:

(a)                                  a
Tax Credit is attributable either to an increased payment of which that Tax
Payment forms part, or to that Tax Payment; and

(b)                                 that
Finance Party has obtained, utilised and retained that Tax Credit,

the Finance Party shall pay an amount to the Obligor which that Finance
Party determines will leave it (after that payment) in the same after-Tax
position as it would have been in had the Tax Payment not been required to be
made by the Obligor.

13.5.                        Stamp taxes

The Borrowers shall pay and, within five Business Days of demand,
indemnify each Finance Party against any cost, loss or liability that Finance
Party incurs in relation to all stamp duty, registration and other similar
Taxes payable in respect of any Finance Document (excluding for the avoidance
of doubt, any stamp registration and other similar taxes arising or incurred in
connection with a transfer, assignment or novation of any Facility or part
thereof, unless such transfer, assignment or novation is entered into at the
request of an Obligor).

13.6.                        Value added tax

(a)                                  All
consideration expressed to be payable under a Finance Document by any Party to
a Finance Party shall be deemed to be exclusive of any VAT. If VAT is
chargeable on any supply made by any Finance Party to any Party in connection
with a Finance Document, that Party shall pay to the Finance Party (in addition
to and at the same time as paying the consideration) an amount equal to the
amount of the VAT.

(b)                                 Where
a Finance Document requires any Party to reimburse a Finance Party for any
costs or expenses, that Party shall also at the same time pay and indemnify the
Finance Party against all VAT incurred by the Finance Party in respect of the
costs or expenses to the extent that the Finance Party reasonably determines
that it is not entitled to credit or repayment of the VAT.

14.                                 INCREASED
COSTS

14.1.                        Increased costs

(a)                                  Subject
to Clause 14.3 (Exceptions) the
Borrowers shall, within five Business Days of a demand by the Agent, pay for
the account of a Finance Party the amount of any Increased Costs incurred by
that Finance Party or any of its Affiliates as a result of (i) the
introduction of or any change in (or in the interpretation, administration or
application of) 

 36
 

 

any law or
regulation or (ii) compliance with any law or regulation made after the
date of this Agreement.

(b)                                 In
this Agreement “Increased Costs” means:

(i)                                     a
reduction in the rate of return from the Facility or on a Finance Party (or its
Affiliate’s) overall capital;

(ii)                                  an
additional or increased cost; or

(iii)                               a
reduction of any amount due and payable under any Finance Document,

which is reasonably incurred or suffered and
documented by a Finance Party or any of its Affiliates to the extent that it is
attributable to that Finance Party having entered into its Commitment or
funding or performing its obligations under any Finance Document.

14.2.                        Increased cost claims

(a)                                  A
Finance Party intending to make a claim pursuant to Clause 14.1 (Increased costs) shall notify the Agent of
the event giving rise to the claim, following which the Agent shall promptly
notify the Borrowers.

(b)                                 Each
Finance Party shall, as soon as practicable after a demand by the Agent,
provide a certificate confirming the amount of its Increased Costs.

14.3.                        Exceptions

(a)                                  Clause
14.1 (Increased costs) does not
apply to the extent any Increased Cost is:

(i)                                     attributable
to a Tax Deduction required by law to be made by an Obligor;

(ii)                                  compensated
for under another Clause (or would have been but for an exception to that
Clause);

(iii)                               attributable
to any breach by any Finance Party or its Affiliates of any law or regulation;
or

(iv)                              arising
from or as a consequence of any transfer or sub-participation of a Lender’s
interest in the Facilities.

(b)                                 In
this Clause, a reference to a “Tax Deduction”
has the same meaning given to the term in Clause 13.1 (Definitions).

15.                                 OTHER
INDEMNITIES

15.1.                        Currency indemnity

(a)                                  if
any sum due from an Obligor under the Finance Documents (a “Sum”), or any order, judgment or award given or made in
relation to a Sum, has to be converted from the currency (the “First Currency”) in which that Sum is payable into another
currency (the “Second Currency”) for the purpose
of:

 37
 

 

(i)                                     making
or filing a claim or proof against that Obligor; or

(ii)                                  obtaining
or enforcing an order, judgment or award in relation to any litigation or
arbitration proceedings,

that Obligor shall as an independent obligation, within five Business
Days of demand, indemnify each Finance Party to whom that Sum is due against
any cost, loss or liability arising out of or as a result of the conversion
including any discrepancy between (A) the rate of exchange used to convert
that Sum from the First Currency into the Second Currency and (B) the rate
or rates of exchange available to that person at the time of its receipt of
that Sum.

(b)                                 Each
Obligor waives any right it may have in any jurisdiction to pay any amount
under the Finance Documents in a currency or currency unit other than that in
which it is expressed to be payable.

15.2.                        Other indemnities

The Borrowers shall (or shall procure that an Obligor will), within
five Business Days of demand, indemnify each Finance Party against any cost,
loss or liability incurred by that Finance Party as a result of:

(a)                                  the
occurrence of any Event of Default;

(b)                                 a
failure by an Obligor to pay any amount due under a Finance Document on its due
date, including without limitation, any cost, loss or liability arising as a
result of Clause 29 (Sharing among the
Finance Parties);

(c)                                  funding,
or making arrangements to fund, its participation in a Loan requested by a
Borrower in a Utilisation Request but not made by reason of the operation of
any one or more of the provisions of this Agreement (other than by reason of
default or negligence by that Finance Party alone); or

(d)                                 a
Loan (or part of a Loan) not being prepaid in accordance with a notice of
prepayment given by a Borrower.

15.3.                        Indemnity to the Agent

The Borrowers shall promptly indemnify the Agent against any cost, loss
or liability incurred by the Agent (acting reasonably) as a result of:

(a)                                  investigating
any event which it reasonably believes is a Default; or

(b)                                 acting
or relying on any notice, request or instruction which it reasonably believes
to be genuine, correct and appropriately authorised.

16.                                 MITIGATION
BY THE LENDERS

16.1.                        Mitigation

(a)                                  Each
Finance Party shall, in consultation with the Italian Borrower, take all
reasonable steps to mitigate any circumstances which arise and which would
result in any amount 

 38
 

 

becoming payable under or pursuant to, or
cancelled pursuant to, any of Clause 8.1 (Illegality),
Clause 13 (Tax gross-up and indemnities),
Clause 14 (Increased costs) or
paragraph 3 of Schedule 4 (Mandatory Cost
formulae) including (but not limited to) transferring its rights and
obligations under the Finance Documents to another Affiliate or Facility
Office.

(b)                                 Paragraph
(a) above does not in any way limit the obligations of any Obligor under
the Finance Documents.

16.2.                        Limitation of liability

(a)                                  The
Borrowers shall indemnify each Finance Party for all costs and expenses
reasonably incurred and documented by that Finance Party as a result of steps
taken by it under Clause 16.1 (Mitigation).

(b)                                 A
Finance Party is not obliged to take any steps under Clause 16.1 (Mitigation) if, in the opinion of that
Finance Party (acting reasonably), to do so might be prejudicial to it.

17.                                 COSTS AND
EXPENSES

17.1.                        Amendment costs

If (a) an Obligor requests an amendment, waiver or consent or (b) an
amendment is required pursuant to Clause 30.9 (Change
of currency), the Borrowers shall, within five Business Days of
demand, reimburse the Agent for the amount of all costs and expenses (including
pre agreed legal fees) reasonably incurred and documented by the Agent in
responding to, evaluating, negotiating or complying with that request or
requirement.

17.2.                        Enforcement costs

The Borrowers shall, within five Business Days of demand, pay to each
Finance Party the amount of all costs and expenses (including legal fees and
any registration taxes) incurred and documented by that Finance Party in
connection with the enforcement of, or the preservation of any rights under,
any Finance Document.

SECTION 7

GUARANTEE

18.                                 GUARANTEE
AND INDEMNITY

18.1.                        Guarantee and indemnity

Each Guarantor irrevocably and unconditionally jointly and severally:

(a)                                  guarantees
to each Finance Party punctual performance by each Borrower of all that
Borrower’s obligations under the Finance Documents;

(b)                                 undertakes
with each Finance Party that whenever a Borrower does not pay any amount when
due under or in connection with any Finance Document, that Guarantor shall
within five Business Days of receiving a demand pay that amount as if it was
the principal obligor; and

 39
 

 

(c)                                  indemnifies
each Finance Party within five Business Days of receiving a demand against any
cost, loss or liability reasonably incurred or suffered and documented by that
Finance Party if any obligation guaranteed by it is or becomes unenforceable,
invalid or illegal. The amount of the cost, loss or liability shall be equal to
the amount which that Finance Party would otherwise have been entitled to
recover.

18.2.                        Continuing guarantee

This guarantee is a continuing guarantee and will extend to the
ultimate balance of sums payable by any Obligor under the Finance Documents,
regardless of any intermediate payment or discharge in whole or in part.

18.3.                        Reinstatement

If any payment by an Obligor or any discharge given by a Finance Party
(whether in respect of the obligations of any Obligor or any security for those
obligations or otherwise) is avoided or reduced as a result of insolvency or
any similar event:

(a)                                  the
liability of each Obligor shall continue as if the payment, discharge,
avoidance or reduction had not occurred; and

(b)                                 each
Finance Party shall be entitled to recover the value or amount of that security
or payment from each Obligor, as if the payment, discharge, avoidance or
reduction had not occurred.

18.4.                        Waiver of defences

The obligations of each Guarantor under this Clause 18 will not be
affected by any act, omission, matter or thing which, but for this Clause 18,
would reduce, release or prejudice any of its obligations under this Clause 18
(without limitation and whether or not known to it or any Finance Party)
including:

(a)                                  any
time, waiver or consent granted to, or composition with, any Obligor or other
person;

(b)                                 the
release of any other Obligor or any other person under the terms of any
composition or arrangement with any creditor of any member of the Group;

(c)                                  the
taking, variation, compromise, exchange, renewal or release of, or refusal or
neglect to perfect, take up or enforce, any rights against, or security over
assets of, any Obligor or other person or any non-presentation or
non-observance of any formality or other requirement in respect of any
instrument or any failure to realise the full value of any security;

(d)                                 any
incapacity or lack of power, authority or legal personality of or dissolution
or change in the members or status of an Obligor or any other person;

(e)                                  any
amendment (however fundamental) or replacement of a Finance Document or any
other document or security;

(f)                                    any
unenforceability, illegality or invalidity of any obligation of any person
under any Finance Document or any other document or security; or

 

 40

 

(g)                                 any
insolvency or similar proceedings.

18.5.                        Immediate recourse

Subject to Clause 18.6 (Requirement
of notice), each Guarantor waives any right it may have of first
requiring any Finance Party (or any trustee or agent on its behalf) to proceed
against or enforce any other rights or security or claim payment from any
person before claiming from that Guarantor under this Clause 18. This waiver
applies irrespective of any law or any provision of a Finance Document to the
contrary.

18.6.                        Requirement of notice

A Finance Party may not make any claim against a Guarantor unless such
Finance Party has first delivered a written notice to the relevant Borrower
notifying it of its failure to perform its payment obligations under the
Finance Documents.

18.7.                        Appropriations

Until all amounts which may be or become payable by the Obligors under
or in connection with the Finance Documents have been irrevocably paid in full,
each Finance Party (or any trustee or agent on its behalf) may:

(a)                                  refrain
from applying or enforcing any other moneys, security or rights held or
received by that Finance Party (or any trustee or agent on its behalf) in
respect of those amounts, or apply and enforce the same in such manner and
order as it sees fit (whether against those amounts or otherwise) and no
Guarantor shall be entitled to the benefit of the same; and

(b)                                 hold
in an interest-bearing suspense account any moneys received from any Guarantor
or on account of any Guarantor’s liability under this Clause 18.

18.8.                        Deferral of Guarantors’ rights

Until all amounts which may be or become payable by the Obligors under
or in connection with the Finance Documents have been irrevocably paid in full
and unless the Agent otherwise directs, no Guarantor will exercise any rights
which it may have by reason of performance by it of its obligations under the
Finance Documents:

(a)                                  to
be indemnified by an Obligor;

(b)                                 to
claim any contribution from any other Guarantor of any Obligor’s obligations
under the Finance Documents; and/or

(c)                                  to
take the benefit (in whole or in part and whether by way of subrogation or
otherwise) of any rights of the Finance Parties under the Finance Documents or
of any other guarantee or security taken pursuant to, or in connection with,
the Finance Documents by any Finance Party.

 41
 

 

18.9.                        Additional security

This guarantee is in addition to and is not in any way prejudiced by
any other guarantee or security now or subsequently held by any Finance Party.

18.10.                  Limitations

(a)                                  Notwithstanding
anything to the contrary contained herein or in any other Finance Document, the
parties hereto agree that:

(i)                                     the
obligations of Luxottica Group S.p.A. as Guarantor shall at no time require
Luxottica Group S.p.A. to pay any amount that exceeds the higher of (i) €2,016,923,000
(or its equivalent in US$) on the date of any payment hereunder and (ii) US$2,441,688,000
(or its equivalent in euro) on the date of any payment hereunder; and

(ii)                                  the
obligations of Luxottica S.r.l. shall at no time require Luxottica S.r.l. to
pay any amount which exceeds an amount corresponding to its Net Worth (as
defined below), as determined from time to time on the basis of its most recent
audited annual financial statements, provided, however, that such amount shall
not exceed the higher of (a) €160,000,000 (or its equivalent in US$ on the
date hereof) and (b) the Net Worth of Luxottica S.r.l. as at the date
hereof;

(iii)                               Luxottica
U.S. Holdings Corp.’s liability as Guarantor (in such capacity the “US Guarantor”) hereunder shall be limited to an amount not
to exceed as of any date of determination the greater of:

(A)                   the
net amount of all Loans and other extensions of credit advanced under the
Finance Documents and directly or indirectly re-loaned or otherwise transferred
to, or incurred for the benefit of, the US Guarantor, plus interest thereon at
the applicable rate specified in this Agreement; or

(B)                     the
amount that could be claimed by the Agents and Lenders from the US Guarantor
under this Guarantee without rendering such claim voidable or avoidable under Section 548
of Chapter 11 of the Bankruptcy Code or under any applicable state Uniform
Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute
or common law after taking into account, among other things, the US Guarantor’s
right of contribution and indemnification from each other Guarantor under
clause (b) below; and

(b)                                 To
the extent that any Guarantor shall make a payment under this Guarantee (a “Guarantor Payment”) of all or any obligations of the
Borrowers (“Guaranteed Obligations”) that,
taking into account all other Guarantor Payments then previously or
concurrently made by the other Guarantors, exceeds the amount that such
Guarantor would otherwise have paid if each Guarantor had paid the aggregate
Guaranteed Obligations satisfied by such Guarantor Payment in the same
proportion that such Guarantor’s “Allocable Amount” (as defined below) (in
effect immediately prior to such Guarantor Payment) bore to the aggregate
Allocable Amounts of all of Guarantors in effect immediately prior to the
making of such Guarantor Payment, then, following indefeasible payment in full
in cash of the Guaranteed Obligations and termination of the 

 42
 

 

Commitments, such Guarantor shall be entitled
to receive contribution and indemnification payments from, and be reimbursed
by, each of the other Guarantors for the amount of such excess, pro rata based
upon their respective Allocable Amounts in effect immediately prior to such
Guarantor Payment.

As of any date of determination, the “Allocable
Amount” of any Guarantor shall be equal to the maximum amount of the
claim that could then be recovered from such Guarantor under this Guarantee
without rendering such claim voidable or avoidable under Section 548 of
Chapter 11 of the Bankruptcy Code or under any applicable state Uniform
Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute
or common law of the jurisdiction of such Guarantor.

This paragraph (b) is intended only to define the relative rights
of Guarantors and nothing set forth in this paragraph (b) is intended to
or shall impair the obligations of Guarantors, jointly and severally, to pay
any amounts as and when the same shall become due and payable in accordance
with the terms of this Guarantee.

The rights of the parties under this paragraph (b) shall be
exercisable upon the full and indefeasible payment of the Guaranteed
Obligations and the termination of the Facility Agreement and the other Finance
Documents.

The parties hereto acknowledge that the rights of contribution and
indemnification hereunder shall constitute assets of any Guarantor to which
such contribution and indemnification is owing.

“Net Worth” means the
total value of the “Patrimonio Netto”
of the Guarantor pursuant to the definition of Article 2424 of the Italian
Civil Code.

18.11.                  Additional Guarantors

(a)                                  Subject
to compliance with the provisions of Clause 20.7 (“Know your customer” checks), the Italian Borrower may
request that any of its Subsidiaries become an Additional Guarantor. That
Subsidiary shall become an Additional Guarantor if:

(i)                                     the
Italian Borrower delivers to the Agent a duly completed and executed Accession
Letter; and

(ii)                                  the
Agent has received all of the documents and other evidence listed in Part I
of Schedule 12 (Additional Guarantors) in
relation to that Additional Guarantor, each in form and substance satisfactory
to the Agent (acting reasonably and in good faith).

(b)                                 The
Agent shall notify the Borrowers and the Lenders promptly upon being satisfied
that it has received (in form and substance satisfactory to it but acting
reasonably and in good faith) all the documents and other evidence listed in Part I
of Schedule 12 (Additional Guarantors).

(c)                                  Delivery
of an Accession Letter constitutes confirmation by the relevant Subsidiary that
the Repeating Representations are true and correct in relation to it as at the
date of delivery as if made by reference to the facts and circumstances then
existing.

 43
 

 

SECTION 8

REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT

19.                                 REPRESENTATIONS

Other than expressly provided to the contrary in this Clause 19 (Representations), each Obligor makes the
representations and warranties set out in this Clause 19 to each Finance Party
on the date of this Agreement.

19.1.                        Status

(a)                                  It
is a corporation, duly incorporated and validly existing under the law of its
jurisdiction of incorporation subject to Clause 22.7 (Merger).

(b)                                 It
and each of its Material Subsidiaries has the power to own its assets and carry
on its business as it is being conducted save to the extent otherwise permitted
by the terms of this Agreement.

19.2.                        Binding obligations

The obligations expressed to be assumed by it in each Finance Document
are, subject to any general principles of law as at the date of this Agreement
limiting its obligations which are specifically referred to in any legal
opinion delivered pursuant to Clause 4 (Conditions
of Utilisation), legal, valid, binding and enforceable obligations.

19.3.                        Non-conflict with other obligations

The entry into and performance by it of, and the transactions
contemplated by, the Finance Documents do not and will not conflict with:

(a)                                  any
law or regulation applicable to it;

(b)                                 its
or any of its Subsidiaries’ constitutional documents; or

(c)                                  any
agreement or instrument binding upon it or any of its Subsidiaries or any of
its or any of its Subsidiaries’ assets in any material respect.

19.4.                        Power and
authority

It has the power to enter into, perform and deliver, and has taken all
necessary action to authorise its entry into, performance and delivery of, the
Finance Documents to which it is a party and the transactions contemplated by
those Finance Documents.

19.5.                        Validity and admissibility in evidence

All Authorisations required:

(a)                                  to
enable it lawfully to enter into, exercise its rights and comply with its
obligations in the Finance Documents to which it is a party; and

 44
 

 

(b)                                 to
make the Finance Documents to which it is a party admissible in evidence in its
jurisdiction of incorporation,

have been obtained or effected and are in full force and effect.

19.6.                        Governing law and enforcement

(a)                                  The
choice of English law as the governing law of the Finance Documents will be
recognised and enforced in its jurisdiction of incorporation; and

(b)                                 any
judgment obtained in England in relation to a Finance Document will be
recognised and enforced in its jurisdiction of incorporation,

in each case subject to any general
principles of law specifically referred to in any legal opinion delivered
pursuant to Clause 4 (Conditions of
Utilisation).

19.7.                        Deduction of Tax

It is not required to make any deduction for or on account of Tax from
any payment it may make under any Finance Document to the Finance Parties which
are Qualifying Lenders, provided that each such Finance Party that is or
becomes eligible under any taxation treaty for a withholding tax exemption
takes any action required to be taken under the relevant laws or regulations to
benefit from such withholding tax exemption.

19.8.                        No filing or stamp taxes

Under the laws of its jurisdiction of incorporation, it is not
necessary that this Agreement or any of the Finance Documents be filed,
recorded or enrolled with any court or other authority in such jurisdiction or
that any stamp, registration or similar tax be paid on or in relation to this
Agreement or the Finance Documents or the transactions contemplated by the
Finance Documents save for:

(a)                                  if
this Agreement or a Finance Document is enforced in Italy either by way of a
direct court judgment or an exequatur of a judgment rendered outside Italy, the
following taxes may become payable;

(i)                                     a
registration tax at a rate not exceeding 3 per cent. on any amount awarded
under the judgment; and

(ii)                                  a
further registration tax at a rate of up to 3 per cent. on any amount
outstanding under this Agreement or a Finance Document if the judgment refers
to this Agreement or such Finance Document provided that it is entered into
between the same parties to which the judgment is rendered and this Agreement
or such Finance Document has not been previously registered;

(b)                                 if
this Agreement or any Finance Document is filed with any public body or any
court in connection with the performance of any administrative functions (caso d’uso) in Italy, registration tax may
become payable in relation to this Agreement or any Finance Document which has
not been previously registered or the documentary taxes payable in respect of
which have not been franked by the payment of imposta
sostitutiva in relation to this Agreement, at a rate up to 3 per
cent. on any amount outstanding thereunder;

 45
 

 

(c)                                  if
this Agreement or any Finance Document is filed with any public body or any
court in connection with the performance of any administrative functions (caso d’uso) in Italy, stamp duties will
become payable at a nominal rate (currently €10.33 per foolscap sheet), in
respect of any Finance Document the documentary taxes payable in respect of
which have not been franked by the payment of imposta
sostitutiva in relation to this Agreement; and

(d)                                 any
registration or filing required to be made with the US Securities and Exchange
Commission, Consob or any other regulatory authority.

19.9.                        No default

(a)                                  No
Event of Default is continuing or would reasonably be expected to result from
the making of any Utilisation.

(b)                                 No
other event or circumstance is outstanding which constitutes a default under
any other agreement or instrument which is binding on it or any of its
Subsidiaries or to which its assets or the assets of any of its Subsidiaries
are subject which is reasonably likely to have a Material Adverse Effect.

19.10.                  No misleading information

(a)                                  Any
factual written information supplied by any member of the Group pursuant to the
terms of this Agreement (the “Information”)
is true and accurate in all material respects as at the date it is provided or as
at the date (if any) at which it is stated.

(b)                                 To
the best of its knowledge and belief, nothing has occurred or been omitted from
the Information which would result in the Information being untrue or
misleading in any material respect.

(c)                                  Any
financial projections contained in the Information have been prepared in good
faith on the basis of recent historical information and on the basis of
assumptions believed to be reasonable at the time such financial projections
were prepared.

(d)                                 The
representations and warranties in this Clause 19.10 are made as and when the
relevant information is provided.

19.11.                  Financial statements

(a)                                  The
most recent audited Consolidated Financial Statements (in the case of the
Italian Borrower) and audited consolidated financial statements (in the case of
the US Borrower) delivered to the Agent were prepared in accordance with GAAP
consistently applied.

(b)                                 The
most recent audited Consolidated Financial Statements (in the case of the
Italian Borrower) and audited consolidated financial statements (in the case of
the US Borrower) delivered to the Agent in each case fairly represent the
consolidated financial condition and operations of the relevant company or the
Group in the case of the Italian Borrower during the relevant financial year.

(c)                                  There
has been no material adverse change in the business or consolidated financial
condition of the Group since the date of the Original Financial Statements
which would 

 46
 

 

affect the
Borrowers’ ability to perform their payment obligations under the Finance
Documents.

19.12.                  Pari passu ranking

Its payment obligations under the Finance Documents rank at least pari passu with the claims of all its
other unsecured and unsubordinated creditors, except for obligations
mandatorily preferred by law applying to companies generally.

19.13.                  No proceedings pending or threatened

No litigation, arbitration, investigation or administrative proceedings
of or before any court, arbitral body or agency have (to the best of its
knowledge and belief) been started or threatened against it or any of its
Subsidiaries which are reasonably likely to be adversely determined and, if
adversely determined, are reasonably likely to have a Material Adverse Effect.

19.14.                  Environmental matters

(a)                                  Each
member of the Group has performed and observed in all material respects all
Environmental Laws, Environmental Permits and all other material covenants,
conditions, restrictions or agreements directly or indirectly concerned with
any contamination, pollution or waste or the release or discharge of any toxic
or hazardous substance in connection with any real property which is or was at
any time owned, leased or occupied by any member of the Group or on which any
member of the Group has conducted any activity, in each case where failure to
do so is reasonably likely to have a Material Adverse Effect.

(b)                                 No
Environmental Claim has been commenced or (to the best of its knowledge and
belief) is threatened against any member of the Group which is reasonably
likely to be adversely determined and if so determined is reasonably likely to
have a Material Adverse Effect.

19.15.                  Taxation

(a)                                  It
has duly and punctually paid and discharged all Taxes imposed upon it or its
assets within the time period allowed without incurring penalties where failure
to do so is reasonably likely to have a Material Adverse Effect (save to the
extent that (i) payment is being contested in good faith, and (ii) payment
can be lawfully withheld).

(b)                                 It
is not materially overdue in the filing of any Tax returns when failure to do
so is reasonably likely to have a Material Adverse Effect.

(c)                                  No
claims are being or are reasonably likely to be asserted against it with
respect to Taxes which are reasonably likely to be determined against it and,
if so determined, are reasonably likely to have a Material Adverse Effect.

19.16.                  Intellectual Property

It is not aware of any adverse circumstance relating to validity,
subsistence or use of any of the Group’s Intellectual Property which could
reasonably be expected to have a Material Adverse Effect.

 47
 

 

19.17.                  Security

Save for Permitted Security, no Security exists over all or any of the
assets of any member of the Group.

19.18.                  Consents and Approvals and compliance with U.S.
regulations

(a)                                  All
consents, licences, authorisations and other approvals necessary for the
conduct of the business of any member of the Group as carried on at the date
hereof have been, or when required will be obtained where failure to obtain
would reasonably be expected to have a Material Adverse Effect, their terms and
conditions have been complied with where any failure to comply would reasonably
be expected to have a Material Adverse Effect and they have not been and, so
far as it is aware, will not be revoked or otherwise terminated where such
revocation or termination is reasonably likely to have a Material Adverse
Effect.

(b)                                 It
is not engaged and will not engage, principally or as one of its important
activities, in the business of purchasing or carrying margin stock (within the
meaning of Regulation U issued by the Board of Governors of the Federal Reserve
System of the United States), or extending credit for the purpose of purchasing
or carrying margin stock and no proceeds of any Loans will be used to purchase
or carry any margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock.

(c)                                  Neither
it, nor its direct Holding Company, nor any Subsidiary (i) 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, or (ii) is
or is required to be registered as an “investment company” under the Investment
Company Act of 1940. Neither the making of any Loan nor the application of the
proceeds or repayment thereof by a Borrower, nor the consummation of the other
transactions contemplated by the Finance Documents, will violate any provision
of any such Act or any rule, regulation or order of the Securities and Exchange
Commission of the United States thereunder.

19.19.                  No Winding-up

Save for any Corporate Reconstruction as defined in and permitted by
Clause 22.7 (Merger) and any
other solvent reorganisation or solvent liquidation of any member of the Group
(and solely in the case of a solvent liquidation, other than an Obligor), no
Obligor nor any of its Material Subsidiaries have taken any corporate action
nor have any other steps been taken or legal proceedings been started or (to
the best of its knowledge and belief having made all reasonable enquiry)
threatened in writing against any Obligor nor any of its Material Subsidiaries
for its winding-up, dissolution, administration, controlled administration (amministrazione controllata), extraordinary
administration (amministrazione
straordinaria), bankruptcy (fallimento)
or composition with creditors (concordato
preventivo) unless any Agreed Exception applies to such procedure.

19.20.                  Pension Schemes

Each member of the Group is in compliance with all applicable laws and
contracts relating to pension schemes (if any) for the time being operated by
it or in which it participates and each such pension scheme is adequately
funded based on reasonable actuarial assumptions and 

 48
 

 

recommendations as required by law in each case where failure to do so
is reasonably likely to have a Material Adverse Effect.

19.21.                  ERISA and Multiemployer Plans

(a)                                  Each
Employee Plan is in compliance in form and operation with ERISA and the Code
and all other applicable laws and regulations save where any failure to comply
would not reasonably be expected to have a Material Adverse Effect.

(b)                                 Each
Employee Plan which is intended to be qualified under Section 401 (a) of
the Code has been determined by the IRS to be so qualified.

(c)                                  There
exists no Unfunded Pension Liability with respect to any Employee Plan, except
as would not have a Material Adverse Effect.

(d)                                 Neither
the U.S. Group Company nor any ERISA Affiliate has incurred a complete or
partial withdrawal from any Multiemployer Plan that would reasonably be
expected to have a Material Adverse Effect, and if each of the U.S. Group
Companies and each ERISA Affiliate were to withdraw in a complete withdrawal as
of the date hereof, the aggregate withdrawal liability that would be incurred
would not reasonably be expected to have a Material Adverse Effect.

(e)                                  Each
U.S. Group Company and any ERISA Affiliate has made all material contributions
to or under each such Employee Plan required by law within the applicable time
limits prescribed thereby, the terms of such Employee Plan, or any contract or
agreement requiring contributions to an Employee Plan save where any failure to
comply would not reasonably be expected to have a Material Adverse Effect.

(f)                                    Neither
any U.S. Group Company nor any ERISA Affiliate has incurred or reasonably
expects to incur any liability to PBGC save for any liability for premiums due
in the ordinary course or other liability which would not reasonably be
expected to have a Material Adverse Effect.

19.22.                  Repetition

The Repeating Representations are deemed to be made by each Obligor (by
reference to the facts and circumstances then existing) on the date of each
Utilisation Request and the first day of each Interest Period.

20.                                 INFORMATION
UNDERTAKINGS

The undertakings in this Clause 20 remain in force from the date of
this Agreement for so long as any amount is outstanding under the Finance
Documents or any Commitment is in force.

20.1.                        Financial statements

(a)                                  The
Italian Borrower shall supply or procure the supply to the Agent in sufficient
copies for all the Lenders.

(i)                                     as
soon as practicable after the same become available, but in any event within
150 days after the end of each of its financial years its Consolidated
Financial 

 49
 

 

Statements for that financial year and
(during the Pro-Forma Relevant Period), the Consolidated Pro-Forma Financial
Statements; and

(ii)                                  as
soon as practicable after the same become available, but in any event within 90
days after the end of each quarter (other than the last quarter in any
financial year) of its financial years its Consolidated Quarterly Financial
Statements and (during the Pro-Forma Relevant Period) the Consolidated
Quarterly Pro-Forma Financial Statements for that quarter. For the avoidance of
doubt, the first Consolidated Quarterly Financial Statements to be delivered
hereunder shall be those relating to the quarter ending on 31 March 2004.

(b)                                 The
US Borrower shall supply or procure the supply to the Agent (in sufficient
copies for all the Lenders) as soon as practicable after they become available,
but in any event within 150 days of each of its financial years its audited
consolidated financial statements for that financial year.

(c)                                  If
so requested by the Agent, Luxottica S.r.l. shall supply to the Agent in sufficient
copies for all the Lenders, as soon as they become available, but in any event
within 180 days of each of its financial years its financial statements which
have been prepared in accordance with GAAP for that financial year.

20.2.                        Compliance Certificate

(a)                                  The
Italian Borrower shall supply or procure to supply to the Agent, with each set
of financial statements delivered pursuant to paragraph (a) of Clause 20.1
(Financial statements), a
Compliance Certificate setting out (in reasonable detail) computations as to
compliance with Clause 21 (Financial
covenants) as at the date as at which those financial statements
were drawn up.

(b)                                 Each
Compliance Certificate shall be signed by an Authorised Signatory and, other
than during the Pro-Forma Relevant Period if required to be delivered with the
financial statements delivered pursuant to paragraph (a)(i) of Clause 20.1
(Financial statements), by the
Italian Borrower’s auditors, it being agreed that should the Italian Borrower’s
auditors refuse to sign the compliance certificate for internal policy reasons
of such auditors (but not, for the avoidance of doubt, by reason of breach of
the relevant financial covenant) this shall not be an Event of Default but the
Italian Borrower shall nevertheless use reasonable endeavours to ensure that
its auditors provide some other form of confirmation in a form and substance
satisfactory to the Lenders.

20.3.                        Requirements as to financial statements

(a)                                  Each
set of financial statements delivered by the Borrowers pursuant to Clause 20.1
(Financial statements) shall be
certified by an Authorised Signatory of the relevant Borrower as fairly
representing its financial condition as at the date as at which those financial
statements were drawn up.

(b)

(i)                                     The
Italian Borrower shall procure that each set of financial statements delivered
pursuant to Clause 20.1 (Financial statements)
is prepared using GAAP, and in respect only of the Consolidated Financial
Statements and Consolidated 

 50
 

 

Quarterly Financial Statements using
accounting practices and financial reference periods consistent with those
applied in the preparation of its Original Financial Statements unless, in
relation to any set of Consolidated Financial Statements or Consolidated
Quarterly Financial Statements (as the case may be), it notifies the Agent that
there has been a change in GAAP, or the accounting practices or reference
periods and its auditors deliver to the Agent:

(1)                                  a
description of any change necessary for those Consolidated Financial Statements
or Consolidated Quarterly Financial Statements (as the case may be) to reflect
the GAAP, accounting practices and reference periods upon which its Original
Financial Statements were prepared; and

(2)                                  sufficient
information, in form and substance as may be reasonably required by the Agent,
to enable the Lenders to determine whether Clause 21 (Financial covenants) has been complied
with and make an accurate comparison between the consolidated financial
position indicated in those financial statements and its Original Financial
Statements.

(ii)                                  If
the Italian Borrower notifies the Agent of a change in accordance with
paragraph (i) above then the Italian Borrower and Agent shall enter into
negotiations in good faith with a view to agreeing:

(1)                                  whether
or not the change might result in any material alteration in the commercial
effect of any of the terms of this Agreement; and

(2)                                  if
so, any amendments to this Agreement which may be necessary to ensure that the
change does not result in any material alteration in the commercial effect of
those terms,

and if any amendments are agreed they shall take effect and be binding on each of the
Parties in accordance with their terms.

Any reference in this Agreement to those financial statements shall be
construed as a reference to those financial statements as adjusted to reflect
the basis upon which the Original Financial Statements were prepared.

20.4.                        Information: miscellaneous

The Borrowers shall supply to the Agent (in sufficient copies for all
the Lenders, if the Agent so requests):

(a)                                  as
soon as practicable, following receipt of shareholders` approvals and
regulatory approvals in each case in respect of the Acquisition, written confirmation
of such approvals;

(b)                                 in
the event that the Borrowers confirm that they have received the authorisations
set out in paragraph (a) above updates of the financial projections
already prepared and supplied to the Lenders in contemplation of the Acquisition;
and

 

 51

 

(c)                                  all
documents dispatched by the Borrowers to all of their respective creditors
generally (in their capacity as creditors) at the same time as they are
dispatched or as soon as practicable thereafter; and

(d)                                 as
soon as practicable upon becoming aware of them, the details of any litigation,
arbitration or administrative proceedings which are current, threatened or
pending against any member of the Group, which are reasonably likely to be
adversely determined and which would, if adversely determined, have a Material
Adverse Effect; and

(e)                                  promptly,
such further information regarding the financial condition, business and
operations of any member of the Group as any Finance Party (through the Agent)
may reasonably request which the Borrowers can provide without breaching any
applicable law or regulation or contract.

20.5.                        Notification of default

Each Obligor shall notify the Agent of any Default (and the steps, if
any, being taken to remedy it) promptly upon becoming aware of its occurrence
(unless that Obligor is aware that a notification has already been provided by
another Obligor).

20.6.                        Use of websites

(a)                                  The
Borrowers may satisfy their obligation under this Agreement to deliver any
information in relation to those Lenders (the “Website
Lenders”) who accept this method of communication by posting this
information onto an electronic website designated by the Italian Borrower and
the Agent (the “Designated Website”) if:

(i)                                     the
Agent expressly agrees (after consultation with each of the Lenders) that it will
accept communication of the information by this method;

(ii)                                  both
the Borrowers and the Agent are aware of the address of and any relevant
password specifications for the Designated Website; and

(iii)                               the
information is in a format previously agreed between the Borrowers and the
Agent.

If any Lender (a “Paper Form Lender”)
does not agree to the delivery of information electronically then the Agent
shall notify the Borrowers accordingly and the Borrowers shall supply the
information to the Agent (in sufficient copies for each Paper Form Lender)
in paper form.

(b)                                 The
Agent shall supply each Website Lender with the address of and any relevant
password specifications for the Designated Website following designation of
that website by the Borrowers and the Agent.

(c)                                  Each
Borrower shall promptly upon becoming aware of its occurrence notify the Agent
if:

(i)                                     the
Designated Website cannot be accessed due to technical failure;

(ii)                                  the
password specifications for the Designated Website change;

 52
 

 

(iii)                               any
new information which is required to be provided under this Agreement is posted
onto the Designated Website;

(iv)                              any
existing information which has been provided under this Agreement and posted
onto the Designated Website is amended; or

(v)                                 it
become aware that the Designated Website or any information posted onto the
Designated Website is or has been infected by any electronic virus or similar
software.

If a Borrower notifies the Agent under paragraph (c)(i) or
paragraph (c)(v) above, all information to be provided by the Borrower
under this Agreement after the date of that notice shall be supplied in paper
form unless and until the Agent and each Website Lender is satisfied that the
circumstances giving rise to the notification are no longer continuing.

(d)                                 Any
Website Lender may request, through the Agent, one paper copy of any
information required to be provided under this Agreement which is posted onto
the Designated Website. The Borrower shall comply with any such request within
ten Business Days.

20.7.                        “Know your customer” checks

(a)                                  Each
Obligor shall (subject always to Clause 25 (Confidentiality)) promptly upon the
request of the Agent or any Lender supply through the Agent, or procure the
supply through the Agent of, such documentation and other evidence as is
reasonably requested by the Agent (for itself or on behalf of any Lender) or
any Lender (for itself or on behalf of any prospective New Lender) in order for
the Agent, such Lender or any prospective New Lender to carry out and be
satisfied with the results of all necessary “know your customer” or other
checks in relation to any person that it is required to carry out pursuant to
the transactions contemplated in the Finance Documents.

(b)                                 Each
Lender shall promptly upon the request of the Agent supply, or procure the
supply of, such documentation and other evidence as is reasonably requested by
the Agent (for itself) in order for the Agent to carry out and be satisfied
with the results of all necessary “know your customer” or other checks in
relation to any person that it is required to carry out pursuant to the
transactions contemplated in the Finance Documents.

21.                                 FINANCIAL
COVENANTS

21.1.                        Financial definitions

In this Clause:

“Consolidated EBITDA”
means in respect of any Relevant Period, the consolidated income from
operations of the Group for that Relevant Period after adding back all amounts
deducted from consolidated income from operations for depreciation,
amortization, write-downs of goodwill and other intangible assets, and
extraordinary or non-recurring items, as determined (a) at any time other
than during the Pro-Forma Relevant Period, from the Consolidated Financial
Statements or the Consolidated Quarterly Financial Statements (as the case may
be), or (b) during the Pro-Forma Relevant Period, from the Consolidated
Pro-Forma Financial Statements or the Consolidated Pro-Forma Quarterly
Financial Statements (as the case may be).

 53
 

 

“Consolidated Net Finance Charges”
means for any Relevant Period the consolidated amount of interest expense of
the Group, minus interest income, all as determined from (a) at any time
other than during the Pro-Forma Relevant Period, the Consolidated Financial
Statements or the Consolidated Quarterly Financial Statements (as the case may
be), or (b) during the Pro-Forma Relevant Period, from the Consolidated
Pro-Forma Financial Statements or the Consolidated Pro-Forma Quarterly
Financial Statements (as the case may be).

“Consolidated Total Net Debt”
means at the end of any Relevant Period, as determined from the Consolidated
Financial Statements or the Consolidated Quarterly Financial Statements (as the
case may be), the sum of:

(i)                                     bank
overdrafts; plus

(ii)                                  current
portion of notes payable; plus

(iii)                               current
portion of long term debt; plus

(iv)                              notes
payable; plus

(v)                                 long
term debt,

less:

(vi)                              Cash
and Cash Equivalents; and

(vii)                           Restricted
Cash.

“Restricted Cash” means
cash held as security against loans and other bank indebtedness.

21.2.                        Financial condition

The Italian Borrower shall ensure that:

(a)                                  Consolidated
Total Net Debt in respect of any Relevant Period shall not at any time exceed
3.5 times the Consolidated EBITDA for such Relevant Period.

(b)                                 Consolidated
EBITDA in respect of any Relevant Period shall not be less than 5 times the
Consolidated Net Finance Charges for such Relevant Period.

21.3.                        Financial testing

The financial covenants set out in Clause 21.2 (Financial condition) shall be tested by
reference to (a) at any time other than during the Pro-Forma Relevant
Period, each of the Consolidated Financial Statements or the Consolidated
Quarterly Financial Statements (as the case may be) and/or each Compliance
Certificate delivered pursuant to Clause 20.2 (Compliance
Certificate), or (b) during the Pro-Forma Relevant Period, each
of the Consolidated Pro-Forma Consolidated Financial Statements or the
Consolidated Quarterly Financial Statements (as the case may be) and/or each
Compliance Certificate delivered pursuant to Clause 20.2 (Compliance Certificate).

 54
 

 

22.                                 GENERAL
UNDERTAKINGS

The undertakings in this Clause 22 remain in force from the date of
this Agreement for so long as any amount is outstanding under the Finance
Documents or any Commitment is in force.

22.1.                        Authorisations

Each Obligor shall promptly comply with and do all that is necessary to
maintain in full force and effect and obtain any Authorisation required under
any law or regulation of its jurisdiction of incorporation to enable it to
perform its obligations under the Finance Documents and to ensure (subject to
any general principles of law specifically referred to in any legal opinion
delivered pursuant to Clause 4.1 (Initial
conditions precedent)) the legality, validity, enforceability or
admissibility in evidence in its jurisdiction of incorporation of any Finance
Document.

22.2.                        Compliance with laws

Each Obligor shall comply in all respects with all laws to which it may
be subject, if failure so to comply is reasonably likely to have a Material
Adverse Effect.

22.3.                        Negative pledge

(a)                                  No
Obligor shall (and the Italian Borrower shall ensure that no other member of
the Group will) create or permit to subsist any Security over any of its
assets.

(b)                                 No
Obligor shall (and the Italian Borrower shall ensure that no other member of
the Group will):

(i)                                     sell,
transfer or otherwise dispose of any of its assets on terms whereby they are or
may be leased to or re-acquired by an Obligor or any other member of the Group;

(ii)                                  sell,
transfer or otherwise dispose of any of its receivables on recourse terms;

(iii)                               enter
into any arrangement under which money or the benefit of a bank or other
account may be applied, set-off or made subject to a combination of accounts;
or

(iv)                              enter
into any other preferential arrangement having a similar effect,

in circumstances where the arrangement or transaction
is entered into primarily as a method of raising Financial Indebtedness or of
financing the acquisition of an asset.

(c)                                  Paragraphs
(a) and (b) above do not apply to:

(i)                                     any
Security listed in Schedule 7 (Existing Security)
except to the extent the principal amount secured by that Security is increased
beyond the amount stated in that Schedule, it being agreed that any such
increase shall be permitted to the extent that it falls in the basket set out
in sub-paragraph (vii)(A) or (B) of this Clause (as the case may be);

(ii)                                  any
netting or set-off arrangement entered into by any member of the Group in the
ordinary course of its banking arrangements for the purpose of netting debit
and credit balances;

 55
 

 

(iii)                               any
lien arising by operation of law and in the ordinary course of trading;

(iv)                              any
Security or Quasi-Security securing indebtedness permitted under paragraph (b) of
Clause 22.12 (Indebtedness for Borrowed Money),
to the extent such Security or Quasi-Security is discharged within the date
falling six months after the date of the relevant acquisition provided that if
it is not so discharged it shall be permitted to the extent it falls within the
basket set out in sub-paragraph (vii) below;

(v)                                 any
Security or Quasi-Security in connection with deposits to landlords for lease
rentals or to any tax or customs & excise authority, utility company
or car leasing company, in each case granted in the ordinary course of the
business of the relevant member of the Group;

(vi)                              any
cash collateral granted in relation to the issue of a Bank Guarantee up to an
amount equal to €15,000,000 in the aggregate at any time (without double
counting any liability of the Borrower under such Bank Guarantee); or

(vii)                           any
other Security or Quasi-Security not referred to in sub-paragraph (i) to (vi) above
securing indebtedness permitted under Clause 22.12 (Indebtedness
for Borrowed Money) the principal amount of which (A) in the
case of the Obligors does not in aggregate exceed 5 per cent. of the
Consolidated Total Assets or (B) in the case of any other member of the
Group does not in aggregate exceed twenty per cent. of the Consolidated Equity
of the Group,

in each case as determined at the end of any Relevant Period by
reference to the Consolidated Financial Statements or the Consolidated
Quarterly Financial Statements (as the case may be) in respect of such Relevant
Period.

22.4.                        Segregation
of assets under the Italian Civil Code

No Italian Obligor shall segregate assets for the purpose of Article 2447-bis
of the Italian Civil Code (“Patrimoni
Destinati ad uno Specifico Affare”), nor shall it issue any class of
stock or other financial instruments under Article 2447-ter of the
Italian Civil Code.

22.5.                        Intellectual Property

(a)                                  The
Borrowers shall, and the Italian Borrower shall procure that each Group member
shall, do all acts as are reasonably practicable to maintain, protect and
safeguard the Intellectual Property which is necessary for the business of the
relevant member of the Group and not terminate or discontinue the use of any
such Intellectual Property save in each case when failure to do so is
reasonably likely to have a Material Adverse Effect.

(b)                                 The
Borrowers shall not, and the Italian Borrower shall ensure that no member of
Group shall:

(i)                                     use
or allow to be used, or take any step or omit to take any step in respect of
any Intellectual Property, in any way which is reasonably likely to have a
Material Adverse Effect; and

 56
 

 

(ii)                                  without
the prior written consent of the Agent, dispose of or transfer or terminate or
enter into any contract or licence in respect of any Intellectual Property,
where this is reasonably likely to have a Material Adverse Effect.

22.6.                        Disposals

(a)                                  No
Obligor shall (and the Italian Borrower shall ensure that no other member of
the Group will) enter into a single transaction or a series of transactions
(whether related or not) and whether voluntary or involuntary to sell, lease,
transfer or otherwise dispose of any asset.

(b)                                 Paragraph
(a) above does not apply to any sale, lease, transfer or other disposal or
disposals:

(i)                                     made
in the ordinary course of the business of the disposing entity;

(ii)                                  of
assets in exchange for other assets comparable or superior as to type, value
and quality;

(iii)                               the
proceeds of which are applied to the acquisition by any member of the Group, of
property or assets (including the capital stock of any entity) that replaces
the relevant property or assets disposed of, or in property or assets that will
be used or useful in the business or operations of the Group, within 355 days;

(iv)                              following
or in connection with a Corporate Reconstruction as defined in and pursuant to
Clause 22.7 (Merger);

(v)                                 the
proceeds of which are applied in voluntary prepayment of any of the Facilities
in accordance with the terms of this Agreement (such payment to occur on the
last day of the Interest Period for each Loan being prepaid during which such
disposed proceeds are received by the relevant member of the Group);

(vi)                              in
respect of any assets other than shares or other ownership interests in any
member of the Group, by an Obligor to another Obligor or by a member of the
Group (other than an Obligor) to another member of the Group (including an
Obligor);

(vii)                           of
shares or other ownership interests in any member of the Group by a member of
the Group to another member of the Group, subject always to Clause 8.2 (Change of Control); or

(viii)                        where the
book value of the assets (when aggregated with the book value of the assets for
any other sale, lease, transfer or other disposal by the Group, other than any
permitted under paragraphs (i) to (vii) above) carried out over the
period from the date hereof to the Termination Date does not exceed 30 per
cent. of the Consolidated Total Assets of the Group at the end of any Relevant
Period as determined by the Consolidated Financial Statements or Consolidated Quarterly
Financial Statements (as the case may be) for the Relevant Period from the date
hereof to the Termination Date.

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22.7.                        Merger

No Obligor nor any Material Subsidiaries shall (and the Italian
Borrower shall ensure that no other Material Subsidiaries will enter into any
amalgamation, demerger, merger or corporate reconstruction (each a “Corporate Reconstruction”) save for:

(a)                                  Corporate
Reconstructions entered into on a solvent basis between members of the Group;
or

(b)                                 mergers
entered into by a member of the Group on a solvent basis and in accordance with
applicable laws with any corporate entity following the acquisition by such
member of the Group of such entity; or

(c)                                  save
to the extent such transformation or equivalent process is reasonably likely to
have a Material Adverse Effect:

(i)                                     transformations
of any Italian member of the Group from a società a responsabilita
limitata to a società per azioni
(or vice versa), or

(ii)                                  the
change in the corporate status and/or form and/or tax status of any U.S. Group
Company including without limitation, from a C corporation to a limited
liability corporation (or vice versa); or

(iii)                               the
equivalent of (i) and (ii) above with respect to any member of the
Group incorporated in any jurisdiction,

provided that if so requested by the Agent, a
Guarantor that is the subject of any Corporate Reconstruction confirms,
promptly following its implementation, its obligations hereunder to the
Lenders, such confirmation to be in form and substance satisfactory to the
Agent (acting reasonably and in good faith).

22.8.                        Change of business

The Italian Borrower shall procure that no substantial change is made
to the general nature of the business of the Borrowers or the Group from that
carried on at the date of this Agreement, where such change is reasonably
likely to have a Material Adverse Effect.

22.9.                        Insurance

Each Obligor shall (and the Italian Borrower shall ensure that each
member of the Group will) maintain insurances on and in relation to its
business and assets with reputable underwriters or insurance companies against
those risks and to the extent as is usual for companies carrying on the same or
substantially similar business.

22.10.                  Environmental Matters

(a)                                  Each
Obligor shall (and the Italian Borrower shall ensure that each member of the
Group will) comply in all material respects with all applicable Environmental
Laws and obtain and maintain any requisite Environmental Permits applicable to
it in each case where failure to do so is reasonably likely to have a Material
Adverse Effect.

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(b)                                 The
Borrowers shall inform the Agent in writing as soon as reasonably practicable
upon becoming aware of the same:

(i)                                     if
any Environmental Claim has been commenced or (to the best of that Borrower’s
knowledge and belief) is threatened against any member of the Group; or

(ii)                                  of
any facts or circumstances which will or are reasonably likely to result in any
Environmental Claim being commenced or threatened against any member of the
Group,

where in each case the claim is reasonably
likely to be adversely determined against that member of the Group and if so
determined is reasonably likely to have a Material Adverse Effect.

22.11.                  Taxation

Each Obligor shall pay all Taxes imposed upon it or its assets within
the time period allowed without incurring penalties where failure to do so is
reasonably likely to have a Material Adverse Effect, (save to the extent that
payment is being contested in good faith, where such payment can be lawfully
withheld).

22.12.                  Indebtedness for Borrowed Money

The Obligors will procure that no member of the Group not being an
Obligor will incur, create or permit to subsist any Indebtedness for Borrowed
Money or enter into any arrangement or agreement to create, incur or permit to
subsist any Indebtedness for Borrowed Money save for any Indebtedness for
Borrowed Money:

(a)                                  arising
under or permitted pursuant to the Finance Documents;

(b)                                 owed
by any entity acquired by any member of the Group (including any refinancing of
such Indebtedness for Borrowed Money) provided that (i) it was not created
in contemplation of such acquisition; and (ii) it shall be included within
the basket set out in sub-paragraph (d) below, at any time following the
date falling 12 months after the date of such acquisition, unless prior to the
expiring of such 12 month period, the relevant acquired company has acceded to
this Agreement as an Additional Guarantor;

(c)                                  intercompany
loans received from a Group member in the ordinary course of business; or

(d)                                 other
Indebtedness for Borrowed Money not referred in paragraphs (a) to (c) above
which does not exceed 20 per cent. of the Consolidated Equity of the Group
(when aggregated with any Loans and guarantees issued in accordance with
paragraph (b)(iv) of Clause 22.13 (Loans
and Guarantees)) in each case as determined at the end of any
Relevant Period by the Consolidated Financial Statements or the Consolidated
Quarterly Financial Statements (as the case may be) for the Relevant Period.

22.13.                  Loans and Guarantees

(a)                                  The
Italian Borrower shall ensure that no member of the Group that is not an
Obligor will make any loans, grant any credit (save in the ordinary course of
business) or give any 

 59
 

 

guarantee or
indemnity to or for the benefit of any person or otherwise voluntarily assume
any liability, whether actual or contingent, in respect of any obligation of
any person.

(b)                                 Paragraph
(a) shall not apply to:

(i)                                     any
guarantees or counter-indemnities in respect of guarantees to (A) any
applicable VAT office for accelerated VAT refunds (B) landlords for lease
rentals (C) any tax or customs and excise authority, utility company or
car leasing company in each case granted in the ordinary course of business;

(ii)                                  any
guarantees or counter-indemnities in respect of any Bank Guarantee issued in
the ordinary course of business;

(iii)                               other
guarantees granted in the ordinary course of business (excluding guarantees in
respect of Indebtedness for Borrowed Money of any other member of the Group);
or

(iv)                              any
other loans, guarantees or financial accommodation by any member of the Group
that is not an Obligor provided that
the aggregate of such loans, guarantee or financial accommodation when
aggregated with any Indebtedness for Borrowed Money (without double counting)
under paragraph (d) of Clause 22.12 (Indebtedness for Borrowed
Money) does not exceed twenty per cent. of the Consolidated Equity
of the Group, in each case as determined at the end of any Relevant Period by
the Consolidated Financial Statements or the Consolidated Quarterly Financial
Statements (as the case may be) for the Relevant Period.

22.14.                  Distributions

Whilst an Event of Default is continuing, the Borrower shall not:

(a)                                  pay,
make or declare any dividend, return on capital, repayment of capital
contributions or other distribution (whether in cash or in kind) or make any
distribution of assets or other payment whatsoever in respect of share capital
whether directly or indirectly; or

(b)                                 pay
any fees to its shareholders, other than fees paid under agreements entered
into with its shareholders at arm’s length and in the ordinary course of
business.

22.15.                  Arm’s Length Basis

No Obligor shall, and the Borrower shall procure that no Group member
shall, enter into any material arrangement or contract with any other member of
the Group save where such material arrangement or contract is entered into on
an arm’s length basis considering the entire arrangement and is fair and
equitable to the Group as a whole.

22.16.                  Refinancing of Existing Financial Indebtedness

The Italian Borrower shall repay the Existing Indebtedness as and when
it falls due and payable.

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23.                                 EVENTS OF
DEFAULT

Each of the events or circumstances set out in Clause 23 is an Event of
Default.

23.1.                        Non-payment

An Obligor does not pay on the due date any amount payable pursuant to
a Finance Document at the place at and in the currency in which it is expressed
to be payable unless:

(a)                                  its
failure to pay is caused by administrative or technical error; and

(b)                                 payment
is made within 3 Business Days of its due date.

23.2.                        Financial covenants

Any requirement of Clause 21 (Financial
covenants) is not satisfied.

23.3.                        Other obligations

An Obligor fails duly to perform or comply with any other obligation
expressed to be assumed by it in the Finance Documents (including, without
limitation, those specified in Clause 22 (General
Undertakings)) and such failure, if capable of remedy, is not
remedied within 15 Business Days after the earlier to occur of the date the
Agent has given written notice thereof to the relevant Obligor and the date
such Obligor has actual knowledge thereof.

23.4.                        Misrepresentation

Any representation or statement made or deemed to be made by an Obligor
in the Finance Documents or any other document delivered by or on behalf of any
Obligor under or in connection with any Finance Document is or proves to have
been incorrect or misleading in any material respect when made or deemed to be
made in accordance with this Agreement by reference to the facts and
circumstances then existing, provided that,
such incorrect or misleading representation or statement has not been remedied
within 15 Business Days from the earlier of (a) the date the Agent has
given written notice thereof to the relevant Obligor; and (b) the date
such Obligor has actual knowledge thereof.

23.5.                        Cross default

(a)                                  Any
Financial Indebtedness of any Obligor, Finance Subsidiary or Material
Subsidiary is not paid when due nor within any originally applicable grace
period.

(b)                                 Any
Financial Indebtedness of any Obligor, Finance Subsidiary or Material
Subsidiary is declared to be or otherwise becomes due and payable prior to its
specified maturity as a result of an event of default (however described).

(c)                                  Any
commitment for any Financial Indebtedness of any Obligor, Finance Subsidiary or
Material Subsidiary is cancelled by a creditor of any Obligor, Finance
Subsidiary or Material Subsidiary as a result of an event of default (however
described).

(d)                                 Any
creditor of any Obligor, Finance Subsidiary or Material Subsidiary becomes
entitled to declare any Financial Indebtedness of Obligor, Finance Subsidiary
or Material Subsidiary due and payable prior to its specified maturity as a
result of an event of default (however described).

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(e)                                  In
this Clause, “Finance Subsidiary” means any
member of the Group (other than an Obligor or a Material Subsidiary) whose sole
or primary business is that of raising or incurring Financial Indebtedness for
and on behalf of the Group to the extent such Financial Indebtedness so
incurred or raised is not less than 10% of the Consolidated Total Net Debt in the
aggregate at any time.

(f)                                    No
Event of Default will occur under this Clause 23.5 if (i) the aggregate
amount of Financial Indebtedness or commitment for Financial Indebtedness
falling within paragraphs (a) to (d) above is less than €25,000,000
(or its equivalent in any other currency or currencies) or (ii) if the
action or entitlement referred to in paragraphs (a) to (d) above
arises as a result of the change in control of (A) the Target occurring as
a result of the Acquisition or (B) any other entity acquired by any member
of the Group, provided that with respect to paragraphs (a) and (b) above,
the failure to pay any Financial Indebtedness, subject always to (i) of
this sub-paragraph (f) above, by any of Target, such relevant entity or
any of their respective Subsidiaries at any time following the relevant
acquisition, and within five Business Days after the giving of any demand or
notice for payment by any relevant creditor, shall constitute an Event of
Default.

23.6.                        Insolvency

(a)                                  Any
Obligor or any of its Material Subsidiaries are unable or admit in writing
their inability to pay its debts as they fall due, suspends making payments on
any of its debts or, by reason of actual or anticipated financial difficulties,
commences negotiations with one or more of its creditors with a view to
rescheduling any of its indebtedness or in respect of any Obligor or any of its
Material Subsidiaries which is a corporation incorporated in Italy, such
company is dissolved pursuant to Article 2448 of the Italian Civil Code.

(b)                                 A
moratorium is declared in respect of any indebtedness of any Obligor or any of
its Material Subsidiaries.

23.7.                        Insolvency proceedings

Any corporate action, legal proceedings or other procedure or step is
taken in relation to:

(a)                                  the
suspension of payments, a moratorium of any indebtedness, winding-up,
dissolution, administration or reorganisation (by way of voluntary arrangement,
scheme of arrangement or otherwise) of any Obligor or any of its Material
Subsidiaries other than a solvent liquidation or reorganisation of any Material
Subsidiary or any other transaction permitted under Clause 22.7 (Merger);

(b)                                 a
composition, compromise, assignment or arrangement with all the creditors of
any Obligor or any of its Material Subsidiaries;

(c)                                  the
appointment of a liquidator (other than in respect of a solvent liquidation of
any Material Subsidiaries or any other transaction permitted under Clause 22.7
(Merger)), receiver,
administrative receiver, administrator, compulsory manager or other similar
officer in respect of any Obligor or any of its Material Subsidiaries or any of
its assets; or

 62

 

(d)                                 in
respect of any Obligor or any of its Material Subsidiaries which is a
corporation incorporated in Italy, the submission of such corporation to any
procedure which is a procedura concorsuale, including
without limitation,  fallimento, concordato preventivo and amministrazione
controllata under R.d 16 March 1942 No.267 and amministrazione straordinaria under Lg. 8 July 1999
No.270 (as amended from time to time), as amministrazione
straordinaria under L. 18. February 2004 No. 39,

or any analogous procedure or step is taken in any jurisdiction unless
in each case any Agreed Exception applies to any such proceedings.

23.8.                        Creditors’ process and final judgment

(a)                                  Any
expropriation, attachment, sequestration, distress or execution affects any
asset or assets of a member of the Group having an aggregate value of €25,000,000
and is not discharged within 15 days; or

(b)                                 Any
member of the Group fails to comply with or pay any sum due from it or them
under any final judgment or any final order made or given by any court of
competent jurisdiction when such sums exceed €25,000,000 (or its equivalent in
any other currency),

in each case unless any Agreed Exception applies.

23.9.                        Ownership of the Obligors

An Obligor (other than the Italian Borrower) is not or ceases to be a
Subsidiary of the Italian Borrower save for any merger or reorganisation
entered into in accordance with the terms of this Agreement.

23.10.                  Unlawfulness

It is or becomes unlawful for an Obligor to perform any of its
obligations under the Finance Documents.

23.11.                  Repudiation

An Obligor repudiates a Finance Document or evidences an intention to
repudiate a Finance Document.

23.12.                  Litigation

Any litigation, arbitration, administrative proceedings or governmental
or regulatory investigations, proceedings or disputes are commenced or
threatened in writing against any Obligor or any of its Material Subsidiaries
or its respective assets or revenues or there are any circumstances likely to
give rise to any such litigation, arbitration, administrative proceedings or
governmental or regulatory investigations, proceedings or disputes which in
each case are reasonably likely to be adversely determined, and if so
determined is reasonably likely to have a Material Adverse Effect.

 63
 

 

23.13.                  Auditor’s Qualification

The auditors of the Group qualify their annual audit report to the
Consolidated Financial Statements in a manner which has, or would have, a
Material Adverse Effect.

23.14.                  Employee Plans

Any ERISA Event or breach of a representation in Clause 19.21 (ERISA and Multiemployer Plans) shall have
occurred and the liability of a U.S. Group Company or its ERISA Affiliates,
either individually or in the aggregate, related to such ERISA Event or
breaches, individually or when aggregated with all other ERISA Events, and all
such breaches would have or would be reasonably expected to have a Material
Adverse Effect.

23.15.                  Cessation of business

Any Obligor ceases (or threatens in writing to cease) to carry on all
or a substantial part of its business other than as a result of a merger or
intra-group reorganisation permitted under the terms of this Agreement.

23.16.                  Acceleration

On and at any time after the occurrence of an Event of Default which is
continuing the Agent may, and shall if so directed by the Majority Lenders, by
notice to the Borrowers:

(a)                                  cancel
the Total Commitments whereupon they shall immediately be cancelled;

(b)                                 declare
that all or part of the Loans, together with accrued interest, and all other
amounts accrued or outstanding under the Finance Documents be immediately due
and payable, whereupon they shall become immediately due and payable; and/or

(c)                                  declare
that all or part of the Loans be payable on demand, whereupon they shall
immediately become payable on demand by the Agent on the instructions of the
Majority Lenders.

SECTION 9

CHANGES TO PARTIES

24.                                 CHANGES TO
THE LENDERS

24.1.                        Assignments and transfers by the Lenders

Subject to this Clause 24, a Lender (the “Existing Lender”) may:

(a)                                  assign
any of its rights; or

(b)                                 transfer
by novation any of its rights and obligations,

to a Qualifying Lender (the “New
Lender”), provided that
prior to and including 31 December 2004, each Lender may only transfer or
assign up to 25 per cent. of its Commitments to New Lenders provided further that for the avoidance of
doubt, from and including 1 January 2005 no such restriction shall apply. Any
assignment or transfer made by a Lender shall only be permitted 

 64
 

 

to the extent that it is made by such Lender pro-rata across the
Facilities in which it has an interest.

24.2.                        Conditions of assignment or transfer

(a)                                  The
written consent of the Italian Borrower together with a notice to Luxottica
U.S. Holdings Corp, is required for an assignment or transfer by an Existing
Lender, unless the assignment or transfer is to another Lender or an Affiliate
of a Lender provided that no such consent is
required following the occurrence of any Default which is continuing.

(b)                                 The
consent of the Italian Borrower to an assignment or transfer must not be
unreasonably withheld or delayed, The Italian Borrower will be deemed to have
given its consent 15 Business Days after the Existing Lender (through the
Agent) has requested it unless consent is expressly refused by the Italian
Borrower (through the Agent) within that time.

(c)                                  An
assignment will only be effective on:

(i)                                     receipt
by the Agent of written confirmation from the New Lender (in form and substance
satisfactory to the Agent) that the New Lender will assume the same obligations
to the other Finance Parties as it would have been under if it was a Lender;
and

(ii)                                  performance
by the Agent of all “know your customer” or other checks relating to any person
that it is required to carry out in relation to such assignment to a New
Lender, the completion of which the Agent shall promptly notify to the Existing
Lender and the New Lender.

(d)                                 A
transfer will only be effective if the procedure set out in Clause 24.5 (Procedure for transfer) is complied with.

(e)                                  If

(i)                                     a
Lender assigns or transfers any of its rights or obligations under the Finance
Documents or changes its Facility Office; and

(ii)                                  as
a result of circumstances existing at the date the assignment, transfer or
change occurs, an Obligor would be obliged to make a payment to the New Lender
or Lender acting through its new Facility Office under Clause 13 (Tax gross-up and indemnities) or Clause 14 (Increased costs) or incur any other cost, tax or expense of
whatsoever nature including the payment of any Mandatory Cost,

then the New Lender or Lender acting through its new Facility Office is
only entitled to receive any such payment to the same extent as the Existing
Lender or Lender acting through its previous Facility Office would have been if
the assignment, transfer or change had not occurred.

24.3.                        Assignment or transfer fee

The New Lender shall, on the date upon which an assignment or transfer
takes effect, pay to the Agent (for its own account) a fee of €3,000 with
respect to an assignment or transfer relating to 

 65
 

 

all the Facilities or to Facility A and/or Facility C and a fee of US $
3,000 with respect to an assignment or transfer relating to Facility B only provided that no such fee shall be payable
with respect to any transfer made prior to the date specified in the letter
entered into on 12 May 2004 between the Mandated Lead Arrangers.

24.4.                        Limitation of responsibility of Existing Lenders

(a)                                  Unless
expressly agreed to the contrary, an Existing Lender makes no representation or
warranty and assumes no responsibility to a New Lender for:

(i)                                     the
legality, validity, effectiveness, adequacy or enforceability of the Finance
Documents or any other documents;

(ii)                                  the
financial condition of any Obligor;

(iii)                               the
performance and observance by any Obligor of its obligations under the Finance
Documents or any other documents; or

(iv)                              the
accuracy of any statements (whether written or oral) made in or in connection
with any Finance Document or any other document,

and any representations or warranties implied by law are excluded.

(b)                                 Each
New Lender confirms to the Existing Lender and the other Finance Parties that
it:

(i)                                     has
made (and shall continue to make) its own independent investigation and
assessment of the financial condition and affairs of each Obligor and its
related entities in connection with its participation in this Agreement and has
not relied exclusively on any information provided to it by the Existing Lender
in connection with any Finance Document; and

(ii)                                  will
continue to make its own independent appraisal of the creditworthiness of each
Obligor and its related entities whilst any amount is or may be outstanding
under the Finance Documents or any Commitment is in force.

(c)                                  Nothing
in any Finance Document obliges an Existing Lender to:

(i)                                     accept
a re-transfer from a New Lender of any of the rights and obligations assigned
or transferred under this Clause 24; or

(ii)                                  support
any losses directly or indirectly incurred by the New Lender by reason of the
non-performance by any Obligor of its obligations under the Finance Documents
or otherwise.

24.5.                        Procedure for transfer

(a)                                  Subject
to the conditions set out in Clause 24.2 (Conditions
of assignment or transfer) a transfer is effected in accordance with
paragraph (c) below when the Agent executes an otherwise duly completed
Transfer Certificate delivered to it by the Existing Lender and the New Lender.
The Agent shall, subject to paragraph (b) below, as soon as reasonably
practicable after receipt by it of a duly completed Transfer Certificate
appearing on its 

 66
 

 

face to comply
with the terms of this Agreement and delivered in accordance with the terms of
this Agreement, execute that Transfer Certificate.

(b)                                 The
Agent shall only be obliged to execute a Transfer Certificate delivered to it
by the Existing Lender and the New Lender upon its completion of all “know your
customer” or other checks relating to any person that it is required to carry
out in relation to the transfer to such New Lender.

(c)                                  On
the Transfer Date;

(i)                                     to
the extent that in the Transfer Certificate the Existing Lender seeks to
transfer by novation its rights and obligations under the Finance Documents
each of the Obligors and the Existing Lender shall be released from further
obligations towards one another under the Finance Documents and their
respective rights against one another under the Finance Documents shall be
cancelled (being the “Discharged Rights and Obligations”);

(ii)                                  each
of the Obligors and the New Lender shall assume obligations towards one another
and/or acquire rights against one another which differ from the Discharged
Rights and Obligations only insofar as that Obligor and the New Lender have assumed
and/or acquired the same in place of that Obligor and the Existing Lender;

(iii)                               the
Agent, the Mandated Lead Arranger, the New Lender and other Lenders shall
acquire the same rights and assume the same obligations between themselves as
they would have acquired and assumed had the New Lender been a Lender with the
rights and/or obligations acquired or assumed by it as a result of the transfer
and to that extent the Agent, the Mandated Lead Arranger and the Existing
Lender shall each be released from further obligations to each other under the
Finance Documents; and

(iv)                              the
New Lender shall become a Party as a “Lender”.

24.6.                        Copy of Transfer Certificate to Borrowers

The Agent shall, as soon as reasonably practicable after it has
executed a Transfer Certificate, send to the Borrowers a copy of that Transfer
Certificate.

24.7.                        Disclosure of information

Any Lender may disclose to any of its Affiliates and any other person:

(a)                                  to
(or through) whom that Lender assigns or transfers (or may potentially assign
or transfer) all or any of its rights and obligations under this Agreement;

(b)                                 with
(or through) whom that Lender enters into (or may potentially enter into) any
sub-participation in relation to, or any other transaction under which payments
are to be made by reference to, this Agreement or any Obligor; or

(c)                                  to
whom, and to the extent that, information is required to be disclosed by any
applicable law or regulation,

 67
 

 

any information about any Obligor, the Group and the Finance Documents
as that Lender shall consider appropriate if, in relation to paragraphs (a) and
(b) above, the person to whom the information is to be given has entered
into a Confidentiality Undertaking.

25.                                 CONFIDENTIALITY

Each Finance Party hereby severally undertakes to the Obligors that it
will keep confidential and that it will not make use of for any purposes
(otherwise than for the purposes of the Finance Documents) any of the Finance
Documents or other documents relating to this Agreement and all of the
information distributed on behalf of the Obligors or contained in, received
under or obtained in the course of discussions (together with any analyses and
other documents which the relevant Finance Party has prepared or have been
prepared on its behalf), other than any such document or information which has
become generally available to the public otherwise than by disclosure by any
Finance Party or any of the persons described in paragraph (c) below, provided that, each Finance Party shall be
entitled to make disclosure of the same:

(a)                                  subject
to Clause 24.7 (Disclosure of Information)
to any of its Affiliates or any person to whom it is proposing to enter into,
or has entered into, any kind of assignment, transfer, substitution,
participation or other similar arrangement by reference to this Agreement, provided that, such information is disclosed only to such
person if and to the extent necessary for his activities and each such person
will be informed of the confidential nature of the information and the
provisions of this Agreement;

(b)                                 to
its auditors, accountants, legal counsel and tax advisers appointed and to any
other professional advisers appointed to act in connection with the preparation
or administration of the Finance Documents or the enforcement of, or
realisation of any security provided under, any of the Finance Documents, provided that, such information is disclosed only to such
person if and to the extent necessary for his activities and each such person
will be informed of the confidential nature of the information and the
provisions of this Agreement;

(c)                                  to
any other third party where the Borrower has previously agreed in writing that
disclosure may be made to that third party;

(d)                                 to
any banking or other regulatory or examining authorities (whether governmental
or otherwise) where such disclosure is requested by them and with whose
requests that Finance Party has to comply (or with whose requests banks in the
relevant jurisdiction are accustomed to complying);

(e)                                  pursuant
to subpoena or other legal process, or in connection with any action, suit or
proceeding relating to any of the Finance Documents; and

(f)                                    pursuant
to any law or regulation having the force of law.

The provisions of this Clause 25 shall supersede any undertakings with
respect to confidentiality previously provided by any Finance Party to the
Borrower.

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26.                                 CHANGES TO
THE OBLIGORS

26.1.                        Assignment and transfers by Obligors

No Obligor may assign any of its rights or transfer any of its rights
or obligations under the Finance Documents other than by operation of law
pursuant to a merger or other form of corporate reorganisation permitted under
the terms of this Agreement.

SECTION 10

THE FINANCE PARTIES

27.                                 ROLE OF THE
AGENT AND THE MANDATED LEAD ARRANGER

27.1.                        Appointment of the Agent

(a)                                  Each
other Finance Parry appoints the Agent to act as its agent under and in
connection with the Finance Documents.

(b)                                 Each
other Finance Party authorises the Agent to exercise the rights, powers,
authorities and discretions specifically given to the Agent under or in
connection with the Finance Documents together with any other incidental
rights, powers, authorities and discretions.

27.2.                        Duties of the Agent

(a)                                  The
Agent shall promptly forward to a Parry the original or a copy of any document
which is delivered to the Agent for that Party by any other Party.

(b)                                 Except
where a Finance Document specifically provides otherwise, the Agent is not
obliged to review or check the adequacy, accuracy or completeness of any
document it forwards to another Party.

(c)                                  If
the Agent receives notice from a Parry referring to this Agreement, describing
a Default and stating that the circumstance described is a Default, it shall
promptly notify the other Finance Parties.

(d)                                 If
the Agent is aware of the non-payment of any principal, interest, commitment
fee or other fee payable to a Finance Party (other than the Agent or the
Mandated Lead Arranger) under this Agreement it shall promptly notify the other
Finance Parties.

(e)                                  The
Agent’s duties under the Finance Documents are solely mechanical and
administrative in nature.

27.3.                        Role of the Mandated Lead Arranger

Except as specifically provided in the Finance Documents, the Mandated
Lead Arranger has no obligations of any kind to any other Party under or in
connection with any Finance Document.

27.4.                        No fiduciary duties

(a)                                  Nothing
in this Agreement constitutes the Agent or the Mandated Lead Arranger as a
trustee or fiduciary of any other person.

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(b)                                 Neither
the Agent nor the Mandated Lead Arranger shall be bound to account to any
Lender for any sum or the profit element of any sum received by it for its own
account.

27.5.                        Business with the Group

The Agent and the Mandated Lead Arranger may accept deposits from, lend
money to and generally engage in any kind of banking or other business with any
member of the Group.

27.6.                        Rights and discretions of the Agent

(a)                                  The
Agent may rely on:

(i)                                     any
representation, notice or document believed by it to be genuine, correct and
appropriately authorised; and

(ii)                                  any
statement made by a director, authorised signatory or employee of any person
regarding any matters which may reasonably be assumed to be within his
knowledge or within his power to verify.

(b)                                 The
Agent may assume (unless it has received notice to the contrary in its capacity
as agent for the Lenders) that:

(i)                                     no
Default has occurred (unless it has actual knowledge of a Default arising under
Clause 23.1 (Non-payment));

(ii)                                  any
right, power, authority or discretion vested in any Party or the Majority
Lenders has not been exercised; and

(iii)                               any
notice or request made by a Borrower (other than a Utilisation Request or
Selection Notice) is made on behalf of and with the consent and knowledge of
all the Obligors.

(c)                                  The
Agent may engage, pay for and rely on the advice or services of any lawyers,
accountants, surveyors or other experts.

(d)                                 The
Agent may act in relation to the Finance Documents through its personnel and
agents.

(e)                                  The
Agent may disclose to any other Party any information it reasonably believes it
has received as agent under this Agreement.

(f)                                    Notwithstanding
any other provision of any Finance Document to the contrary, neither the Agent
nor the Mandated Lead Arranger is obliged to do or omit to do anything if it
would or might in its reasonable opinion constitute a breach of any law or
regulation or a breach of a fiduciary duty or duty of confidentiality.

27.7.                        Majority Lenders’ instructions

(a)                                  Unless
a contrary indication appears in a Finance Document, the Agent shall (i) exercise
any right, power, authority or discretion vested in it as Agent in accordance
with any instructions given to it by the Majority Lenders (or, if so instructed
by the Majority Lenders, refrain from exercising any right, power, authority or
discretion vested in it as 

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Agent) and (ii) not be liable for any
act (or omission) if it acts (or refrains from taking any action) in accordance
with an instruction of the Majority Lenders.

(b)                                 Unless
a contrary indication appears in a Finance Document, any instructions given by
the Majority Lenders will be binding on all the Finance Parties.

(c)                                  The
Agent may refrain from acting in accordance with the instructions of the
Majority Lenders (or, if appropriate, the Lenders) until it has received such
security as it may require for any cost, loss or liability (together with any
associated VAT) which it may incur in complying with the instructions.

(d)                                 In
the absence of instructions from the Majority Lenders, (or, if appropriate, the
Lenders) the Agent may act (or refrain from taking action) as it considers to
be in the best interest of the Lenders.

(e)                                  The
Agent is not authorised to act on behalf of a Lender (without first obtaining
that Lender’s consent) in any legal or arbitration proceedings relating to any
Finance Document.

27.8.                        Responsibility for documentation

Neither the Agent nor the Mandated Lead Arranger:

(a)                                  is
responsible for the adequacy, accuracy and/or completeness of any information
(whether oral or written) supplied by the Agent, the Mandated Lead Arranger, an
Obligor or any other person given in or in connection with any Finance
Document; or

(b)                                 is
responsible for the legality, validity, effectiveness, adequacy or
enforceability of any Finance Document or any other agreement, arrangement or
document entered into, made or executed in anticipation of or in connection
with any Finance Document.

27.9.                        Exclusion of liability

(a)                                  Without
limiting paragraph (b) below, the Agent will not be liable for any action
taken by it under or in connection with any Finance Document, unless directly
caused by its gross negligence or wilful misconduct.

(b)                                 No
Party (other than the Agent) may take any proceedings against any officer,
employee or agent of the Agent in respect of any claim it might have against
the Agent or in respect of any act or omission of any kind by that officer,
employee or agent in relation to any Finance Document and any officer, employee
or agent of the Agent may rely on this Clause subject to Clause 1.4 (Third Party Rights) and the provisions of
the Contracts (Rights of Third Parties)
Act 1999.

(c)                                  The
Agent will not be liable for any delay (or any related consequences) in
crediting an account with an amount required under the Finance Documents to be
paid by the Agent if the Agent has taken all necessary steps as soon as
reasonably practicable to comply with the regulations or operating procedures
of any recognised clearing or settlement system used by the Agent for that
purpose.

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(d)                                 Nothing
in this Agreement shall oblige the Agent or the Mandated Lead Arranger 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 Agent and the Mandated
Lead Arranger 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 Agent or the Mandated Lead Arranger.

27.10.                  Lenders’ indemnity to the Agent

Each Lender shall (in proportion to its share of the Total Commitments
or, if the Total Commitments are then zero, to its share of the Total Commitments
immediately prior to their reduction to zero) indemnify the Agent, within three
Business Days of demand, against any cost, loss or liability incurred by the
Agent (otherwise than by reason of the Agent’s gross negligence or wilful
misconduct) in acting as Agent under the Finance Documents (unless the Agent
has been reimbursed by an Obligor pursuant to a Finance Document).

27.11.                  Resignation of the Agent

(a)                                  The
Agent may resign and appoint one of its Affiliates as successor by giving
notice to the other Finance Parties and the Italian Borrower.

(b)                                 Alternatively
the Agent may resign by giving notice to the other Finance Parties and the
Italian Borrower, in which case the Majority Lenders may appoint a successor
Agent. Such successor Agent must be acceptable to the Borrowers acting
reasonably and in good faith.

(c)                                  If
the Majority Lenders have not appointed a successor Agent in accordance with
paragraph (b) above within 30 days after notice of resignation was given,
the Agent (after consultation with the Italian Borrower) may appoint a
successor Agent subject to such successor Agent being acceptable to the
Borrowers acting reasonably and in good faith.

(d)                                 The
retiring Agent shall, at its own cost, make available to the successor Agent
such documents and records and provide such assistance as the successor Agent
may reasonably request for the purposes of performing its functions as Agent
under the Finance Documents.

(e)                                  The
Agent’s resignation notice shall only take effect upon the appointment of a
successor.

(f)                                    Upon
the appointment of a successor, the retiring Agent shall be discharged from any
further obligation in respect of the Finance Documents but shall remain
entitled to the benefit of this Clause 27. Its successor and each of the
other Parties shall have the same rights and obligations amongst themselves as
they would have had if such successor had been an original Party.

(g)                                 After
consultation with the Italian Borrower, the Majority Lenders may, by notice to
the Agent, require it to resign in accordance with paragraph (b) above. In
this event, the Agent shall resign in accordance with paragraph (b) above.

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27.12.                  Confidentiality

(a)                                  In
acting as agent for the Finance Parties, the Agent shall be regarded as acting
through its agency division which shall be treated as a separate entity from
any other of its divisions or departments.

(b)                                 If
information is received by another division or department of the Agent, it may
be treated as confidential to that division or department and the Agent shall
not be deemed to have notice of it.

27.13.                  Relationship with the Lenders

(a)                                  The
Agent may treat each Lender as a Lender, entitled to payments under this
Agreement and acting through its Facility Office unless it has received not
less than five Business Days prior notice from that Lender to the contrary in
accordance with the terms of this Agreement.

(b)                                 Each
Lender shall supply the Agent with any information required by the Agent in
order to calculate the Mandatory Cost in accordance with Schedule 4 (Mandatory Cost formulae).

27.14.                  Credit appraisal by the Lenders

Without affecting the responsibility of any Obligor for information
supplied by it or on its behalf in connection with any Finance Document, each
Lender confirms to the Agent and the Mandated Lead Arranger that it has been,
and will continue to be, solely responsible for making its own independent
appraisal and investigation of all risks arising under or in connection with
any Finance Document including but not limited to:

(a)                                  the
financial condition, status and nature of each member of the Group;

(b)                                 the
legality, validity, effectiveness, adequacy or enforceability of any Finance
Document and any other agreement, arrangement or document entered into, made or
executed in anticipation of, under or in connection with any Finance Document;

(c)                                  whether
that Lender has recourse, and the nature and extent of that recourse, against
any Party or any of its respective assets under or in connection with any
Finance Document, the transactions contemplated by the Finance Documents or any
other agreement, arrangement or document entered into, made or executed in
anticipation of, under or in connection with any Finance Document; and

(d)                                 the
adequacy, accuracy and/or completeness of any other information provided by the
Agent, any Party or by any other person under or in connection with any Finance
Document, the transactions contemplated by the Finance Documents or any other
agreement, arrangement or document entered into, made or executed in
anticipation of, under or in connection with any Finance Document.

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27.15.                  Reference Banks

If a Reference Bank (or, if a Reference Bank is not a Lender, the
Lender of which it is an Affiliate) ceases to be a Lender, the Agent shall (in
consultation with the Italian Borrower) appoint another Lender or an Affiliate
of a Lender to replace that Reference Bank.

27.16.                  Deduction from amounts payable by the Agent

If any Party owes an amount to the Agent under the Finance Documents
the Agent may, after giving notice to that Party, deduct an amount not
exceeding that amount from any payment to that Party which the Agent would
otherwise be obliged to make under the Finance Documents, and apply the amount
deducted in or towards satisfaction of the amount owed. For the purposes of the
Finance Documents that Party shall be regarded as having received any amount so
deducted. Notwithstanding the above, an Agent may not unless expressly
authorised in writing by a Borrower, deduct any amount from any Utilisation
requested by that Borrower.

28.                                 CONDUCT OF
BUSINESS BY THE FINANCE PARTIES

No provision of this Agreement will:

(a)                                  interfere
with the right of any Finance Party to arrange its affairs (tax or otherwise)
in whatever manner it thinks fit;

(b)                                 oblige
any Finance Party to investigate or claim any credit, relief, remission or
repayment available to it or the extent, order and manner of any claim; or

(c)                                  oblige
any Finance Party to disclose any information relating to its affairs (tax or
otherwise) or any computations in respect of Tax.

29.                                 SHARING
AMONG THE FINANCE PARTIES

29.1.                        Payments to Finance Parties

If a Finance Party (a “Recovering
Finance Party”) receives or recovers any amount from an Obligor
other than in accordance with Clause 30 (Payment
mechanics) and applies that amount to a payment due under the
Finance Documents then:

(a)                                  the
Recovering Finance Party shall, within three Business Days, notify details of
the receipt or recovery, to the Agent;

(b)                                 the
Agent shall determine whether the receipt or recovery is in excess of the
amount the Recovering Finance Parry would have been paid had the receipt or
recovery been received or made by the Agent and distributed in accordance with
Clause 30 (Payment mechanics),
without taking account of any Tax which would be imposed on the Agent in
relation to the receipt, recovery or distribution; and

(c)                                  the
Recovering Finance Party shall, within three Business Days of demand by the
Agent, pay to the Agent an amount (the “Sharing Payment”)
equal to such receipt or recovery less any amount which the Agent determines
may be retained by the Recovering Finance Party as its share of any payment to
be made, in accordance with Clause 30.5 (Partial
payments).

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29.2.                        Redistribution of payments

The Agent shall treat the Sharing Payment as if it had been paid by the
relevant Obligor and distribute it between the Finance Parties (other than the
Recovering Finance Party) in accordance with Clause 30.5 (Partial payments).

29.3.                        Recovering Finance Party’s rights

(a)                                  On
a distribution by the Agent under Clause 29.2 (Redistribution
of payments), the Recovering Finance Party will be subrogated to the
rights of the Finance Parties which have shared in the redistribution.

(b)                                 If
and to the extent that the Recovering Finance Party is not able to rely on its
rights under paragraph (a) above, the relevant Obligor shall be liable to
the Recovering Finance Party for a debt equal to the Sharing Payment which is
immediately due and payable.

29.4.                        Reversal of redistribution

If any part of the Sharing Payment received or recovered by a
Recovering Finance Party becomes repayable and is repaid by that Recovering
Finance Party, then:

(a)                                  each
Finance Party which has received a share of the relevant Sharing Payment
pursuant to Clause 29.2 (Redistribution of
payments) shall, upon request of the Agent, pay to the Agent for
account of that Recovering Finance Party an amount equal to the appropriate
part of its share of the Sharing Payment (together with an amount as is
necessary to reimburse that Recovering Finance Party for its proportion of any
interest on the Sharing Payment which that Recovering Finance Party is required
to pay); and

(b)                                 that
Recovering Finance Party’s rights of subrogation in respect of any
reimbursement shall be cancelled and the relevant Obligor will be liable to the
reimbursing Finance Party for the amount so reimbursed.

29.5.                        Exceptions

(a)                                  This
Clause 29 shall not apply to the extent that the Recovering Finance Party would
not, after making any payment pursuant to this Clause, have a valid and
enforceable claim against the relevant Obligor.

(b)                                 A
Recovering Finance Party is not obliged to share with any other Finance Party
any amount which the Recovering Finance Party has received or recovered as a
result of taking legal or arbitration proceedings, if:

(i)                                     it
notified that other Finance Party of the legal or arbitration proceedings; and

(ii)                                  that
other Finance Party had an opportunity to participate in those legal or
arbitration proceedings but did not do so as soon as reasonably practicable
having received notice and did not take separate legal or arbitration proceedings.

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SECTION 11

ADMINISTRATION

30.                                 PAYMENT
MECHANICS

30.1.                        Payments to the Agent

(a)                                  On
each date on which an Obligor or a Lender is required to make a payment under a
Finance Document, that Obligor or Lender shall make the same available to the
Agent (unless a contrary indication appears in a Finance Document) for value on
the due date at the time and in such funds specified by the Agent as being
customary at the time for settlement of transactions in the relevant currency
in the place of payment. A payment made by an Obligor to the Agent which
relates to moneys owed to a Finance Party shall be deemed to be received by
such Finance Party once made to the Agent.

(b)                                 Payment
shall be made to such account in the principal financial centre of the country
of that currency (or, in relation to euro, in a principal financial centre in a
Participating Member State or London) with such bank as the Agent specifies.

30.2.                        Distributions by the Agent

Each payment received by the Agent under the Finance Documents for another
Party shall, subject to Clause 30.3 (Distributions
to an Obligor), Clause 34.4 (Clawback)
and Clause 27.16 (Deduction from amounts
payable by the Agent) be made available by the Agent as soon as
practicable after receipt to the Party entitled to receive payment in
accordance with this Agreement (in the case of a Lender, for the account of its
Facility Office), to such account as that Party may notify to the Agent by not
less than five Business Days’ notice with a bank in the principal financial
centre of the country of that currency (or, in relation to euro, in the
principal financial centre of a Participating Member State or London).

30.3.                        Distributions to an Obligor

The Agent may (with the consent of the Obligor or in accordance with
Clause 31 (Setoff) apply any
amount received by it for that Obligor in or towards payment (on the date and
in the currency and funds of receipt) of any amount due from that Obligor under
the Finance Documents or in or towards purchase of any amount of any currency
to be so applied.

30.4.                        Clawback

(a)                                  Where
a sum is to be paid to the Agent under the Finance Documents for another Party,
the Agent is not obliged to pay that sum to that other Party (or to enter into
or perform any related exchange contract) until it has been able to establish
to its satisfaction that it has actually received that sum.

(b)                                 If
the Agent pays an amount to another Party and it proves to be the case that the
Agent had not actually received that amount, then the Party to whom that amount
(or the proceeds of any related exchange contract) was paid by the Agent shall
on demand refund the same to the Agent together with interest on that amount
from the date of payment to the date of receipt by the Agent, calculated by the
Agent to reflect its cost of funds.

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30.5.                        Partial payments

(a)                                  If
the Agent receives a payment that is insufficient to discharge all the amounts
then due and payable by an Obligor under the Finance Documents, the Agent shall
apply that payment towards the obligations of that Obligor under the Finance
Documents in the following order:

(i)                                     first, in or towards payment pro rata of any unpaid fees,
costs and expenses of the Agent and the Mandated Lead Arranger under the
Finance Documents;

(ii)                                  secondly, in or towards payment pro rata of any accrued
interest, fee or commission due but unpaid under this Agreement;

(iii)                               thirdly, in or towards payment pro rata of any principal due
but unpaid under this Agreement; and

(iv)                              fourthly, in or towards payment pro rata of any other sure
due but unpaid under the Finance Documents.

(b)                                 The
Agent shall, if so directed by the Majority lenders, vary the order set out in
paragraphs (a)(ii) to (iv) above.

(c)                                  Paragraphs
(a) and (b) above will override any appropriation made by an Obligor.

30.6.                        No set-off by Obligors

All payments to be made by an Obligor under the Finance Documents shall
be calculated and be made without (and free and clear of any deduction for)
set-off or counterclaim.

30.7.                        Business Days

(a)                                  Any
payment which is due to be made on a day that is not a Business Day shall be
made on the next Business Day in the same calendar month (if there is one) or
the preceding Business Day (if there is not).

(b)                                 During
any extension of the due date for payment of any principal or Unpaid Sum under
this Agreement interest is payable on the principal or Unpaid Sum at the rate
payable on the original due date.

30.8.                        Currency of account

(a)                                  Subject
to paragraphs (b) to (e) below, the Base Currency is the currency of
account and payment for any sum due from an Obligor under any Finance Document.

(b)                                 A
repayment of a Loan or Unpaid Sum or a part of a Loan or Unpaid Sum shall be
made in the currency in which that Loan or Unpaid Sum is denominated on its due
date. For the avoidance of doubt, a Loan advanced in an Optional Currency is
denominated in the Optional Currency and not in the Base Currency.

(c)                                  Each
payment of interest shall be made in the currency in which the sum in respect
of which the interest is payable was denominated when that interest accrued.
For the 

 77
 

 

avoidance of
doubt, interest on a Loan in an Optional Currency is payable in the Optional
Currency and not in the Base Currency.

(d)                                 Each
payment in respect of costs, expenses or Taxes shall be made in the currency in
which the costs, expenses or Taxes are incurred.

(e)                                  Any
amount expressed to be payable in a currency other than the Base Currency shall
be paid in that other currency.

30.9.                        Change of currency

(a)                                  Unless
otherwise prohibited by law, if more than one currency or currency unit are at
the same time recognised by the central bank of any country as the lawful
currency of that country, then:

(i)                                     any
reference in the Finance Documents to, and any obligations arising under the
Finance Documents in, the currency of that country shall be translated into, or
paid in, the currency or currency unit of that country designated by the Agent
(after consultation with the Italian Borrower); and

(ii)                                  any
translation from one currency or currency unit to another shall be at the
official rate of exchange recognised by the central bank for the conversion of
that currency or currency unit into the other, rounded up or down by the Agent
(acting reasonably).

(b)                                 If
a change in any currency of a country occurs, this Agreement will, to the
extent the Agent (acting reasonably and after consultation with the Italian
Borrower) specifies to be necessary, be amended to comply with any generally
accepted conventions and market practice in the Relevant Interbank Market and
otherwise to reflect the change in currency.

31.                                 SET-OFF

A Finance Party may set off any matured obligation due from an Obligor
under the Finance Documents (to the extent beneficially owned by that Finance
Party) against any matured obligation owed by that Finance Party to that
Obligor, regardless of the place of payment, booking branch or currency of
either obligation. If the obligations are in different currencies, the Finance
Party may convert either obligation at a market rate of exchange in its usual
course of business for the purpose of the set-off.

32.                                 NOTICES

32.1.                        Communications in writing

Any communication to be made under or in connection with the Finance
Documents shall be made in writing and, unless otherwise stated, may be made by
fax or letter.

32.2.                        Addresses

The address and fax number (and the department or officer, if any, for
whose attention the communication is to be made) of each Party for any
communication or document to be made or delivered under or in connection with
the Finance Documents is:

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(a)                                  in
the case of the Borrowers, that identified with their respective names below;

(b)                                 in
the case of each Lender or any other Obligor, that notified in writing to the
Agent on or prior to the date on which it becomes a Party; and

(c)                                  in
the case of the Agent, that identified with its name below,

or any substitute address or fax number or department or officer as the
Party may notify to the Agent (or the Agent may notify to the other Parties, if
a change is made by the Agent) by not less than five Business Days’ notice.

32.3.                        Delivery

(a)                                  Any
communication or document made or delivered by one person to another under or
in connection with the Finance Documents will only be effective:

(i)                                     if
by way of fax, when received in legible form; or

(ii)                                  if
by way of letter, when it has been left at the relevant address or five
Business Days after being deposited in the post postage prepaid in an envelope
addressed to it at that address, and, if a particular department or officer is
specified as part of its address details provided under Clause 32.2 (Addresses), if addressed to that department or officer.

(b)                                 Any
communication or document to be made or delivered to the Agent will be
effective only when actually received by the Agent and then only if it is
expressly marked for the attention of the department or officer identified with
the Agent’s signature below (or any substitute department or officer as the
Agent shall specify for this purpose).

(c)                                  All
notices from or to an Obligor shall be sent through the Agent.

(d)                                 Each
Obligor (other than the Italian Borrower) irrevocably appoints the Italian
Borrower to act as its agent:

(i)                                     to
give and receive all communications under this Agreement;

(ii)                                  to
supply all information concerning itself to any Finance Party; and

(iii)                               to
sign all documents under or in connection with the Finance Documents.

(e)                                  Any
communication or document made or delivered to the Italian Borrower in
accordance with this Clause will be deemed to have been made or delivered to
each of the Obligors.

32.4.                        Notification of address and fax number

Promptly upon receipt of notification of an address and fax number or
change of address or fax number pursuant to Clause 32.2 (Addresses) or changing its own address or
fax number, the Agent shall notify the other Parties.

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32.5.                        Electronic communication

(a)                                  Any
communication to be made between the Agent and a Lender under or in connection
with the Finance Documents may be made by electronic mail or other electronic
means, if the Agent and the relevant Lender:

(i)                                     agree
that, unless and until notified to the contrary, this is to be an accepted form
of communication;

(ii)                                  notify
each other in writing of their electronic mail address and/or any other
information required to enable the sending and receipt of information by that
means; and

(iii)                               notify
each other of any change to their address or any other such information
supplied by them.

(b)                                 Any
electronic communication made between the Agent and a Lender will be effective
only when actually received in readable form and in the case of any electronic
communication made by a Lender to the Agent only if it is addressed in such a
manner as the Agent shall specify for this purpose.

32.6.                        English language

(a)                                  Any
notice given under or in connection with any Finance Document must be in
English.

(b)                                 All
other documents provided under or in connection with any Finance Document must
be:

(i)                                     in
English; or

(ii)                                  if
not in English, and if so required by the Agent, accompanied by a certified
English translation and, in this case, the English translation will prevail
unless the document is a constitutional, statutory or other official document.

33.                                 CALCULATIONS
AND CERTIFICATES

33.1.                        Accounts

In any litigation or arbitration proceedings arising out of or in
connection with a Finance Document, in the absence of manifest error the entries
made in the accounts maintained by a Finance Party are prima facie evidence of the matters to
which they relate.

33.2.                        Certificates and Determinations

Any certification or determination by a Finance Party of a rate or
amount under any Finance Document is, in the absence of manifest error,
conclusive evidence of the matters to which it relates.

33.3.                        Day count convention

Any interest, commission or fee accruing under a Finance Document will
accrue from day to day and is calculated on the basis of the actual number of
days elapsed and a year of 360 days.

 80
 

 

34.                                 PARTIAL
INVALIDITY

If, at any time, any provision of the Finance Documents is or becomes
illegal, invalid or unenforceable in any respect under any law of any
jurisdiction, neither the legality, validity or enforceability of the remaining
provisions nor the legality, validity or enforceability of such provision under
the law of any other jurisdiction will in any way be affected or impaired.

35.                                 REMEDIES AND
WAIVERS

No failure to exercise, nor any delay in exercising, on the part of any
Finance Party, any right or remedy under the Finance Documents shall operate as
a waiver, nor shall any single or partial exercise of any right or remedy
prevent any further or other exercise or the exercise of any other right or
remedy. The rights and remedies provided in this Agreement are cumulative and
not exclusive of any rights or remedies provided by law.

36.                                 AMENDMENTS
AND WAIVERS

36.1.                        Required consents

(a)                                  Subject
to Clause 36.2 (Exceptions) any term of the
Finance Documents may be amended or waived only with the consent of the
Majority Lenders and the Obligors and any such amendment or waiver will be
binding on all Parties.

(b)                                 The
Agent may effect, on behalf of any Finance Party, any amendment or waiver
permitted by this Clause.

36.2.                        Exceptions

(a)                                  An
amendment or waiver that has the effect of changing or which relates to:

(i)                                     the
definition of “Majority Lenders” in Clause 1.1 (Definitions);

(ii)                                  an
extension to the date of payment of any amount under the Finance Documents;

(iii)                               a
reduction in the Margin or a reduction in the amount of any payment of
principal, interest, fees or commission payable;

(iv)                              an
increase in or an extension of any Commitment;

(v)                                 a
change to the Borrowers or Guarantors;

(vi)                              any
provision which expressly requires the consent of all the Lenders;

(vii)                           Clause
2.2 (Finance Parties’ rights and obligations),
Clause 24 (Changes to the Lenders) or this
Clause 36,

shall not be made without the prior consent of all the Lenders.

(b)                                 An
amendment or waiver which relates to the rights or obligations of the Agent or
the Mandated Lead Arranger may not be effected without the consent of the Agent
or the Mandated Lead Arranger.

 81
 

 

37.                                 COUNTERPARTS

Each Finance Document may be executed in any number of counterparts,
and this has the same effect as if the signatures on the counterparts were on a
single copy of the Finance Document.

SECTION 12

GOVERNING LAW AND ENFORCEMENT

38.                                 GOVERNING
LAW

This Agreement is governed by English law.

39.                                 ENFORCEMENT

39.1.                        Jurisdiction

(a)                                  The
courts of England have exclusive jurisdiction to settle any dispute arising out
of or in connection with this Agreement (including a dispute regarding the
existence, validity or termination of this Agreement) (a “Dispute”).

(b)                                 The
Parties agree that the courts of England are the most appropriate and
convenient courts to settle Disputes and accordingly no Party will argue to the
contrary.

(c)                                  This
Clause 39.1 is for the benefit of the Finance Parties only. As a result, no
Finance Party shall be prevented from taking proceedings relating to a Dispute
in any other courts with jurisdiction. To the extent allowed by law, the
Finance Parties may take concurrent proceedings in any number of jurisdictions.

39.2.                        Service of process

Without prejudice to any other mode of service allowed under any
relevant law, each Obligor:

(a)                                  irrevocably
appoints Luxottica UK Ltd. as its agent for service of process in relation to
any proceedings before the English courts in connection with any Finance
Document; and

(b)                                 agrees
that failure by a process agent to notify the relevant Obligor of the process
will not invalidate the proceedings concerned.

This
Agreement has been entered into on the date stated at the beginning of this
Agreement.

 82

 

SCHEDULE
2

CONDITIONS
PRECEDENT

Part I

Conditions
precedent to initial Utilisation

1.                                      Obligors

(a)

(i)                                     A copy of the constitutional documents of
the US Borrower.

(ii)                                  In respect of each Obligor which is a
company incorporated under the laws of Italy:

(1)                                  a copy of the relevant deed of
incorporation (atto costitutivo);

(2)                                  a copy of the current by-laws (statuto); and

(3)                                  a certificate of registration (certificato di iscrizione) of the relevant
Obligor with the competent companies’ register dated not earlier than 5 days
before the execution of this Agreement, mentioning the absence of any
insolvency procedures affecting such Obligor.

(b)                                 A copy of a resolution of the board of
directors of each Obligor:

(i)                                     approving the terms of, and the
transactions contemplated by, the Finance Documents to which it is a party and
resolving that it execute the Finance Documents to which it is a party;

(ii)                                  authorising a specified person or persons
to execute the Finance Documents to which it is a party on its behalf; and

(iii)                               authorising a specified person or
persons, on its behalf, to sign and/or despatch all documents and notices
(including, if relevant, any Utilisation Request and Selection Notice) to be
signed and/or despatched by it under or in connection with the Finance
Documents to which it is a party.

(c)                                  A specimen of the signature of each
person authorised by the resolution referred to in paragraph (b) above.

(d)                                 A certificate of each Obligor confirming
that borrowing or guaranteeing, as appropriate, the Facility A Commitments and
the Facility C Commitments in the case of the Italian Borrower and the Facility
B Commitments and the Facility C Commitments in the case of the US Borrower
would not cause any borrowing, guaranteeing or similar limit binding on any
Obligor to be exceeded.

(e)                                  A certificate of an authorised signatory
of the relevant Obligor certifying that each copy document relating to it
specified in this Part 1 of Schedule 2 is correct, complete and in full
force and effect as at a date no earlier than the date of this Agreement.

 83
 

 

2.                                      Legal opinions

(a)                                  A legal opinion of Studio Legale
Associato, in associazione con Clifford Chance as to matters of English law (in
the form circulated to the Mandated Lead Arranger prior to the date of this
Agreement).

(b)                                 A legal opinion of Studio Legale
Associato, in associazione con Clifford Chance as to matters of Italian law (in
the form circulated to the Mandated Lead Arranger prior to the date of this
Agreement).

(c)                                  A legal opinion of Allen & Overy
Studio Legale Associato Milano addressed to the Lenders at the date of this
Agreement confirming that the Obligors incorporated in the Republic of Italy
have power and authority to execute this Agreement.

(d)                                 A legal opinion of Allen & Overy
L.L.P. addressed to the Mandated Lead Arranger as legal advisers to the US
Borrower as to matters of US Law.

3.                                      Other documents and evidence

(a)                                  Evidence that any process agent referred
to in Clause 39.2 (Service of process)
has accepted its appointment.

(b)                                 A copy of any other Authorisation or
other document, opinion or assurance which the Agent considers to be necessary
or desirable (if it has notified the Italian Borrower accordingly) in
connection with the entry into and performance of the transactions contemplated
by any Finance Document or for the validity and enforceability of any Finance
Document.

(c)                                  The Original Financial Statements.

(d)                                 Acceptance by the Borrower of the
Documento di Sintesi.

(e)                                  Evidence that the fees, costs and
expenses then due from the Borrowers on or prior to the first Utilisation Date
pursuant to Clause 12 (Fees) and
Clause 17 (Costs and expenses)
have been paid or will be paid by the first Utilisation Date.

 84
 

 

Part II

Conditions
precedent to Facility B initial Utilisation

(a)                                  Evidence that immediately following the
first Utilisation under the Facility B and application of the proceeds by the
Paying Agent (as defined in the merger agreement referred to in paragraph (f) below),
the Acquisition will be completed.

(b)                                 Evidence that all governmental and
regulatory consents and other clearances (including, but not limited to, tax
clearances) and all third party consents and approvals required under the
Acquisition Documents have been obtained.

(c)                                  A funds flow statement in a form agreed
to by the Agent detailing the proposed movement of funds to be applied towards
the Total Consideration.

(d)                                 A certificate of the US Borrower (signed
by an Authorised Signatory) confirming that entering into the Acquisition
Documents (and the performance of the relevant transactions thereunder) would
not conflict with: (i) any law or regulation applicable to it or Target, (ii) its
or Target’s or any of its Subsidiaries constitutional documents, and (iii) any
agreement or instrument binding upon Target or any of its or Target’s
Subsidiaries or any of its Subsidiaries’ assets except any such conflict that
would not be reasonably expected to have a Material Adverse Effect.

(e)                                  A structure chart in a form agreed by the
Agent showing the corporate structure of the Group (including Target and its Subsidiaries)
immediately following the Acquisition.

(f)                                    A copy of the merger agreement dated as
of 23 January 2004 between, inter alia,
the Italian Borrower and Target.

(g)                                 A copy of the latest available audited
consolidated financial statements of Target and the latest available quarterly
financial statements in each case of Target.

 

 85

 

SIGNATURES

THE
ORIGINAL BORROWERS

LUXOTTICA
GROUP S.p.A.

by:  ENRICO CAVATORTA

Address:  VIA CANTU, 2, 20123, MILAN, ITALY

Fax:  +39 02 86996550 / +39 02 874893

Attention:  ENRICO CAVATORTA / SARA FRANCESCUTTO

LUXOTTICA
U.S. HOLDINGS CORP.

 by: 
ENRICO CAVATORTA

Address:  44, HARBOUR PARK DRIVE, PORT WASHINGTON, NEW
YORK, 11050, USA

Fax:  + 1 516 9183151 / + 1 516 4849010 / + 1 516
9183151

Attention:  VITO GIANNOLA / MICHEAL BOXER / DAN SOCCI

THE
ORIGINAL GUARANTORS

LUXOTTICA
GROUP S.p.A.

by:  ENRICO CAVATORTA

Address:  VIA CANTU, 2, 20123, MILAN, ITALY

Fax:  +39 02 86996550 / +39 02 874893

Attention:  ENRICO CAVATORTA / SARA FRANCESCUTTO

LUXOTTICA
U.S. HOLDINGS CORP.

by:  ENRICO CAVATORTA

Address: 44, HARBOUR PARK
DRIVE, PORT WASHINGTON, NEW YORK, 11050, USA

Fax: + 1 516 9183151 / +
1 516 4849010 / + 1 516 9183151

Attention: VITO GIANNOLA
/ MICHEAL BOXER / DAN SOCCI

LUXOTTICA
S.r.l.

by:  ENRICO CAVATORTA

Address:  VIA CANTU, 2, 20123, MILAN, ITALY

 105
 

 

Fax:  +39 02 86996550 / +39 02 874893

Attention:  ENRICO CAVATORTA / SARA FRANCESCUTTO

THE
AGENTS

UNICREDITO
ITALIANO S.p.A., NEW YORK BRANCH

by:  HORACIO MARTINEZ

Address:  430 PARK AVENUE 9th FLOOR, NEW YORK, NY 10022, UNITED STATES OF
AMERICA

Fax.:  00 1 212 8268623

Attention:  NICOLA LONGO DENTE / BESNICK BACKA (CREDIT
DEPT) - DENNIS MCKEON (LOAN ADMINISTRATION DEPT)

UNICREDIT
BANCA D’IMPRESA S.p.A.

by:  PAOLO SPADA

Address:  PRESIDIO TERRITORIALE POOL LOMBARDIA 6606,
VIALE BODIO 29, 20158, MILAN, ITALY

Fax:  +39 02 3772 4460

Attention:  MRS LUCIANA SILVERA

THE MANDATED
LEAD ARRANGERS

ABN AMRO
BANK N.V.

by:  HORACIO MARTINEZ

Address:

Fax:

Attention:

BANCA
INTESA S.p.A.

by:  HORACIO MARTINEZ

Address:

Fax:

Attention:

 106
 

 

BANC
OF AMERICA SECURITIES LIMITED

by:  STEPHAN JANES

Address:

Fax:

Attention:

CITIGROUP
GLOBAL MARKETS LIMITED

by:  KIM MCNAMARA

Address:

Fax:

Attention:

HSBC
BANK PLC

by:  JOHN HAIRE

Address:

Fax:

Attention:

MEDIOBANCA
- BANCA DI CREDITO FINANZIARIO S.p.A.

by:  HORACIO MARTINEZ

Address:

Fax:

Attention:

THE
ROYAL BANK OF SCOTLAND PLC

by:  HORACIO MARTINEZ

Address:

Fax:

Attention:

 107
 

 

UNICREDIT
BANCA MOBILIARE S.p.A.

by:  HORACIO MARTINEZ

Address:

Fax:

THE
ORIGINAL LENDERS

ABN AMRO
BANK N.V., MILAN BRANCH

by:  HORACIO MARTINEZ

Address:

Fax:

Attention:

ABN AMRO
BANK N.V.

Facility Office for US
Borrower:

by:  HORACIO MARTINEZ

Address:

Fax:

Attention:

BANCA
INTESA S.p.A.

Facility Office for US
Borrower:

by:  HORACIO MARTINEZ

Address:

Fax:

Attention:

 108
 

 

BANK
OF AMERICA, N.A., MILAN BRANCH

by:  STEPHAN JANES

Address:

Fax:

Attention:

BANK OF
AMERICA, N.A.

Facility Office for US
Borrower:

by:  STEPHAN JANES

Address:

Fax:

Attention:

CITIBANK,
N.A., MILAN BRANCH

by:  KIM MCNAMARA

Address:

Fax:

Attention:

CITIBANK,
N.A.

Facility Office for US
Borrower:

by:  KIM MCNAMARA

Address:

Fax:

Attention:

 109
 

 

HSBC
BANK PLC, MILAN BRANCH

by:  JOHN HAIRE

Address:

Fax:

Attention:

HSBC
BANK PLC

Facility Office for US
Borrower:  London

by:  JOHN HAIRE

Address:

Fax:

Attention:

MEDIOBANCA
- BANCA DI CREDITO FINANZIARIO S.p.A.

by:  HORACIO MARTINEZ

Address:

Fax:

Attention:

THE
ROYAL BANK OF SCOTLAND PLC, MILAN BRANCH

by:  ROSSELLA SCHIAVINI / HORACIO MARTINEZ

Address:

Fax:

Attention:

THE
ROYAL BANK OF SCOTLAND PLC

Facility Office for US
Borrower:

by: HORACIO MARTINEZ

Address:

Fax:

 110
 

 

Attention:

UNICREDIT
BANCA D’IMPRESA S.p.A.

by:  PAOLO SPADA

Address:

Fax:

Attention:

UNICREDITO
ITALIANO S.p.A., NEW YORK BRANCH

by:  HORACIO MARTINEZ

Address:

Fax:

Attention:

 

 111Exhibit 4.12

EXECUTION VERSION

AMENDMENT
AGREEMENT

Dated 10 MARCH 2006

for

LUXOTTICA GROUP S.p.A.

AND

LUXOTTICA U.S.
HOLDINGS CORP.

arranged by

ABN AMRO BANK N.V., BANC
OF AMERICA SECURITIES LIMITED, BANCA

INTESA S.p.A., CALYON
S.A., SUCCURSALE DI MILANO, CALYON NEW YORK

BRANCH, CAPITALIA S.p.A.,
CITIGROUP GLOBAL. MARKETS LIMITED,

MEDIOBANCA - BANCA DI
CREDITO FINANZIARIO S.p.A., THE ROYAL BANK OF

SCOTLAND PLC AND

UNICREDIT BANCA
MOBILIARE S.p.A.

with

BANC OF AMERICA
SECURITIES LIMITED, CITIGROUP GLOBAL MARKETS

LIMITED, THE ROYAL BANK
OF SCOTLAND PLC AND UNICREDIT BANCA

MOBILIARE S.p.A.

acting as
Bookrunners

with

UNICREDITO ITALIANO
S.p.A., NEW YORK BRANCH

UNICREDIT BANCA D’IMPRESA
S.p.A,

acting as Agents

RELATING
TO A MULTICURRENCY TERM AND

REVOLVING
FACILITIES AGREEMENT

DATED
3 JUNE 2004

 

 

 

CONTENTS

	
  Clause

  	
   

  	
  Page

  
	
  1. 
 	
   

  	
  DEFINITIONS AND
  INTERPRETATION

  	
   

  	
  2

  
	
  2. 
 	
   

  	
  RESTATEMENT

  	
   

  	
  2

  
	
  3. 
 	
   

  	
  REPRESENTATIONS

  	
   

  	
  3

  
	
  4. 
 	
   

  	
  CONTINUITY AND FURTHER
  ASSURANCE

  	
   

  	
  3

  
	
  5. 
 	
   

  	
  FEES, COSTS AND
  EXPENSES

  	
   

  	
  3

  
	
  6. 
 	
   

  	
  MISCELLANEOUS

  	
   

  	
  4

  
	
  7. 
 	
   

  	
  GOVERNING LAW

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 1   CONDITIONS
  PRECEDENT

  	
   

  	
  5

  
	
  SCHEDULE 2   RESTATED AGREEMENT

  	
   

  	
  6

  

 

 

 

THIS AGREEMENT is
dated 10 March 2006 and made in Lugano between:

(1)                                  LUXOTTICA GROUP S.p.A., as borrower (the “Italian Borrower”);

(2)                                  LUXOTTICA U.S. HOLDINGS CORP., as borrower
(the “US Borrower” and, together
with the Italian Borrower, the “Borrowers”);

(3)                                  LUXOTTICA GROUP S.p.A., LUXOTTICA S.r.l. and LUXOTTICA U.S. HOLDINGS CORP. as guarantors
(the “Guarantors”);

(4)                                  ABN AMRO BANK N.V., BANC OF AMERICA SECURITIES
LIMITED, BANCA INTESA S.p.A., CALYON S.A., SUCCURSALE DI MILANO, CALYON NEW
YORK BRANCH, CAPITALIA S.p.A., CITIGROUP GLOBAL MARKETS LIMITED, MEDIOBANCA -
BANCA DI CREDITO FINANZIARIO S.p.A., THE ROYAL BANK OF SCOTLAND PLC AND
UNICREDIT BANCA MOBILIARE S.p.A. as mandated lead arrangers (whether
acting individually or together, the “Mandated
Lead Arranger”);

(5)                                  BANC OF AMERICA SECURITIES LIMITED, CITIGROUP GLOBAL
MARKETS LIMITED, THE ROYAL BANK OF SCOTLAND PLC AND UNICREDIT BANCA MOBILIARE
S.p.A., as bookrunners (whether acting individually or together, the
“Bookrunner”);

(6)                                  ABN AMRO BANK N.V., ABN AMRO BANK N.V., MILAN BRANCH,
BANCA DI ROMA S.p.A., BANCA INTESA S.p.A., BANCA MONTE DEI PASCHI DI SIENA
S.p.A., BANCA MONTE DEI PASCHI DI SIENA S.pA., NEW YORK BRANCH, BANCA NAZIONALE
DEL LAVORO S.p.A., BANCA NAZIONALE DEL LAVORO S.p.A., NEW YORK BRANCH, BANCO
BILBAO VIZCAYA ARGENTARIA S.A., MILAN BRANCH, BANCO BILBAO VIZCAYA ARGENTARIA
S.A., NEW YORK BRANCH, BANK OF AMERICA, N.A., MILAN BRANCH, BANK OF
TOKYO-MITSUBISHI UFJ, LTD. MILAN BRANCH, BANK OF TOKYO-MITSUBISHI UFJ, LTD.
LONDON BRANCH,, BAYERISCHE LANDESBANK, FILIALE DI MILANO, BAYERISCHE
LANDESBANK, NEW YORK BRANCH, CALYON S.A., SUCCURSALE DI MILANO, CALYON NEW YORK
BRANCH, CITIBANK, N.A., CITIBANK, N.A., MILAN BRANCH, MEDIOBANCA - BANCA DI
CREDITO FINANZIARIO S.p.A., THE ROYAL BANK OF SCOTLAND PLC, THE ROYAL BANK OF
SCOTLAND PLC, MILAN BRANCH, UNICREDIT BANCA D’IMPRESA S.p.A. AND UNICREDITO
ITALIANO S.p.A. NEW YORK BRANCH as lenders (whether acting
individually or together, the “Lenders”);

(7)                                  UNICREDIT BANCA D’IMPRESA S.p.A., as agent
in relation to the Base Currency (as such term is defined in the Original
Facility Agreement) (the “Italian Agent”);
and

(8)                                  UNICREDITO ITALIANO S.p.A., NEW YORK BRANCH,
as agent in relation to the Optional Currency (as such term is defined in the
Original Facility Agreement) (the “US Agent”
and, together with the Italian Agent, the “Agents”).

 1
 

 

IT IS AGREED as
follows:

1.                                       DEFINITIONS AND INTERPRETATION

1.1.                              Definitions

In this Agreement:

“Amendment and Restatement Date” means the
date on which the Agent confirms to the Lenders and the Company that it has
received each of the documents listed in Schedule 1 (Conditions Precedent) in a form and
substance satisfactory to the Agent (acting reasonably).

“Original Facility Agreement” means the €740,000,000
and US$325,000,000 multicurrency term and revolving facilities agreement dated
3 June 2004 between the Borrowers, the Guarantors, the Agents and others
(as amended from time to time).

“Restated Agreement” means the Original
Facility Agreement, as amended by this Agreement, the terms of which are set
out in Schedule 2 (Restated Agreement).

1.2.                              Incorporation of defined terms

(a)                                  Unless
a contrary indication appears, a term defined in any other Finance Document has
the same meaning in this Agreement.

(b)                                 The
principles of construction set out in the Original Facility Agreement shall
have effect as if set out in this Agreement.

1.3.                              Clauses

In this Agreement any
reference to a “Clause” or a “Schedule” is, unless the context otherwise
requires, a reference to a Clause or a Schedule to this Agreement.

1.4.                              Third party rights

A person who is not a
party to this Agreement has no right under the Contracts (Rights of Third
Parties) Act 1999 to enforce or to enjoy the benefit of any term of this
Agreement.

1.5.                              Designation

In accordance with the
Original Facility Agreement, each of the Company and the Agent designates this
Agreement as a Finance Document.

2.                                       RESTATEMENT

2.1.                              Restatement of the Original Facility Agreement

With effect from the
Amendment and Restatement Date, the Original Facility Agreement shall be
amended and restated so that it shall be read and construed for all purposes as
set out in Schedule 2 (Restated
Agreement).

The Restated Agreement
shall include amendments to the following provisions of the Original Facility
Agreement: the definitions of “Consolidated Pro-Forma Financial Statements”, “Consolidated
Quarterly Pro-Forma Financial Statements”, “Margin”, “Quotation Day”, “Termination
Date”, “Total Commitments” and “Total Facility C Commitments” in Clause 1.1 (Definitions), subparagraph (a)(ii) of
Clause 12.1 (Commitment fee),
subparagraph (viii) of Clause 

 2
 

 

22.6 (Disposals), sub-paragraph (b) of
Clause 22.12 (Indebtedness for Borrowed
Money), Part II, Part III and Part IV of
Schedule 1 (The Parties) and
Schedule 10 (Authorised Signatories)
and shall contain two new Clauses 7A (Extension
of Termination Date) and 7.5 (Extension
fee).

3.                                       REPRESENTATIONS

The Repeating
Representations are deemed to be made by each Obligor (by reference to the
facts and circumstances then existing) on:

(a)                                  the
date of this Agreement; and

(b)                                 the
Amendment and Restatement Date.

4.                                       CONTINUITY AND FURTHER ASSURANCE

4.1.                              Continuing obligations

The provisions of the
Original Facility Agreement and the other Finance Documents shall, save as
amended by this Agreement, continue in full force and effect.

4.2.                              Further assurance

Each Obligor shall, at
the request of the Agent and at its own expense, do all such acts and things
necessary or desirable to give effect to the amendments effected or to be effected
pursuant to this Agreement.

5.                                       FEES, COSTS AND EXPENSES

5.1.                              Transaction expenses

The Borrowers shall,
within five Business pays of demand, reimburse the Agent for the amount of all
costs and expenses (including pre-agreed legal fees) reasonably incurred and
documented by the Agent in connection with the negotiation, preparation,
printing and execution of this Agreement and any other documents referred to in
this Agreement.

5.2.                              Enforcement costs

The Borrowers shall,
within five Business Days of demand, pay to each Finance Party the amount of
all costs and expenses (including legal fees and any registration taxes)
incurred and documented by that Finance Party in connection with the
enforcement of, or the preservation of any rights under, this Agreement.

5.3.                              Stamp taxes

The Borrowers shall pay
and, within five Business Days of demand, indemnify each Finance Party against
any cost, loss or liability that Finance Party incurs in relation to all stamp
duty, registration and other similar Taxes payable in respect of any Finance
Document (excluding for the avoidance of doubt, any stamp registration and
other similar taxes arising or incurred in connection with a transfer,
assignment or novation of any Facility or part thereof, unless such transfer,
assignment or novation is entered into at the request of an Obligor).

 3
 

 

6.                                       MISCELLANEOUS

6.1.                              Incorporation of terms

The provisions of Clause
32 (Notices), Clause 34 (Partial Invalidity), Clause 35 (Remedies and waivers), Clause 38 (Governing Law) and Clause 39 (Enforcement) of the Original Facility
Agreement shall be incorporated into this Agreement as if set out in full in
this Agreement and as if references in those clauses to “this Agreement” or “the
Finance Documents” are references to this Agreement.

6.2.                              Counterparts

This
Agreement may be executed in any number of counterparts, and this has the same
effect as if the signatures on the counterparts were on a single copy of this
Agreement.

7.                                       GOVERNING LAW

This Agreement is
governed by English law.

This Agreement has been entered into
on the date stated at the beginning of this Agreement.

 4
 

 

SCHEDULE 1

CONDITIONS PRECEDENT

1.                                       Obligors

(a)                                  A
copy of the constitutional documents of each Obligor or a certificate of an
authorised signatory of each relevant Obligor certifying that the
constitutional documents previously delivered to the Agent for the purposes of
the Original Facility Agreement have not been amended and remain in full force
and effect.

(b)                                 A
copy of a resolution of the board of directors of each Obligor:

(i)                                     approving
the terms of, and the transactions contemplated by, this Agreement and
resolving that it execute this Agreement; and

(ii)                                  authorising
a specified person or persons to execute this Agreement on its behalf.

(c)                                  A
specimen of the signature of each person authorised by the resolution referred
to in paragraph (b) above.

(d)                                 A
certificate of an authorised signatory of the relevant Obligor certifying that
each copy document relating to it specified in this Schedule 1 is correct,
complete and in full force and effect as at a date no earlier than the date of
this Agreement.

2.                                       Legal Opinions

The following legal opinions in the form circulated to the Agent prior
to the Amendment and Restatement Date:

(a)                                  a
legal opinion of Clifford Chance LLP Studio Legale Associato, in associazione
con Clifford Chance as to matters of English law confirming the legal, valid
and binding nature of this Agreement,

(b)                                 a
legal opinion of Allen & Overy Studio Legale Associate Milano as to
matters. of Italian law confirming that the Obligors incorporated in the
Republic of Italy have power and authority to execute this Agreement, in
substantially the same form as that supplied as a condition precedent to
initial Utilisation under the Original Facility Agreement.

(c)                                  a
legal opinion of Allen & Overy LLP as to matters of US Law, in
substantially the same form as that supplied as a condition precedent to
initial Utilisation under the Original Facility Agreement.

3.                                       Other documents and evidence

(a)                                  Evidence
that the amendment fee due on the date hereof from the Borrowers pursuant to
the letter from the Italian Borrower to the Agents dated 30 January 2006
has been paid to the Agents.

(b)                                 A
copy of any other Authorisation or other document, opinion or assurance which
the Agent considers to be necessary or desirable (if it has notified the
Company accordingly) in connection with the entry into and performance of the
transaction contemplated by this Agreement or for the validity and
enforceability of this Agreement.

 5

 

 

SIGNATURES

The Borrowers

LUXOTTICA GROUP S.p.A.

By:

Address:  VIA
CANTU, 2, 20123, MILAN, ITALY

Fax:

 

LUXOTTICA U.S. HOLDINGS CORP.

By:

Address:  44,
HARBOUR PARK DRIVE, PORT WASHINGTON, NEW YORK, 11050, USA

Fax:

 

 

The Guarantors

LUXOTTICA GROUP S.p.A.

By:

Address:  VIA
CANTU, 2, 20123, MILAN, ITALY

Fax:

 

LUXOTTICA S.r.l.

By:

Address:  VIA
CANTU, 2, 20123, MILAN, ITALY

Fax:

 

LUXOTTICA U.S. HOLDINGS CORP.

By:

Address:  44,
HARBOUR PARK DRIVE, PORT WASHINGTON, NEW YORK, 11050, USA

Fax:

 

 

The Agents

UNICREDITO BANCA D’IMPRESA S.p.A.

By:

Address: 
PRESIDIO TERRITORIALE POOL LOMBARDIA 6606, VIALE BODIO 29, 20158, MILAN,
ITALY

Fax:

 

 7
 

 

UNICREDITO ITALIANO S.p.A., NEW YORK
BRANCH

By:

Address:  430
PARK AVENUE 9TH FLOOR, NEW YORK, NY 10022, UNITED STATES OF AMERICA

Fax:

 

 

The Mandated Lead Arrangers

ABN AMRO BANK N.V.

By:

Address:  

Fax:

 

BANC OF AMERICA SECURITIES LIMITED

By:

Address:

Fax:

 

BANCA INTESA S.p.A.

By:  CIACCIA
RAFFAELLA

Address:  Piazza
Scala 6 - 20121 Milan (Italy)

Fax:  +39 02
87943297

Attention:  CIACCIA
RAFFAELLA

 

CALYON S.A., SUCCURSALE DI MILANO

By:

Address:  

Fax:

 

CALYON NEW YORK BRANCH

By:

Address:  

Fax:

 

CAPITALIA S.p.A.

By:

Address:  

Fax:

 8
 

 

 

CITIGROUP GLOBAL MARKETS LIMITED

By:

Address:  

Fax:

 

MEDIOBANCA - BANCA DI CREDITO
FINANZIARIO S.p.A.

By:

Address:  

Fax:

 

THE ROYAL BANK OF SCOTLAND PLC

By:

Address:  

Fax:

 

UNICREDIT BANCA MOBILIARE S.p.A.

By:

Address:  

Fax:

 

 

The Bookrunners

BANC OF AMERICA SECURITIES LIMITED 

By:

Address:  

Fax:

 

CITIGROUP GLOBAL MARKETS LIMITED

By:

Address:  

Fax:

 

THE ROYAL BANK OF SCOTLAND PLC 

By:

Address:  

Fax:

 9
 

 

 

UNICREDIT BANCA MOBILIARE S.p.A.

By:

Address:  

Fax:

 

 

The Lenders

 

________________________________

for and on behalf of 

ABN AMRO BANK N.V., MILAN BRANCH

By:

Address:  

Fax:

 

________________________________

for and on behalf of 

ABN AMRO BANK N.V. 

Facility Office for US Borrower:

By:

Address:  

Fax:

 

________________________________

for and on behalf of 

BANCA DI ROMA S.p.A.

By:

Address:  

Fax:

 

________________________________

for and on behalf of 

BANCA INTESA S.p.A. - New York Branch

Facility Office for US Borrower:

By:  BAIOCCHI
GIANCARLO

Address:  One
William Street - New York USA

 10
 

 

Fax:  +12
128099780

Attention: 
BAIOCCHI GIANCARLO

________________________________

for and on behalf of 

BANCA MONTE DEI PASCHI DI SIENA
S.p.A.

By:

Address:  

Fax:

 

________________________________

for and on behalf of 

BANCA MONTE DEI PASCHI DI SIENA
S.p.A., NEW YORK BRANCH

By:

Address:  

Fax:

 

________________________________

for and on behalf of 

BANCA NAZIONALE DEL LAVORO S.p.A.

By:

Address:  

Fax:

 

________________________________

for and on behalf of 

BANCA NAZIONALE DEL LAVORO S.p.A.,
NEW YORK BRANCH

By:

Address:  

Fax:

 

________________________________

for and on behalf of 

BANCO BILBAO VIZCAYA ARGENTARIA S.A.,
MILAN BRANCH

By:

Address:  

Fax:

 11
 

 

 

________________________________

for and on behalf of 

BANCO BILBAO VIZCAYA ARGENTARIA S.A.,
NEW YORK BRANCH

By:

Address:  

Fax:

 

________________________________

for and on behalf of 

BANK OF AMERICA, N.A., MILAN BRANCH

By:

Address:  

Fax:

 

________________________________

for and on behalf of 

BANK OF AMERICA, N.A.

By:

Address:  

Fax:

 

________________________________

for and on behalf of 

THE BANK OF TOKYO-MITSUBISHI UFJ,
LTD. MILAN BRANCH

By:

Address:  

Fax:

 

________________________________

for and on behalf of 

THE BANK OF TOKYO-MITSUBISHI UFJ,
LTD. LONDON BRANCH

By:

Address:  

Fax:

 12
 

 

________________________________

for and on behalf of 

BAYERISCHE LANDESBANK, FILIALE DI
MILANO

By:

Address:  

Fax:

 

________________________________

for and on behalf of 

BAYERISCHE LANDESBANK, NEW YORK
BRANCH

By:

Address:  

Fax:

 

________________________________

for and on behalf of 

CALYON S.A., SUCCURSALE MILANO

By:

Address:  

Fax:

 

________________________________

for and on behalf of 

CALYON NEW YORK BRANCH

By:

Address:  

Fax:

 

________________________________

for and on behalf of 

CITIBANK, N.A., MILAN BRANCH

By:

Address:  

Fax:

 

________________________________

for and on behalf of 

CITIBANK, N.A.

 13
 

 

Facility Office for US Borrower:

By:

Address:  

Fax:

________________________________

for and on behalf of 

MEDIOBANCA - BANCA DI CREDITO
FINANZIARO S.p.A.

By:

Address:  

Fax:

________________________________

for and on behalf of 

THE ROYAL BANK OF SCOTLAND PLC, MILAN
BRANCH

By:

Address:  

Fax:

________________________________

for and on behalf of 

THE ROYAL BANK OF SCOTLAND PLC

Facility Office for US Borrower:

By:

Address:  

Fax:

________________________________

for and on behalf of 

UNICREDIT BANCA D’IMPRESA S.p.A.

By:

Address:  

Fax:

________________________________

for and on behalf of 

UNICREDITO
ITALIANO S.p.A., NEW YORK BRANCH

By:

Address:  

Fax:

 14

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