Document:

Exhibit 10.1

 

AMENDED AND RESTATED BUSINESS
MANAGEMENT

AND SHARED SERVICES AGREEMENT

 

THIS AMENDED AND RESTATED BUSINESS MANAGEMENT AND
SHARED SERVICES AGREEMENT (this “Agreement”)
is made and entered into as of January 25, 2010, by and between
TRAVELCENTERS OF AMERICA LLC, a Delaware limited liability company (the “Company”), and REIT MANAGEMENT &
RESEARCH LLC, a Delaware limited liability company (“RMR”).

 

WHEREAS, the Company and RMR are parties to a
Management and Shared Services Agreement dated as of January 31, 2007 (the
“Original Agreement”); and

 

WHEREAS, the Company and RMR wish to amend and
restate the Original Agreement as hereinafter provided;

 

NOW, THEREFORE, in consideration of the foregoing
and of the mutual covenants and agreements set forth herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereto
agree that the Original Agreement is hereby amended and restated as follows:

 

Section 1.                                            Management
Services.

 

1.1                                 Management
Services to be Rendered. 
Subject to the terms and conditions hereinafter set forth, the Company
hereby continues to engage RMR to provide the business management and shared
services contemplated by this Agreement with respect to the Company’s business
and operations, and RMR hereby accepts such continued engagement.  RMR shall provide the Company with the
management services described below (each, a “Service”,
and collectively, the “Services”), in
each case to the extent requested by the Company:

 

(a)                                  Property Maintenance and Repairs.  Advice in obtaining,
when appropriate, the services of property managers or management firms to
perform customary property management services with regard to the hospitality
and fuel service facilities (each a “Travel Center”)
operated, leased or owned by or otherwise in the possession of the Company or
any subsidiary thereof; performance of 
such supervisory, evaluation or monitoring services on behalf of the
Company with respect to the activities of those property managers or management
firms as would be performed by a prudent operator, owner or lessee in the
Company’s business, including, but not limited to, supervising the activities
of property managers or management firms, reviewing the maintenance and
renovation needs for governmental or regulatory compliance at the Company’s
properties, assessing capital and engineering projects, property 

 

 

inspections, and
participating in property management budgeting, but excluding the actual
on-site property management functions performed by Company personnel, property
managers or management firms.

 

(b)                                 Site Selection, Etc.  Advice in site selection of properties on
which new Travel Centers may be developed, and in the identification and acquisition
of new and existing Travel Centers and travel center companies.

 

(c)                                  Accounting Support.  Advice and assistance with accounting, tax,
audit and financial reporting of the Company, including, without limitation,
advice and assistance in:  (i) setting
up and maintaining systems for financial record keeping; (ii) conducting
the administration of the day-to-day bookkeeping and accounting functions as
are required for the proper management of the assets of the Company; (iii) establishing
and implementing internal audit functions; (iv) contracting for and
supervising the process for independent annual audits; and (v) preparation
of financial reports as may be required by any governmental authority in
connection with the ordinary conduct of the Company’s business, including,
without limitation, periodic reports, returns or statements required under the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”), the Internal Revenue Code of 1986, as amended, the securities
and tax statutes of any jurisdiction in which the Company is obligated to file
such reports, or the rules and regulations promulgated under any of the
foregoing.

 

(d)                                 Capital Markets, Financing and Strategic Advice and
Assistance.

 

(i)                                     Equity Capital Markets.  Advice and assistance relating to equity
capital raising transactions, but not including solicitation of investors as a
broker, dealer or underwriter in any capital raising transactions.

 

(ii)                                  Debt Financing.  Advice and assistance relating to revolving
lines of credit and other issuances of indebtedness.

 

(iii)                               Strategic.  Advice and assistance relating to possible
business and strategic opportunities as may come to the attention of the
Company or RMR, including, without limitation, acquisitions, joint ventures,
dispositions and other strategic transactions.

 

(iv)                              Investigation.  Investigation and evaluation of financing,
refinancing, leasing and other business opportunities, and making
recommendations concerning these opportunities.

 

(e)                                  Cash Management.  Advice and assistance in:  (i) operating and managing the Company’s
collection systems, cash concentration systems and electronic disbursements; (ii) maintaining
bank accounts, including opening and closing of operating, security deposits,
local depository and petty cash accounts; (iii) bank administration; and (iv) maintaining
bank relationships.

 

(f)                                    Human Resources.  Advice and assistance in management of the
Company’s 401(k) plan and other employee benefit plans, Company employee
and management 

 

2

 

recruitment, performance
evaluation and establishment of salary, bonus and other compensation scales and
executive and staff employee structure.

 

(g)                                 Insurance Administration.  Advice and assistance in:  (i) securing all forms of insurance,
including property, casualty and workers’ compensation; (ii) managing
insurance policies; (iii) negotiation of premiums and arranging payment
terms; (iv) managing claims; and (v) preparation of loss
analysis.  The amount and levels of
insurance shall be determined in the sole and absolute discretion of the
Company.

 

(h)                                 Investor Relations.  Advice and assistance in the preparation and
coordination of:  (i) annual and
other reports to shareholders; (ii) presentations to the public; (iii) public
relations; (iv) marketing materials; (v) internet website; and (vi) investor
relations services.

 

(i)                                     Regulatory Compliance.  Advice and assistance with compliance with
applicable legal and regulatory requirements, including, without limitation,
advice and assistance in preparation of financial reports as may be required by
any governmental authority in connection with the ordinary conduct of the
Company’s business.

 

(j)                                     Contracts.  Assistance in review and negotiation of and
advice concerning Company contracts and agreements, including, without
limitation, contracts in connection with the services described in subsections
1.1(b) and (d), in each case, on behalf of the Company and in the
furtherance of the Company’s objectives.

 

(k)                                  Legal.  Advice and assistance in review of and advice
concerning Company contracts and agreements, coordination and supervision of
all third party legal services and oversight of processing of claims by or
against the Company.

 

(l)                                     Management Information Systems.

 

(i)                                     Applications Development.  Advice and assistance related to development
and maintenance of Company information technology system applications,
including, without limitation, intranet, financial, accounting and clerical
systems.

 

(ii)                                  Telecommunications.  Advice and assistance related to design,
operation and maintenance of network infrastructure, including telephone and
data transmission lines, voice mail, facsimile machines, cellular phones,
pager, etc.; negotiation of contracts with third party vendors and suppliers; and
local area network and wide area network communications support.

 

(iii)                               Operations/Technical Support and User Support.  Advice and
assistance related to design, maintenance and operation of the computing
environment, including business specific applications, network wide
applications, electronic mail and other systems; managing the purchase and
maintenance of equipment, including hardware and software; configuration,
installation and support of computer equipment; and education and training of
the user community.

 

(m)                               Research.  Advice and assistance in the conduct of
market research reports and special research assignments; investigation and
evaluation of financing, refinancing, 

 

3

 

leasing and other business
opportunities; and making recommendations concerning these opportunities.

 

(n)                                 Securities Filings.  Advice and assistance in the preparation and
filing of periodic and other reports required to be filed by Sections 13 and 15
of the Exchange Act and the rules and regulations thereunder; advice and
assistance in the preparation, filing, distribution and posting of proxy and
consent materials pursuant to the Exchange Act and the rules and
regulations thereunder; and advice and assistance in the preparation and filing
of all offering documents (public and private), and all registration
statements, prospectuses or other documents filed with the Securities and
Exchange Commission (the “SEC”) or any
state; it being understood that the Company shall be responsible for the
content of any and all of its offering documents and SEC filings, and RMR shall
not be held liable for any costs or liabilities arising out of any
misstatements or omissions in the Company’s offering documents or SEC filings,
whether or not material, and the Company shall promptly indemnify RMR from any
such costs or liabilities incurred by it.

 

(o)                                 Special Projects.  Advice and assistance in special projects and
such other services within the scope contemplated by this Agreement although
not expressly covered elsewhere in this subsection 1.1.

 

(p)                                 Supervision of Third Party Manager Arrangements.  Advice and oversight
concerning the Company’s relationship with any and all, current or future,
third party managers of its current or future facilities or properties.

 

(q)                                 Tax Administration.  Advice and assistance in the preparation,
review and filing of all federal, state and other required tax returns and tax
related matters. All tax matters shall be determined by the Company in its
absolute and sole discretion.

 

(r)                                    Third Party Advisors.  To the extent not specifically addressed
elsewhere in this subsection 1.1, advise, assist and oversee the retention of
counsel, consultants and other third party professionals on behalf of the
Company.

 

Notwithstanding
anything herein, it is understood and agreed that the duties of, and services
to be provided by, RMR pursuant to this Agreement shall not include any
investment management or related services with respect to any assets of the
Company as the Company may wish to allocate from time to time to investments in
“securities” (as defined in the Investment Advisers Act of 1940, as amended).

 

1.2                                 Performance of
Services.  RMR
covenants that it will perform or cause to be performed the Services in a
timely, efficient and workmanlike manner. 
RMR further covenants that it will maintain or contract for a sufficient
staff of trained personnel to enable it to perform the Services hereunder.  With the Company’s approval, RMR may retain
third parties or its affiliates to provide certain of the Services
hereunder.  In such cases, and
notwithstanding anything herein to the contrary, the Company shall pay the fees
and costs of such third parties and reimburse RMR in accordance with subsection
1.4 for RMR’s actual out-of-pocket costs and expenses for arranging for such
Services (including, without limitation, the fees and costs of such third
parties paid by RMR) to the extent the Company is not billed or does not pay
directly.  

 

4

 

RMR shall be responsible for
paying such affiliates for their fees and costs in providing such Services
unless otherwise approved by a majority vote of the Independent Directors (as
defined in the Company’s Bylaws, as in effect from time to time) of the
Company.  Any arrangements between RMR
and its affiliates for the provision of Services hereunder shall be
commercially reasonable and on terms not less favorable than those which could
be obtained from unaffiliated third parties. 
All services shall be performed as requested and/or authorized by the
Company from time to time.

 

In performing its services hereunder with respect to
the Company, RMR shall adhere to, and shall require its officers and employees
in the course of providing such services to the Company to adhere to, the
Company’s Code of Business Conduct and Ethics, as in effect from time to
time.  In addition, RMR shall make
available to its officers and employees providing such services to the Company
the procedures for the receipt, retention and treatment of complaints regarding
accounting, internal accounting controls or auditing matters relating to the
Company and for the confidential, anonymous submission by such officers and
employees of concerns regarding questionable accounting or auditing matters
relating to the Company, as set forth in the Company’s Procedures for Handling
Concerns or Complaints about Accounting, Internal Accounting Controls or
Auditing Matters, as in effect from time to time.

 

1.3                                 Compensation.

 

(a)                                  Payment for Services.  RMR shall be paid a fee for the Services
provided to the Company under this Agreement (the “Fee”)
equal to the sum of (i) 0.6% of the gross fuel margin and (ii) 0.6%
of the total non-fuel revenues (such gross fuel margin and total non-fuel
revenues, collectively, “Revenues”) of
the Company and its subsidiaries determined in accordance with generally
accepted accounting principles in the United States.  The Fee shall be estimated and paid monthly
by the Company in advance based upon the prior calendar month’s Revenues, and
such payment shall be paid within 15 calendar days of the end of the applicable
prior calendar month unless otherwise agreed. 
The calculation of the fee for any month shall be based upon the Company’s
monthly financial statements and shall be in reasonable detail.  A copy of the computations shall promptly be
delivered to RMR accompanied by payment of the Fee thereon to be due and
payable.  The Fee shall be pro-rated for
any partial month this Agreement shall be in effect.

 

The aggregate annual Fee
paid in any fiscal year shall be subject to adjustment as of the end of that
fiscal year.  On or before the 30th day
after public availability of the Company’s annual audited financial statements
for each fiscal year, the Company shall deliver to RMR a notice setting forth (i) the
Company’s Revenues for such year, (ii) the Company’s computation of the
Fee payable for such year and (iii) the amount of the Fee theretofore paid
to RMR in respect of such year.  If the
annual Fee payable for said fiscal year exceeds the aggregate amounts
previously paid with respect thereto by the Company, the Company shall pay such
deficit amount to RMR at the time of delivery of such notice.  If the annual Fee payable for said fiscal
year as shown in such notice is less than the aggregate amounts previously paid
with respect thereto by the Company, the Company shall specify in such notice
whether RMR should (i) refund to the Company payment in an amount equal to
such difference or (ii) grant the

 

5

 

Company a credit against the
Fee next coming due in the amount of such difference until such amount has been
fully paid or otherwise discharged.

 

(b)                                 Payment Subordination.  No Fee payments shall be paid by the Company
to RMR if any of the contractual rent obligations of the Company or any of its
subsidiaries to Hospitality Properties Trust or any of its subsidiaries
(collectively “HPT”) pursuant to any
lease agreement are past due.  Any Fee
payment unpaid as a result of the preceding sentence shall accrue interest
until paid at the Prime Rate (as defined below), and shall be automatically due
and payable: (i) when the condition preventing the payment of such Fee is
no longer in effect, (ii) upon any termination of the Agreement, or (iii) upon
the occurrence of any event of default by the Company enumerated in subsection
3.2 or a Change of Control (as defined in subsection 3.4) of the Company.  This subsection 1.3(b) is only intended
to define the relative rights of RMR and HPT.  Without intending to limit the generality of
the foregoing, nothing in this subsection 1.3(b) shall: (i) impair,
as between the Company and RMR, the obligation of the Company to pay any
amounts owing hereunder in accordance with the terms hereof; or (ii) affect
the relative rights of RMR and creditors of the Company other than HPT.  For purposes of this Agreement, “Prime
Rate” shall mean the Prime Rate or base rate on corporate loans at large
U.S. money center commercial banks as published in The Wall Street Journal or,
if publication of such rate shall be suspended or terminated, Prime Rate shall
mean the annual rate of interest, determined daily and expressed as a
percentage, from time to time announced by one of the three largest national or
New York State chartered banking institutions having their principal office in
New York, New York and selected by RMR at the time such publication is
suspended or terminated.  All interest
hereunder shall be calculated on the basis of actual days elapsed and a 360-day
year.

 

1.4                                 Reimbursement.  The Company will reimburse RMR for (a) reasonable
out-of-pocket travel and lodging expenses of RMR personnel in providing the
Services and (b) reasonable out-of-pocket third party expenses incurred by
RMR in connection with its performance of the Services and for the Company’s
share, if any, of technology infrastructure and internal audit costs that are
provided to the Company and to other customers of RMR, in each case within 30
days of receipt of the invoice therefor, but only to the extent that the
Company shall have approved such expenses and costs.  RMR shall submit to the Company such reports
detailing said expenses and supporting receipts and bills, or other suitable
evidence, as may be reasonably requested by the Company.

 

Section 2.                                            Limitations;
Third Party Costs.

 

2.1                                 Limits of RMR
Responsibility.  RMR assumes
no responsibility other than to render the services described herein in
subsections 1.1 and 4.2 in good faith and shall not be responsible for any
action of the Company in following or declining to follow any advice or
recommendation of RMR.

 

2.2                                 Third Party
Costs.  Except to the extent expressly
provided herein to the contrary, all third party costs incurred in connection
with actions to be taken by the Company shall solely be the responsibility of
the Company, including, but not limited to, all legal, auditing, accounting,
underwriting, brokerage, investor communications, and listing, reporting and 

 

6

 

registration fees or other
costs of the SEC, any state or local governments, any national securities
exchange and the Financial Industry Regulatory Authority, Inc.

 

Section 3.                                            Term;
Termination.

 

3.1                                 Term.  This Agreement shall continue in force and
effect until December 31, 2010, and shall be automatically renewed for
successive one year terms annually thereafter unless notice of non-renewal is
given by the Company or RMR before the end of the term.  It is expected that the terms and conditions
may be reviewed by the Independent Directors of the Compensation Committee of
the Board of Directors of the Company at least annually.  Notwithstanding any other provision of this
Agreement to the contrary, this Agreement, or any extension thereof, may be
terminated pursuant to Sections 3.2 or 3.3.

 

3.2                                 Default;
Bankruptcy; Etc.  At the
option of the nondefaulting party, this Agreement may be terminated immediately
by written notice from the nondefaulting party to the defaulting party if any
of the following events shall have occurred:

 

(a)                                  RMR or the Company shall have violated any provision of this
Agreement and, after written notice from the Company or RMR, as the case may
be, of the violation, shall have failed to cure the default within thirty (30)
days;

 

(b)                                 a petition shall have been filed against RMR or the Company
for an involuntary proceeding under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, and that petition shall not have
been dismissed within ninety (90) days of filing; or a court having
jurisdiction shall have appointed a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of RMR or the Company for any
substantial portion of its property, or ordered the winding up or liquidation
of its affairs, and that appointment or order shall not have been rescinded or
vacated within ninety days of the appointment or order; or

 

(c)                                  RMR or the Company shall have commenced a voluntary
proceeding under any applicable bankruptcy, insolvency or other similar law now
or hereafter in effect, or shall have made any general assignment for the
benefit of creditors, or shall have failed generally to pay its debts as they
became due.

 

3.3                                 Other
Termination. 
Notwithstanding any other provision of this Agreement to the contrary,
this Agreement, or any extension thereof, may be terminated:  (a) by either party thereto upon sixty
(60) days’ written notice to the other party; and (b) by RMR upon five (5) business
days’ written notice to the Company if there is a Change of Control of the
Company.  Any termination of this
Agreement by the Company pursuant to clause (a) of this subsection 3.3
must be approved by a majority vote of the Independent Directors of the
Compensation Committee of the Board of Directors of the Company.  Any termination of this Agreement by RMR
pursuant to clause (a) or (b) of this subsection 3.3 must be approved
by a majority vote of the directors of RMR.

 

7

 

3.4                                 Change of
Control.  For purposes of this Agreement,
a “Change of Control” shall mean: 
(a) the acquisition by any person or entity, or two or more persons
or entities acting in concert, of beneficial ownership (such term, for purposes
of this subsection 3.4, having the meaning provided such term in Rule 13d-3
under the Exchange Act) of 9.8% or more, or rights, options or warrants to
acquire 9.8% or more, or any combination thereof, of the outstanding common
shares of the Company or other voting interests of the Company, including
voting proxies for such shares, or the power to direct the management and
policies of the Company, directly or indirectly (excluding RMR and its
affiliates and persons or entities that beneficially own 9.8% or more of the
Company’s outstanding common shares as of immediately prior to the execution
and delivery of this Agreement by the parties hereto); (b) the merger or
consolidation of the Company with or into any other entity (other than the
merger or consolidation of any entity into the Company that does not result in
a Change in Control of the Company under clauses (a), (c), or (d) of this
definition); (c) any one or more sales or conveyances to any person or
entity of all or any material portion of the assets (including capital stock or
other equity interests) or business of the Company and its subsidiaries taken
as a whole; or (d) the cessation, for any reason, of the individuals who
at the beginning of any 36 consecutive month period constituted the Board of
Directors of the Company (together with any new director whose election by the
Board of Directors of the Company or whose nomination for election by the
shareholders of the Company was approved by a vote of a majority of the
directors then still in office who were either directors at the beginning of
any such period or whose election or nomination for election was previously so
approved) to constitute a majority of the Board of Directors of the Company
then in office; provided, however, a Change of Control shall not include the
acquisition by any person or entity, or two or more persons or entities acting
in concert, of beneficial ownership of 9.8% or more, or rights, options or
warrants to acquire 9.8% or more, or any combination thereof, of the
outstanding common shares of the Company or other voting interests of the Company
if such acquisition is approved by the Board of Directors of the Company in
accordance with the Company’s organizational documents and if such acquisition
is otherwise in compliance with applicable law.

 

3.5                                 Action Upon
Termination.  Except as
provided in subsection 7.4, from and after the effective date of any
termination of this Agreement pursuant to subsection 3.1, 3.2 or 3.3, RMR shall
be entitled to no compensation for services rendered hereunder for the pro rata
remainder of the then current term of this Agreement but shall be paid all
compensation due for services performed prior to the effective date of such
termination, including, without limitation, the then current year’s Fee through
the date of termination, and the costs and expenses incurred on or prior to
such effective date.  Upon the expiration
or sooner termination of this Agreement, RMR shall, as promptly as practicable,
deliver to the Company all property and documents of the Company then in its
custody or possession.  This subsection
3.5 shall govern the rights, liabilities and obligations of the parties upon
termination of this Agreement; and, except as provided in Section 7, a
termination shall be without further liability of either party to the other for
breach or violation of this Agreement prior to termination.

 

Section 4.                                            Additional
Services; Senior Executives.

 

4.1                                 Common
Management.  The parties
acknowledge and agree that certain senior executives of the Company may be
employees, officers or directors of both the Company and RMR.  Each party shall be solely responsible for
payment of compensation to such senior 

 

8

 

executives for services
rendered to or on behalf of such party and the payment by the Company for
services by senior executives who are also senior executives of RMR shall be
approved by majority vote of the Independent Directors of the Compensation
Committee of the Board of Directors of the Company.

 

4.2                                 Additional
Services.

 

(a)                                  To the extent requested by the Company, RMR shall make its
executive officers and directors who are not also senior executives of the
Company reasonably available to the Company for the provision of additional
services, including day-to-day activities enumerated in subsection 1.1.  The parties acknowledge and agree that no
additional compensation shall be due and payable for any additional services
requested by the Company and provided by executive officers and directors of
RMR pursuant to this subsection 4.2(a).

 

(b)                                 If, and to the extent that, the Company shall request RMR to
render services on behalf of the Company other than those to be rendered by RMR
in accordance with the subsection 1.1 and subsection 4.2(a) of this
Agreement, such additional services shall be compensated separately on terms to
be agreed upon between RMR and the Company from time to time.

 

Section 5.                                            Prevention of
Performance.  RMR shall
not be determined to be in violation of this Agreement if it is prevented from
performing any Services hereunder for any reason beyond its reasonable control,
including, without limitation, acts of God, nature, or of public enemy,
strikes, or limitations of law, regulations or rules of the federal or of
any state or local government or of any agency thereof.

 

Section 6.                                            RMR
Restrictions.  Other than
activities or arrangements existing as of the date hereof or those consented to
by the Company, RMR shall not directly or indirectly provide any advice or
assistance to any business or enterprise that is competitive with the Company’s
business, including, but not limited to, any business or enterprise that
manages or operates travel centers along the North American highway
system.  Subject to the immediately
preceding sentence, nothing herein shall prevent or restrict RMR from engaging
in any other activities or businesses or from providing management services to
any other person or entity.  In addition,
nothing herein shall prevent any shareholder or affiliate of RMR from engaging
in any other business or from rendering services of any kind to any other person
or entity (including competitive business activities).  For avoidance of doubt, nothing herein is
intended or shall be construed to prevent RMR from providing management
services to HPT, including services to HPT related to properties owned or to be
owned by HPT which may be leased, operated or managed by the Company or which
may be leased, operated or managed by competitors of the Company.

 

Section 7.               Indemnification; Remedies.

 

7.1           By the Company.  The Company shall indemnify, defend and hold
RMR, and its shareholders, directors, officers, employees and agents harmless
from and against any and 

 

9

 

all
damages, claims, losses, expenses, costs, obligations and liabilities,
including, without limiting the generality of the foregoing, liabilities for
all reasonable attorneys’, accountants’ and experts’ fees and expenses incurred
(collectively, “Losses and Expenses”) or suffered by them by reason of
or arising out of the course of performing the Services and any duties on
behalf of the Company and its subsidiaries as prescribed hereby, except for
matters covered by subsection 7.2 hereof.

 

7.2                                 By RMR.  RMR shall indemnify, defend and hold the
Company and its subsidiaries and their respective directors, trustees,
officers, employees and agents harmless from and against Losses and Expenses
suffered by them by reason of or arising out of any willful bad faith or gross
negligence in the performance of any obligation or agreement of RMR herein.  Any dispute, claim or controversy between the
Company and RMR as to whether RMR acted with willful bad faith or gross
negligence in the performance of any obligation or agreement of RMR herein
shall be arbitrated in accordance with Section 11, except that,
notwithstanding anything to the contrary in Section 11, the costs and
expenses of the prevailing party to such arbitration shall be paid by the
non-prevailing party to such arbitration.

 

7.3                                 Company
Remedies.  Except as
otherwise provided in subsection 7.2 hereof, RMR does not assume any
responsibility under this Agreement other than to render the Services called
for under this Agreement in good faith. 
Except as otherwise provided in subsection 7.2 hereof, the Company’s
remedy on account of the failure of RMR to render the Services as and when
required hereunder shall be to terminate this Agreement; provided however, that
if RMR acts with willful bad faith or gross negligence, the Company’s remedy
shall be to procure services elsewhere and to charge RMR the difference between
the reasonable increased cost, if any, to procure new services, and the Fee,
pro-rated, that would have been payable to RMR had RMR performed such Services
under this Agreement.

 

7.4                                 RMR Remedies.  Except as otherwise provided in subsection
7.1, the Company does not assume any responsibility under this Agreement other
than to pay the Fee and other fees, compensation, costs and expenses payable by
the Company to RMR and satisfy the other obligations imposed upon it hereunder,
in each case, in accordance with the terms of this Agreement.  Except as otherwise provided in subsection
7.1, RMR’s sole remedy on account of the failure of the Company to satisfy its
obligations in accordance with the terms of this Agreement shall be to
terminate this Agreement and receive the Fee payable for the then remaining
term of this Agreement and any other amounts then owing to RMR by the Company.

 

Section 8.                                            Relationship of
the Parties.

 

8.1                                 No Partnership
or Joint Venture.  The parties
are not partners or joint venturers with each other and neither the terms of
this Agreement nor the fact that the Company and RMR and their respective
affiliates have joint interests in any one or more investments, ownership or
other interests in any one or more entities, have common directors, officers or
employees or have tenancy relationships shall be construed so as to make them
partners or joint venturers or impose any liability as such on either of them.

 

10

 

8.2                                 Conflicts of
Interest.  The parties
acknowledge that, as of the date hereof, (a) the Company and its
subsidiaries lease all or substantially all of their real estate from HPT and
may enter into additional leases or other transactions with HPT, (b) RMR
provides management services to HPT pursuant to management agreements, and (c) RMR
provides certain services to Affiliates Insurance Company.  The parties agree that these relationships
shall not affect either party’s rights and obligations under this Agreement;
provided, however, the Company acknowledges and agrees that whenever any
conflicts of interest arise resulting from the relationships described in this
subsection 8.2 or any such relationship as may arise or be present in the
future by and between the Company and any of RMR, affiliates of RMR or any
publicly owned entity with whom RMR has a relationship or contract: (i) RMR
will act on its own behalf and on behalf of HPT or such entity and not on the
Company’s behalf; and (ii) the Company shall make its own decisions and
require and obtain the advice and assistance of independent third parties at
its own cost, as it may deem necessary.

 

Section 9.                                            Records.  RMR shall maintain appropriate books and
records relating to Services performed pursuant to this Agreement, which books
and records shall be available for inspection by representatives of the Company
upon reasonable notice during ordinary business hours.

 

Section 10.                                      Assignment.   Neither party may assign this Agreement or
its rights hereunder or delegate its duties hereunder without the written
consent of the other party, except in the case of an assignment or delegation
by RMR to a corporation, partnership, limited liability company, association,
trust, or other successor entity which may take over the property and carry on
the affairs of RMR and which remains under the control of one or more persons
who controlled the operations of RMR immediately prior to such assignment or
delegation.

 

Section 11.                                      Arbitration.

 

11.1                           Procedures for
Arbitration of Disputes.  Any
disputes, claims or controversies between the parties (a) arising out of
or relating to this Agreement or the provision of services by RMR pursuant to
this Agreement, or (b) brought by or on behalf of any shareholder of the
Company (which, for purposes of this Section 11, shall mean any
shareholder of record or any beneficial owner of shares of the Company, or any
former shareholder of record or beneficial owner of shares of the Company),
either on his, her or its own behalf, on behalf of the Company or on behalf of
any series or class of shares of the Company or shareholders of the Company
against the Company or any director, officer, manager (including RMR or its
successor), agent or employee of the Company, including disputes, claims or controversies
relating to the meaning, interpretation, effect, validity, performance or
enforcement of this Agreement or the Company’s Limited Liability Company
Agreement or Bylaws (all of which are referred to as “Disputes”), or
relating in any way to such a Dispute or Disputes shall, on the demand of any
party to such Dispute be resolved through binding and final arbitration in
accordance with the Commercial Arbitration Rules (the “Rules”) of
the American Arbitration Association (“AAA”) then in effect, except as
those Rules may be modified in this Section 11.  For the avoidance of doubt, and not as a
limitation, Disputes are intended to include derivative actions against
directors, officers or managers of the Company and class actions by a
shareholder against those individuals or entities and the Company.  For the avoidance of doubt, a Dispute shall
include a Dispute made derivatively on behalf of one party against another
party.

 

11

 

11.2                           Arbitrators.  There shall be three arbitrators.  If there are only two parties to the Dispute,
each party shall select one arbitrator within 15 days after receipt by
respondent of a copy of the demand for arbitration.  Such arbitrators may be affiliated or
interested persons of such parties.  If
either party fails to timely select an arbitrator, the other party to the
Dispute shall select the second arbitrator who shall be neutral and impartial
and shall not be affiliated with or an interested person of either party.  If there are more than two parties to the
Dispute, all claimants, on the one hand, and all respondents, on the other
hand, shall each select, by the vote of a majority of the claimants or the
respondents, as the case may be, one arbitrator.  Such arbitrators may be affiliated or
interested persons of the claimants or the respondents, as the case may
be.  If either all claimants or all
respondents fail to timely select an arbitrator then such arbitrator (who shall
be neutral, impartial and unaffiliated with any party) shall be appointed by
the AAA.  The two arbitrators so
appointed shall jointly appoint the third and presiding arbitrator (who shall
be neutral, impartial and unaffiliated with any party) within 15 days of the appointment
of the second arbitrator.  If the third
arbitrator has not been appointed within the time limit specified herein, then
the AAA shall provide a list of proposed arbitrators in accordance with the
Rules, and the arbitrator shall be appointed by the AAA in accordance with a
listing, striking and ranking procedure, with each party having a limited
number of strikes, excluding strikes for cause.

 

11.3                           Place of
Arbitration.  The place
of arbitration shall be Boston, Massachusetts unless otherwise agreed by the
parties.

 

11.4                           Discovery.  There shall be only limited documentary
discovery of documents directly related to the issues in dispute, as may be
ordered by the arbitrators.

 

11.5                           Awards.  In rendering an award or decision (the “Award”),
the arbitrators shall be required to follow the laws of The Commonwealth of
Massachusetts.  Any arbitration
proceedings or Award rendered hereunder and the validity, effect and
interpretation of this arbitration agreement shall be governed by the Federal
Arbitration Act, 9 U.S.C. §1 et seq.  The
Award shall be in writing and may, but shall not be required to, briefly state
the findings of fact and conclusions of law on which it is based.

 

11.6                           Costs and
Expenses.  Except as
provided in subsection 7.2 and to the extent otherwise agreed by the parties,
each party involved in a Dispute shall bear its own costs and expenses
(including attorneys’ fees), and the arbitrators shall not render an award that
would include shifting of any such costs or expenses (including attorneys’
fees) or, in a derivative case or class action, award any portion of the
Company’s award to the claimant or the claimant’s attorneys.  Except as provided in subsection 7.2 and to
the extent otherwise agreed by the parties, each party (or, if there are more
than two parties to the Dispute, all claimants, on the one hand, and all
respondents, on the other hand, respectively) shall bear the costs and expenses
of its (or their) selected arbitrator and the parties (or, if there are more
than two parties to the Dispute, all claimants, on the one hand, and all
respondents, on the other hand) shall equally bear the costs and expenses of
the third appointed arbitrator.

 

11.7                           Final and
Binding.  An Award shall be final and
binding upon the parties thereto and shall be the sole and exclusive remedy
between such parties relating to the Dispute, including any claims,
counterclaims, issues or accounting presented to the arbitrators.  Judgment 

 

12

 

upon the Award may be
entered in any court having jurisdiction.  To the fullest extent permitted by law, no
application or appeal to any court of competent jurisdiction may be made in
connection with any question of law arising in the course of arbitration or
with respect to any award made except for actions relating to enforcement of
this agreement to arbitrate or any arbitral award issued hereunder and except
for actions seeking interim or other provisional relief in aid of arbitration
proceedings in any court of competent jurisdiction.

 

11.8                           Payment of
Awards.  Any monetary award shall be
made and payable in U.S. dollars free of any tax, deduction or offset.  Each party against which the Award assesses a
monetary obligation shall pay that obligation on or before the 30th day following
the date of the Award or such other date as the Award may provide.

 

11.9                           Beneficiary.  This Section 11 is intended to benefit
and be enforceable by the shareholders, directors, officers, managers
(including RMR or its successor), agents or employees of the Company and the
Company and shall be binding on the shareholders of the Company and the
Company, as applicable, and shall be in addition to, and not in substitution
for, any other rights to indemnification or contribution that such individuals
or entities may have by contract or otherwise.

 

Section 12.                                      Consent to
Jurisdiction and Forum.  This
Section 12 is subject to, and shall not in any way limit the application
of, Section 11 or the mandatory arbitration requirements of subsection
7.2; in case of any conflict between this Section 12 and Section 11
or subsection 7.2, Section 11 or subsection 7.2, as applicable, shall
govern.  The exclusive jurisdiction and
venue in any action brought by any party hereto pursuant to this Agreement
shall lie in any federal or state court located in Boston, Massachusetts.  By execution and delivery of this Agreement,
each party hereto irrevocably submits to the jurisdiction of such courts for
itself and in respect of its property with respect to such action.  The parties irrevocably agree that venue
would be proper in such court, and hereby waive any objection that such court
is an improper or inconvenient forum for the resolution of such action.  The parties further agree and consent to the
service of any process required by any such court by delivery of a copy thereof
in accordance with subsection 13.1 and that any such delivery shall constitute
valid and lawful service of process against it, without necessity for service
by any other means provided by statute or rule of court.

 

Section 13.                                      Miscellaneous.

 

13.1                           Notices.  Any notice, report or other communication
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given:  when
delivered in person; upon confirmation of receipt when transmitted by facsimile
transmission; on the next business day if transmitted by a nationally
recognized overnight courier; or on the third business day following mailing by
first class mail, postage prepaid; in each case as follows (or at such other
United States address or facsimile number for a party as shall be specified by
like notice):

 

13

 

If to the Company, to:

 

TravelCenters of America LLC

24601 Center Ridge Road 

Westlake, Ohio 44145 

Attn:  President

Facsimile No.:  (440) 808-3301

 

If to RMR, to:

 

Reit Management & Research LLC 

400 Centre Street

Newton, Massachusetts 02458 

Attn:  President

Facsimile No.:  (617) 928-1305

 

13.2                           Entire
Agreement; Waiver.  This
Agreement constitutes and sets forth the entire agreement and understanding of
the parties pertaining to the subject matter hereof, and no prior or
contemporaneous written or oral agreements, understandings, undertakings,
negotiations, promises, discussions, warranties or covenants not specifically
referred to or contained herein or attached hereto shall be valid and
enforceable.  No waiver of this Agreement
or any provision of this Agreement shall be binding unless executed in writing
by the party to be bound thereby.  No
waiver of any of the provisions of this Agreement shall be deemed, or shall
constitute, a waiver of any other provision hereof (whether or not similar),
nor shall any such waiver constitute a continuing waiver unless otherwise
expressly provided.

 

13.3                           Binding Effect.  This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and each of their respective
successors and permitted assigns.

 

13.4                           Severability.  If any provision of this Agreement shall be
held invalid by a court with jurisdiction over the parties to this Agreement,
then and in that event such provision shall be deleted from the Agreement,
which shall then be construed to give effect to the remaining provisions
thereof.  If any one or more of the
provisions contained in this Agreement or in any other instrument referred to
herein shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, then in that event, to the maximum extent permitted by law,
such invalidity, illegality or enforceability shall not affect any other
provisions of this Agreement or any other such instrument.

 

13.5                           Counterparts.  This Agreement may be executed in separate
counterparts, each of which shall be deemed an original, but both of which
taken together shall be considered one and the same instrument.

 

13.6                           Amendments.  The Agreement shall not be amended, changed,
modified, terminated, or discharged in whole or in part except by an instrument
in writing signed by each of the parties hereto, or by their respective
successors or assigns, or otherwise as provided herein.

 

14

 

13.7                           Third Party
Beneficiaries.  Except as
otherwise provided in subsection 11.9, no person or entity other than the
parties hereto and their successors and permitted assigns is intended to be a
beneficiary of this Agreement.

 

13.8                           Governing Law.  This Agreement shall be interpreted,
construed, applied and enforced in accordance with the laws of The Commonwealth
of Massachusetts applicable to contracts between residents of Massachusetts
which are to be performed entirely within Massachusetts.

 

13.9                           Interpretation.  The Company and RMR agree and covenant to
construe the provisions of and give effect to this Agreement in such a manner
to enable HPT to continue to comply with its real estate investment trust qualification
requirements under applicable tax laws.

 

13.10                     Captions.  The headings and titles of the various
sections and paragraphs of this Agreement are inserted merely for the purpose
of convenience, and do not expressly or by implication limit, define, extend or
affect the meaning or interpretation of this Agreement or the specific terms or
text of the section or paragraph so designated.

 

13.11                     Survival.  The provisions of subsections 1.1(n) (relating
to the Company’s obligation to indemnify RMR for costs and liabilities incurred
by RMR arising out of any misstatements or omissions in the Company’s offering
documents or SEC filings and the Company’s absence of liability for any such
costs or liabilities), 2.1, 2.2, 3.5, 13.1, 13.4, 13.7, 13.8, 13.9 and 13.11
and Sections 7, 11 and 12 of this Agreement shall survive the termination
hereof.

 

[Signature page to
follow.]

 

15

 

IN WITNESS WHEREOF, the parties hereto have executed
this Amended and Restated Business Management and Shared Services Agreement
under seal as of the date first above written.

 

 

	
   

  	
  TRAVELCENTERS
  OF AMERICA LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Mark R. Young

  
	
   

  	
   

  	
  Name:
  Mark R. Young

  
	
   

  	
   

  	
  Title:
  Executive Vice President and General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  REIT
  MANAGEMENT & RESEARCH LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Adam D. Portnoy

  
	
   

  	
   

  	
  Name:
  Adam D. Portnoy

  
	
   

  	
   

  	
  Title: President

  

 

16Exhibit 10.1

 

EXECUTION COPY

$750,000,000

CREDIT AGREEMENT

dated as of

April 26, 2007

among

The Estée Lauder Companies Inc.,

Estee Lauder Inc.,

The Eligible Subsidiaries Referred to Herein,

The Lenders Listed Herein,

JPMorgan Chase Bank, N.A.,

as Administrative Agent,

Citibank, N.A. and Bank of America, N.A. 

as Syndication Agents

and

Bank of Tokyo-Mitsubishi UFJ Trust Company and BNP Paribas,

as Documentation Agents

 

 

Joint Bookrunners and Joint Lead Arrangers:

J.P. Morgan Securities Inc.

Citigroup Global Markets, Inc.

 

 

TABLE OF CONTENTS

 

 

	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  
	
  Article 1

  
	
  DEFINITIONS

  
	
   

  	
   

  	
   

  
	
  Section 1.01.  Definitions

  	
   

  	
  1

  
	
  Section 1.02.  Accounting Terms and Determinations

  	
   

  	
  19

  
	
  Section 1.03.  Types of Borrowing

  	
   

  	
  19

  
	
   

  	
   

  	
   

  
	
  Article 2

  
	
  THE
  CREDITS

  
	
   

  	
   

  	
   

  
	
  Section 2.01.  Commitments To Lend

  	
   

  	
  19

  
	
  Section 2.02.  Notice of Committed Borrowing

  	
   

  	
  20

  
	
  Section 2.03.  Competitive Bid Borrowings

  	
   

  	
  21

  
	
  Section 2.04.  Notice To Lenders; Funding of Loans

  	
   

  	
  25

  
	
  Section 2.05.  Evidence Of Debt

  	
   

  	
  26

  
	
  Section 2.06.  Maturity of Loans

  	
   

  	
  27

  
	
  Section 2.07.  Interest Rates

  	
   

  	
  27

  
	
  Section 2.08.  Fees

  	
   

  	
  29

  
	
  Section 2.09.  Optional Termination or Reduction of
  Commitments

  	
   

  	
  29

  
	
  Section 2.10.  Method of Electing Interest Rates

  	
   

  	
  30

  
	
  Section 2.11.  Mandatory Termination of Commitments

  	
   

  	
  32

  
	
  Section 2.12.  Optional Prepayments

  	
   

  	
  32

  
	
  Section 2.13.  Determining Dollar Amounts of Committed
  Alternative Currency Loans; Related Mandatory Prepayments

  	
   

  	
  33

  
	
  Section 2.14.  General Provisions as to Payments

  	
   

  	
  34

  
	
  Section 2.15.  Funding Losses

  	
   

  	
  35

  
	
  Section 2.16.  Computation of Interest and Fees

  	
   

  	
  36

  
	
  Section 2.17.  [Intentionally Omitted]

  	
   

  	
  36

  
	
  Section 2.18.  Regulation D Compensation

  	
   

  	
  36

  
	
  Section 2.19.  Letters of Credit

  	
   

  	
  37

  
	
  Section 2.20.  Incremental Increase in Commitments

  	
   

  	
  41

  
	
   

  	
   

  	
   

  
	
  Article 3

  
	
  CONDITIONS

  
	
   

  	
   

  	
   

  
	
  Section 3.01.  Closing

  	
   

  	
  42

  
	
  Section 3.02.  Borrowings and Issuances of Letters of
  Credit

  	
   

  	
  43

  
	
  Section 3.03.  First Borrowing by Each Eligible Subsidiary

  	
   

  	
  43

  
	
  Section 3.04.  Existing Credit Agreement

  	
   

  	
  44

  

 

 

	
  Article 4

  
	
  REPRESENTATIONS
  AND WARRANTIES

  
	
   

  	
   

  	
   

  
	
  Section 4.01.  Corporate Existence and Power

  	
   

  	
  44

  
	
  Section 4.02.  Corporate and Governmental Authorization;
  No Contravention

  	
   

  	
  44

  
	
  Section 4.03.  Binding Effect

  	
   

  	
  45

  
	
  Section 4.04.  Financial Information

  	
   

  	
  45

  
	
  Section 4.05.  Litigation

  	
   

  	
  45

  
	
  Section 4.06.  Compliance with ERISA

  	
   

  	
  46

  
	
  Section 4.07.  Environmental Matters

  	
   

  	
  46

  
	
  Section 4.08.  Taxes

  	
   

  	
  46

  
	
  Section 4.09.  Subsidiaries

  	
   

  	
  46

  
	
  Section 4.10.  Regulatory Restrictions on Borrowing

  	
   

  	
  47

  
	
  Section 4.11.  Full Disclosure

  	
   

  	
  47

  
	
   

  	
   

  	
   

  
	
  Article 5

  
	
  COVENANTS

  
	
   

  	
   

  	
   

  
	
  Section 5.01.  Information

  	
   

  	
  47

  
	
  Section 5.02.  Payment of Obligations

  	
   

  	
  49

  
	
  Section 5.03.  Insurance

  	
   

  	
  49

  
	
  Section 5.04.  Conduct of Business and Maintenance of
  Existence

  	
   

  	
  50

  
	
  Section 5.05.  Compliance with Laws

  	
   

  	
  50

  
	
  Section 5.06.  Inspection of Property, Books and Records

  	
   

  	
  50

  
	
  Section 5.07.  Mergers and Sales of Assets

  	
   

  	
  50

  
	
  Section 5.08.  Use of Proceeds

  	
   

  	
  51

  
	
  Section 5.09.  Negative Pledge

  	
   

  	
  51

  
	
  Section 5.10.  Interest Expense Coverage Ratio

  	
   

  	
  52

  
	
  Section 5.11.  Debt of Subsidiaries

  	
   

  	
  52

  
	
  Section 5.12.  Transactions with Affiliates

  	
   

  	
  52

  
	
   

  	
   

  	
   

  
	
  Article 6

  
	
  DEFAULTS

  
	
   

  	
   

  	
   

  
	
  Section 6.01.  Events of Default

  	
   

  	
  53

  
	
  Section 6.02.  Notice of Default

  	
   

  	
  55

  
	
   

  	
   

  	
   

  
	
  Article 7

  
	
  THE
  ADMINISTRATIVE AGENT

  
	
   

  	
   

  	
   

  
	
  Section 7.01.  Appointment and Authorizations

  	
   

  	
  55

  
	
  Section 7.02.  Agents and Affiliates

  	
   

  	
  55

  
	
  Section 7.03.  Action by Agents

  	
   

  	
  56

  
	
  Section 7.04.  Consultation with Experts

  	
   

  	
  56

  
	
  Section 7.05.  Liability of Agents

  	
   

  	
  56

  

 

ii

 

	
  Section 7.06.  Indemnification

  	
   

  	
  56

  
	
  Section 7.07.  Credit Decision

  	
   

  	
  57

  
	
  Section 7.08.  Successor Agents

  	
   

  	
  57

  
	
  Section 7.09.  Administrative Agent’s Fees

  	
   

  	
  57

  
	
  Section 7.10.  Other Agents Not Liable

  	
   

  	
  57

  
	
   

  	
   

  	
   

  
	
  Article 8

  
	
  CHANGE IN
  CIRCUMSTANCES

  
	
   

  	
   

  	
   

  
	
  Section 8.01.  Basis for Determining Interest Rate
  Inadequate or Unfair

  	
   

  	
  58

  
	
  Section 8.02.  Illegality

  	
   

  	
  58

  
	
  Section 8.03.  Increased Cost and Reduced Return

  	
   

  	
  59

  
	
  Section 8.04.  Taxes

  	
   

  	
  60

  
	
  Section 8.05.  Base Rate Loans Substituted for Affected
  Fixed Rate Loans

  	
   

  	
  62

  
	
  Section 8.06.  Substitution of Lenders

  	
   

  	
  63

  
	
   

  	
   

  	
   

  
	
  Article 9

  
	
  REPRESENTATIONS
  AND WARRANTIES OF ELIGIBLE SUBSIDIARIES

  
	
   

  	
   

  	
   

  
	
  Section 9.01.  Corporate Existence and Power

  	
   

  	
  63

  
	
  Section 9.02.  Corporate Governmental Authorization; No
  Contravention

  	
   

  	
  63

  
	
  Section 9.03.  Binding Effect

  	
   

  	
  64

  
	
  Section 9.04.  Taxes

  	
   

  	
  64

  
	
   

  	
   

  	
   

  
	
  Article 10

  
	
  MISCELLANEOUS

  
	
   

  	
   

  	
   

  
	
  Section 10.01.  Notices

  	
   

  	
  64

  
	
  Section 10.02.  No Waivers

  	
   

  	
  64

  
	
  Section 10.03.  Expenses; Indemnification

  	
   

  	
  65

  
	
  Section 10.04.  Sharing of Set-Offs

  	
   

  	
  66

  
	
  Section 10.05.  Amendments and Waivers

  	
   

  	
  66

  
	
  Section 10.06.  Successors and Assigns

  	
   

  	
  67

  
	
  Section 10.07.  Collateral

  	
   

  	
  70

  
	
  Section 10.08.  Governing Law, Submission to Jurisdiction 

  	
   

  	
  70

  
	
  Section 10.09.  Counterparts; Integration; Effectiveness

  	
   

  	
  70

  
	
  Section 10.10.  WAIVER OF JURY TRIAL

  	
   

  	
  70

  
	
  Section 10.11.  Confidentiality

  	
   

  	
  70

  
	
  Section 10.12.  Conversion of Currencies

  	
   

  	
  71

  
	
  Section 10.13.  European Economic and Monetary Union

  	
   

  	
  72

  
	
  Section 10.14.  USA Patriot Act

  	
   

  	
  72

  
	
   

  	
   

  	
   

  
	
  Article 11

  
	
  GUARANTY

  
	
   

  	
   

  	
   

  
	
  Section 11.01.  The Guaranty

  	
   

  	
  73

  

 

iii

 

	
  Section 11.02.  Guaranty Unconditional

  	
   

  	
  73

  
	
  Section 11.03.  Discharge Only upon Payment in Full;
  Reinstatement in Certain Circumstances

  	
   

  	
  74

  
	
  Section 11.04.  Waiver by the Guarantor

  	
   

  	
  74

  
	
  Section 11.05.  Subrogation

  	
   

  	
  74

  
	
  Section 11.06.  Stay of Acceleration

  	
   

  	
  74

  
	
  Section 11.07.  Limitation of Liability

  	
   

  	
  75

  
	
  Section 11.08.  Notice of Commitment
  Termination

  	
   

  	
  75

  

 

Commitment
Schedule

Pricing
Schedule

Schedule
4.05 - Litigation

 

EXHIBIT
A - Note

EXHIBIT
B - Competitive Bid Quote Request

EXHIBIT
C - Invitation for Competitive Bid Quotes

EXHIBIT
D - Competitive Bid Quote

EXHIBIT
E-1 - Opinion of Counsel for the Obligors (New York)

EXHIBIT
E-2 - Opinion of Counsel for Estée Lauder NV

EXHIBIT
F - Assignment and Assumption Agreement

EXHIBIT
G - Calculation of Mandatory Costs Rate

EXHIBIT
H -  Election to Participate

EXHIBIT
I - Election to Terminate

 

iv

 

AGREEMENT dated as of April 26, 2007 among THE
ESTÉE LAUDER COMPANIES INC., ESTEE LAUDER INC., the ELIGIBLE SUBSIDIARIES
referred to herein, the LENDERS listed on the signature pages hereof,
JPMORGAN CHASE BANK, N.A., as Administrative Agent,  CITIBANK N.A. and BANK OF AMERICA, N.A. as
Syndication Agents.

 

The parties hereto agree as follows:

 

ARTICLE
1

DEFINITIONS

 

Section 1.01.  Definitions.  The following terms, as used
herein, have the following meanings:

 

“Absolute Rate Auction”
means a solicitation of Competitive Bid Quotes setting forth Competitive Bid
Absolute Rates pursuant to Section 2.03.

 

“Administrative Agent”
means JPMorgan Chase Bank, N.A. in its capacity as Administrative Agent for the
Lenders hereunder, and its successors in such capacity.

 

“Administrative
Questionnaire” means, with respect to each Lender, an administrative
questionnaire in the form prepared by the Administrative Agent and submitted to
the Administrative Agent (with a copy to the Company) duly completed by such
Lender.

 

“Affiliate”
means (i) any Person that directly, or indirectly through one or more
intermediaries, controls the Company (a “Controlling Person”)
or (ii) any Person (other than the Company or a Subsidiary) which is
controlled by or is under common control with a Controlling Person.  As used herein, the term “control” means
possession, directly or indirectly, of the power to vote securities
constituting 10% or more of the voting power represented by all of the
outstanding voting securities of a Person or to direct or cause the direction
of the management or policies of a Person, whether through the ownership of
voting securities, by contract or otherwise.

 

“Affiliate Transaction”
has the meaning set forth in Section 5.12.

 

“Alternative Currencies”
means Sterling, Euros, Yen and Swiss Francs.

 

“Alternative Currency
Sublimit” means a Dollar Amount equal to $250,000,000.

 

 

“Applicable Agent”
means, (a) with respect to a Loan or Borrowing denominated in Dollars, the
Administrative Agent, or (b) with respect to any particular Alternative
Currency, the Administrative Agent or such other Person as may be agreed upon
by the Company and the Administrative Agent and designated in a notice
delivered to the Lenders.

 

“Applicable Lending Office”
means, with respect to any Lender, (i) in the case of its Base Rate Loans,
its Domestic Lending Office, (ii) in the case of its Euro-Currency Loans,
its Euro-Currency Lending Office and (iii) in the case of its Competitive
Bid Loans, its Competitive Bid Lending Office.

 

“Approved Fund”
means any Fund that is administered or managed by (i) a Lender, (ii) an
affiliate of a Lender or (iii) an entity or an affiliate of an entity that
administers or manages a Lender.

 

 “Assignee” has the meaning set forth in Section 10.06(c).

 

“Available Commitment”
means, with respect to any Lender at any time, an amount equal to such Lender’s
Commitment at such time minus such Lender’s Outstanding Committed Amount at
such time.

 

“Base Rate”
means, for any day, a rate per annum equal to the higher of (i) the Prime
Rate for such day and (ii) the sum of 1⁄2 of 1% plus the Federal Funds Rate
for such day.

 

“Base Rate Loan”
means (i) a Committed Dollar Loan which bears interest at the Base Rate
pursuant to the applicable Notice of Committed Borrowing or Notice of Interest
Rate Election, (ii) a Committed Loan which bears interest at the Base Rate
pursuant to the provisions of Article 8 or (iii) an overdue amount
which was a Base Rate Loan immediately before it became overdue.

 

“Benefit Arrangement”
means at any time an employee benefit plan within the meaning of Section 3(3) of
ERISA which is not a Plan or a Multiemployer Plan and which is maintained or
otherwise contributed to by any member of the ERISA Group.

 

“Borrower” means
the Company or any Eligible Subsidiary, as the context may require, and their
respective successors, and “Borrowers”
means all of the foregoing.  When used in
relation to any Loan or Letter of Credit, references to “the Borrower” are to the particular
Borrower to which such Loan is or is to be made or at whose request such Letter
of Credit is or is to be issued.

 

“Borrowing” has
the meaning set forth in Section 1.03.

 

“Capitalized Lease Obligations” of any
Person means obligations of such Person to pay rent or other amounts under any
lease of (or other arrangement 

 

2

 

conveying the right to use) real or personal
property, or a combination thereof, which obligations are required under GAAP
to be classified and accounted for as capital leases on a balance sheet of such
Person.  The amount of such obligations
will be the capitalized amount thereof determined in accordance with GAAP.

 

“Change of Control”
means (i) the acquisition of ownership, directly or indirectly,
beneficially or of record, by any Person or group (within the meaning of the
Securities Exchange Act of 1934 and the rules of the Securities and
Exchange Commission thereunder as in effect on the date hereof) other than the
Lauder Family Members, of equity interests representing more than 50% of the
aggregate ordinary voting power represented by the issued and outstanding
equity interests of the Company; (ii) occupation of a majority of the
seats (other than vacant seats) on the board of directors of the Company by
persons who were neither (x) nominated by the board of directors of the
Company nor (y) appointed by directors so nominated; (iii) the
acquisition of direct or indirect control of the Company by any person or group
other than the Lauder Family Members; or (iv) the Company shall cease at
any time to own, directly or indirectly, 100% of the outstanding capital stock
of the Company Guarantor.

 

“Closing Date”
means April 26, 2007 or such later date on which the Administrative Agent
shall have received the documents specified in or pursuant to Section 3.01.

 

“Commitment”
means (i) with respect to each Lender, the amount of such Lender’s
Commitment, as such amount is set forth opposite the name of such Lender on the
Commitment Schedule, as such Commitment may be (a) increased from time to time
pursuant to Section 2.20, (ii) with respect to any Additional Lender,
the amount of the Commitment assumed by it pursuant to Section 2.20, and (iii) with
respect to any Assignee, the amount of the transferor Lender’s Commitment
assigned to it pursuant to Section 10.06, in each case as such amount may
be reduced from time to time pursuant to Section 2.09 and Section 2.20
or Section 10.06; provided
that, if the context so requires, the term “Commitment” means the obligation of
a Lender to extend credit up to such amount to the Borrowers hereunder.

 

“Committed Alternative
Currency Loans” means Loans denominated in Alternative Currencies
and made pursuant to Section 2.01.

 

“Committed Dollar
Loans” means Loans denominated in dollars and made pursuant to Section 2.01.

 

“Committed Loan”
means a Committed Dollar Loan or a Committed Alternative Currency Loan; provided that, if any such loan or loans
(or portions thereof) are combined or subdivided pursuant to a Notice of
Interest Rate Election, the term “Committed Loan” shall refer to the combined
principal Dollar 

 

3

 

Amount resulting from such combination or to
each of the separate principal Dollar Amounts resulting from such subdivision,
as the case may be.

 

“Company”
means The Estée Lauder Companies Inc., a Delaware corporation, and its
successors.

 

“Company Guarantor”
means Estee Lauder Inc., a Delaware corporation, and its successors.

 

“Competitive Bid Absolute
Rate” has the meaning set forth in Section 2.03(d).

 

“Competitive Bid Absolute
Rate Loan” means a loan to be made by a Lender pursuant to an
Absolute Rate Auction.

 

“Competitive Bid Lending
Office” means, as to each Lender, its Domestic Lending Office or
such other office, branch or affiliate of such Lender as it may hereafter
designate as its Competitive Bid Lending Office by notice to the Company and
the Administrative Agent; provided
that any Lender may from time to time by notice to the Company and the
Administrative Agent designate separate Competitive Bid Lending Offices for its
Competitive Bid LIBOR Loans, on the one hand, and its Competitive Bid Absolute
Rate Loans, on the other hand, in which case all references herein to the
Competitive Bid Lending Office of such Lender will be deemed to refer to either
or both of such offices, as the context may require.

 

“Competitive Bid LIBOR Loan”
means a loan to be made by a Lender pursuant to a LIBOR Auction (including such
a loan bearing interest at the Base Rate pursuant to Section 8.01).

 

“Competitive Bid Loan”
means a Competitive Bid LIBOR Loan or a Competitive Bid Absolute Rate Loan.

 

“Competitive Bid Margin”
has the meaning set forth in Section 2.03(d)(ii)(C).

 

“Competitive Bid Quote”
means an offer by a Lender to make a Competitive Bid Loan in accordance with Section 2.03.

 

“Consolidated Interest Expense” means, for any period, (x) total interest
expense (including, without limitation, rent or interest expense pursuant to Capitalized
Lease Obligations that is treated as interest in accordance with GAAP) of the
Company and its Consolidated Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP
minus (y) the interest income of the Company and its
Consolidated Subsidiaries for such period determined on a consolidated basis in
accordance with GAAP.

 

4

 

 “Consolidated  EBITDA”
means, for any period, the consolidated net income of the Company and its
Consolidated Subsidiaries for such period 
plus, to the extent
deducted in computing such consolidated net income for such period, the sum
(without duplication) of (a) income tax expense, (b) Consolidated
Interest Expense, (c) depreciation and amortization expense and (d) extraordinary
non-cash charges, and minus, to
the extent added in computing such consolidated net income for such
period,  extraordinary gains.

 

“Consolidated Subsidiary”
means at any date any Subsidiary or other entity the accounts of which would be
consolidated with those of the Company in its consolidated financial statements
if such statements were prepared as of such date.

 

“Consolidated Tangible Net
Worth” means at any date the consolidated stockholders’ equity of
the Company and its Consolidated Subsidiaries (excluding for this purpose any
amount attributable to stock which is required to be redeemed, or is redeemable
at the option of the holder, if certain events or conditions occur or exist or
otherwise, other than shares of the Company’s Series A cumulative
redeemable preferred stock, par value $.01 per share, due June 2015
outstanding on the date of this Agreement) less their consolidated Intangible
Assets, all determined as of such date. 
For purposes of this definition, “Intangible Assets” means the amount
(to the extent reflected in determining such consolidated stockholders’ equity)
of (i) all write-ups (other than write-ups resulting from foreign currency
translations and write-ups of assets of a going concern business made within
twelve months after the acquisition of such business) subsequent to June 30,
2006 in the book value of any asset owned by the Company or a Consolidated
Subsidiary, (ii) all investments in unconsolidated Subsidiaries and all
equity investments in Persons which are not Subsidiaries and (iii) all
unamortized debt discount and expense, unamortized deferred charges, goodwill,
patents, trademarks, service marks, trade names, anticipated future benefit of
tax loss carry-forwards, copyrights, organization or developmental expenses and
other intangible assets.

 

“Debt” of any
Person means at any date, without duplication, (i) all obligations of such
Person for borrowed money, (ii) all obligations of such Person evidenced
by bonds, debentures, notes or other similar instruments, (iii) all
obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (iv) all Capitalized Lease Obligations of such Person, (v) all
non-contingent obligations (and, for purposes of Section 5.10 and the
definitions of Material Debt and Material Financial Obligations, all contingent
obligations) of such Person to reimburse any bank or other Person in respect of
amounts paid under a letter of credit or similar instrument, (vi) all Debt
secured by a Lien on any asset of such Person, whether or not such Debt is
otherwise an obligation of such Person and (vii) all Debt of others
Guaranteed by such Person.

 

5

 

 “Default” means any condition or event which constitutes an
Event of Default or which with the giving of notice or lapse of time or both
would, unless cured or waived, become an Event of Default.

 

“Derivatives Obligations”
of any Person means all obligations of such Person in respect of any rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond
option, interest rate option, foreign exchange transaction, cap transaction,
floor transaction, collar transaction, currency swap transaction,
cross-currency rate swap transaction, currency option or any other similar
transaction (including any option with respect to any of the foregoing
transactions) or any combination of the foregoing transactions.

 

“Dollar Amount”
means, at any time:

 

(i)            with respect to any Loan denominated
in dollars, the principal amount thereof then outstanding;

 

(ii)           with respect to any Committed
Alternative Currency Loan, the equivalent in dollars of the principal amount
thereof then outstanding in the relevant Alternative Currency, determined by
the Administrative Agent using the Exchange Rate with respect to such
Alternative Currency then in effect; and

 

(iii)          with respect to any Letter of Credit
Liabilities, (A) if denominated in Dollars, the amount thereof and (B) if
denominated in an Alternative Currency, determined by the Administrative Agent
using the Exchange Rate with respect to such Alternative Currency then in
effect.

 

“dollars”, “Dollars” and the sign “$” mean lawful currency of the United
States.

 

“Domestic Business Day”
means any day except a Saturday, Sunday or other day on which commercial banks
in New York City are authorized by law to close.

 

“Domestic Lending Office”
means, as to each Lender, its office located at its address set forth in its
Administrative Questionnaire (or identified in its Administrative Questionnaire
as its Domestic Lending Office) or such other office as such Lender may
hereafter designate as its Domestic Lending Office by notice to the Company and
the Administrative Agent.

 

“Effective Date”
means the date this Agreement becomes effective in accordance with Section 10.09.

 

6

 

“Election to Participate”
means an Election to Participate substantially in the form of Exhibit H
hereto.

 

“Election to Terminate”
means an Election to Terminate substantially in the form of Exhibit I
hereto.

 

“Eligible Subsidiary”
means Estée Lauder NV and any Wholly-Owned Consolidated Subsidiary, as to which
an Election to Participate shall have been delivered to the Administrative
Agent and as to which an Election to Terminate with respect to such Election to
Participate shall not have been delivered to the Administrative Agent.  Each such Election to Participate and Election
to Terminate shall be duly executed on behalf of such Wholly-Owned Consolidated
Subsidiary and the Company in such number of copies as the Administrative Agent
may request.  If at any time a Subsidiary
theretofore designated as an Eligible Subsidiary no longer qualifies as a
Wholly-Owned Consolidated Subsidiary, the Company shall cause to be delivered
to the Administrative Agent an Election to Terminate terminating the status of
such Subsidiary as an Eligible Subsidiary. 
The delivery of an Election to Terminate shall not affect any obligation
of an Eligible Subsidiary theretofore incurred or the guaranty thereof by the
Company and the Company Guarantor.  The
Administrative Agent shall promptly give notice to the Lenders of the receipt
of any Election to Participate or Election to Terminate.

 

“Environmental Laws”
means any and all federal, state, local and foreign statutes, laws, judicial
decisions, regulations, ordinances, rules, judgments, orders, decrees, plans,
injunctions, permits, concessions, grants, franchises, licenses, agreements and
other governmental restrictions relating to the environment, the effect of the
environment on human health or to emissions, discharges or releases of
pollutants, contaminants, Hazardous Substances or wastes into the environment
including, without limitation, ambient air, surface water, ground water, or
land, or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of pollutants,
contaminants, Hazardous Substances or wastes or the clean-up or other
remediation thereof.

 

“ERISA” means
the Employee Retirement Income Security Act of 1974, as amended, or any
successor statute.

 

“ERISA Group”
means the Company, any Subsidiary and all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Company or any Subsidiary, are treated
as a single employer under Section 414 of the Internal Revenue Code.

 

“Euro” means the
single currency of the Participating Member States of the European Union.

 

7

 

“Euro-Currency Business Day”
means a Euro-Dollar Business Day, unless such term is used in connection with
an Alternative Currency Borrowing or Committed Alternative Currency Loan, in
which case such day shall not be a Euro-Currency Business Day unless commercial
banks are open for international business (including dealings in deposits in
such Alternative Currency) in both London and the place designated by the
Applicable Agent with respect to such Alternative Currency for funds to be paid
or made available in such Alternative Currency.

 

“Euro-Currency Lending
Office” means, as to each Lender, its office, branch or affiliate
located at its address set forth in its Administrative Questionnaire (or
identified in its Administrative Questionnaire as its Euro-Currency Lending
Office) or such other office, branch or affiliate of such Lender as it may
hereafter designate as its Euro-Currency Lending Office by notice to the Company
and the Administrative Agent; provided that
any Lender may from time to time by notice to the Company and the
Administrative Agent designate separate Euro-Currency Lending Offices for its
Loans in different currencies, in which case all references herein to the
Euro-Currency Lending Office of such Lender shall be deemed to refer to any or
all of such offices, as the context may require.

 

“Euro-Currency Loan”
means a Committed Loan that is either a Euro-Dollar Loan or a Committed
Alternative Currency Loan.

 

“Euro-Currency Margin”
has the meaning set forth in the Pricing Schedule.

 

“Euro-Currency Rate”
means a rate of interest determined pursuant to Section 2.07 on the basis
of a London Interbank Offered Rate.

 

“Euro-Currency Reserve
Percentage” means, for any day, that percentage (expressed as a
decimal) which is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for determining the
maximum reserve requirement for a member bank of the Federal Reserve System in
New York City with deposits exceeding five billion dollars in respect of “Eurocurrency
liabilities” (or in respect of any other category of liabilities which includes
deposits by reference to which the interest rate on Euro-Dollar Loans is determined
or any category of extensions of credit or other assets which includes loans by
a non-United States office of any Lender to the United States residents).

 

“Euro-Dollar Business Day”
means any Domestic Business Day on which commercial banks are open for
international business (including dealings in dollar deposits) in London.

 

8

 

“Euro-Dollar Loan”
means (i) a Committed Dollar Loan which bears interest at a Euro-Currency
Rate pursuant to the applicable Notice of Committed Borrowing or Notice of
Interest Rate Election or (ii) an overdue amount which was a Euro-Dollar
Loan immediately before it became overdue.

 

“Event of Default”
has the meaning set forth in Section 6.01.

 

“Exchange Rate”
means, on any day, with respect to any Alternative Currency, the rate at which
such Alternative Currency may be exchanged into dollars (and, for purposes of
any provision of this Agreement requiring or permitting the conversion of
Committed Alternative Currency Loans to Loans denominated in dollars, the rate
at which dollars may be exchanged into the applicable Alternative Currency), as
set forth at or about 9:00 a.m., New York City time, or at or about 11:00 a.m.,
London time, on such date on the Reuters World Currency Page for such
currency.  In the event that such rate
does not appear on any Reuters World Currency Page, the Exchange Rate shall be
determined by reference to such other publicly available service for displaying
exchange rates as may be agreed upon by the Administrative Agent, the
Applicable Agent with respect to such Alternative Currency and the Company, or,
in the absence of such agreement, such Exchange Rate shall instead be the
arithmetic average of the spot buying and selling rates of exchange of such Applicable
Agent in the market where its foreign currency exchange operations in respect
of such currency are then being conducted, on or about 11:00 a.m., New
York City time, or on or about 11:00 a.m., London time, on such date for
the purchase of dollars (or such foreign currency, as the case may be) for
delivery two Business Days later; provided
that if at the time of any such determination, for any reason, no such spot
rate is being quoted, such Applicable Agent, after consultation with the
Company and the Administrative Agent, may use any reasonable method it deems
appropriate to determine such rate, and such determination shall be presumed
correct absent manifest error.

 

“Existing Credit Agreement”
means the Credit Agreement dated as of May 27, 2005 among the Company, the
Company Guarantor, the lenders listed therein and the administrative agent
listed therein.

 

“Facility Fee”
has the meaning set forth in Section 2.08.

 

“Facility Fee Rate”
has the meaning set forth in the Pricing Schedule.

 

“Federal Funds Rate”
means, for any day, the rate per annum (rounded upward, if necessary, to the
nearest 1/100th of 1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers on such day, as published by the Federal Reserve Bank
of New York on the Domestic Business Day next succeeding such day; provided that (i) if such day is not
a Domestic Business Day, the Federal Funds Rate for such day shall be such rate
on such transactions 

 

9

 

on the next preceding Domestic Business Day
as so published on the next succeeding Domestic Business Day, and (ii) if
no such rate is so published on such next succeeding Domestic Business Day, the
Federal Funds Rate for such day shall be the average rate quoted to JPMorgan
Chase Bank, N.A. on such day on such transactions as determined by the
Administrative Agent.

 

“Fixed Rate Loans”
means Euro-Currency Loans or Competitive Bid Loans (excluding Competitive Bid
LIBOR Loans bearing interest at the Base Rate pursuant to Section 8.01) or
any combination of the foregoing.

 

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

 

“GAAP”
means generally accepted accounting principles as in effect from time to time
in the United States.

 

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

 

“Group of Loans”
means at any time a group of Loans consisting of (i) all Committed Loans
to the same Borrower which are Base Rate Loans at such time or (ii) all
Euro-Currency Loans to the same Borrower which are in the same currency and
have the same Interest Period at such time; provided
that, if a Committed Loan of any particular Lender is converted to or made as a
Base Rate Loan pursuant to Article 8, such Loan shall be included in the
same Group or Groups of Loans from time to time as it would have been if it had
not been so converted or made.

 

“Guarantee” by
any Person means any obligation, contingent or otherwise, of such Person
directly or indirectly guaranteeing any Debt of any other Person and, without
limiting the generality of the foregoing, any obligation, direct or indirect,
contingent or otherwise, of such Person (i) to purchase or pay (or advance
or supply funds for the purchase or payment of) such Debt (whether arising by
virtue of partnership arrangements, by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for the purpose of
assuring in any other manner the holder of such Debt of the payment thereof or
to protect such holder against loss in respect thereof (in whole or in part); provided that the term Guarantee shall not
include endorsements for collection or deposit in the ordinary course of
business.  The term “Guarantee” used as a verb has a corresponding
meaning.

 

“Guarantor”
means, with respect to the obligations of the Borrowers hereunder, the Company
Guarantor and, with respect to the obligations of Borrowers hereunder other
than the Company, the Company, and “Guarantors”
means all of the foregoing.

 

10

 

“Guaranty” means
the obligations of the Guarantors set forth in Article 11.

 

“Hazardous Substances”
means any toxic, radioactive, caustic or otherwise hazardous substance,
including petroleum, its derivatives, by-products and other hydrocarbons, or
any substance having any constituent elements displaying any of the foregoing
characteristics.

 

“Increased Cost”
has the meaning set forth in Section 10.06(f).

 

“Incremental Commitments”
has the meaning set forth in Section 2.20.

 

“Incremental Commitment
Notice” has the meaning set forth in Section 2.20.

 

“Indemnitee” has
the meaning set forth in Section 10.03(b).

 

“Interest Expense Coverage
Ratio” means, as of any date, the ratio of Consolidated EBITDA to
Consolidated Interest Expense, in each case determined for the four most recent
fiscal quarters (taken as a single accounting period) ended on such date.

 

“Interest Period”
means:

 

(1)           with respect to each Euro-Currency Loan, the period
commencing on the date of borrowing specified in the applicable Notice of Borrowing
or on the date specified in the applicable Notice of Interest Rate Election and
ending one, two, three or six months thereafter, as a Borrower may elect in the
applicable notice; provided that:

 

(a)           any Interest Period
(except an Interest Period determined pursuant to clause (c) below) which
would otherwise end on a day which is not a Euro-Currency Business Day shall be
extended to the next succeeding Euro-Currency Business Day unless such
Euro-Currency Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Euro-Currency Business Day;

 

(b)           any Interest Period
which begins on the last Euro-Currency Business Day of a calendar month (or on
a day for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall, subject to clause (c) below,
end on the last Euro-Currency Business Day of a calendar month; and

 

(c)           any Interest Period
which would otherwise end after the Termination Date shall end on the
Termination Date (or, if the Termination Date is not a Euro-Currency Business
Day, on the next preceding Euro-Currency Business Day);

 

11

 

(2)           with respect to each Competitive Bid LIBOR Loan, the
period commencing on the date of borrowing specified in the applicable Notice
of Borrowing and ending such whole number of months thereafter as a Borrower
may elect in accordance with Section 2.03; provided that:

 

(a)           any Interest Period
(except an Interest Period determined pursuant to clause (c) below) which
would otherwise end on a day which is not a Euro-Dollar Business Day shall be
extended to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Euro-Dollar Business Day;

 

(b)           any Interest Period
which begins on the last Euro-Dollar Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall, subject to clause (c) below,
end on the last Euro-Dollar Business Day of a calendar month; and

 

(c)           any Interest Period
which would otherwise end after the Termination Date shall end on the Termination
Date (or, if the Termination Date is not a Euro-Dollar Business Day, the next
preceding Euro-Dollar Business Day); and

 

(3)           with respect to each Competitive Bid Absolute Rate Loan,
the period commencing on the date of borrowing specified in the applicable
Notice of Borrowing and ending such number of days thereafter (but not less
than 7 days) as a Borrower may elect in accordance with Section 2.03; provided that:

 

(a)           any Interest Period
(except an Interest Period determined pursuant to clause (b) below) which
would otherwise end on a day which is not a Euro-Dollar Business Day shall be
extended to the next succeeding Euro-Dollar Business Day; and

 

(b)           any Interest Period
which would otherwise end after the Termination Date shall end on the
Termination Date (or, if the Termination Date is not a Euro-Dollar Business
Day, on the next preceding Euro-Dollar Business Day).

 

“Internal Revenue Code”
means the Internal Revenue Code of 1986, as amended, or any successor statute.

 

“Issuing Lender”
means JPMorgan Chase Bank, N.A., in its capacity as issuer of a Letter of
Credit hereunder.

 

“Joint Arrangers”
means J.P. Morgan Securities Inc. and Citigroup Global Markets, Inc.

 

12

 

“Lauder Family Member”
means (i) the estate of Mrs. Estée Lauder, (ii) each descendant
of Mrs. Estée Lauder (each such Person, a “Lauder Descendant”) and their respective estates, guardians,
conservators or committees, (iii) each Family Controlled Entity, (iv) each
Current Spouse of Lauder Descendants and (v) the trustees, in their
respective capacities as such, of each Family Controlled Trust.  As used herein, “Family Controlled Entity” means (w) any not-for-profit
corporation if at least a majority of its board of directors is composed of Lauder
Descendants and/or Current Spouses of Lauder Descendants, (x) any other
corporation if (i) both (aa) Lauder Descendants and/or Current Spouses of
Lauder Descendants (or in the case of subclause (i)(aa)(xx), their respective
estates, guardians, conservators or committees) (xx) hold in the aggregate,
directly or indirectly through one or more wholly owned Persons, securities
having ordinary voting power to elect a majority of the board of directors of
such corporation or (yy) constitute a majority of the board of directors of
such corporation and (bb) at least a majority of the value of the outstanding
equity of such corporation is owned by Lauder Family Members or (ii) at
least 80% of the value of the outstanding equity of such corporation is owned
by Lauder Family Members, (y) any partnership if at least a majority of
the value of its partnership interests (both general and limited) are owned by
Lauder Family Members, and (z) any limited liability or similar company if
(i) both (aa) Lauder Descendants and/or Current Spouses of Lauder
Descendants (or, in the case of subclause (i)(aa)(xx), their respective
estates, guardians, conservators or committees) (xx) hold in the aggregate,
directly or indirectly through one or more wholly owned Persons, securities or
other equity interests having ordinary voting power to elect or appoint at
least a majority of the managing members of such company or (yy) constitute a
majority of the managing members of such company and (bb) a majority of the
value of such company is owned by Lauder Family Members or (ii) at least
80% of the value of such company is owned by Lauder Family Members. As used
herein, “Family Controlled Trust”
shall mean any trust the primary beneficiaries of which are Lauder Descendants,
Spouses of Lauder Descendants and/or charitable organizations (collectively, “Lauder Beneficiaries”); provided,
that, if the trust is a wholly charitable trust, at least a majority of the
trustees of such trust consist of Lauder Descendants and/or Current Spouses of
Lauder Descendants.  For purposes of the
definition of “Family Controlled Trust”, the primary beneficiaries of a trust
will be deemed to be Lauder Beneficiaries if, under the maximum exercise of
discretion by the trustee in favor of persons who are neither Lauder
Beneficiaries nor Family Controlled Trusts, the value of the interests of such
persons in such trust, computed actuarially, is less than 50%.  In determining the primary beneficiaries of a
trust for purposes of the definition of “Family Controlled Trust”, (A) the
factors and methods prescribed in section 7520 of the Internal Revenue Code of
1986, as amended, for use in ascertaining the value of certain interests shall
be used in determining a beneficiary’s actuarial interest in a trust, (B) the
actuarial value of the interest in a trust of any person in whose favor a
testamentary power of appointment may be exercised shall be deemed to be zero
and (C) in the case of

 

13

 

a trust created by one or more of Mrs. Estée
Lauder, Joseph H. Lauder or Lauder Descendants, the actuarial value of the
interest in such trust of any person who may receive trust property only at the
termination of the trust and then only in the event that, at the termination of
the trust, there are no living issue of one or more of Mrs. Estée Lauder,
Joseph H. Lauder or Lauder Descendants shall be deemed to be zero.  For purposes hereof, (1) “Spouses of Lauder Descendants” means those
individuals who at any time were married to any Lauder Descendant whether or
not such marriage is subsequently dissolved by death, divorce, or by any other
means, (2) “Current Spouse of Lauder
Descendants” means an individual who is married to a Lauder
Descendant, but only so long as such marriage has not been dissolved by death,
divorce or by any other means, (3) the relationship of any person that is
derived by or through legal adoption shall be considered a natural
relationship, (4) a minor who is a descendant of Mrs. Estée Lauder
and for whom equity interests are held pursuant to a Uniform Gifts to Minors
Act or similar law shall be considered the holder of such equity interests and
the custodian who is the record holder of such equity interests shall not be
considered the holder thereof, (5) an incompetent stockholder of any
equity interests whose equity interests are owned or held by a guardian or
conservator shall be considered the holder of such equity interest and such
guardian or conservator who is the holder of such equity interests shall not be
considered the holder thereof, (6) any equity interests pledged by a
holder thereof as security for any obligation shall be deemed to be held by
such holder unless and until the pledgee of such equity interests has declared
a default with respect to such obligation and has the right (whether or not
being presently exercised) to vote or direct the voting of such equity
interests and (7) except as provided in clauses (4), (5) and (6) above,
the holder of any equity interests shall mean the record holder of such equity
interests; provided, however,
that if such record holder of such equity interests is a nominee, the holder of
such equity interests shall be the first person in the chain of ownership of
such equity interests who is not holder thereof solely as a nominee.

 

“Lender” means (i) each
bank or other institution listed on the signature pages hereof, (ii) each
financial institution which becomes a Lender pursuant to Section 2.20, (iii) each
Assignee which becomes a Lender pursuant to Section 10.06(c) and (iv) their
respective successors.

 

“Letter of Credit”
means a letter of credit to be issued hereunder by the Issuing Lender in
accordance with Section 2.19.

 

“Letter of Credit
Disbursement” means a payment made by the Issuing Lender pursuant to
a Letter of Credit.

 

“Letter of Credit Fee Rate”
has the meaning set forth in the Pricing Schedule.

 

14

 

“Letter of Credit
Liabilities” means, for any Lender and at any time, such Lender’s
ratable participation in the sum of (x) the amounts then owing by each
Borrower in respect of amounts drawn under Letters of Credit and (y) the
aggregate amount then available for drawing under all Letters of Credit.

 

“Letter of Credit Sublimit”
means a Dollar Amount equal to $100,000,000.

 

“LIBOR Auction”
means a solicitation of Competitive Bid Quotes setting forth Competitive Bid
Margins based on the London Interbank Offered Rate pursuant to Section 2.03.

 

“Lien” means,
with respect to any asset, any mortgage, lien, pledge, charge, security interest
or encumbrance of any kind, or any other type of preferential arrangement that
has the practical effect of creating a security interest, in respect of such
asset.  For the purposes of this
Agreement, the Company or any Subsidiary shall be deemed to own subject to a
Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement relating to such asset.

 

“Loan” means a
Base Rate Loan, a Euro-Currency Loan or a Competitive Bid Loan and “Loans” means Base Rate Loans, Euro-Currency
Loans or Competitive Bid Loans or any combination of the foregoing.

 

“London Interbank Offered
Rate” has the meaning set forth in Section 2.07(b).

 

“Material Adverse Effect”
means a material adverse effect on the business, financial position or results
of operations of the Company and its Consolidated Subsidiaries, taken as a
whole.

 

“Material Debt”
means Debt (other than the Loans) of the Company and/or one or more of its
Subsidiaries, arising in one or more related or unrelated transactions, in an
aggregate principal or face amount exceeding $50,000,000.

 

“Material Financial
Obligations” means a principal or face amount of Debt and/or payment
or collateralization obligations in respect of Derivatives Obligations of the
Company and/or one or more of its Subsidiaries, arising in one or more related
or unrelated transactions, exceeding in the aggregate $50,000,000.

 

“Material Plan”
means at any time a Plan or Plans having aggregate Unfunded Liabilities in
excess of $50,000,000.

 

“Multiemployer Plan”
means at any time an employee pension benefit plan within the meaning of Section 4001(a)(3) of
ERISA to which any member of

 

15

 

the ERISA Group is then making or accruing an
obligation to make contributions or has within the preceding five plan years
made contributions, including for these purposes any Person which ceased to be
a member of the ERISA Group during such five year period.

 

“Notes” means
promissory notes of a Borrower, substantially in the form of Exhibit A
hereto, evidencing the obligation of such Borrower to repay the Loans made to
it, and “Note” means any one of
such promissory notes issued hereunder.

 

“Notice of Borrowing”
means a Notice of Committed Borrowing (as defined in Section 2.02) or a
Notice of Competitive Bid Borrowing (as defined in Section 2.03(f)).

 

“Notice of Interest Rate
Election” has the meaning set forth in Section 2.10.

 

“Notice of Issuance”
has the meaning set forth in Section 2.19.

 

“Obligors” means
the Borrowers and the Guarantors, and “Obligor”
means any one of the Borrowers and the Guarantors.

 

“Outstanding Committed
Amount” means, as to any Lender at any time, the sum at such time,
without duplication, of (i) the aggregate principal amount of the
outstanding Committed Dollar Loans of such Lender at such time, (ii) the
aggregate Dollar Amount of the aggregate principal amount of the outstanding
Committed Alternative Currency Loans of such Lender at such time and (iii) the
aggregate Dollar Amount of such Lender’s Letter of Credit Liabilities at such
time.

 

“Parent” means,
with respect to any Lender, any Person controlling such Lender.

 

“Participant”
has the meaning set forth in Section 10.06(b).

 

“Participating Member State”
means any member state of the European Community 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.

 

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

 

“Person” means
an individual, a corporation, a limited liability company, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.

 

16

 

“Plan” means at
any time an employee pension benefit plan (other than a Multiemployer Plan)
which is covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Internal Revenue Code and either (i) is
maintained, or contributed to, by any member of the ERISA Group for employees
of any member of the ERISA Group or (ii) has at any time within the
preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group for employees of any Person which
was at such time a member of the ERISA Group.

 

“Pricing Schedule”
means the Pricing Schedule attached hereto.

 

“Prime Rate”
means the rate of interest publicly announced by JPMorgan Chase Bank, N.A. at
its Principal Office from time to time as its prime rate.  Each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as
being effective.

 

“Principal Office”
shall mean the principal office of JPMorgan Chase Bank, N.A., presently located
at 270 Park Avenue, New York, New York 10017.

 

“Proxy Statement”
means the Proxy Statement of the Company for the Annual Meeting of Stockholders
dated as of September 29, 2006.

 

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

 

“Rate Fixing Date”
means, with respect to any Interest Period, the day on which quotes for
deposits in the relevant currency for such Interest Period are customarily
taken in the London interbank market for delivery on the first day of such
Interest Period.

 

“Reference Banks”
means the principal London offices of JPMorgan Chase Bank, N.A. and one or more
Lenders selected by the Administrative Agent from time to time.

 

“Regulation U”
means Regulation U of the Board of Governors of the Federal Reserve System, as
in effect from time to time.

 

“Reimbursement Obligation”
has the meaning set forth in Section 2.19(d).

 

“Required Lenders”
means at any time Lenders having in excess of 50% of the aggregate amount of
the Commitments or, if the Commitments shall have been terminated, holding more
than 50% of the Total Outstanding Amount.

 

“Revolving Credit Period”
means the period from and including the Effective Date to but not including the
earlier of the Termination Date and the date of termination of the Commitments.

 

17

 

“Senior Officer”
means, with respect to any Person, the chief executive officer, the chief
operating officer, the president, the chief financial officer, the general
counsel, the chief accounting officer or the treasurer of such Person (or in
any case persons having substantially similar responsibilities regardless of
title).

 

“Significant Subsidiary”
means at any time a Subsidiary that as at that time would be a “significant
subsidiary” as defined in Rule 1-02 of Regulation S-X promulgated by the
Securities and Exchange Commission as in effect on the date hereof; provided that the Company Guarantor and
each Eligible Subsidiary shall always be deemed to be a Significant Subsidiary.

 

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

 

“Sterling” means
the lawful currency of the United Kingdom.

 

“Subsidiary” means,
as to any Person, any corporation or other entity of which securities or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions are at the
time directly or indirectly owned by such Person; unless otherwise specified, “Subsidiary”
means a Subsidiary of the Company.

 

“Swiss Francs”
means the lawful currency of the Swiss Confederation.

 

“Termination Date”
means April 26, 2012, or, if such day is not a Euro-Dollar Business Day,
the next preceding Euro-Dollar Business Day.

 

“Total Outstanding Amount”
means, at any time, the aggregate Dollar Amount of all Loans outstanding at
such time plus the aggregate Dollar Amount of the Letter of Credit Liabilities
of all Lenders at such time.

 

“Unfunded Liabilities”
means, with respect to any Plan at any time, the amount (if any) by which (i) the
value of all benefit liabilities under such Plan, determined on a plan
termination basis using the assumptions prescribed by the PBGC for purposes of Section 4044
of ERISA, exceeds (ii) the fair market value of all Plan assets allocable
to such liabilities under Title IV of ERISA (excluding any accrued but unpaid
contributions), all determined as of the then most recent valuation date for
such Plan, but only to the extent that such excess represents a potential
liability of a member of the ERISA Group to the PBGC or any other Person under
Title IV of ERISA.

 

“United States”
means the United States of America, including the States and the District of
Columbia, but excluding its territories and possessions.

 

“Wholly-Owned Consolidated
Subsidiary” means any Consolidated Subsidiary all of the shares of
capital stock or other ownership interests of which (except for qualifying
shares held by directors or foreign nationals in accordance

 

18

 

with applicable law) are at the time directly
or indirectly owned by the Company or one or more other Wholly-Owned
Consolidated Subsidiaries.

 

“Yen” means the
lawful currency of Japan.

 

Section 1.02.  Accounting Terms and
Determinations.  Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP, applied on a basis consistent (except for changes
concurred in by the Company’s independent public accountants) with the most
recent audited consolidated financial statements of the Company and its
Consolidated Subsidiaries delivered to the Lenders; provided that, if the Company notifies the Administrative
Agent that the Company wishes to amend any covenant in Article 5 to
eliminate the effect of any change in GAAP on the operation of such covenant
(or if the Administrative Agent notifies the Company that the Required Lenders
wish to amend Article 5 for such purpose), then the Company’s compliance
with such covenant shall be determined on the basis of GAAP in effect
immediately before the relevant change in GAAP became effective, until either
such notice is withdrawn or such covenant is amended in a manner satisfactory
to the Company and the Required Lenders.

 

Section 1.03.  Types of Borrowing.  The term “Borrowing”
denotes the aggregation of Loans of one or more Lenders to be made to a single
Borrower pursuant to Article 2 on the same date, all of which Loans are of
the same type and currency (subject to Article 8) and, except in the case
of Base Rate Loans, have the same initial Interest Period.  Borrowings are classified for purposes of
this Agreement either (a) by reference to the currency and/or pricing of
Loans comprising such Borrowing (e.g., a “Fixed Rate Borrowing” is a
Euro-Currency Borrowing or a Competitive Bid Borrowing (excluding any such
Borrowing consisting of Competitive Bid LIBOR Loans bearing interest at the
Base Rate pursuant to Section 8.01), and a “Euro-Currency Borrowing” is a
Borrowing comprised of Euro-Currency Loans), or (b) by reference to the
provisions of Article 2 under which participation therein is determined (i.e., a “Committed Borrowing” is a Borrowing under Section 2.01 in
which all Lenders participate in proportion to their Commitments, while a “Competitive Bid Borrowing” is a
Borrowing under Section 2.03 in which the Lender participants are
determined on the basis of their bids in accordance therewith).

 

ARTICLE
2

THE CREDITS

 

Section 2.01.  Commitments To Lend.  (a) During the Revolving
Credit Period, each Lender severally agrees, on the terms and conditions set
forth in this Agreement, to make Loans denominated in Dollars or in an
Alternative Currency 

 

19

 

to any Borrower pursuant to this Section 2.01(a) from
time to time in amounts such that (i) such Lender’s Outstanding Committed
Amount shall not exceed the amount of its Commitment, (ii) the Total
Outstanding Amount shall not exceed the aggregate amount of the Commitments and
(iii) the sum of the aggregate Dollar Amount of the aggregate principal
amount of all outstanding Committed Alternative Currency Loans plus the
aggregate Dollar Amount of the aggregate Letter of Credit Liabilities for
Letters of Credit in an Alternative Currency shall not exceed the Alternative
Currency Sublimit.  Each Borrowing under
this Section 2.01(a) shall be (x) in the case of a
Dollar-Denominated Borrowing, in a minimum aggregate Dollar Amount of
$20,000,000 and any larger multiple of $1,000,000 and (y) in the case of
an Alternative Currency Borrowing, in a minimum aggregate Dollar Amount of
$5,000,000 and in integral multiples of 500,000 units of the applicable
Alternative Currency (except that any such Borrowing may be in the aggregate
amount available in accordance with this Section 2.01(a) and Section 3.02)
and shall be made from the several Lenders ratably in proportion to their
respective Available Commitments.

 

(b)        Within the foregoing limits, any Borrower may borrow under
this Section, repay, or to the extent permitted by Section 2.12, prepay
Loans and reborrow at any time during the Revolving Credit Period under this
Section.

 

Section 2.02.  Notice of Committed
Borrowing.   A Borrower shall give the Applicable Agent
notice (a “Notice of Committed Borrowing”)
not later than 10:30 A.M. (New York City time)(or 10:30 A.M. (London
time) in the case of Alternative Currency Borrowing) on (x) the date of
each Base Rate Borrowing, (y) the third Euro-Dollar Business Day before
each Euro-Dollar Borrowing and (z) the third Euro-Currency Business Day
before (or, solely in the case of Alternative Currency Borrowings denominated
in Sterling, telephonic notice (such telephonic notice to be confirmed promptly
in writing) not later than 5:00 A.M. (New York City time) on the
Euro-Currency Business Day of) each Alternative Currency Borrowing, specifying:

 

(i)           the
date of such Borrowing, which shall be a Domestic Business Day in the case of a
Base Rate Borrowing or a Euro-Currency Business Day in the case of a
Euro-Currency Borrowing;

 

(ii)          the
currency and the aggregate amount in the relevant currency and the Dollar
Amount of such Borrowing; provided
that if no currency is specified with respect to any requested Borrowing, then
the Borrower shall be deemed to have selected Dollars;

 

(iii)         in
the case of Committed Dollar Loans, whether the Loans comprising such Borrowing
are to bear interest initially at the Base Rate or a Euro-Currency Rate; and

 

20

 

 

(iv)                         in the case of a
Euro-Currency Borrowing, the duration of the initial Interest Period applicable
thereto, subject to the provisions of the definition of Interest Period, and,
in the case of an Alternative Currency Borrowing, the location from which payments
of the principal and interest on such Alternative Currency Borrowing will be
made, which will comply with the requirements of Section 2.14.

 

Section 2.03.  Competitive Bid
Borrowings.  (a) The
Competitive Bid Option.  In addition
to Committed Borrowings pursuant to Section 2.01, any Borrower may, as set
forth in this Section, request the Lenders during the Revolving Credit Period
to make offers to make Competitive Bid Loans to such Borrower.  The Lenders may, but shall have no obligation
to, make such offers and a Borrower may, but shall have no obligation to,
accept any such offers in the manner set forth in this Section.

 

(b)                                 Competitive Bid
Quote Request.  When a
Borrower wishes to request offers to make Competitive Bid Loans under this
Section, it shall transmit to the Administrative Agent by telex or facsimile
transmission a Competitive Bid Quote Request substantially in the form of Exhibit B
hereto so as to be received not later than 10:30 A.M. (New York City
time)(or 10:30 A.M. (London time) in the case of a proposed Alternative
Currency Borrowing) on (x) the fourth Euro-Dollar Business Day prior to
the date of Borrowing proposed therein (or in the case of an Alternative
Currency Borrowing, the fourth Eurocurrency Business Day), in the case of a
LIBOR Auction or (y) the Business Day prior to the date of Borrowing
proposed therein, in the case of an Absolute Rate Auction (or, in either case,
such other time or date as such Borrower and the Administrative Agent shall
have mutually agreed and shall have notified to the Lenders not later than the
date of the Competitive Bid Quote Request for the first LIBOR Auction or
Absolute Rate Auction for which such change is to be effective) specifying:

 

(i)                                the proposed date of
Borrowing, which shall be a Euro-Dollar Business Day (or in the case of an
Alternative Currency Borrowing, a Eurocurrency Business Day) in the case of a
LIBOR Auction or a Domestic Business Day in the case of an Absolute Rate
Auction in dollars,

 

(ii)                             the proposed currency of
such Borrowing,

 

(iii)                          the aggregate amount of such
Borrowing, which shall be (x) in the case of a Dollar-Denominated
Borrowing, in a minimum aggregate Dollar Amount of $20,000,000 and any larger
multiple of $1,000,000 and (y) in the case of an Alternative Currency Borrowing,
in a minimum aggregate Dollar Amount of $5,000,000 and in integral multiples of
500,000 units of the applicable Alternative Currency,

 

(iv)                         the duration of the Interest
Period applicable thereto, subject to the provisions of the definition of Interest
Period, and

 

21

 

(v)                            whether the Competitive Bid
Quotes requested are to set forth a Competitive Bid Margin or a Competitive Bid
Absolute Rate.

 

A Borrower may request offers to make
Competitive Bid Loans for more than one Interest Period in a single Competitive
Bid Quote Request.  No Competitive Bid
Quote Request shall be given within four Euro-Dollar Business Days (or such
other number of days as the applicable Borrower and the Administrative Agent may
agree) of any other Competitive Bid Quote Request.

 

(c)                        Invitation for
Competitive Bid Quotes. 
Promptly upon receipt of a Competitive Bid Quote Request, the
Administrative Agent shall send to the Lenders by telex or facsimile
transmission an Invitation for Competitive Bid Quotes substantially in the form
of Exhibit C hereto, which shall constitute an invitation by the
applicable Borrower to each Lender to submit Competitive Bid Quotes offering to
make the Competitive Bid Loans to which such Competitive Bid Quote Request
relates in accordance with this Section.

 

(d)                       Submission and
Contents of Competitive Bid Quotes.  (i) Each Lender may submit a Competitive
Bid Quote containing an offer or offers to make Competitive Bid Loans in
response to any Invitation for Competitive Bid Quotes.  Each Competitive Bid Quote must comply with
the requirements of this subsection (d) and must be submitted to the
Administrative Agent by telex or facsimile transmission at its offices
specified in or pursuant to Section 10.01 not later than (x) 9:30 A.M.
(New York City time)(or 9:30 A.M. (London time) in the case of an
Alternative Currency Borrowing) on the third Euro-Dollar Business Day prior to
the proposed date of Borrowing (or in the case of an Alternative Currency
Borrowing, the third Eurocurrency Business Day), in the case of a LIBOR Auction
or (y) 9:30 A.M. (New York City time) (or 9:30 A.M. (London
time) in the case of an Alternative Currency Borrowing) on the proposed date of
Borrowing, in the case of an Absolute Rate Auction (or, in either case, such
other time or date as the applicable Borrower and the Administrative Agent
shall have mutually agreed and shall have notified to the Lenders not later
than the date of the Competitive Bid Quote Request for the first LIBOR Auction
or Absolute Rate Auction for which such change is to be effective); provided that Competitive Bid Quotes
submitted by the Administrative Agent (or any affiliate of the Administrative
Agent) in the capacity of a Lender may be submitted, and may only be submitted,
if the Administrative Agent or such affiliate notifies the Borrower of the
terms of the offer or offers contained therein not later than (x) one hour
prior to the deadline for the other Lenders, in the case of a LIBOR Auction or (y) 15
minutes prior to the deadline for the other Lenders, in the case of an Absolute
Rate Auction.  Subject to Articles 3 and
6, any Competitive Bid Quote so made shall be irrevocable except with the
written consent of the Administrative Agent given on the instructions of the
applicable Borrower.

 

(ii)                             Each Competitive Bid Quote
shall be substantially in the form of Exhibit D hereto and shall in any
case specify:

 

22

 

(A)                              the proposed date of
Borrowing,

 

(B)                                the principal amount of the
Competitive Bid Loan for which each such offer is being made, which principal
amount (w) may be greater than or less than the Commitment of the quoting
Lender, (x) must be (1) in the case of a Dollar-Denominated
Borrowing, $5,000,000 or a larger multiple of $1,000,000 and (2) in the
case of an Alternative Currency Borrowing, $500,000 or an integral multiple of
500,000 units of the applicable Alternative Currency, (y) may not exceed
the principal amount of Competitive Bid Loans for which offers were requested
and (z) may be subject to an aggregate limitation as to the principal
amount of Competitive Bid Loans for which offers being made by such quoting
Lender may be accepted,

 

(C)                                in the case of a LIBOR
Auction, the margin above or below the applicable London Interbank Offered Rate
(the “Competitive Bid Margin”)
offered for each such Competitive Bid Loan, expressed as a percentage
(specified to the nearest 1/10,000th of 1%) to be added to or subtracted from
such base rate,

 

(D)                               in the case of an Absolute
Rate Auction, the rate of interest per annum (specified to the nearest
1/10,000th of 1%) (the “Competitive Bid
Absolute Rate”) offered for each such Competitive Bid Loan, and

 

(E)                                 the identity of the quoting
Lender.

 

A Competitive Bid Quote may set forth up to
five separate offers by the quoting Lender with respect to each Interest Period
specified in the related Invitation for Competitive Bid Quotes.

 

(iii)                          Any Competitive Bid Quote
shall be disregarded if it:

 

(A)                              is not substantially in
conformity with Exhibit D hereto or does not specify all of the
information required by subsection (d)(ii) above;

 

(B)                                contains qualifying,
conditional or similar language;

 

(C)                                proposes terms other than or
in addition to those set forth in the applicable Invitation for Competitive Bid
Quotes; or

 

23

 

(D)                               arrives after the time set
forth in subsection (d)(i).

 

(e)                        Notice to
Borrower.  The
Administrative Agent shall promptly notify the applicable Borrower of the terms
(x) of any Competitive Bid Quote submitted by a Lender that is in
accordance with subsection (d) and (y) of any Competitive Bid Quote
that amends, modifies or is otherwise inconsistent with a previous Competitive
Bid Quote submitted by such Lender with respect to the same Competitive Bid
Quote Request.  Any such subsequent
Competitive Bid Quote shall be disregarded by the Administrative Agent unless
such subsequent Competitive Bid Quote is submitted solely to correct a manifest
error in such former Competitive Bid Quote. 
The Administrative Agent’s notice to the applicable Borrower shall
specify (A) the aggregate principal amount of Competitive Bid Loans for
which offers have been received for each Interest Period specified in the
related Competitive Bid Quote Request, (B) the respective principal
amounts and Competitive Bid Margins or Competitive Bid Absolute Rates, as the
case may be, so offered and (C) if applicable, limitations on the
aggregate principal amount of Competitive Bid Loans for which offers in any
single Competitive Bid Quote may be accepted.

 

(f)                          Acceptance and
Notice by Borrower.  Not later
than 10:30 A.M. (New York City time) (or 10:30 A.M. (London time) in
the case of an Alternative Currency Borrowing) on (x) the third
Euro-Dollar Business Day prior to the proposed date of Borrowing (or in the
case of an Alternative Currency Borrowing, the third Eurocurrency Business
Day), in the case of a LIBOR Auction or (y) the proposed date of
Borrowing, in the case of an Absolute Rate Auction (or, in either case, such
other time or date as the Borrower and the Administrative Agent shall have
mutually agreed and shall have notified to the Lenders not later than the date
of the Competitive Bid Quote Request for the first LIBOR Auction or Absolute
Rate Auction for which such change is to be effective), the applicable Borrower
shall notify the Administrative Agent of its acceptance or non-acceptance of
the offers so notified to it pursuant to subsection (e).  In the case of acceptance, such notice (a “Notice of Competitive Bid Borrowing”) shall
specify the aggregate principal amount of offers for each Interest Period that
are accepted.  The applicable Borrower
may accept any Competitive Bid Quote in whole or in part; provided that:

 

(i)                                the aggregate principal
amount of each Competitive Bid Borrowing may not exceed the applicable amount
set forth in the related Competitive Bid Quote Request;

 

(ii)                             the principal amount of each
Competitive Bid Borrowing must be (x) in the case of a Dollar-Denominated
Borrowing, in a minimum aggregate Dollar Amount of $20,000,000 and any larger
multiple of $1,000,000 and (y) in the case of an Alternative Currency
Borrowing, in a minimum aggregate Dollar Amount of $5,000,000 and in integral
multiples of 500,000 units of the applicable Alternative Currency;

 

24

 

(iii)                          acceptance of offers may
only be made on the basis of ascending Competitive Bid Margins or Competitive
Bid Absolute Rates, as the case may be; and

 

(iv)                         the applicable Borrower may
not accept any offer that is described in subsection (d)(iii) or that
otherwise fails to comply with the requirements of this Agreement.

 

(g)                       Allocation by
Administrative Agent.  If offers
are made by two or more Lenders with the same Competitive Bid Margins or
Competitive Bid Absolute Rates, as the case may be, for a greater aggregate
principal amount than the amount in respect of which such offers are accepted
for the related Interest Period, the principal amount of Competitive Bid Loans
in respect of which such offers are accepted shall be allocated by the
Administrative Agent among such Lenders as nearly as possible (as the
Administrative Agent may deem appropriate) in proportion to the aggregate
principal amounts of such offers. 
Determinations by the Administrative Agent of the amounts of Competitive
Bid Loans shall be conclusive in the absence of manifest error.

 

Section 2.04.  Notice To Lenders; Funding of
Loans.  (a) Upon receipt
of a Notice of Borrowing, the Applicable Agent shall promptly notify each
Lender of the contents thereof and of such Lender’s share (if any) of such
Borrowing and such Notice of Borrowing shall not thereafter be revocable by the
applicable Borrower.

 

(b)                  On the date of each
Borrowing, each Lender participating therein shall (except as provided in
subsection (c) of this Section):

(1)                             if such
Borrowing is to be made in dollars, make available its share of such Borrowing
in dollars not later than 12:00 Noon (New York City time), in Federal or other
funds immediately available in New York City, to the Administrative Agent at
its office specified in or pursuant to Section 10.01; or

 

(2)                             if such
Borrowing is to be made in an Alternative Currency, make available its share of
such Borrowing in such Alternative Currency (in such funds as may then be
customary for the settlement of international transactions in such Alternative
Currency) to the account of the Applicable Agent at such time and place as
shall have been notified by the Applicable Agent to the Lenders by at least three
Euro-Currency Business Days’ notice (or, solely in the case of such Borrowing
denominated in Sterling, by telephonic notice on the Euro-Currency Business Day
of the date of such Borrowing, such notice to be promptly confirmed in
writing).

 

25

 

(c)                        Unless the
Applicable Agent shall have received notice from a Lender prior to the date of
any Borrowing that such Lender will not make available to the Applicable Agent
such Lender’s share of such Borrowing, the Applicable Agent may assume that
such Lender has made such share available to the Applicable Agent on the date
of such Borrowing in accordance with subsection (b) of this Section and
the Applicable Agent may, in reliance upon such assumption, make available to
the applicable Borrower on such date a corresponding amount.  If and to the extent that such Lender shall
not have so made such share available to the Applicable Agent, such Lender and
the applicable Borrower severally agree to repay to the Applicable Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to the applicable
Borrower until the date such amount is repaid to the Applicable Agent, at (i) in
the case of the applicable Borrower, a rate per annum equal to the higher of
the Federal Funds Rate and the interest rate applicable thereto pursuant to Section 2.07
and (ii) in the case of such Lender, the Federal Funds Rate (if such
Borrowing is in dollars) or the applicable London Interbank Offered Rate (if
such Borrowing is in an Alternative Currency). 
If such Lender shall repay to the Applicable Agent such corresponding
amount, such amount so repaid shall constitute such Lender’s Loan included in
such Borrowing for purposes of this Agreement.

 

(d)                       Each Lender may, at its option, make any
Loan available to a Borrower that is
organized under the laws of a jurisdiction other than of the United States or a
political subdivision thereof  by causing any foreign or domestic
branch or Affiliate of such Lender to make such Loan; provided that any
exercise of such option shall not affect the obligation of such Borrower to
repay such Loan in accordance with the terms of this Agreement

 

Section 2.05.  Evidence Of Debt.  (a) Each Lender shall
maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of each Borrower to such Lender resulting from each
Loan made by such Lender, including the amounts of principal and interest
payable and paid to such Lender by such Borrower from time to time hereunder.

 

(b)                       The
Administrative Agent shall maintain accounts in which it shall record (i) the
Dollar Amount of each Loan made to a Borrower hereunder, the class, type and,
in the case of any Committed Alternative Currency Loans, currency thereof and
the Interest Period (if any) applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from each
Borrower to each Lender hereunder and (iii) the amount of any sum received
by the Administrative Agent hereunder for the account of the Lenders and each
Lender’s share thereof.

 

(c)                        The entries
made in the accounts maintained pursuant to paragraph (a) or (b) of
this Section shall be prima facie
evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any

 

26

 

Lender or the Administrative
Agent to maintain such accounts or any error therein shall not in any manner
affect the obligation of each Borrower to repay the Lenders in accordance with
the terms of this Agreement.

 

(d)                       Any Lender may
request that Loans made by it be evidenced by a promissory note.  In such event, the applicable Borrower shall
prepare, execute and deliver to such Lender a promissory note payable to the
order of such Lender (or, if requested by such Lender, to such Lender and its
registered assigns) substantially in the form of Exhibit A hereto.  Thereafter, the Loans evidenced by each such
promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 10.06) be represented by one or more
promissory notes in such form payable to the order of the payee named therein
(or, if such promissory note is a registered note, to such payee and its
registered assigns).  Each reference in
this Agreement to the “Note” of
such Lender shall be deemed to refer to and include any or all of such Notes.

 

Section 2.06.  Maturity of Loans.  (a) Each Committed Loan shall
mature, and the principal amount thereof shall be due and payable, together
with accrued interest thereon, on the Termination Date.

 

(b)                       Each
Competitive Bid Loan shall mature, and the principal amount thereof shall be
due and payable, together with accrued interest thereon, on the last day of the
Interest Period applicable to such Loan.

 

Section 2.07.  Interest Rates.  (a) Each Base Rate Loan shall
bear interest on the outstanding principal amount thereof, for each day from
the date such Loan is made until it becomes due, at a rate per annum equal to
the Base Rate for such day.  Such
interest shall be payable quarterly in arrears on each Quarterly Date and, with
respect to the principal amount of any Base Rate Loan converted to a Euro-Dollar
Loan, on each date a Base Rate Loan is so converted. Any overdue principal of
or interest on any Base Rate Loan shall bear interest, payable on demand, for
each day until paid at a rate per annum equal to the sum of 2% plus the rate
otherwise applicable to Base Rate Loans for such day.

 

(b)                       Each
Euro-Currency Loan shall bear interest on the outstanding principal amount
thereof, for each day during the Interest Period applicable thereto, at a rate
per annum equal to the sum of the Euro-Currency Margin plus the London
Interbank Offered Rate applicable to such Interest Period.  Such interest shall be payable for each
Interest Period on the last day thereof and, if such Interest Period is longer
than three months, at intervals of three months after the first day of such
Interest Period.

 

The “London Interbank Offered
Rate” applicable to any Interest Period means the rate appearing on “Page BBAM 1” on
the Bloomberg Service (or on any successor or substitute page of
such Service, or any successor to or substitute for such Service, providing
rate quotations comparable to those currently

 

27

 

provided on such page of such Service,
as determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to deposits in the relevant
currency in the London interbank market) at approximately 11:00 a.m.,
London time, two Business Days before the beginning (or, solely in the case of
Borrowings denominated in Sterling, on the first day) of such Interest Period,
as the rate for deposits in the relevant currency with a maturity comparable to
such Interest Period.  If such rate is
not available at such time for any reason, then the “London
Interbank Offered Rate” with respect to such Interest Period shall
be the average (rounded upward, if necessary, to the next higher 1/16 of 1%) of
the respective rates per annum at which deposits in the relevant currency are
offered to each of the Reference Banks in the London interbank market at
approximately 11:00 A.M. (London time) on the Rate Fixing Date in an
amount approximately equal to the principal amount of the Euro-Currency Loan of
such Reference Bank to which such Interest Period is to apply and for a period
of time comparable to such Interest Period.

 

(c)                        Any overdue
principal of or interest on any Euro-Currency Loan shall bear interest, payable
on demand, for each day until paid at a rate per annum equal to the higher of (i) the
sum of 2% plus the Euro-Currency Margin plus the London Interbank Offered Rate
applicable to the Interest Period for such Loan and (ii) the sum of 2%
plus the Euro-Currency Margin plus the average (rounded upward, if necessary,
to the next higher 1/16 of 1%) of the respective rates per annum at which one
day (or, if such amount due remains unpaid more than three Euro-Currency
Business Days, then for such other period of time not longer than three months
as the Administrative Agent may select) deposits in the relevant currency in an
amount approximately equal to such overdue payment due to each of the Reference
Banks are offered to such Reference Bank in the London interbank market for the
applicable period determined as provided above (or, if the circumstances
described in clause (a) or (b) of Section 8.01 shall exist, at a
rate per annum equal to the sum of 2% plus the rate applicable to Base Rate
Loans for such day).

 

(d)                       Subject to Section 8.01,
each Competitive Bid LIBOR Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a rate
per annum equal to the sum of the London Interbank Offered Rate for such
Interest Period (determined in accordance with Section 2.07(b) as if
the related Competitive Bid LIBOR Borrowing were a Committed Euro-Dollar
Borrowing) plus (or minus) the Competitive Bid Margin quoted by the Lender
making such Loan in accordance with Section 2.03.  Each Competitive Bid Absolute Rate Loan shall
bear interest on the outstanding principal amount thereof, for the Interest
Period applicable thereto, at a rate per annum equal to the Competitive Bid
Absolute Rate quoted by the Lender making such Loan in accordance with Section 2.03.  Such interest shall be payable for each
Interest Period on the last day thereof and, if such Interest Period is longer
than three months, at intervals of three months after the first day thereof.

 

28

 

(e)                        Any overdue
principal of or interest on any Competitive Bid Loan shall bear interest,
payable on demand, for each day until paid at a rate per annum equal to the sum
of 2% plus the Base Rate for such day.

 

(f)                          The
Administrative Agent shall determine each interest rate applicable to the Loans
hereunder.  The Administrative Agent
shall give prompt notice to the applicable Borrower and the participating
Lenders of each rate of interest so determined, and its determination thereof
shall be conclusive in the absence of manifest error.

 

(g)                       Each Reference
Bank agrees to use its best efforts to furnish quotations to the Administrative
Agent as contemplated by this Section. 
If any Reference Bank does not furnish a timely quotation, the
Administrative Agent shall determine the relevant interest rate on the basis of
the quotation or quotations furnished by the remaining Reference Bank or Banks
or, if none of such quotations is available on a timely basis, the provisions
of Section 8.01 shall apply.

 

Section 2.08.  Fees.  (a) The Company shall pay to
the Administrative Agent for the account of the Lenders ratably a facility fee
(the “Facility Fee”), which shall accrue at
the Facility Fee Rate (i) from and including the Effective Date to but
excluding the date of termination of the Commitments in their entirety, on the
average daily aggregate amount of the Commitments (whether used or unused) and (ii) from
and including such date of termination to but excluding the date the Loans
shall be repaid in their entirety, on the average daily aggregate outstanding
principal Dollar Amount of the Loans.

 

(b)                       The Company
shall pay to the Administrative Agent (i) for the account of the Lenders
ratably a letter of credit fee in Dollars accruing daily on the aggregate
Dollar Amount of all outstanding Letters of Credit at the Letter of Credit Fee
Rate (determined daily in accordance with the Pricing Schedule) and (ii) for
the account of the Issuing Lender a letter of credit fronting fee accruing
daily on the aggregate Dollar Amount of all Letters of Credit issued by the
Issuing Lender at a rate per annum mutually agreed from time to time by the
Company and the Issuing Lender.  The
Company shall also pay to the Issuing Lender for its own account issuance,
drawing, amendment and extension charges in the amounts and at the times as
agreed between the Company and the Issuing Lender.

 

(c)                        Accrued fees
under this Section shall be payable quarterly in arrears on each Quarterly
Date and on the date of termination of the Commitments in their entirety (and,
in the case of clause (a), if later, the date the Loans shall be repaid in
their entirety and, in the case of clause (b), if later, the date on which all
Letters of Credit shall have been terminated).

 

Section 2.09.  Optional Termination or
Reduction of Commitments.  During
the Revolving Credit Period, the Company may, upon at least three

 

29

 

Domestic Business Days’ notice to the
Administrative Agent, (i) terminate the Commitments at any time, if no
Loans or Letter of Credit Liabilities are outstanding at such time or (ii) ratably
reduce from time to time by an aggregate amount of $20,000,000 or a larger
multiple of $1,000,000, the aggregate amount of the Commitments in excess of
the Total Outstanding Amount.

 

Section 2.10.  Method of Electing Interest
Rates.  (a) The Committed
Dollar Loans included in each Committed Borrowing shall bear interest initially
at the type of rate specified by the applicable Borrower in the applicable
Notice of Committed Dollar Borrowing. 
Thereafter, the applicable Borrower may from time to time elect to
change or continue the type of interest rate borne by each Group of Committed
Dollar Loans (subject in each case to Section 2.07(c) and the
provisions of Article 8 and the last sentence of this subsection (a)), as
follows:

 

(i)                                if such Loans are Base Rate
Loans, the applicable Borrower may elect to convert such Loans to Euro-Dollar
Loans as of any Euro-Dollar Business Day; and

 

(ii)                             if such Loans are
Euro-Dollar Loans, the applicable Borrower may elect to convert such Loans to
Base Rate Loans as of any Domestic Business Day, or elect to continue such
Loans as Euro-Dollar Loans for an additional Interest Period as of any
Euro-Dollar Business Day, subject to Section 2.15 in the case of any such
conversion or continuation effective on any day other than the last day of the
then current Interest Period applicable to such Loans.

 

Each such election shall be made by delivering a
notice (a “Notice of Interest Rate Election”)
to the Administrative Agent not later than 10:00 A.M. (New York City time)
on the third Euro-Dollar Business Day (or in the case of an Alternative Currency
Borrowing, the third Eurocurrency Business Day) before the conversion or
continuation selected in such notice is to be effective.  A Notice of Interest Rate Election may, if it
so specifies, apply to only a portion of the aggregate principal Dollar Amount
of the relevant Group of Loans; provided
that (i) such portion is allocated ratably among the Loans comprising such
Group and (ii) the portion to which such Notice applies, and the remaining
portion to which it does not apply, are each (x) in the case of a
Dollar-Denominated Borrowing, $20,000,000 or any larger multiple of $1,000,000
and (y) in the case of an Alternative Currency Borrowing, $5,000,000 or an
integral multiple of 500,000 units of the applicable Alternative Currency.  If no Notice of Interest Rate Election is
timely delivered prior to the end of an Interest Period for any Euro-Dollar
Loan, the Borrower shall be deemed to have elected that all Loans having such
Interest Period shall be converted to Base Rate Loans effective as of the last
day of such Interest Period.

 

(b)                       Each Notice of
Interest Rate Election shall specify:

 

30

 

 

(i)                                the Group of Loans (or
portion thereof) to which such notice applies;

 

(ii)                             the date on which the
conversion or continuation selected in such notice is to be effective, which
shall comply with the applicable clause of subsection (a) above;

 

(iii)                          if the Loans comprising such
Group are to be converted, the new type of Loans and, if the Loans being
converted are to be Euro-Dollar Loans, the duration of the next succeeding
Interest Period applicable thereto; provided
that, if at the time such notice is delivered an Event of Default has occurred
and is continuing, the duration of the Interest Period with respect to any
Euro-Dollar Loans to which such notice applies shall be one month; and

 

(iv)                         if such Loans are to be
continued as Euro-Dollar Loans for an additional Interest Period, the duration
of such additional Interest Period; provided
that, if at the time such notice is delivered an Event of Default has occurred
and is continuing, the duration of the Interest Period with respect to any
Euro-Dollar Loans to which such notice applies shall be one month.

 

Each Interest Period specified in a Notice of
Interest Rate Election shall comply with the provisions of the definition of
Interest Period.

 

(c)                        Upon receipt of
a Notice of Interest Rate Election from the applicable Borrower pursuant to
subsection (a) above, the Administrative Agent shall promptly notify each
Lender of the contents thereof and such notice shall not thereafter be
revocable by such Borrower.

 

(d)                       A Borrower
shall not be entitled to elect to convert any Committed Dollar Loans to, or
continue any Committed Dollar Loans for an additional Interest Period as,
Euro-Dollar Loans, in each case made to it, if a Default shall have occurred
and be continuing when such Borrower delivers notice of such election to the
Administrative Agent.

 

(e)                        An election by
any Borrower to change or continue the rate of interest applicable to any Group
of Loans pursuant to this Section shall not constitute a “Borrowing” subject to the provisions of Section 3.02.

 

(f)                          The initial
Interest Period for each Group of Committed Alternative Currency Loans shall be
specified by the applicable Borrower in the applicable Notice of
Borrowing.  The applicable Borrower may
specify the duration of each subsequent Interest Period applicable to such
Group of Loans by delivering to the Administrative Agent, not later than 10:30 A.M.
(London time) on the third Euro-Currency Business Day before the end of the
immediately preceding Interest

 

31

 

Period, a notice specifying
the Group of Loans to which such notice applies and the duration of such
subsequent Interest Period (which shall comply with the provisions of the
definition of Interest Period).  Such notice
may, if it so specifies, apply to only a portion of the aggregate principal
amount of the relevant Group of Loans; provided
that (i) such portion is allocated ratably among the Loans comprising such
Group and (ii) the Dollar Amounts of the portion to which such notice
applies, and the remaining portion to which it does not apply, are each at
least $5,000,000 and shall be in integral multiples of 500,000 units of the
relevant Alternative Currency.  If no
such notice is timely received by the Administrative Agent before the end of
any applicable Interest Period, the applicable Borrower shall be deemed to have
elected that the subsequent Interest Period for such Group of Loans shall have
a duration of one month (subject to the provisions of the definition of
Interest Period).

 

Section 2.11.  Mandatory Termination of
Commitments.  Unless
previously terminated, the Commitments shall terminate on the Termination Date
and any Loans then outstanding (together with accrued interest thereon) shall
be due and payable on such date.

 

Section 2.12.  Optional Prepayments.  (a)  Subject in the case of
any Fixed Rate Borrowing to Section 2.15, each Borrower may, upon at least
one Domestic Business Day’s notice to the Administrative Agent, prepay any Base
Rate Borrowing (or any Competitive Bid Borrowing bearing interest at the Base
Rate pursuant to Section 8.01) made to it or upon at least three
Euro-Currency Business Days’ notice to the Administrative Agent and the
Applicable Agent (if different), prepay any Euro-Currency Borrowing made to it,
in each case in whole at any time, or from time to time in part in an aggregate
Dollar Amount not less than $20,000,000 or in the case of any Loan denominated
in dollars, any larger multiple of $1,000,000, or in the case of any Committed
Alternative Currency Loan in an aggregate Dollar Amount not less than
$5,000,000 or any larger integral multiple of 500,000 units of the relevant
Alternative Currency, by paying (in the relevant currency) the principal Dollar
Amount to be prepaid together with accrued interest thereon to the date of
prepayment.  Each such optional
prepayment shall be applied to prepay ratably the Loans of the several Lenders
included in such Borrowing.

 

(b)                       A Borrower may
not prepay all or any portion of the principal amount of any Competitive Bid
Loan made to it prior to the maturity thereof except (i) as provided in
subsection (a) above or (ii) with respect to any particular
Competitive Bid Loan, as agreed upon between the Lender making such Loan and
such Borrower so long as at the time such Borrower makes such prepayment no
Default has occurred and is continuing.

 

(c)                        Upon receipt of
a notice of prepayment pursuant to this Section, the Administrative Agent shall
promptly notify each Lender of the contents thereof

 

32

 

and of such Lender’s ratable
share (if any) of such prepayment and such notice shall not thereafter be
revocable by the applicable Borrower.

 

Section 2.13.  Determining Dollar Amounts of
Committed Alternative Currency Loans; Related Mandatory Prepayments.  (a)   The
Administrative Agent shall determine the Dollar Amount of each Committed
Alternative Currency Loan promptly after it receives the related Notice of
Committed Borrowing, based on the Exchange Rate on the third Euro-Currency
Business Day before (or, solely in the case of Alternative Currency Borrowings
denominated in Sterling, on) the date of Borrowing specified in such
notice.  Thereafter, the Administrative
Agent shall redetermine the Dollar Amount of each Committed Alternative
Currency Loan on the last Euro-Currency Business Day of each calendar month
while such Loan remains outstanding, based in each case on the Exchange Rate on
such Euro-Currency Business Day.  The
Administrative Agent shall promptly notify the applicable Borrower and the
participating Lenders of each Dollar Amount so determined, and its
determination thereof shall be conclusive in the absence of manifest error.

 

(b)                       The
Administrative Agent shall determine the Dollar Amount of the Letter of Credit
Liabilities related to each Letter of Credit promptly after it receives the
related Notice of Issuance, based on the Exchange Rate on the third
Euro-Currency Business Day before (or, solely in the case of a Letter of Credit
denominated in Sterling, on) the date of issuance specified in such
notice.  Thereafter, the Administrative
Agent shall redetermine the Dollar Amount of each Letter of Credit on the last
Euro-Currency Business Day of each calendar month while such Letter of Credit
remains outstanding, based in each case on the Exchange Rate on such
Euro-Currency Business Day.  The
Administrative Agent shall promptly notify the applicable Borrower and the
participating Lenders of each Dollar Amount so determined, and its
determination thereof shall be conclusive in the absence of manifest error.

 

(c)                        If, (i) on
the last day of any Interest Period for any Borrowing, the Total Outstanding
Amount at such time exceeds the aggregate amount of Commitments, the relevant
Borrower shall, on such day, prepay Committed Loans included in such Borrowing
in an amount equal to the lesser of (x) such excess and (y) the
amount of such Borrowing and (ii) on the last day of any Interest Period
for any Committed Alternative Currency Borrowing, the Dollar Amount of the
aggregate principal amount of outstanding Alternative Currency Loans exceeds
the Alternative Currency Sublimit, the relevant Borrower shall, on such date,
prepay Committed Alternative Currency Loans included in such Borrowing in an
amount equal to the lesser of (x) such excess and (y) the amount of
such Borrowing.

 

(d)                       If, on the last
Euro-Currency Business Day of any calendar month, after any redetermination of
the Dollar Amounts pursuant to Section 2.13(a), the Total Outstanding
Amount at such time exceeds 105% of the aggregate amount of

 

33

 

Commitments, then the
Borrowers shall, on the last Euro-Currency Business Day of the next calendar
month (the “Prepayment Date”),
prepay one or more Groups of Borrowings in an aggregate principal amount equal
to the excess, if any, of the Total Outstanding Amount as of such Prepayment
Date over the then outstanding Commitments.

 

(e)                        If, on the last
Euro-Currency Business Day of any calendar month, after any redetermination of
the Dollar Amounts pursuant to Section 2.13(a), the aggregate Dollar
Amount of the aggregate Committed Alternative Currency Loans exceeds 105% of
the Alternative Currency Sublimit, then the Borrowers shall, on the Prepayment
Date, prepay one or more Groups of Borrowings in an aggregate principal amount
equal to the excess, if any, of the aggregate Dollar Amount of the aggregate
Committed Alternative Currency Loans as of such Prepayment Date over the
Alternative Currency Sublimit.

 

Section 2.14.  General Provisions as to
Payments.  (a)  Each
Borrower shall make each payment of principal of, and interest on, the Loans
and Letter of Credit Liabilities denominated in Dollars and of fees hereunder,
not later than 12:00 Noon (New York City time) on the date when due, in Federal
or other funds immediately available in New York City, without defense, set-off
or counterclaim and free of any restriction or condition, to the Administrative
Agent at its address referred to in Section 10.01.  Each Borrower shall make each payment of
principal of, and interest on, the Committed Alternative Currency Loans in the
relevant Alternative Currency in such funds as may then be customary for the
settlement of international transactions in such Alternative Currency, to such
account and at such time and at such place as shall have been notified by the
Applicable Agent to such Borrower and the Lenders by at least three
Euro-Currency Business Days’ notice (or, solely in the case of Alternative
Currency Borrowings denominated in Sterling, by at least one Euro-Currency
Business Days’ notice).  The Borrower may
specify in any notice delivered to the Administrative Agent and the Applicable
Agent with respect to any Alternative Currency, one or more locations from
which such Borrower may make payments of principal or of interest on any
Committed Alternative Currency Loan in such Alternative Currency; provided that the Administrative Agent
approve such location.  The Applicable
Agent will promptly distribute to each Lender its ratable share of each such
payment received by the Administrative Agent for the account of the
Lenders.  Whenever any payment of
principal of, or interest on, the Base Rate Loans, Letter of Credit Liabilities
denominated in Dollars or of fees shall be due on a day which is not a Domestic
Business Day, the date for payment thereof shall be extended to the next
succeeding Domestic Business Day. 
Whenever any payment of principal of, or interest on, the Euro-Currency
Loans shall be due on a day which is not a Euro-Currency Business Day, the date
for payment thereof shall be extended to the next succeeding Euro-Currency
Business Day unless such Euro-Currency Business Day falls in another calendar
month, in which case the date for payment thereof shall be the next preceding
Euro-Currency Business

 

34

 

Day. 
Whenever any payment of principal of, or interest on, the Competitive
Bid Loans shall be due on a day which is not a Euro-Dollar Business Day, the
date for payment thereof shall be extended to the next succeeding Euro-Dollar
Business Day.  Whenever any payment of
principal of or interest on Letter of Credit Liabilities denominated in an
Alternative Currency shall be due on a day which is not a Euro-Currency
Business Day, the date for payment thereof shall be extended to the next
succeeding Euro-Currency Business Day. 
If the date for any payment of principal is extended by operation of law
or otherwise, interest thereon shall be payable for such extended time.

 

(b)                       Unless the
Administrative Agent shall have received notice from a Borrower prior to the
date on which any payment is due to the Lenders hereunder that such Borrower
will not make such payment in full, the Administrative Agent may assume that
such Borrower has made such payment in full to the Administrative Agent on such
date and the Administrative Agent may, in reliance upon such assumption, cause
to be distributed to each Lender on such due date an amount equal to the amount
then due such Lender.  If and to the
extent that such Borrower shall not have so made such payment, each Lender
shall repay to the Administrative Agent forthwith on demand such amount
distributed to such Lender together with interest thereon, for each day from
the date such amount is distributed to such Lender until the date such Lender
repays such amount to the Administrative Agent, at the Federal Funds Rate (if
such amount was distributed in dollars) or (ii) the rate per annum at
which one-day deposits in the relevant currency are offered to the
Administrative Agent in the London interbank market for such day (if such
amount was distributed in an Alternative Currency).

 

Section 2.15.  Funding Losses.  If a Borrower makes any payment of
principal with respect to any Fixed Rate Loan, any Fixed Rate Loan is converted
(pursuant to Article 2, 6 or 8 or otherwise) or continued on any day other
than the last day of an Interest Period applicable thereto, or the last day of
an applicable period fixed pursuant to Section 2.07(c), or if any
Committed Alternative Currency Loan is converted to a Loan denominated in
dollars pursuant to Article 8, or if a Borrower fails to borrow, prepay,
convert or continue any Fixed Rate Loans after notice has been given to any
Lender in accordance with Section 2.04(a), 2.12(a) or Section 2.10,
respectively, such Borrower shall reimburse each Lender within 15 days after
demand for any resulting loss or expense incurred by it (or by an existing or
prospective Participant in the related Loan), including (without limitation)
any loss incurred in obtaining, liquidating or employing deposits from third
parties, but excluding loss of margin for the period after any such prepayment
or conversion or continuation or failure to borrow, prepay, convert or
continue; provided that such
Lender shall have delivered to such Borrower and the Administrative Agent a
certificate as to the amount of such loss or expense and setting forth the
calculation thereof in reasonable detail, which certificate shall be conclusive
in the absence of manifest error.

 

35

 

Section 2.16.  Computation of Interest and
Fees.  Interest based on the
Prime Rate and, in the case of Committed Alternative Currency Loans denominated
in Sterling, the Euro-Currency Rate hereunder shall be computed on the basis of
a year of 365 days and paid for the actual number of days elapsed (including
the first day but excluding the last day). 
All other interest and fees shall be computed on the basis of a year of
360 days and paid for the actual number of days elapsed (including the first
day but excluding the last day); provided
that if the Administrative Agent reasonably determines that a different basis
of computation is the market convention for a particular Alternative Currency,
such different basis shall be used.

 

Section 2.17.  [Intentionally
Omitted]

 

Section 2.18.  Regulation D
Compensation.  (a)  Each
Lender may require each Borrower to pay, contemporaneously with each payment of
interest on the Euro-Currency Loans, additional interest on the related
Euro-Currency Loan of such Lender at a rate per annum determined by such Lender
up to but not exceeding the excess of (i) (A) the applicable London
Interbank Offered Rate divided by (B) one minus the Euro-Currency Reserve
Percentage over (ii) the applicable London Interbank Offered Rate.  Any Lender wishing to require payment of such
additional interest (x) shall so notify such Borrower and the
Administrative Agent, in which case such additional interest on the
Euro-Currency Loans of such Lender shall be payable to such Lender at the place
indicated in such notice with respect to each Interest Period commencing at
least three Euro-Currency Business Days after the giving of such notice and (y) shall
notify such Borrower at least five Euro-Currency Business Days prior to each date
on which interest is payable on the Euro-Currency Loans of the amount then due
it under this Section.

 

(b)                       If and so long
as any Lender is required to make special deposits with the Bank of England, to
maintain reserve asset ratios or to pay fees in respect of such Lender’s
Euro-Currency Loans, such Lender may require each Borrower to pay,
contemporaneously with each payment of interest on each of such Loans,
additional interest on such Loan at a rate per annum equal to the Mandatory
Costs Rate calculated in accordance with the formula and in the manner set
forth in Exhibit G hereto.

 

(c)                        If and so long
as any Lender is required to comply with reserve assets, liquidity, cash margin
or other requirements of any monetary or other authority (including any such
requirement imposed by the European Central Bank or the European System of
Central Banks, but excluding requirements referred to in subsections (a) and
(b) above) in respect of any of such Lender’s Euro-Currency Loans, such
Lender may require each Borrower to pay, contemporaneously with each payment of
interest on each of such Lender’s Euro-Currency Loans subject to such
requirements, additional interest on such Loan at

 

36

 

a rate per annum specified
by such Lender to be the cost to such Lender of complying with such
requirements in relation to such Loan.

 

(d)                       Any additional
interest owed pursuant to subsection (a), (b) or (c) above shall be
determined by the relevant Lender, which determination shall be conclusive and
binding for all purposes except in the case of manifest error, and notified to
each Borrower (with a copy to the Administrative Agent) at least five
Euro-Currency Business Days before each date on which interest is payable for
the relevant Loan, and such additional interest so notified to such Borrower by
such Lender shall be payable to the Administrative Agent for the account of
such Lender on each date on which interest is payable for such Loan.

 

Section 2.19.  Letters of Credit.  (a) Subject to the terms and
conditions hereof, the Issuing Lender agrees to issue Letters of Credit
hereunder denominated in Dollars or in an Alternative Currency from time to
time until the tenth day prior to the Termination Date upon the request of the
Company for its account or the account of any Subsidiary; provided
that, immediately after each Letter of Credit is issued (i) the Total
Outstanding Amount shall not exceed the aggregate amount of the Commitments, (ii) the
aggregate Dollar Amount of Letter of Credit Liabilities shall not exceed the
Letters of Credit Sublimit and (iii) the sum of the aggregate Dollar
Amount of the aggregate principal amount of all outstanding Committed
Alternative Currency Loans plus the aggregate Dollar Amount of the aggregate
Letter of Credit Liabilities for Letters of Credit in an Alternative Currency
shall not exceed the Alternative Currency Sublimit.  Upon the date of issuance by the Issuing
Lender of a Letter of Credit, the Issuing Lender shall be deemed, without
further action by any party hereto, to have sold to each Lender, and each
Lender shall be deemed, without further action by any party hereto, to have
purchased from the Issuing Lender, a participation in such Letter of Credit and
the related Letter of Credit Liabilities in the proportion their respective
Commitments bear to the aggregate Commitments.

 

(b)                       The Company
shall give the Issuing Lender notice at least (i) five Euro-Currency
Business Days prior to the requested issuance of an Alternative Currency Letter
of Credit and (ii) three Domestic Business Days prior to the requested
issuance of a Dollar Letter of Credit specifying the date such Letter of Credit
is to be issued, and describing the terms of such Letter of Credit, the nature
of the transactions to be supported thereby and the proposed Alternative
Currency of such Letter of Credit (such notice, including any such notice given
in connection with the extension of a Letter of Credit, a “Notice of
Issuance”).  Upon receipt of a
Notice of Issuance, the Issuing Lender shall promptly notify the Administrative
Agent, and the Administrative Agent shall promptly notify each Lender of the
contents thereof and of the amount of such Lender’s participation in such
Letter of Credit.  The issuance by the
Issuing Lender of each Letter of Credit shall, in addition to the conditions
precedent set forth in Article 3, be subject to the conditions precedent
that such Letter of Credit shall be in such form and contain such terms as
shall be satisfactory to the Issuing Lender and that the

 

37

 

Company shall have executed
and delivered such other instruments and agreements relating to such Letter of
Credit as the Issuing Lender shall have reasonably requested.  The extension or renewal of any Letter of
Credit shall be deemed to be an issuance of such Letter of Credit, and if any
Letter of Credit contains a provision pursuant to which it is deemed to be
extended unless notice of termination is given by the Issuing Lender, the
Issuing Lender shall timely give such notice of termination unless it has
theretofore timely received a Notice of Issuance and the other conditions to
issuance of a Letter of Credit have also theretofore been met with respect to
such extension.

 

(c)                        Each Letter of
Credit shall expire at or prior to the close of business on the earlier of (i) the
date one year after the date of the issuance of such Letter of Credit (or, in
the case of any renewal or extension thereof, one year after such renewal or
extension) and (ii) the date that is five Business Days prior to the
Termination Date.

 

(d)                       Upon receipt
from the beneficiary of any Letter of Credit of any notice of a drawing under
such Letter of Credit, the Issuing Lender shall notify the Administrative Agent
and the Administrative Agent shall promptly notify the Company and each other
Lender as to the amount to be paid as a result of such demand or drawing and
the payment date.  The Company shall be
irrevocably and unconditionally obligated forthwith to reimburse the Issuing
Lender for any amounts paid by the Issuing Lender upon any drawing under any
Letter of Credit, in the currency of such payment (a “Reimbursement
Obligation”) without presentment, demand, protest or other
formalities of any kind.  All such
amounts paid by the Issuing Lender and remaining unpaid by the Company shall
bear interest, payable on demand, for each day until paid at a rate per annum
equal to the sum of 2% plus (i) if such amount is denominated in Dollars,
the Base Rate for such day and (ii) if such amount is denominated in an
Alternative Currency, the sum of the Euro-Currency Margin plus the rate per
annum at which one-day deposits in the relevant currency are offered by the
principal London office of the Administrative Agent in the London interbank market
for such day.  In addition, each Lender
will pay to the Administrative Agent, for the account of the Issuing Lender,
immediately upon the Issuing Lender’s demand at any time during the period
commencing after such drawing until reimbursement therefor in full by the
Company, an amount equal to such Lender’s ratable share of such drawing (in
proportion to its participation therein), together with interest on such amount
for each day from the date of the Issuing Lender’s demand for such payment (or,
if such demand is made after 12:00 Noon (New York City time) on such date, from
the next succeeding Domestic Business Day) to the date of payment by such
Lender of such amount at a rate of interest per annum equal to (i) if such
amount is denominated in Dollars, the Federal Funds Rate and (ii) if such
amount is denominated in an Alternative Currency, the rate per annum at which
one-day deposits in the relevant currency are offered by the principal London
office of the Administrative Agent in the London interbank market for such
day.  The Issuing

 

38

 

Lender will pay to each
Lender ratably all amounts received from the Company for application in payment
of its reimbursement obligations in respect of any Letter of Credit, but only
to the extent such Lender has made payment to the Issuing Lender in respect of
such Letter of Credit pursuant hereto.

 

(e)                        The obligations
of the Company and each Lender under subsection 2.19(d) above shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement, under all circumstances
whatsoever, including without limitation the following circumstances:

 

(i)                                the use which may be made of
any Letter of Credit by, or any acts or omission of, a beneficiary of any
Letter of Credit (or any Person for whom the beneficiary may be acting);

 

(ii)                             the existence of any claim,
set-off, defense or other rights that the Company may have at any time against
a beneficiary of a Letter of Credit (or any Person for whom the beneficiary may
be acting), the Lenders (including the Issuing Lender) or any other Person,
whether in connection with this Agreement or the Letter of Credit or any
document related hereto or thereto or any unrelated transaction;

 

(iii)                          any statement or any other
document presented under a Letter of Credit proving to be forged, fraudulent or
invalid in any respect or any statement therein being untrue or inaccurate in
any respect whatsoever;

 

(iv)                         payment under a Letter of
Credit to the beneficiary of such Letter of Credit against presentation to the
Issuing Lender of a draft or certificate that does not comply with the terms of
the Letter of Credit; or

 

(v)                            any other act or omission to
act or delay of any kind by any Lender (including the Issuing Lender), the
Administrative Agent or any other Person or any other event or circumstance
whatsoever that might, but for the provisions of this subsection (v),
constitute a legal or equitable discharge of the Company’s or the Lender’s obligations
hereunder.

 

(f)                          The Company
hereby indemnifies and holds harmless each Lender (including the Issuing
Lender) and the Administrative Agent from and against any and all claims,
damages, losses, liabilities, costs or expenses which such Lender or the Administrative
Agent may incur (including, without limitation, any claims, damages, losses,
liabilities, costs or expenses which the Issuing Lender may incur by reason of
or in connection with the failure of any other Lender to fulfill or comply with
its obligations to the Issuing Lender hereunder (but nothing herein contained
shall affect any rights the Company may have against such defaulting Lender)),
and none of the Lenders (including the Issuing Lender) nor the

 

39

 

Administrative Agent nor any
of their officers or directors or employees or agents shall be liable or
responsible, by reason of or in connection with the execution and delivery or
transfer of or payment or failure to pay under any Letter of Credit, including
without limitation any of the circumstances enumerated in subsection 2.19(e) above,
as well as (i) any error, omission, interruption or delay in transmission
or delivery of any messages, by mail, cable, telegraph, telex or otherwise, (ii) any
loss or delay in the transmission of any document required in order to make a
drawing under a Letter of Credit, and (iii) any consequences arising from
causes beyond the control of the Issuing Lender, including without limitation
any government acts, or any other circumstances whatsoever in making or failing
to make payment under such Letter of Credit; provided
that the Company shall not be required to indemnify the Issuing Lender for any
claims, damages, losses, liabilities, costs or expenses, and the Company shall
have a claim for direct (but not consequential) damage suffered by it, to the
extent found by a court of competent jurisdiction to have been caused by (x) the
willful misconduct or gross negligence of the Issuing Lender in determining
whether a request presented under any Letter of Credit complied with the terms
of such Letter of Credit or (y) the Issuing Lender’s failure to pay under
any Letter of Credit after the presentation to it of a request strictly
complying with the terms and conditions of the Letter of Credit. Nothing in
this Section 2.19(f) is intended to limit the obligations of the
Company under any other provision of this Agreement.  To the extent the Company does not indemnify
the Issuing Lender as required by this subsection, the Lenders agree to do so
ratably in accordance with their Commitments.

 

(g)                       If any Event of
Default shall occur and be continuing, on the day that the Company receives
notice from the Administrative Agent or the Required Lenders demanding the
deposit of cash collateral pursuant to this paragraph, the Company shall
deposit in an account with the Administrative Agent, in the name of the
Administrative Agent and for the benefit of the Lenders, an amount in cash in
the relevant currency equal to the Letter of Credit Liabilities as of such date
plus any accrued and unpaid interest thereon; provided
that the obligation to deposit such cash collateral shall become effective
immediately, and such deposit shall become immediately due and payable, without
demand or other notice of any kind, upon the occurrence of any Event of Default
with respect to the Company described in clause (g) or (clause (h) of
Section 6.01 .  Such deposit shall
be held by the Administrative Agent as collateral for the payment and
performance of the obligations of the Company under this Agreement.  The Administrative Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal, over such
account.  Other than any interest earned
on the investment of such deposits, which investments shall be made at the
option and sole discretion of the Administrative Agent and at the Company’s
risk and expense, such deposits shall not bear interest.  Interest or profits, if any, on such
investments shall accumulate in such account. 
Moneys in such account shall be applied by the Administrative Agent to
reimburse the Issuing Lender for Letter of

 

40

 

Credit Disbursements for
which it has not been reimbursed and, to the extent not so applied, shall be
held for the satisfaction of the reimbursement obligations of the Company for
the Letter of Credit Liabilities at such time or, if the maturity of the Loans
has been accelerated, be applied to satisfy other obligations of the Company
under this Agreement.  If the Company is
required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Company within three Euro-Dollar Business
Days after all Events of Default have been cured or waived.

 

Section 2.20.  Incremental Increase in
Commitments.  (a)  At any
time, if no Event of Default shall have occurred and be continuing, the Company
may, if it so elects but subject to due authorization by all necessary
corporate action, increase the aggregate amount of the Commitments (the “Incremental Commitments”), either by
designating one or more financial institutions not theretofore Lenders to
become a Lender (such designation to be effective only with the prior written
consent of the Administrative Agent, which consent will not be unreasonably
withheld or delayed), or by agreeing with one or more existing Lenders that
such Lender’s Commitment shall be increased. 
The Incremental Commitments shall be treated as Commitments for all
purposes under this Agreement, except as specifically addressed herein.  No Lender shall be obligated to make any
Incremental Commitment unless it shall elect to do so in its sole and absolute
discretion in response to the Company’s request.

 

(b)                       Upon execution
and delivery by the Company and such Lender or other financial institution of
an instrument (the “Incremental Commitment
Notice”) in form reasonably satisfactory to the Administrative Agent
(which instrument shall specify the amount of each Commitment), such existing
Lender shall have a Commitment as therein set forth or such other financial
institution shall become a Lender with a Commitment as therein set forth and
all the rights and obligations of a Lender with such a Commitment hereunder; provided that:

 

(i)                                the Company shall provide
prompt notice of such increase to the Administrative Agent, who shall promptly
notify the Lenders;

 

(ii)                             the amount of such
Incremental Commitment, together with all other increases in the aggregate
amount of the Commitments pursuant to this Section 2.20 since the date of
this Agreement, shall not exceed $250,000,000;

 

(iii)                          the Letter of Credit
Sublimit and Alternative Currency Sublimit shall each be increased by an amount
which bears the same ratio to the Increased Commitments as the Letter of Credit
Sublimit and Alternative Currency Sublimit, respectively, bears to the
aggregate Commitments then existing; and

 

41

 

 

(iv)       after
giving effect to such increase or new Commitment, the amount of the Commitment
of any Lender shall not exceed 20% of the aggregate amount of the Commitments
(excluding, for purposes of this clause (iv), any increase resulting solely
from the merger or the acquisition of one Lender into or by another Lender).

 

ARTICLE
3

CONDITIONS

 

Section 3.01.  Closing.  The closing hereunder shall occur
upon receipt by the Administrative Agent of the following documents, each dated
the Closing Date unless otherwise indicated:

 

(a)        (i) an opinion of Weil, Gotshal & Manges, LLP,
counsel for the Obligors, substantially in the form of Exhibit E-1 hereto
and covering such additional matters relating to the transactions contemplated
hereby as the Required Lenders may reasonably request, and (ii) an opinion
of Baker & McKenzie CVBA/SCRL, Belgium counsel for Estée Lauder NV,
substantially in the form of Exhibit E-2 hereto and covering such
additional matters relating to the transactions contemplated hereby as the
Required Lenders may reasonably request(1);

 

(b)        an advice from the Administrative Agent that it has received
all fees and other amounts due and payable on or prior to the Closing Date,
including reimbursement or payment of all reasonable out-of-pocket expenses to
be reimbursed or paid by the Company;

 

(c)        all documents the Administrative Agent may reasonably request
relating to the existence of each of the Company, the Company Guarantor and
Estée Lauder NV, the corporate authority for and the validity of this Agreement
and the Notes, and any other matters relevant hereto, all in form and substance
satisfactory to the Administrative Agent; and

 

(d)        the Administrative Agent shall have received evidence
reasonably satisfactory to it that all principal of any loans outstanding
under, and all accrued interest and fees under, the Existing Credit Agreement
shall have been paid in full and that the commitments under the Existing Credit
Agreement have been terminated.

 

(1) Baker &
McKenzie — Please furnish draft opinion for review.

 

42

 

The Administrative Agent shall promptly
notify the Company and the Lenders of the Closing Date, and such notice shall
be conclusive and binding on all parties hereto.

 

Section 3.02.  Borrowings and Issuances of
Letters of Credit.  The
obligation of any Lender to make a Loan on the occasion of any Borrowing and
the obligation of the Issuing Lender to issue (or renew or extend the term of )
any Letter of Credit is subject to the satisfaction of the following
conditions:

 

(a)        receipt by the Administrative Agent of a Notice of Borrowing
as required by Section 2.02 or Section 2.03, or receipt by the
Issuing Lender of a Notice of Issuance as required by Section 2.19, as the
case may be;

 

(b)        the fact that, immediately after such Borrowing or issuance
of such Letter of Credit (i) the Total Outstanding Amount will not exceed
the aggregate amount of the Commitments, (ii) the aggregate amount of
Letter of Credit Liabilities will not exceed the Letter of Credit Sublimit, and
(iii) the sum of the aggregate Dollar Amount of the aggregate principal
amount of all outstanding Committed Alternative Currency Loans plus the
aggregate Dollar Amount of the aggregate Letter of Credit Liabilities for
Letters of Credit in an Alternative Currency shall not exceed the Alternative
Currency Sublimit;

 

(c)        the fact that, immediately before and after such Borrowing or
issuance of such Letter of Credit, no Default shall have occurred and be
continuing;

 

(d)        the fact that the representations and warranties of the
Company and the Company Guarantor (and, in the case of a Borrowing or an
issuance of a Letter of Credit by an Eligible Subsidiary, of such Eligible
Subsidiary) contained in this Agreement shall be true on and as of the date of
such Borrowing or issuance of such Letter of Credit; and

 

(e)        the closing shall have occurred in accordance with Section 3.01.

 

Each Borrowing and issuance of a Letter of
Credit hereunder shall be deemed to be a representation and warranty by the
Company and the Company Guarantor (and, in the case of a Borrowing or an
issuance of a Letter of Credit by an Eligible Subsidiary, of such Eligible
Subsidiary) on the date of such Borrowing as to the facts specified in clauses
(b), (c) and (d) of this Section.

 

Section 3.03.  First Borrowing by Each
Eligible Subsidiary.  The
obligation of each Lender to make a Loan, and the obligation of the Issuing
Lender to issue a Letter of Credit, on the occasion of the first Borrowing by
or issuance of a Letter of Credit for the account of each Eligible Subsidiary
is subject to the satisfaction of the following further conditions:

 

43

 

(a)        receipt by the Administrative Agent of an opinion of counsel
for such Eligible Subsidiary reasonably acceptable to the Administrative Agent
covering such matters relating to the transactions contemplated hereby as the
Required Lenders may reasonably request; and

 

(b)        receipt by the Administrative Agent of all documents which it
may reasonably request relating to the existence of such Eligible Subsidiary,
the corporate authority of and the validity of the Election to Participate of
such Eligible Subsidiary, this Agreement and the Notes (if any) of such
Eligible Subsidiary, and any other matters relevant thereto, all in form and
substance reasonably satisfactory to the Administrative Agent.

 

Section 3.04.  Existing Credit Agreement.  (a) On the Closing Date, the “Facility
Commitments” and the “Alternative Currency Commitments”, if any, each as
defined in the Existing Credit Agreement shall terminate.

 

(b)        The Lenders that are parties to the Existing Credit
Agreement, comprising the “Required Lenders” as defined therein, hereby waive
any requirement of notice of termination of the “Facility Commitments” and the “Alternative
Currency Commitments” (each as defined in the Existing Credit Agreement)
pursuant to Section 2.09 thereof.

 

ARTICLE
4

REPRESENTATIONS AND WARRANTIES

 

Each of the Company and the Company Guarantor
jointly and severally represents and warrants that:

 

Section 4.01.  Corporate Existence and
Power.  Each Obligor is an
organization duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, and has all requisite powers and
all governmental licenses, authorizations, consents and approvals required to
carry on its business as now conducted, except to the extent that the failure
to have such licenses, authorizations, consents and approvals could not
reasonably be expected to have a Material Adverse Effect.

 

Section 4.02.  Corporate and Governmental
Authorization; No Contravention.  The
execution, delivery and performance by each of the Company and the Company
Guarantor (and, as applicable, each Eligible Subsidiary) of this Agreement and
by the Company (and, as applicable, each Eligible Subsidiary) of the Notes (if
any) are within the corporate powers of the Company and the Company Guarantor,
as applicable (and, as applicable, each Eligible Subsidiary), have been duly
authorized by all necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or official and do
not contravene, or constitute a default under, any 

 

44

 

provision of applicable law or regulation or
of the certificate of incorporation, organizational documents or by-laws of the
Company or the Company Guarantor, as applicable (and, as applicable, each
Eligible Subsidiary), or of any agreement evidencing or governing Debt or of any
other material agreement, or of any judgment, injunction, order, decree or
other material instrument binding upon the Company or any of its Subsidiaries
or result in the creation or imposition of any Lien on any asset of the Company
or any of its Subsidiaries.

 

Section 4.03.  Binding Effect.  This Agreement constitutes a valid
and binding agreement of each Obligor and each Note (if any), when executed and
delivered by the Company (and, as applicable, any Eligible Subsidiary) in
accordance with this Agreement, will constitute a valid and binding obligation
of the Company (and, as applicable, such Eligible Subsidiary), in each case
enforceable in accordance with its terms, except as the same may be limited by
bankruptcy, insolvency or similar laws affecting creditors’ rights generally
and by general principles of equity.

 

Section 4.04.  Financial Information.  (a)  The consolidated balance
sheet of the Company and its Consolidated Subsidiaries as of June 30, 2006
and the related consolidated statements of earnings and cash flows for the
fiscal year then ended, reported on by KPMG LLP, a copy of which has been
delivered to each of the Lenders, fairly present, in conformity with GAAP, the
consolidated financial position of the Company and its Consolidated Subsidiaries
as of such date and their consolidated results of operations and cash flows for
such fiscal year.

 

(b)        The unaudited consolidated balance sheet of the Company and
its Consolidated Subsidiaries as of December 31, 2006 and the related
unaudited consolidated statements of earnings and cash flows for the six months
then ended, a copy of which has been delivered to each of the Lenders, fairly
present, in conformity with GAAP applied on a basis consistent with the
financial statements referred to in subsection (a) of this Section, the
consolidated financial position of the Company and its Consolidated
Subsidiaries as of such date and their consolidated results of operations and
cash flows for such six-month period.

 

(c)        On the Closing Date, there has been no material adverse
change in the business, financial position or results of operations of the
Company and its Consolidated Subsidiaries, considered as a whole, since December 31,
2006.

 

Section 4.05.  Litigation.  Except as described in Schedule
4.05, there is no action, suit or proceeding pending against, or to the
knowledge of any Obligor, overtly threatened against or affecting, the Company
or any of its Subsidiaries before any court or arbitrator or any governmental
body, agency or official in which there is a reasonable possibility of an
adverse decision which could have a Material Adverse Effect, or which in any
manner draws into question the validity or enforceability of this Agreement or
the Notes (if any).

 

45

 

Section 4.06.  Compliance with ERISA.  Each member of the ERISA Group has
fulfilled its obligations under the minimum funding standards of ERISA and the
Internal Revenue Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the
Internal Revenue Code with respect to each Plan.  No member of the ERISA Group has (i) sought
a waiver of the minimum funding standard under Section 412 of the Internal
Revenue Code in respect of any Plan, (ii) failed to make any contribution
or payment to any Plan or Multiemployer Plan or in respect of any Benefit
Arrangement, or made any amendment to any Plan or Benefit Arrangement, which
has resulted or could result in the imposition of a Lien or the posting of a
bond or other security under ERISA or the Internal Revenue Code or (iii) incurred
any liability under Title IV of ERISA other than a liability to the PBGC for
premiums under Section 4007 of ERISA.

 

Section 4.07.  Environmental Matters.  In the ordinary course of its
business, the Company conducts an ongoing review of the effect of Environmental
Laws on the business, operations and properties of the Company and its
Subsidiaries, in the course of which it identifies and evaluates associated
liabilities and costs (including, without limitation, any capital or operating
expenditures required for clean-up or closure of properties presently or
previously owned, any capital or operating expenditures required to achieve or
maintain compliance with environmental protection standards imposed by law or
as a condition of any license, permit or contract, any related constraints on
operating activities, including any periodic or permanent shutdown of any
facility or reduction in the level of or change in the nature of operations
conducted thereat, any costs or liabilities in connection with off-site
disposal of wastes or Hazardous Substances, and any actual or potential
liabilities to third parties, including employees, and any related costs and
expenses).  On the basis of this review,
the Company has reasonably concluded that such associated liabilities and
costs, including the costs of compliance with Environmental Laws, are unlikely
to have a Material Adverse Effect.

 

Section 4.08.  Taxes.  The Company and its Subsidiaries
have filed all United States Federal income tax returns and all other material
tax returns which are required to be filed by them and have paid all taxes due
pursuant to such returns or pursuant to any assessment received by the Company
or any Subsidiary, other than taxes due pursuant to any such assessment which
are being contested in good faith by appropriate proceedings.  The charges, accruals and reserves on the
books of the Company and its Subsidiaries in respect of taxes or other governmental
charges are, in the opinion of the Company, adequate.

 

Section 4.09.  Subsidiaries.  (a)  Each of the Company’s
corporate Significant Subsidiaries (other than the Company Guarantor or the
Eligible Subsidiaries, with respect to which representations and warranties
comparable to those set forth in this Section are being made in Section 4.01)
is a corporation duly incorporated, validly existing and in good standing under
the laws of its 

 

46

 

jurisdiction of incorporation, and has all
corporate powers and all governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted, except to the
extent that the failure to be or have any of the foregoing could not reasonably
be expected to have a Material Adverse Effect.

 

(b)        The Company owns, directly or indirectly, 100% of the
outstanding capital stock of the Company Guarantor.

 

Section 4.10.  Regulatory Restrictions on
Borrowing.  No Obligor is an “investment company” within the meaning of the Investment
Company Act of 1940, as amended, or otherwise subject to any regulatory scheme
which restricts its ability to incur debt.

 

Section 4.11.  Full Disclosure.  All information heretofore
furnished by each Obligor to the Administrative Agent or any Lender for
purposes of or in connection with this Agreement or any transaction
contemplated hereby is, and all such information hereafter furnished by each
Obligor to the Administrative Agent or any Lender will be, true and accurate in
all material respects on the date as of which such information is stated or
certified.

 

ARTICLE
5

COVENANTS

 

The Company agrees that, so long as any Lender has
any Commitment hereunder or any amount payable in respect of any Loan remains
unpaid or any Letter of Credit Liability remains outstanding:

 

Section 5.01.  Information.  The Company will furnish to each
of the Lenders:

 

(a)        as soon as available and in any event within 75 days after
the end of each fiscal year of the Company, a consolidated balance sheet of the
Company and its Consolidated Subsidiaries as of the end of such fiscal year and
the related consolidated statements of earnings and cash flows for such fiscal
year, setting forth in each case in comparative form the figures for the previous
fiscal year, all reported on by KPMG LLP or other independent public
accountants of nationally recognized standing without any qualification or
exception which (i) is of a “going concern”
or similar nature, (ii) relates to the limited scope of examination of
matters relevant to such financial statements or (iii) relates to the
treatment or classification of any item in such financial statements and which,
as a condition to its removal, would require an adjustment to such item the
effect of which would be to cause an Event of Default under Sections 5.09(k),
5.10 or 5.11;

 

(b)        as soon as available and in any event within 40 days after
the end of each of the first three quarters of each fiscal year of the Company,
a consolidated 

 

47

 

balance sheet of the Company
and its Consolidated Subsidiaries as of the end of such quarter, the related
consolidated statements of earnings for such quarter and the related
consolidated statements of earnings and cash flows for the portion of the
Company’s fiscal year ended at the end of such quarter, setting forth in the
case of such statements of earnings and cash flows, in comparative form the
figures for the corresponding quarter (with respect to the statement of earnings
only) and the corresponding portion of the Company’s previous fiscal year, all
certified (subject to normal year-end adjustments) as to fairness of
presentation and GAAP applied on a consistent basis by the chief financial
officer or the chief accounting officer of the Company;

 

(c)        simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of
the chief financial officer, the chief accounting officer or the treasurer of
the Company (i) setting forth in reasonable detail the calculations
required to establish whether the Company was in compliance with the
requirements of Sections 5.09 through 5.11, inclusive, on the date of such
financial statements and (ii) stating whether any Default exists on the
date of such certificate and, if any Default then exists, setting forth the
details thereof and the action which the Company is taking or proposes to take
with respect thereto;

 

(d)        within ten days after any Senior Officer of any Obligor
obtains knowledge of any Default, if such Default is then continuing, a
certificate of the chief financial officer, the chief accounting officer or the
treasurer of the Company setting forth the details thereof and the action which
each Obligor is taking or proposes to take with respect thereto;

 

(e)        within ten days after the mailing thereof to the stockholders
of the Company generally, copies of all financial statements, reports and proxy
statements so mailed;

 

(f)         within ten days after the filing thereof, copies of all
registration statements (other than the exhibits thereto and any registration
statements on Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q
and 8-K (or their equivalents) which the Company shall have filed with the
Securities and Exchange Commission;

 

(g)        if and when any member of the ERISA Group (i) gives or
is required to give notice to the PBGC of any “reportable
event” (as defined in Section 4043 of ERISA) with respect to
any Plan which might constitute grounds for a termination of such Plan under
Title IV of ERISA, or knows that the plan administrator of any Plan has given
or is required to give notice of any such reportable event, a copy of the
notice of such reportable event given or required to be given to the PBGC; (ii) receives
notice of complete or partial withdrawal liability under Title IV of ERISA or
notice that any Multiemployer Plan is in reorganization, is insolvent or has
been terminated, a copy of such notice; (iii)

 

48

 

receives notice from the
PBGC under Title IV of ERISA of an intent to terminate, impose liability (other
than for premiums under Section 4007 of ERISA) in respect of, or appoint a
trustee to administer any Plan, a copy of such notice; (iv) applies for a
waiver of the minimum funding standard under Section 412 of the Internal
Revenue Code, a copy of such application; (v) gives notice of intent to
terminate any Plan under Section 4041(c) of ERISA, a copy of such
notice and other information filed with the PBGC; (vi) gives notice of
withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of such
notice; or (vii) fails to make any payment or contribution to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement or makes any
amendment to any Plan or Benefit Arrangement which has resulted or could result
in the imposition of a Lien or the posting of a bond or other security, a
certificate of the chief financial officer, the chief accounting officer or the
treasurer of the Company setting forth details as to such occurrence and
action, if any, which the Company or applicable member of the ERISA Group is
required or proposes to take; and

 

(h)        from time to time such additional information regarding the
financial position or business of the Company and its Subsidiaries as the
Administrative Agent, at the request of any Lender, may reasonably request.

 

For purposes of this Section, the Company’s
obligation to deliver the items referred to in Sections 5.01(a), (b), (e) and
(f) will be deemed satisfied by the electronic delivery to the
Administrative Agent of such items and posting of such items on a website to
which the Lenders have access, and which shall have been designated in a notice
delivered to the Lenders and the Administrative Agent.

 

Section 5.02.  Payment of Obligations.  The Company will pay and
discharge, and will cause each Significant Subsidiary to pay and discharge, at
or before maturity, all their respective material obligations and liabilities
(including, without limitation, tax liabilities and claims of materialmen,
warehousemen and the like which if unpaid might by law give rise to a Lien),
except where the same may be contested in good faith by appropriate proceedings
or to the extent that failure to do so could not reasonably be expected to have
a Material Adverse Effect, and will maintain, and will cause each Significant
Subsidiary to maintain, in accordance with GAAP, appropriate reserves for the
accrual of any of the same.

 

Section 5.03.  Insurance.  The Company will, and will cause
each of its Significant Subsidiaries to, maintain (either in the name of the
Company or in such Significant Subsidiary’s own name), with financially sound
and responsible insurance companies or pursuant to a self-insurance program,
insurance on all their respective properties in at least such amounts, against
at least such risks and with such risk retention as are usually maintained,
insured against or retained, as the case may be, in the same general area by
companies of established repute engaged in the same or a similar business; and
will furnish to the Lenders, upon 

 

49

 

request from the Administrative Agent,
information presented in reasonable detail as to the insurance so carried.

 

Section 5.04.  Conduct of Business and
Maintenance of Existence.  The
Company will preserve, renew and keep in full force and effect, and will cause
each Guarantor and each other Significant Subsidiary to preserve, renew and
keep in full force and effect its corporate existence and rights, privileges
and franchises necessary or desirable in the normal conduct of business
(except, solely with respect to any Significant Subsidiary that is not an
Obligor, to the extent that failure to do so could not reasonably be expected
to have a Material Adverse Effect); provided
that nothing in this Section 5.04 shall prohibit (i) the merger of a
Significant Subsidiary into the Company or the merger or consolidation of a
Significant Subsidiary with or into another Person if the corporation surviving
such consolidation or merger is a Subsidiary (provided that in the case of any
such merger or consolidation involving a Guarantor, it or the Company must be
the surviving corporation) and if, in each case, after giving effect thereto,
no Default shall have occurred and be continuing or (ii) the termination
of the corporate existence of any Significant Subsidiary (other than any
Guarantor) if the Company in good faith determines that such termination is in
the best interest of the Company and is not materially disadvantageous to the
Lenders.

 

Section 5.05.  Compliance with Laws.  The Company will comply, and cause
the Company Guarantor and each other Significant Subsidiary to comply, in all
material respects with all applicable laws, ordinances, rules, regulations, and
requirements of governmental authorities (including, without limitation,
Environmental Laws and ERISA and the rules and regulations thereunder)
except where the necessity of compliance therewith is contested in good faith
by appropriate proceedings or to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect.

 

Section 5.06.  Inspection of Property, Books
and Records.  The Company will
keep, and will cause the Company Guarantor and each other Significant
Subsidiary to keep, proper books of record and account in which full, true and
correct entries shall be made in all material respects of all dealings and
transactions in relation to its business and activities; and will permit, and
will cause the Company Guarantor and each other Subsidiary to permit,
representatives of any Lender at such Lender’s expense to visit and inspect any
of its properties, to examine and make abstracts from any of its books and
records and to discuss its affairs, finances and accounts with its officers,
employees and independent public accountants, all at such reasonable times and
as often as may reasonably be desired.

 

Section 5.07.  Mergers and Sales of
Assets.  The Company will not,
and will not permit any Guarantor to, (i) consolidate or merge with or
into any other Person or (ii) sell, lease or otherwise transfer, directly
or indirectly, all or substantially all of the assets of the Company and its
Subsidiaries, taken as a

 

50

 

whole, to any other Person; provided that (a) the Company may
merge with another Person if (x) the Company is the corporation surviving
such merger and (y) after giving effect to such merger, no Default shall
have occurred and be continuing and (b) any Guarantor may be a party to
any merger or consolidation permitted by Section 5.04.

 

Section 5.08.  Use of Proceeds.  The proceeds of the Loans made
under this Agreement will be used by each Borrower to provide credit support
for such Borrower’s commercial paper program, to fund the Company’s share
repurchase program and for such general corporate purposes in the ordinary
course of business of the Company and its Subsidiaries as shall be determined
by the Company from time to time.  None
of such proceeds will be used, directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of buying or carrying any “margin stock”
within the meaning of Regulation U.

 

Section 5.09.  Negative Pledge.  The Company will not, and will not
permit any Subsidiary to, create, assume or suffer to exist any Lien on any
asset now owned or hereafter acquired by it, except:

 

(a)        Liens existing on the date of this Agreement securing Debt
outstanding on the date of this Agreement in an aggregate principal or face
amount not exceeding $50,000,000;

 

(b)        any Lien existing on any asset of any Person at the time such
Person becomes a Subsidiary and not created in contemplation of such event;

 

(c)        any Lien on any asset securing Debt incurred or assumed for
the purpose of financing all or any part of the cost of acquiring or
constructing such asset; provided
that such Lien attaches to such asset concurrently with or within 90 days after
the acquisition or substantial completion of construction thereof, as the case
may be;

 

(d)        any Lien on any asset of any Person existing at the time such
Person is merged or consolidated with or into the Company or a Subsidiary and
not created in contemplation of such event;

 

(e)        any Lien existing on any asset prior to the acquisition
thereof by the Company or a Subsidiary and not created in contemplation of such
acquisition;

 

(f)         any Lien arising out of the refinancing, extension, renewal
or refunding of any Debt secured by any Lien permitted by any of the foregoing
clauses of this Section; provided
that such Debt is not increased and is not secured by any additional assets;

 

(g)        Liens imposed by any governmental authority for taxes,
assessments, governmental charges, duties or levies not yet due or which are 

 

51

 

being contested in good faith and by appropriate
proceedings; provided adequate
reserves with respect thereto are maintained on the books of the Company and
its Consolidated Subsidiaries in accordance with GAAP;

 

(h)        carriers’, warehousemen’s, mechanics’, transporters,
materialmen’s, repairmen’s or other like Liens arising in the ordinary course
of business; provided any such
Lien is either (x) discharged within five days of the date when payment of
the obligation secured by such Lien is due or (y) is being contested in
good faith by appropriate proceedings diligently conducted;

 

(i)         Liens (other than Liens described in clauses (g) or
(h)) arising in the ordinary course of its business which (i) do not
secure Debt or Derivatives Obligations, (ii) do not secure any obligation
in an amount exceeding $50,000,000 and (iii) do not in the aggregate
materially detract from the value of its assets or materially impair the use
thereof in the operation of its business;

 

(j)         Liens on cash and cash equivalents securing Derivatives
Obligations; provided that the
aggregate amount of cash and cash equivalents subject to such Liens may at no
time exceed $50,000,000; and

 

(k)        Liens not otherwise permitted by the foregoing clauses of
this Section securing Debt in an aggregate principal or face amount at any
date not to exceed the greater of (i) $150,000,000 and (ii) 15% of
Consolidated Tangible Net Worth at the last day of the most recently ended
fiscal quarter.

 

Section 5.10.  Interest Expense Coverage Ratio.  The Interest Expense Coverage
Ratio as of the last day of each fiscal quarter shall be greater than 3.0:1.0.

 

Section 5.11.  Debt of Subsidiaries.  The Company will not permit any of
its Subsidiaries (other than the Company Guarantor) to incur or at any time be
liable with respect to any Debt other than (i) Debt owing to the Company
or a wholly owned Subsidiary, (ii) Debt created under this Agreement, (iii) any
commercial paper issued by an Eligible Subsidiary the credit support for which
is provided by this Agreement, and (iv) other Debt in an aggregate
principal amount outstanding not exceeding $300,000,000.  For purposes of this Section any
preferred stock of a Subsidiary held by a Person other than the Company or a
Wholly-Owned Subsidiary shall be included, at the higher of its voluntary or
involuntary liquidation value, in the “Debt” of such
Subsidiary.

 

Section 5.12.  Transactions with
Affiliates.  The Company will
not, and will not permit any Subsidiary to, directly or indirectly, pay any
funds to or for the account of, make any investment (whether by acquisition of
stock or indebtedness, by loan, advance, transfer of property, guarantee or
other agreement to pay, purchase or service, directly or indirectly, any Debt,
or otherwise) in, lease, sell, transfer or otherwise dispose of any assets,
tangible or intangible, to, or 

 

52

 

participate in, or effect, any transaction
with, any Affiliate (any such payment, investment, lease, sale, transfer, other
disposition or transaction, an “Affiliate Transaction”)
except on an arms-length basis on terms at least as favorable to the Company or
such Subsidiary as terms that could have been obtained from a third party who
was not an Affiliate; provided
that the foregoing provisions of this Section shall not prohibit (i) any
such Person from declaring or paying any lawful dividend or other payment
ratably in respect of all of its capital stock of the relevant class so long
as, after giving effect thereto, no Default shall have occurred and be
continuing, (ii) any Affiliate Transaction disclosed in the Proxy
Statement under the heading “Certain Relationships and Related Transactions” or
(iii) any Affiliate Transaction (other than any Affiliate Transaction
described in clauses (i) or (ii)) in which the amount involved does not
exceed $500,000. The approval by the independent directors (or any committee
thereof) of the board of directors of the Company or a Subsidiary of any
Affiliate Transaction to which the Company or such Subsidiary is a party shall
create a rebuttable presumption that such Affiliate Transaction is on an
arms-length basis on terms at least as favorable to the Borrower or such
Subsidiary as terms that could have been obtained from a third party who was not
an Affiliate.

 

ARTICLE
6

DEFAULTS

 

Section 6.01.  Events of Default.  If one or more of the following
events (“Events of Default”) shall have occurred
and be continuing:

 

(a)        any Borrower shall fail to pay when due any principal of any
Loan or any Reimbursement Obligation or shall fail to pay any interest or fees
payable hereunder within five Domestic Business Days of the due date thereof;

 

(b)        the Company shall fail to observe or perform any covenant
contained in Article 5, other than those contained in Sections 5.01
through 5.06 and 5.12;

 

(c)        any Obligor shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by clause (a) or
(b) above) for 30 days after notice thereof has been given to the Company
by the Administrative Agent at the request of any Lender;

 

(d)        any representation, warranty, certification or statement made
by any Obligor in this Agreement or in any certificate, financial statement or
other document delivered pursuant to this Agreement shall prove to have been
incorrect in any material respect when made (or deemed made);

 

53

 

(e)   the Company or any Subsidiary shall fail to make any payment in
respect of any Material Financial Obligations when due or within any applicable
grace period;

 

(f)    any event or condition shall occur which results in the
acceleration of the maturity of any Material Debt or enables the holder of such
Debt or any Person acting on such holder’s behalf to accelerate the maturity
thereof;

 

(g)   the Company or any Significant Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment
for the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporate action to authorize any of the
foregoing;

 

(h)   an involuntary case or other proceeding shall be commenced against
the Company or any Significant Subsidiary seeking liquidation, reorganization
or other relief with respect to it or its debts under any bankruptcy, insolvency
or other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 90 days; or an order for
relief shall be entered against the Company or any Significant Subsidiary under
the federal bankruptcy laws as now or hereafter in effect;

 

(i)    any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $50,000,000 which it shall have
become liable to pay under Title IV of ERISA; or notice of intent to terminate
a Material Plan shall be filed under Title IV of ERISA by any member of the
ERISA Group, any plan administrator or any combination of the foregoing; or the
PBGC shall institute proceedings under Title IV of ERISA to terminate, to
impose liability (other than for premiums under Section 4007 of ERISA) in
respect of, or to cause a trustee to be appointed to administer any Material
Plan; or a condition shall exist by reason of which the PBGC would be entitled
to obtain a decree adjudicating that any Material Plan must be terminated; or
there shall occur a complete or partial withdrawal from, or a default, within
the meaning of Section 4219(c)(5) of ERISA, with respect to, one or
more Multiemployer Plans which could cause one or more members of the ERISA
Group to incur a current payment obligation in excess of $50,000,000;

 

(j)    judgments or orders for the payment of money in excess of
$50,000,000 (net of any insurance with respect to which the carrier has 

 

54

 

acknowledged coverage) shall
be rendered against the Company or any Subsidiary and such judgments or orders
shall continue unsatisfied and unstayed for a period of 30 days;

 

(k)        there occurs a Change of Control; or

 

(l)         the Guaranty or any provision thereof shall be found or held
invalid or unenforceable by a court of competent jurisdiction or either
Guarantor shall have repudiated its obligations under the Guaranty;

 

then, following the occurrence and during the
continuance of every such event, the Administrative Agent shall (i) if
requested by Required Lenders, by notice to the Company terminate the
Commitments and they shall thereupon terminate, and (ii) if requested by
Lenders holding more than 50% of the aggregate principal Dollar Amount of the
Loans, by notice to the Company declare the Loans (together with accrued
interest thereon) to be, and the Loans shall thereupon become, immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by each Obligor; provided that in the case of any of the Events of Default
specified in clause 6.01(g) or 6.01(h) above with respect to the
Company, without any notice to any Obligor or any other act by the
Administrative Agent or the Lenders, the Commitments shall thereupon terminate
and the Loans (together with accrued interest thereon) shall become immediately
due and payable without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by each Obligor.

 

Section 6.02.  Notice of Default.  The Administrative Agent shall
give notice to the Company under Section 6.01(c) promptly upon being
requested to do so by any Lender and shall thereupon notify all the Lenders
thereof.

 

ARTICLE
7

THE ADMINISTRATIVE AGENT

 

Section 7.01.  Appointment and
Authorizations.  Each Lender
irrevocably appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
and the Notes (if any) as are delegated to the Administrative Agent by the
terms hereof or thereof, together with all such powers as are reasonably incidental
thereto.

 

Section 7.02.  Agents and Affiliates.  JPMorgan Chase Bank, N.A. shall
have the same rights and powers under this Agreement as any other Lender and
may exercise or refrain from exercising the same as though it were not the
Administrative Agent, and JPMorgan Chase Bank, N.A. and its affiliates may
accept deposits from, lend money to, and generally engage in any kind of
business

 

55

 

 with
the Company or any Subsidiary or affiliate of the Company as if it were not the
Administrative Agent.

 

Section 7.03.  Action by Agents.  The obligations of Administrative
Agent hereunder are only those expressly set forth herein.  Without limiting the generality of the
foregoing, the Administrative Agent shall not be required to take any action
with respect to any Default, except as expressly provided in Article 6, and except as
expressly set forth herein and in other Financing Documents, the Administrative
Agent shall not have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to the Company or any of its
Subsidiaries that is communicated to or obtained by the bank serving as
Administrative Agent or any of its Affiliate in any capacity.

 

Section 7.04.  Consultation with
Experts.  The Administrative
Agent may consult with legal counsel (who may be counsel for any Obligor),
independent public accountants and other experts selected by it and shall not
be liable for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts.

 

Section 7.05.  Liability of Agents.  Neither the Administrative Agent
nor any of its affiliates nor any of their respective directors, officers,
agents or employees shall be liable for any action taken or not taken by it in
connection herewith (i) with the consent or at the request of the Required
Lenders or (ii) in the absence of its own gross negligence or willful
misconduct.  Neither the Administrative
Agent nor any of its affiliates nor any of their respective directors,
officers, agents or employees shall be responsible for or have any duty to
ascertain, inquire into or verify (i) any statement, warranty or
representation made in connection with this Agreement or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of any Obligor; (iii) the satisfaction of any condition
specified in Article 3, except receipt of items required to be delivered
to the Administrative Agent; or (iv) the validity, effectiveness or
genuineness of this Agreement, the Notes or any other instrument or writing
furnished in connection herewith.  The
Administrative Agent shall not incur any liability by acting in reliance upon
any notice, consent, certificate, statement, or other writing (which may be a
bank wire, telex, facsimile transmission or similar writing) believed by it to
be genuine or to be signed by the proper party or parties.

 

Section 7.06.  Indemnification.  Each Lender shall, ratably in
accordance with its Commitment (or, if at any time the Commitments shall have
been terminated, ratably in accordance with the aggregate outstanding principal
Dollar Amount of Loans of such Lender), indemnify the Administrative Agent, its
affiliates and their respective directors, officers, agents and employees (to
the extent not reimbursed by any Obligor) against any cost, expense (including
counsel fees and disbursements), claim, demand, action, loss or liability
(except such as result from such indemnitees’ gross negligence or willful
misconduct) that 

 

56

 

such indemnitees may suffer or incur in
connection with this Agreement or any action taken or omitted by such
indemnitees hereunder.

 

Section 7.07.  Credit Decision.  Each Lender acknowledges that it
has, independently and without reliance upon the Administrative Agent, any
Joint Arranger or any other Lender, and based on such documents and information
as it has deemed appropriate, made its own credit analysis and decision to
enter into this Agreement.  Each Lender
also acknowledges that it will, independently and without reliance upon the
Administrative Agent, any Joint Arranger or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking any action under this
Agreement.

 

Section 7.08.  Successor Agents.  The Administrative Agent may
resign at any time by giving notice thereof to the Lenders and each Obligor and
shall resign if requested by the Required Lenders. Upon any such resignation,
the Required Lenders shall have the right (after consulting with the Company)
to appoint a successor to the Administrative Agent.  If no successor to the Administrative Agent shall
have been so appointed by the Required Lenders, and shall have accepted such
appointment, within 30 days after the retiring Administrative Agent gives
notice of resignation, then the retiring Administrative Agent may, on behalf of
the Lenders, appoint a successor Administrative Agent, which shall be a
commercial bank organized or licensed under the laws of the United States of
America or of any State thereof and having a combined capital and surplus of at
least $500,000,000.  Upon the acceptance
of its appointment as the Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder. 
After the retiring Administrative Agent’s resignation hereunder, the
provisions of this Article shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was the Administrative Agent.

 

Section 7.09.  Administrative Agent’s
Fees.  The Company shall pay
to the Administrative Agent for its own account fees in the amounts and at the
times previously agreed upon between the Company and the Administrative Agent.

 

Section 7.10.  Other Agents Not Liable.  Nothing in this Agreement shall
impose upon Citibank, N.A. or Bank of America, N.A., in their capacities as
Syndication Agents, or Bank of Tokyo-Mitsubishi UFJ Trust Company or BNP
Paribas, in their capacities as Documentation Agents, any duties or
responsibilities whatsoever.

 

57

 

ARTICLE
8

CHANGE IN CIRCUMSTANCES

 

Section 8.01.  Basis for Determining Interest
Rate Inadequate or Unfair. If on or prior to the first day of any
Interest Period for any Euro-Currency Loan or Competitive Bid LIBOR Loan:

 

(a)        the Administrative Agent is advised by the Reference Banks
that deposits in the relevant currency (in the applicable amounts) are not
being offered to the Reference Banks in the relevant market for such Interest
Period, or

 

(b)        in the case of Euro-Currency Loans, Lenders having 50% or
more of the aggregate amount of the Commitments advise the Administrative Agent
that the London Interbank Offered Rate as determined by the Administrative
Agent will not adequately and fairly reflect the cost to such Lenders of
funding their Euro-Currency Loans in the relevant currency for such Interest
Period,

 

the Administrative Agent shall forthwith give
notice thereof to the Borrower and the Lenders, whereupon until the
Administrative Agent notifies the Borrower that the circumstances giving rise
to such suspension no longer exist, (i) the obligations of the Lenders to
make Euro-Currency Loans in the relevant currency or to continue or convert
outstanding Loans as or into Euro-Currency Loans in the relevant currency, as
the case may be, shall be suspended, (ii) each outstanding Euro-Currency
Loan shall be prepaid (or in the case of an affected Loan denominated in
dollars, converted into a Base Rate Loan) on the last day of the then current
Interest Period applicable thereto, (iii) unless the Borrower notifies the
Administrative Agent at least two Domestic Business Days before the date of any
Fixed Rate Borrowing denominated in dollars for which a Notice of Borrowing has
previously been given that it elects not to borrow on such date, (x) if
such Fixed Rate Borrowing is a Committed Dollar Borrowing, such Borrowing shall
instead be made as a Base Rate Borrowing and (y) if such Fixed Rate
Borrowing is a Competitive Bid LIBOR Borrowing, the Competitive Bid LIBOR Loans
comprising such Borrowing shall bear interest for each day from and including
the first day to but excluding the last day of the Interest Period applicable
thereto at the Base Rate for such day and (iv) any request for a Committed
Alternative Currency Loan shall be ineffective.

 

Section 8.02.  Illegality.  If, on or after the date of this
Agreement, the adoption of any applicable law, rule or regulation, or any
change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or its Euro-Currency Lending Office) with
any request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency shall make it unlawful or
impossible for any Lender (or its Euro-Currency Lending Office) to make,
maintain or fund any of its Euro-

 

58

 

Currency Loans in any currency and such
Lender shall so notify the Administrative Agent, the Administrative Agent shall
forthwith give notice thereof to the other Lenders and the Company, whereupon
until such Lender notifies the Company and the Administrative Agent that the
circumstances giving rise to such suspension no longer exist, the obligation of
such Lender to make Euro-Currency Loans in such currency, or to convert or
continue outstanding Loans into Euro-Currency Loans in such currency, shall be
suspended.  Before giving any notice to
the Administrative Agent pursuant to this Section, such Lender shall designate
a different Euro-Currency Lending Office if such designation will avoid the
need for giving such notice and will not, in the sole judgment of such Lender,
be otherwise disadvantageous to such Lender. 
If such notice is given, each Euro-Currency Loan of such Lender then
outstanding in such currency shall be converted at the Exchange Rate on the day
of conversion to a Base Rate Loan either (a) on the last day of the then
current Interest Period applicable to such Euro-Currency Loan if such Lender
may lawfully continue to maintain and fund such Loan to such day or (b) immediately
if such Lender shall determine that it may not lawfully continue to maintain
and fund such Loan to such day.

 

Section 8.03.  Increased Cost and Reduced
Return.  (a)  If on or
after (x) the date hereof, in the case of any Committed Loan or Letter of
Credit or any obligation to make Committed Loans or issue or participate in any
Letter of Credit or (y) the date of any related Competitive Bid Quote, in
the case of any Competitive Bid Loan, the adoption of any applicable law, rule or
regulation, or any change in any applicable law, rule or regulation, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall impose, modify
or deem applicable any reserve (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve System,
but excluding with respect to any Euro-Currency Loan any such requirement with
respect to which such Lender is entitled to compensation during the relevant
interest period under Section 2.20), special deposit, insurance assessment
or similar requirement against assets of, deposits with or for the account of,
or credit extended by, any Lender (or its Applicable Lending Office) or shall
impose on any Lender (or its Applicable Lending Office) or on the London
interbank market any other condition affecting its Fixed Rate Loans, its Note
(if any) or its obligation to make Fixed Rate Loans or its obligations
hereunder with respect of Letters of Credit and the result of any of the
foregoing is to increase the cost to such Lender (or its Applicable Lending
Office) of making or maintaining any Fixed Rate Loan or issuing or
participating in any Letter of Credit, or to reduce the amount of any sum
received or receivable by such Lender (or its Applicable Lending Office) under
this Agreement or under its Note (if any) with respect thereto, by an amount
deemed by such Lender to be 

 

59

 

material, then, within 15 days after demand
by such Lender (with a copy to the Administrative Agent), the Company shall
pay, or shall cause another Borrower to pay, to such Lender such additional
amount or amounts as will compensate such Lender for such increased cost or
reduction.

 

(b)        If any Lender shall have determined that, after the date
hereof, the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change in any such law, rule or regulation, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on capital of such Lender (or its Parent) as a consequence of such Lender’s
obligations hereunder to a level below that which such Lender (or its Parent)
could have achieved but for such adoption, change, request or directive (taking
into consideration its policies with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time, within 15 days
after demand by such Lender (with a copy to the Administrative Agent), the
Company shall pay to such Lender such additional amount or amounts as will
compensate such Lender (or its Parent) for such reduction.

 

(c)        Each Lender will promptly notify the Company and the
Administrative Agent of any event of which it has knowledge, occurring after
the date hereof, which will entitle such Lender to compensation pursuant to
this Section and will designate a different Applicable Lending Office if
such designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the sole judgment of such Lender, be otherwise
disadvantageous to such Lender.  A
certificate of any Lender claiming compensation under this Section and
setting forth the additional amount or amounts to be paid to it hereunder and
the calculation thereof in  reasonable
detail shall be conclusive in the absence of manifest error.  In determining such amount, such Lender may
use any reasonable averaging and attribution methods.

 

Section 8.04.  Taxes.  (a)  For the purposes of this
Section 8.04, the following terms have the following meanings:

 

“Taxes” means
any and all present or future taxes, duties, levies, imposts, deductions,
charges or withholdings with respect to any payment by any Obligor pursuant to
this Agreement or under any Note, and all liabilities with respect thereto,
excluding (i) in the case of each Lender and the Administrative Agent,
taxes imposed on its income, and franchise or similar taxes imposed on it, by a
jurisdiction under the laws of which such Lender or the Administrative Agent
(as the case may be) is organized or in which its principal executive office is
located or, in the case of each Lender, in which its Applicable Lending Office
is located and (ii) in the case of each Lender, any United States
withholding tax imposed on 

 

60

 

such payments but only to the extent that
such Lender is subject to United States withholding tax that is not creditable
against such Lender’s tax liability in the jurisdiction under the laws of which
such Lender is organized or in which its principal executive office is located
or in which its Applicable Lending Office is located at the time such Lender
first becomes a party to this Agreement.

 

“Other Taxes”
means any present or future stamp or documentary taxes and any other excise or
property taxes, or similar charges or levies, which arise from any payment made
pursuant to this Agreement or under any Note or from the execution or delivery
of, or otherwise with respect to, this Agreement or any Note.

 

(b)        Any and all payments by any Obligor to or for the account of
any Lender or the Administrative Agent hereunder or under any Note shall be
made without deduction for any Taxes or Other Taxes; provided that, if an Obligor shall be required by law to
deduct any Taxes or Other Taxes from any such payments, (i) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section) such Lender or the Administrative Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) such Obligor shall make such deductions, (iii) such
Obligor shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law and (iv) such Obligor
shall furnish to the Administrative Agent, at its address referred to in Section 10.01,
the original or a certified copy of a receipt evidencing payment thereof.

 

(c)        Each Obligor agrees to indemnify each Lender and the
Administrative Agent for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section) paid by such Lender or the
Administrative Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect
thereto.  This indemnification shall be
paid within 30 days after such Lender or the Administrative Agent (as the case
may be) makes demand therefor.

 

(d)        Each Lender organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its execution and
delivery of this Agreement in the case of each Lender listed on the signature pages hereof
and on or prior to the date on which it becomes a Lender in the case of each
other Lender, and from time to time thereafter if requested in writing by the
Company (but only so long as such Lender remains lawfully able to do so), shall
provide the Company and the Administrative Agent with Internal Revenue Service
form W-8BEN or W-8ECI, as appropriate, or any successor form prescribed by the
Internal Revenue Service, certifying that such Lender is entitled to benefits
under an income tax treaty to which the United States is a party which exempts
the Lender from United States withholding tax or reduces the rate of
withholding tax 

 

61

 

on payments of interest for
the account of such Lender or certifying that the income receivable pursuant to
this Agreement is effectively connected with the conduct of a trade or business
in the United States.

 

(e)        For any period with respect to which a Lender has failed to
provide the Company or the Administrative Agent with the appropriate form
pursuant to Section 8.04(d) (unless such failure is due to a change
in treaty, law or regulation occurring subsequent to the date on which such
form originally was required to be provided), such Lender shall not be entitled
to indemnification under Section 8.04(b) or (c) with respect to
Taxes imposed by the United States; provided
that if a Lender, which is otherwise exempt from or subject to a reduced rate
of withholding tax, becomes subject to Taxes because of its failure to deliver
a form required hereunder, the Company shall take such steps as such Lender
shall reasonably request to assist such Lender to recover such Taxes.

 

(f)         If any Obligor is required to pay additional amounts to or
for the account of any Lender pursuant to this Section, then such Lender will
change the jurisdiction of its Applicable Lending Office if, in the sole
judgment of such Lender, such change (i) will eliminate or reduce any such
additional payment which may thereafter accrue and (ii) is not otherwise
disadvantageous to such Lender.

 

Section 8.05.  Base Rate Loans Substituted
for Affected Fixed Rate Loans.  If
(i) the obligation of any Lender to make, or to convert or continue
outstanding Loans to, Euro-Currency Loans in any currency has been suspended
pursuant to Section 8.02 or (ii) any Lender has demanded compensation
under Section 8.03 or 8.04 with respect to its Euro-Currency Loans in any
currency and the Company shall, by at least five Euro-Dollar Business Days’
prior notice to such Lender through the Administrative Agent, have elected that
the provisions of this Section shall apply to such Lender, then, unless
and until such Lender notifies the Company that the circumstances giving rise
to such suspension or demand for compensation no longer exist:

 

(a)        all Loans which would otherwise be made by such Lender as (or
continued as or converted into) Euro-Currency Loans in such currency shall be
made instead as Base Rate Loans (in the case of Committed Alternative Currency
Loans, in the same Dollar Amount as the Euro-Currency Loan that such Lender
would otherwise have made in the Alternative Currency (on which interest and
principal shall be payable contemporaneously with the related Fixed Rate Loans
of the other Lenders); and

 

(b)        after each of its Euro-Currency Loans in such currency has
been repaid (or converted to a Base Rate Loan), all payments of principal which
would otherwise be applied to repay such Fixed Rate Loans shall be applied to
repay its Base Rate Loans instead.

 

62

 

If such Lender notifies the Company that the
circumstances giving rise to such notice no longer apply, the principal amount
of each such Base Rate Loan shall be converted into a Euro-Currency Loan
denominated in the relevant currency, as the case may be, on the first day of
the next succeeding Interest Period applicable to the related Euro-Currency
Loans of the other Lenders. If such Loan is converted into an Committed
Alternative Currency Loan, such Lender, the Administrative Agent and the
relevant Borrower shall make such arrangements as shall be required (including
increasing or decreasing the amount of such Committed Alternative Currency
Loan) so that such Committed Alternative Currency Loan shall be in the same
amount as it would have been if the provisions of this Section had never
applied thereto.

 

Section 8.06.  Substitution of Lenders.  If (i) the obligation of any
Lender to make Euro-Currency Loans has been suspended pursuant to Section 8.02
or (ii) any Lender has demanded compensation under Section 8.03 or
8.04, the Company shall have the right, with the assistance of the
Administrative Agent and the Issuing Lender, to seek a substitute lender or
lenders (which may be one or more of the Lenders), satisfactory to the Company,
the Administrative Agent and the Issuing Lender, to purchase the Loans and
assume the Commitments and Letter of Credit Liabilities of such Lender, for a
purchase price equal to the aggregate outstanding principal of such Loans
(together with any accrued and unpaid interest thereon and breakage costs, if
any) or such other purchase price as such Lender and substitute lender or
lenders shall agree upon.

 

ARTICLE
9

REPRESENTATIONS AND WARRANTIES OF ELIGIBLE SUBSIDIARIES

 

Each Eligible Subsidiary shall be deemed by the
execution and delivery of its Election to Participate to have represented and
warranted as of the date thereof that:

 

Section 9.01.  Corporate Existence and
Power.  It is a company duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization and is a Wholly-Owned Consolidated Subsidiary.

 

Section 9.02.  Corporate Governmental
Authorization; No Contravention.  The
execution and delivery by it of its Election to Participate and its Notes (if
any), and the performance by it of this Agreement and its Notes (if any), are
within its corporate powers, have been duly authorized by all necessary company
action, require no action by or in respect of, or filing with, any governmental
body, agency or official (other than those already obtained or made and in full
force and effect) and do not contravene, or constitute a default under, any
provision of applicable law or regulation or of its certificate or
incorporation, articles of incorporation (or the equivalent organizational
documents) or by-laws (or the equivalent governing documents) or of any
agreement, judgment, 

 

63

 

injunction, order, decree or other instrument
binding upon the Company or such Eligible Subsidiary or result in the creation
or imposition of any Lien on any asset of the Company or any of its
Subsidiaries.

 

Section 9.03.  Binding Effect.  This Agreement constitutes a valid
and binding agreement of such Eligible Subsidiary and its Notes, when and if
executed and delivered in accordance with this Agreement, will constitute valid
and binding obligations of such Eligible Subsidiary, in each case enforceable
in accordance with its terms except as the same may be limited by bankruptcy,
insolvency or similar laws affecting creditors’ rights generally and by general
principles of equity.

 

Section 9.04.  Taxes.  Except as disclosed in such
Election to Participate, there is no income, stamp or other tax of any country,
or any taxing authority thereof or therein, imposed by or in the nature of
withholding or otherwise, which is imposed on any payment to be made by such
Eligible Subsidiary pursuant hereto or on its Notes (if any), or is imposed on
or by virtue of the execution, delivery or enforcement of its Election to
Participate or of its Notes (if any).

 

ARTICLE
10

MISCELLANEOUS

 

Section 10.01.  Notices.  All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
facsimile transmission or similar writing) and shall be given to such party: (a) in
the case of the Company, the Company Guarantor or the Administrative Agent, at
its address or facsimile number set forth on the signature pages hereof, (b) in
the case of any Lender, at its address or facsimile number set forth in its
Administrative Questionnaire, (c) in the case of any Eligible Subsidiary,
to it in care of the Company or (d) in the case of any party, such other
address or facsimile number as such party may hereafter specify for the purpose
by notice to the Administrative Agent and the Company.  Each such notice, request or other
communication shall be effective (i) if given by facsimile transmission,
when transmitted to the facsimile number specified in this Section and
confirmation of receipt is received, (ii) if given by mail, 72 hours after
such communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (iii) if given by any other means, when
delivered at the address specified in this Section; provided that notices to the Administrative Agent or the
Issuing Lender under Article 2 or Article 8 shall not be effective
until received.

 

Section 10.02.  No Waivers.  No failure or delay by the
Administrative Agent or any Lender in exercising any right, power or privilege
hereunder or under any Note shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of 

 

64

 

any other right, power or privilege.  The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.

 

Section 10.03.  Expenses;
Indemnification.  (a) 
The Company shall pay (i) all reasonable out-of-pocket expenses of the
Administrative Agent and the Joint Arrangers, including reasonable fees and
disbursements of special counsel for the Administrative Agent, in connection
with the preparation and administration of this Agreement, any waiver or
consent hereunder or any amendment hereof or any Default or alleged Default
hereunder and (ii) if an Event of Default occurs, all out-of-pocket
expenses incurred by the Administrative Agent, the Issuing Lender and each
Lender, including (without duplication) the fees and disbursements of outside
counsel and the allocated cost of inside counsel, in connection with such Event
of Default and collection, bankruptcy, insolvency and other enforcement
proceedings resulting therefrom.

 

(b)        The Company agrees to indemnify the Administrative Agent, the
Issuing Lender, each Joint Arranger and each Lender, their respective
affiliates and the respective directors, officers, agents and employees of the
foregoing (each an “Indemnitee”)
and hold each Indemnitee harmless from and against any and all liabilities,
losses, damages, costs and expenses of any kind, including, without limitation,
the reasonable fees and disbursements of counsel, which may be incurred by such
Indemnitee in connection with any investigative, administrative or judicial
proceeding (whether or not such Indemnitee shall be designated a party thereto)
brought or overtly threatened relating to or arising out of this Agreement or
any actual or proposed use of proceeds of Loans hereunder; provided that no Indemnitee shall have the
right to be indemnified hereunder for such Indemnitee’s own gross negligence or
willful misconduct as determined by a court of competent jurisdiction.  Each Indemnitee agrees to notify the Company
promptly of any proceeding in respect of which it will seek indemnification
hereunder; provided, however,
that the failure of any Indemnitee so to notify the Company shall not affect
the rights of such Indemnitee hereunder; but provided,
further, that the Company shall be entitled to assert by separate
action against such Indemnitee any claim for actual damages incurred by the
Company as a consequence of such failure by such Indemnitee to give such
notice.  In the event any action, suit or
proceeding is brought against any Indemnitee by any Person other than a Lender,
the Administrative Agent, the Issuing Lender or any of their respective
affiliates (a “third party action”), (i) the
Company shall be entitled, upon written notice to such Indemnitee, to assume
the investigation and defense thereof with counsel reasonably satisfactory to
such Indemnitee unless (x) the employment by such Indemnitee of separate
counsel has been specifically approved by the Company in writing or (y) the
designated parties to the proceeding in which such claim, demand, action or
cause of action has been asserted include (or are reasonably likely to include)
both such Indemnitee and any of the Obligor, or any Affiliate (each, a “designated related party”) and in the opinion of counsel for
such Indemnitee there exist one or more defenses that may be available to such 

 

65

 

Indemnitee which are in
conflict with those available to any designated related party, (ii) such
Indemnitee shall be entitled to employ separate counsel and to participate in
the investigation and defense of any such third party action (whether or not
the Company has elected to assume such investigation and defense as
contemplated by clause (i) above) and (iii) the fees and expenses of
any separate counsel employed by any Indemnitee in connection with any such
third party action shall be borne by such Indemnitee except (x) under the
circumstances contemplated by subclauses (x) and (y) of clause (i) above
or (y) if such Indemnitee has reasonably concluded that the Company is
failing actively and diligently to defend such third party action (whether or
not the Company has elected to assume such investigation and defense as
contemplated by clause (i) above). 
The Company shall not settle or compromise any action or claim without
the relevant Indemnitee’s consent if the settlement or compromise involves any
performance by, or adverse admission of, such Indemnitee.

 

Section 10.04.  Sharing of Set-Offs.  Each Lender agrees that if it
shall, by exercising any right of set-off or counterclaim or otherwise, receive
payment of a proportion of the aggregate amount of principal and interest due
with respect to any Loan and Letter of Credit Liabilities held by it which is
greater than the proportion received by any other Lender in respect of the
aggregate amount of principal and interest due with respect to any Loan and
Letter of Credit Liability held by such other Lender, the Lender receiving such
proportionately greater payment shall purchase such participations in the Loans
and Letter of Credit Liabilities held by the other Lenders, and such other
adjustments shall be made, as may be required so that all such payments of
principal and interest with respect to the Loans and Letter of Credit
Liabilities held by the Lenders shall be shared by the Lenders pro rata; provided that nothing in this Section shall
impair the right of any Lender to exercise any right of set-off or counterclaim
it may have and to apply the amount subject to such exercise to the payment of
indebtedness of the Obligors other than its indebtedness hereunder.  Each Obligor agrees, to the fullest extent it
may effectively do so under applicable law, that any holder of a participation
in a Loan and Letter of Credit Liability, whether or not acquired pursuant to
the foregoing arrangements, may exercise rights of set-off or counterclaim and
other rights with respect to such participation as fully as if such holder of a
participation were a direct creditor of such Obligor in the amount of such
participation.

 

Section 10.05.  Amendments and Waivers.  Except as explicitly set forth in Section 2.12(b),
any provision of this Agreement or the Notes (if any) may be amended or waived
if, but only if, such amendment or waiver is in writing and is signed by each
Obligor and the Required Lenders (and, if the rights or duties of the
Administrative Agent or the Issuing Lender are affected thereby, by the
Administrative Agent and the Issuing Lender, respectively); provided that, except as explicitly set
forth in Section 2.12(b), no such amendment or waiver shall, (x) (i) increase
or decrease the Commitment of any Lender (except for a ratable

 

66

 

decrease in the Commitments of all Lenders)
or subject any Lender to any additional obligation unless signed by such
Lender, (ii) reduce the principal of or rate of interest on any Loan or
the amount to be reimbursed in respect of any Letter of Credit or any interest
thereon or any fees hereunder unless signed by each Lender directly affected
thereby or (iii) postpone the date fixed for any payment of principal of
or interest on any Loan or for reimbursement in respect of any Letter of Credit
or any fees hereunder or for any scheduled reduction or termination of any
Commitment unless signed by each Lender directly affected thereby or (y) unless
signed by all the Lenders (i) release any Guarantor from any of its
obligations under Article 11, (ii) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Loans or the
aggregate amount of the Letter of Credit Liabilities, or the number of Lenders,
which shall be required for the Lenders or any of them to take any action under
this Section or any other provision of this Agreement or (iii) amend
or waive the provisions of Section 10.04, this Section 10.05, Section 10.06(a) or
the definition of Required Lenders.

 

Increases in Commitments and related
modifications pursuant to Section 2.20 are not amendments subject to the
provisions of this Section.

 

Section 10.06.  Successors and Assigns.  (a)  The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, except that none of the Obligors
may assign or otherwise transfer any of its rights under this Agreement without
the prior written consent of all Lenders.

 

(b)        Any Lender may at any time grant to one or more banks or
other institutions (each a “Participant”)
participating interests in its Commitments or any or all of its Loans and
Letter of Credit Liabilities.  In the
event of any such grant by a Lender of a participating interest to a
Participant, whether or not upon notice to each Obligor and the Administrative
Agent, such Lender shall remain responsible for the performance of its
obligations hereunder, and each Obligor and the Administrative Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement.  Any agreement pursuant to which any Lender
may grant such a participating interest shall provide that such Lender shall
retain the sole right and responsibility to enforce the obligations of the
Borrowers hereunder including, without limitation, the right to approve any
amendment, modification or waiver of any provision of this Agreement; provided that such participation agreement
may provide that such Lender will not agree to any modification, amendment or
waiver of this Agreement described in Section 10.05 without the consent of
the Participant.  Each Obligor agrees
that each Participant shall, to the extent provided in its participation
agreement, be entitled to the benefits of Section 2.18 and Article 8
with respect to its participating interest. 
An assignment or other transfer which is not permitted by subsection (c) or
(d) below shall be given effect 

 

67

 

for purposes of this
Agreement only to the extent of and as a participating interest granted in
accordance with this subsection (b).

 

(c)        With the prior written consent of the Administrative Agent,
the Issuing Lender and, so long as no Event of Default has occurred and is
continuing, the Company, which consent shall not be unreasonably withheld (provided that if an Assignee is an
affiliate of such transferor Lender or was a Lender immediately prior to such
assignment or an Approved Fund, no such consent from the Company shall be
required), any Lender may at any time assign to one or more banks or other
institutions (each an “Assignee”) all,
or a proportionate part (equivalent to an initial Commitment in an amount of
not less than $10,000,000) of all, of its rights and obligations under this
Agreement and the Notes (if any), and such Assignee shall assume such rights
and obligations, pursuant to an Assignment and Assumption Agreement in substantially
the form of Exhibit F hereto; provided
that such assignment may, but need not, include rights of the transferor Lender
in respect of outstanding Competitive Bid Loans.  Upon execution and delivery of such
instrument and payment by such Assignee to such transferor Lender of an amount
equal to the purchase price agreed between such transferor Lender and such
Assignee, such Assignee shall be a Lender party to this Agreement and shall
have all the rights and obligations of a Lender with Commitments as set forth
in such instrument of assumption, and the transferor Lender shall be released
from its obligations hereunder to a corresponding extent, and no further
consent or action by any party shall be required.  Upon the consummation of any assignment
pursuant to this subsection (c), the transferor Lender, the Administrative
Agent and the Borrowers shall make appropriate arrangements so that, if
required, a new Note is issued to the Assignee. 
In connection with any such assignment, the transferor Lender shall pay
to the Administrative Agent an administrative fee for processing such
assignment in the amount of $3,500.  If
the Assignee is not incorporated under the laws of the United States of America
or a state thereof, it shall deliver to the Company and the Administrative
Agent certification as to exemption from deduction or withholding of any United
States federal income taxes in accordance with Section 8.04.

 

(d)        Any Lender may at any time assign all or any portion of its
rights under this Agreement and its Note (if any) to a Federal Reserve
Bank.  No such assignment shall release
the transferor Lender from its obligations hereunder.

 

(e)        No Assignee, Participant or other transferee of any Lender’s
rights shall be entitled to receive any greater payment under Section 8.03
or 8.04 than such Lender would have been entitled to receive with respect to
the rights transferred, unless such transfer is made with the Company’s prior
written consent or by reason of the provisions of Section 8.02, 8.03 or
8.04 requiring such Lender to designate a different Applicable Lending Office
under certain circumstances or at a time when the circumstances giving rise to
such greater payment did not exist.

 

68

 

(f)         Notwithstanding anything to the contrary contained herein,
any Lender (a “Granting Lender”) may grant to a
special purpose funding vehicle (an “SPC”) sponsored
by a Granting Lender and identified as such in writing from time to time by the
Granting Lender to the Administrative Agent and the Company, the option to
provide to the Company all or any part of any Loan that such Granting Lender
would otherwise be obligated to make to the Borrower pursuant to this
Agreement; provided that (i) nothing
herein shall constitute a commitment by any SPC to make any Loan and (ii) if
an SPC elects not to exercise such option or otherwise fails to provide all or
any part of such Loan, the Granting Lender shall be obligated to make such Loan
pursuant to the terms hereof.  The making
of a Loan by an SPC hereunder shall utilize the Commitments of the Granting
Lender to the same extent, and as if, such Loan were made by such Granting
Lender.  Each party hereto hereby agrees
that no SPC shall be liable for any indemnity or similar payment obligation under
this Agreement (all liability for which shall remain with the Granting
Lender).  In furtherance of the
foregoing, each party hereto hereby agrees (which agreement shall survive the
termination of this Agreement) that, prior to the date that is one year and one
day after the payment in full of all outstanding commercial paper or other
senior indebtedness of any SPC, it will not institute against, or join any
other Person in instituting against, such SPC any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under the laws of the United
States or any State thereof.  In
addition, notwithstanding anything to the contrary in this Section 10.06,
any SPC may (i) with notice to, but without the prior written consent of,
the Company and the Administrative Agent and without paying any processing fee
therefor, assign all or a portion of its interests in any Loans to the Granting
Lender or to any financial institution providing liquidity and/or credit
support to or for the account of such SPC to support the funding or maintenance
of Loans; provided that any such
assignment to a financial institution other than to the Granting Lender shall
require the consent of the Company and the Administrative Agent, which consent
shall be provided in the sole and absolute discretion of the Company or the
Administrative Agent, as the case may be, and (ii) disclose any non-public
information relating to its Loans to any rating agency, commercial paper dealer
or provider of any surety, guarantee or credit or liquidity enhancement to such
SPC; provided that any such Person (other than a rating agency) signs a
confidentiality agreement which contains substantially the same provisions as
set forth in Section 10.11.  As this
Section 10.06(f) applies to any particular SPC, this Section 10.06(f) may
not be amended without the written consent of such SPC.  Additionally, the Company shall not be
subject to any increased costs pursuant to Section 8.03, indemnity claims
pursuant to Section 10.03(b) or increased taxes pursuant to Section 8.04
(collectively, “Increased Costs”) with respect to
an SPC if the Company would not have been subjected to such Increased Costs had
the Loan not been funded (directly or indirectly) by the SPC and any payment
for any such Increased Costs shall be limited to the amounts that the Company
would have been required to pay to the Granting Lender if such Loan had not
been so funded by the SPC.

 

69

 

Section 10.07.  Collateral.  Each of the Lenders represents to
the Administrative Agent and each of the other Lenders that it in good faith is
not relying upon any “margin stock” (as defined in Regulation U) as collateral
in the extension or maintenance of the credit provided for in this Agreement.

 

Section 10.08.  Governing Law, Submission to
Jurisdiction .  This Agreement
and each Note (if any) shall be governed by and construed in accordance with
the laws of the State of New York.  Each
Obligor hereby submits to the nonexclusive jurisdiction of the United States
District Court for the Southern District of New York and of any New York State
court sitting in New York City for purposes of all legal proceedings arising
out of or relating to this Agreement or the transactions contemplated hereby.  Each Obligor irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such proceeding brought in such a court
and any claim that any such proceeding brought in such a court has been brought
in an inconvenient forum.

 

Section 10.09.  Counterparts; Integration;
Effectiveness.  This Agreement
may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were
upon the same instrument.  This Agreement
constitutes the entire agreement and understanding among the parties hereto and
supersedes any and all prior agreements and understandings, oral or written,
relating to the subject matter hereof. 
This Agreement shall become effective upon receipt by the Administrative
Agent of counterparts hereof signed by each of the parties hereto (or, in the
case of any party as to which an executed counterpart shall not have been
received, receipt by the Administrative Agent in form satisfactory to it of
telegraphic, telex, facsimile or other written confirmation from such party of
execution of a counterpart hereof by such party).

 

Section 10.10.  WAIVER OF JURY TRIAL.  EACH OBLIGOR, THE AGENTS AND THE
LENDERS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

 

Section 10.11.  Confidentiality.  Each of the Administrative Agent
and each Lender agrees to keep any information delivered or made available by
any Obligor pursuant to this Agreement confidential from anyone other than
persons employed or retained by the Administrative Agent or such Lender who are
engaged in evaluating, approving, structuring or administering the credit
facility contemplated hereby; provided that
nothing herein shall prevent the Administrative Agent or any Lender from
disclosing such information (a) to any persons employed or retained by the
Administrative Agent or any other Lender who are engaged in evaluating,
approving, structuring or administering the credit facility contemplated
hereby, (b) to any other Person if reasonably incidental to 

 

70

 

the administration of the credit facility contemplated
hereby so long as such Person agrees to keep such information confidential in
accordance with the provisions of this Section 10.11, (c) upon the
order of any court or administrative agency, (d) upon the request or
demand of any regulatory agency or authority, (e) which had been publicly
disclosed other than as a result of a disclosure by the Administrative Agent or
any Lender prohibited by this Agreement or, to the knowledge of the
Administrative Agent or such Lender, by any other Person as a result of a
disclosure by such Person in violation of an obligation of confidentiality, (f) to
the extent necessary, in connection with any litigation to which the
Administrative Agent, any Lender or its subsidiaries or Parent may be a party, (g) to
the extent necessary in connection with the exercise of any remedy hereunder, (h) to
such Lender’s or the Administrative Agent’s legal counsel and independent
auditors or (i) subject to an agreement containing provisions
substantially similar to those contained in this Section, to (i) any
actual or proposed Participant or Assignee or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative
transaction relating to any Borrower and its obligations.  Each Lender and the Administrative Agent
shall give the Company prompt notice of any disclosure made by such Lender or
the Administrative Agent, as the case may be, as permitted pursuant to clauses
(c), (d) (other than any such disclosure made by any Lender to bank
examiners during any examination of such Lender conducted in the ordinary
course by such examiners) or (f) of this Section, but solely to the extent
permitted by law and, in the case of any disclosure permitted pursuant to
clause (f), solely to the extent that the interests of such Lender or the
Administrative Agent, as the case may be, and the applicable Obligor in the
relevant litigation are not adverse in any material respect.

 

Section 10.12.  Conversion of Currencies.  (a) If, for the purpose of
obtaining judgment in any court, it is necessary to convert a sum owing
hereunder in one currency into another currency, each party hereto (including
any Eligible Subsidiary) agrees, to the fullest extent that it may effectively
do so, that the rate of exchange used shall be that at which in accordance with
normal banking procedures in the relevant jurisdiction the first currency could
be purchased with such other currency on the Euro-Currency Business Day
immediately preceding the day on which final judgment is given.

 

(b)   The obligations of each Borrower in respect of any sum due to any
party hereto or any holder of the obligations owing hereunder (the “Applicable Creditor”) shall, notwithstanding any judgment in
a currency (the “Judgment Currency”) other than the
currency in which such sum is stated to be due hereunder (the “Agreement Currency”), be discharged only to the extent that,
on the Euro-Currency Business Day following receipt by the Applicable Creditor
of any sum adjudged to be so due in the Judgment Currency, the Applicable Creditor
may in accordance with normal banking procedures in the relevant jurisdiction
purchase the Agreement Currency with the Judgment Currency; if the amount of
the Agreement Currency so purchased is less than the sum originally due to the 

 

71

 

Applicable Creditor in the
Agreement Currency, such Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Applicable Creditor against
such loss.  The obligations of the Borrowers
contained in this Section 10.12 shall survive the termination of this
Agreement and the payment of all other amounts owing hereunder.

 

Section 10.13.  European Economic and Monetary
Union.  (a) Definitions.  In this Section 10.13 and in each other
provision of this Agreement to which reference is made in this Section 10.13
expressly or impliedly, the following terms have the meanings given to them in
this Section 10.13:

 

“Euro Unit”
means the currency unit of the Euro;

 

“National Currency Unit”
means the unit of currency (other than a Euro Unit) of a Participating Member
State;

 

(b)        Redenomination and Eligible Currencies.  On the date on which any state that is not a
Participating Member State on the date hereof becomes a Participating Member
State, each obligation under this Agreement of a party to this Agreement which
has been denominated in the National Currency Unit of such Participating Member
State shall be redenominated into the Euro Unit in accordance with EMU
Legislation.

 

(c)        Loans.  Any Loan
in the currency of a state that becomes a Participating Member State after the
date hereof shall be made in the Euro Unit after the date on which such state
becomes a Participating Member State.

 

(d)        Payments by the Administrative Agent to the Lenders.  Any amount payable by the Administrative
Agent to the Lenders under this Agreement in the currency of a state that
becomes a Participating Member State after the date hereof shall be paid in the
Euro Unit after the date on which such state becomes a Participating Member
State.

 

Section 10.14.  USA Patriot Act.  Each Lender subject to the Act
hereby notifies the Borrowers that pursuant to the requirements of the USA
PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”), it is required to obtain,
verify and record information that identifies each Borrower, which information
includes the names and addresses of each Borrower and other information that
will allow such Lender to identify each Borrower in accordance with the Act.

 

72

 

ARTICLE
11

GUARANTY

 

Section 11.01.  The Guaranty.  Each Guarantor hereby
unconditionally guarantees the full and punctual payment (whether at stated
maturity, upon acceleration or otherwise) of the principal of and interest on
each Loan made to each Borrower pursuant to this Agreement, and the full and
punctual payment of all other amounts payable by each Borrower under this
Agreement (including any interest, fees, costs, expenses and other obligations
that accrue after the commencement of any bankruptcy, insolvency,
reorganization or similar case or proceeding, or which would have accrued but
for such case, proceeding or other action and whether or not such interest,
fees, costs, expenses or other obligations are allowed or allowable as a claim
in such case, proceeding or other action). 
Upon failure by any Borrower to pay punctually any such amount, each
Guarantor (in case of the obligations of the Company, only the Company
Guarantor) shall forthwith on demand pay the amount not so paid at the place
and in the manner and currency specified in this Agreement.

 

Section 11.02.  Guaranty Unconditional.  The obligations of each Guarantor
hereunder shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged or otherwise
affected by:

 

(i)    any
extension, renewal, settlement, compromise, waiver or release in respect of any
obligation of any Borrower under this Agreement or any Note, by operation of
law or otherwise;

 

(ii)   any
modification or amendment of or supplement to this Agreement or any Note;

 

(iii)  any
release, impairment, non-perfection or invalidity of any direct or indirect
security for any obligation of any Borrower under this Agreement or any Note;

 

(iv)  any
change in the corporate existence, structure or ownership of any Borrower, or
any insolvency, bankruptcy, reorganization or other similar proceeding
affecting any Borrower or its assets or any resulting release or discharge of
any obligation of any Borrower contained in this Agreement or any Note;

 

(v)   the
existence of any claim, set-off or other rights which either Guarantor may have
at any time against any Borrower, the Administrative Agent, the Issuing Lender,
any Lender or any other Person, whether in connection herewith or any unrelated
transactions, provided that nothing herein
shall prevent the assertion of any such claim by separate suit or compulsory
counterclaim;

 

73

 

(vi)  any
invalidity or unenforceability relating to or against any Borrower for any
reason of this Agreement or any Note, or any provision of applicable law or
regulation purporting to prohibit the payment by any Borrower of the principal
of or interest on any Note or any other amount payable by any Borrower under this
Agreement; or

 

(vii) any
other act or omission to act or delay of any kind by any Borrower, the
Administrative Agent, the Issuing Lender, any Lender or any other Person or any
other circumstance whatsoever which might, but for the provisions of this paragraph,
constitute a legal or equitable discharge of or defense to the Guarantor’s
obligations hereunder.

 

Section 11.03.  Discharge Only upon Payment in
Full; Reinstatement in Certain Circumstances. 
Each Guarantor’s obligations hereunder shall remain in full
force and effect until the Commitments shall have terminated, the principal of
and interest on the Loans and all other amounts payable by the Borrowers under
this Agreement shall have been paid in full and no Letter of Credit Liabilities
remain outstanding.  If at any time any
payment of the principal of or interest on any Loan, any reimbursement
obligation or any other amount payable by any Borrower under this Agreement is
rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy
or reorganization of such Borrower or otherwise, each Guarantor’s obligations
hereunder with respect to such payment shall be reinstated as though such
payment had been due but not made at such time.

 

Section 11.04.  Waiver by the Guarantor.  Each Guarantor irrevocably waives
acceptance hereof, presentment, demand, protest and any notice not provided for
herein, as well as any requirement that at any time any action be taken by any
Person against any Borrower or any other Person.

 

Section 11.05.  Subrogation.  Upon making any payment with
respect to any Borrower hereunder, each applicable Guarantor shall be
subrogated to the rights of the payee against such Borrower with respect to
such payment; provided that such
Guarantor shall not enforce any payment by way of subrogation until all amounts
of principal of and interest on the Loans and all other amounts payable by such
Borrower under this Agreement have been paid in full and no Letter of Credit
Liabilities remain outstanding.

 

Section 11.06.  Stay of Acceleration.  If acceleration of the time for
payment of any amount payable by any Borrower under this Agreement or the Notes
(if any) is stayed upon the insolvency, bankruptcy or reorganization of such
Borrower, all such amounts otherwise subject to acceleration under the terms of
this Agreement shall nonetheless be payable by each applicable Guarantor
hereunder forthwith on demand by the Agent made at the request of the requisite
proportion of the Lenders specified in Section 6.01 of this Agreement.

 

74

 

Section 11.07.  Limitation of Liability.  Notwithstanding the other
provisions of this Article 11, the obligations of each Guarantor hereunder
shall be limited to an aggregate amount equal to the largest amount that would
not render its obligations hereunder subject to avoidance under Section 548
of the United States Bankruptcy Code or any comparable provisions of applicable
law of any State of the United States of America.

 

Section 11.08.  Notice of Commitment Termination.  The Company hereby gives notice
that the Company wishes to terminate the commitments under the Existing Credit
Agreement, effective as of the Effective Date. 
Each Lender that is a party to the Existing Credit Agreement, by its
execution hereof, waives any requirement of prior notice set forth therein as a
condition to the right of the Company to terminate the commitments thereunder.

 

75

 

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

 

 

	
   

  	
  THE ESTÉE LAUDER COMPANIES INC., as Borrower and
  Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Terence
  R. Stack

  
	
   

  	
   

  	
  Name:

  	
  Terence
  R. Stack

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President – Corporate Treasurer

  

 

1

 

	
   

  	
  ESTÉE LAUDER NV, as Eligible Subsidiary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Richard W. Kunes

  
	
   

  	
   

  	
  Name:

  	
  Richard
  W. Kunes

  
	
   

  	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Malcolm B. Bond

  
	
   

  	
   

  	
  Name:

  	
  Malcolm
  B. Bond

  
	
   

  	
   

  	
  Title:

  	
  Director

  

 

 

	
   

  	
  ESTEE LAUDER INC., as Company Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Terence R. Stack

  
	
   

  	
   

  	
  Name:

  	
  Terence
  R. Stack

  
	
   

  	
   

  	
  Title:

  	
  Vice President – Corporate
  Treasurer

  

 

 

	
   

  	
  JPMORGAN CHASE BANK, N.A., as Administrative Agent
  and Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Tara Lynne Moore

  
	
   

  	
   

  	
  Name:

  	
  Tara
  Lynne Moore

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CITIBANK,
  N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Chris Snider

  
	
   

  	
   

  	
  Name:

  	
  Chris
  Snider

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Bank
  of America, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  J. Casey Cosgrove

  
	
   

  	
   

  	
  Name:

  	
  J.
  Casey Cosgrove

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Bank
  of Tokyo – Mitsubishi UFJ Trust Company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Lillian Kim

  
	
   

  	
   

  	
  Name:

  	
  Lillian
  Kim

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  

 

 

	
   

  	
  BNP
  Paribas

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Simone Vinocour

  
	
   

  	
   

  	
  Name:

  	
  Simon
  Vinocour

  
	
   

  	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Berangere Allen

  
	
   

  	
   

  	
  Name:

  	
  Berangere
  Allen

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  William Street Commitment Corporation (recourse
  only to the assets of William Street Commitment Corporation)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Mark Walton

  
	
   

  	
   

  	
  Name:

  	
  Mark
  Walton

  
	
   

  	
   

  	
  Title:

  	
  Assistant
  Vice-President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HSBC
  Bank USA, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Thomas A. Foley

  
	
   

  	
   

  	
  Name:

  	
  Thomas
  A. Foley

  
	
   

  	
   

  	
  Title:

  	
  Senior
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  The
  Royal Bank of Scotland plc

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Belinda Tucker

  
	
   

  	
   

  	
  Name:

  	
  Belinda
  Tucker

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  

 

 

	
   

  	
  Banco Sandander Central Hispano – New York

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Ignacio Campillo

  
	
   

  	
   

  	
  Name:

  	
  Ignacio
  Campillo

  
	
   

  	
   

  	
  Title:

  	
  Executive
  Director Grupo Santander

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  L. Ruben Perez-Romo

  
	
   

  	
   

  	
  Name:

  	
  L.
  Ruben Perez-Romo

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President Global Corporate Banking

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MELLON
  BANK, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Daniel J. Lenckos

  
	
   

  	
   

  	
  Name:

  	
  Daniel
  J. Lenckos

  
	
   

  	
   

  	
  Title:

  	
  First
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  US
  BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Gregory L. Dryder

  
	
   

  	
   

  	
  Name:

  	
  Gergory
  L. Dryder

  
	
   

  	
   

  	
  Title:

  	
  Sr.
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  State
  Street Bank and Trust Company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  M. H. Carey

  
	
   

  	
   

  	
  Name:

  	
  M.H.
  Carey

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  

 

 

	
   

  	
  BANCA NAZIONALE DEL
  LAVORO SPA, NEW YORK BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Donna La Spina

  
	
   

  	
   

  	
  Name:

  	
  Donna
  La Spina

  
	
   

  	
   

  	
  Title:

  	
  Relationship
  Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Luigi Concordia

  
	
   

  	
   

  	
  Name:

  	
  Luigi
  Concordia

  
	
   

  	
   

  	
  Title:

  	
  Senior
  Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ROYAL BANK OF CANADA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Dustin Cravin

  
	
   

  	
   

  	
  Name:

  	
  Dustin
  Cravin

  
	
   

  	
   

  	
  Title:

  	
  Attorney-in-Fact

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Intesa
  Aanpaolo S.p.A., New York Branch

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  D. Mara Lowenstein

  
	
   

  	
   

  	
  Name:

  	
  D.
  Mara Lowenstein

  
	
   

  	
   

  	
  Title:

  	
  General
  Counsel and Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Renato Carducci

  
	
   

  	
   

  	
  Name:

  	
  Renato
  Carducci

  
	
   

  	
   

  	
  Title:

  	
  General Manager

  

 

 

COMMITMENT SCHEDULE

 

	
  LENDER

  	
   

  	
  COMMITMENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  JPMORGAN CHASE BANK, N.A.

  	
   

  	
  $

  	
  90,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  CITIBANK, N.A.

  	
   

  	
  $

  	
  90,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  BANK OF AMERICA, N.A.

  	
   

  	
  $

  	
  75,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  BANK OF TOKYO – MITSUBISHI UFJ TRUST COMPANY

  	
   

  	
  $

  	
  75,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  BNP PARIBAS

  	
   

  	
  $

  	
  75,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  WILLIAM STREET COMMITMENT CORPORATION

  	
   

  	
  $

  	
  50,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  HSBC BANK USA, N.A.

  	
   

  	
  $

  	
  50,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ROYAL BANK OF SCOTLAND PLC

  	
   

  	
  $

  	
  50,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  BANCO SANTANDER
  CENTRAL HISPANO – NEW YORK

  	
   

  	
  $

  	
  30,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MELLON BANK, N.A.

  	
   

  	
  $

  	
  30,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  U.S. BANK NATIONAL ASSOCIATION

  	
   

  	
  $

  	
  30,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  STATE STREET BANK AND TRUST COMPANY

  	
   

  	
  $

  	
  30,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  BANCA NAZIONALE DEL LAVORO SPA, NEW YORK BRANCH

  	
   

  	
  $

  	
  25,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ROYAL BANK OF CANADA

  	
   

  	
  $

  	
  25,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  INTESA SANPAOLO S.P.A., NEW YORK BRANCH

  	
   

  	
  $

  	
  25,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TOTAL

  	
   

  	
  $

  	
  750,000,000

  	
   

  

 

 

PRICING SCHEDULE

 

Each of “Facility Fee Rate”
and “Euro-Currency Margin” means, for any
day, the rate per annum set forth below in the row opposite such term and in
the column corresponding to the Pricing Level that applies on such day:

 

	
  Pricing

  	
   

  	
  Level I

  	
   

  	
  Level II

  	
   

  	
  Level III

  	
   

  	
  Level IV

  	
   

  	
  Level V

  	
   

  
	
  Facility Fee Rate:

  	
   

  	
  3.5
  bps

  	
   

  	
  4.5
  bps

  	
   

  	
  5
  bps

  	
   

  	
  6
  bps

  	
   

  	
  8
  bps

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Euro-Currency

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Margin:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Utilization ≤ 50%

  	
   

  	
  9.0
  bps 

  	
   

  	
  10.5
  bps 

  	
   

  	
  15.0
  bps 

  	
   

  	
  19.0
  bps 

  	
   

  	
  27.0
  bps 

  	
   

  
	
  Utilization > 50%

  	
   

  	
  14

  	
   

  	
  15.5
  bps

  	
   

  	
  20.0
  bps

  	
   

  	
  24.0
  bps

  	
   

  	
  32.0
  bps

  	
   

  

 

For purposes of this Schedule, the following terms
have the following meanings:

 

“Level I Status” exists at any date if, at
such date, the Company’s Unsecured Long-Term Debt is rated AA- or higher by
S&P or Aa3 or higher by Moody’s.

 

“Level II Status” exists at any date if, at
such date, (i) the Company’s Unsecured Long-Term Debt is rated A+ or
higher by S&P or A1 or higher by Moody’s, and (ii) Level I Status does
not exist.

 

“Level III Status” exists at any date if, at
such date, (i)  the Company’s Unsecured Long-Term Debt is rated A or
higher by S&P or A2 or higher by Moody’s, and (ii) neither Level I
Status nor Level II Status exists.

 

“Level IV Status” exists at any date if, at
such date, (i) the Company’s Unsecured Long-Term Debt is rated A- or
higher by S&P or A3 or higher by Moody’s, and (ii) neither Level I
Status, Level II Status nor Level III Status exists.

 

“Level V Status” exists at any date if, at
such date, no other Status applies.

 

“Moody’s” means Moody’s Investors Services, Inc.

 

“S&P” means Standard & Poor’s
Rating Services.

 

“Status” refers to the
determination of which of Level I Status, Level II Status, Level III Status,
Level IV Status or Level V Status exists at any date.

 

“Utilization” means, at any date, the
percentage equivalent of a fraction (i) the numerator of which is the
aggregate outstanding principal amount of the loans at such date and the face
amount of Letters of Credit outstanding under the 

 

 

Revolving Credit Facility and (ii) the
denominator of which is the aggregate amount of the commitments at such date
under the Revolving Credit Facility; provided
that if any loans remain outstanding following the termination of the
commitments under the Revolving Credit Facility, Utilization will be deemed to
be 100%.

 

The credit ratings to be utilized for purposes of
this Schedule are those assigned to the senior unsecured long-term debt
securities of the Company without third-party credit enhancement (the “Company’s
Unsecured Long-Term Debt”), and any ratings assigned to any other debt
security of the Company shall be disregarded. 
The ratings in effect for any day are those in effect at the close of
business on such day. In the case of split ratings from S&P and Moody’s,
the rating to be used to determine the applicable Status is the higher of the
two (e.g., AA-/A1 results in
Level I Status); provided that if
the split is more than one full rating category, the rating one rating category
below the highest rating shall be used (e.g.,
A/Baa1 results in Level IV Status and AA-/Baa1 results in Level II Status).

 

 

SCHEDULE 4.05

 

On March 30, 2005, the United States District Court for the Northern District of California entered into a Final Judgment approving the settlement agreement we entered into in July 2003 with the plaintiffs, the other Manufacturer Defendants (as defined below) and the Department Store Defendants (as defined below) in a consolidated class action lawsuit that had been pending in the Superior Court of the State of California in Marin County since 1998. On April 29, 2005, notices of appeal were filed by representatives of two members of the purported class of consumers. One of those appeals has since been withdrawn. If the appeal is resolved satisfactorily, the Final Judgment will result in the plaintiffs’ claims being dismissed, with prejudice, in their entirety in both the Federal and California actions. There has been no finding or admission of any wrongdoing by us in this lawsuit. We entered into the settlement agreement solely to avoid protracted and costly litigation. In connection with the settlement agreement, the defendants, including the Company, will provide consumers with certain free products and pay the plaintiffs’ attorneys’ fees. To meet its obligations under the settlement, we took a special pre-tax charge of $22.0 million, or $13.5 million after-tax, equal to $.06 per diluted common share in the fourth quarter of fiscal 2003. At December 31, 2006, the remaining accrual balance was $16.3 million. The charge did not have a material adverse effect on our consolidated financial condition. In the Federal action, the plaintiffs, purporting to represent a class of all U.S. residents who purchased prestige cosmetics products at retail for personal use from eight department stores groups that sold such products in the United States (the “Department Store Defendants”), alleged that the Department Store Defendants, the Company and eight other manufacturers of cosmetics (the “Manufacturer Defendants”) conspired to fix and maintain retail prices and to limit the supply of prestige cosmetics products sold by the Department Store Defendants in violation of state and Federal laws.
The plaintiffs sought, among other things, treble damages, equitable relief, attorneys’ fees, interest and costs.
 
In 1999, the Office of the Attorney General of the State of New York (the “State”) notified the Company and ten other entities that they had been identified as potentially responsible parties (“PRPs”) with respect to the Blydenburgh landfill in Islip, New York. Each PRP may be jointly and severally liable for the costs of investigation and cleanup, which the State estimated in 2006 to be approximately $19.7 million for all PRPs. In 2001, the State sued other PRPs (including Hickey’s Carting, Inc., Dennis C. Hickey and Maria Hickey, collectively the “Hickey Parties”), in the U.S. District Court for the Eastern District of New York to recover such costs in connection with the site, and in September 2002, the Hickey Parties brought contribution actions against the Company and other Blydenburgh PRPs. These contribution actions seek to recover, among other things, any damages for which the Hickey Parties are found 

 

 

liable in the State’s lawsuit against them, and related costs and expenses, including attorneys’ fees. In June 2004, the State added the Company and other PRPs as defendants in its pending case against the Hickey Parties. In April 2006, the Company and other defendants added numerous other parties to the case as third-party defendants. The Company and certain other PRPs have engaged in settlement discussions which to date have been unsuccessful. Settlement negotiations with the new third-party defendants, the State, the Company and other defendants began in July 2006. We have accrued an amount which we believe would be necessary to resolve our share of this matter. If settlement discussions are not successful, we intend to vigorously defend the pending claims. While no assurance can be given as to the ultimate outcome, management believes that the resolution of the Blydenburgh matters will not have a material adverse effect on our consolidated financial condition.
 
On March 30, 2006, a purported securities class action complaint captioned Thomas S. Shin, et al. v. The Estee Lauder Companies Inc., et al., was filed against the Company and certain of our officers and directors (collectively the “Defendants”) in the United States District Court for the Southern District of New York. The complaint alleged that the Defendants made statements during the period April 28, 2005 to October 25, 2005 in press releases, the Company’s public filings and during conference calls with analysts that were materially false and misleading and that artificially inflated the price of the Company’s stock. The complaint alleged claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The complaint also asserted that during the class period, certain executive officers and the trust for the benefit of a director sold shares of our Class A Common Stock at artificially inflated prices. Three additional purported securities class action complaints were subsequently filed in the United States District Court for the Southern District of New York containing similar allegations. On July 10, 2006, the Court consolidated these actions under the caption In re: Estee Lauder Companies Securities Litigation, appointed lead plaintiff, and approved the selection of lead counsel. A consolidated amended complaint addressing the same issues as the original complaint was filed on September 8, 2006. The Defendants filed a motion to dismiss the amended complaint on November 7, 2006 and the plaintiff responded to the motion on January 5, 2007. Defendants replied to plaintiff’s response on February 5, 2007. The Defendants believe that the claims asserted in the consolidated amended complaint are without merit and they intend to defend the consolidated action vigorously.
 
On April 10, 2006, a shareholder derivative action complaint captioned Miriam Loveman v. Leonard A. Lauder, et al., was filed against certain of our officers and all of our directors as of that date (collectively the “Derivative Action Defendants”) in the United States District Court for the Southern District of New York. The complaint alleges that the Derivative Action Defendants breached their fiduciary duties to the Company based on the same alleged course of conduct 

 

 

identified in the complaint described above. On May 4, 2006, the derivative action was reassigned to the judge assigned to the consolidated securities action. On September 1, 2006, the Derivative Action Defendants filed a motion to dismiss. The plaintiff responded to the Derivative Action Defendants’ motion to dismiss on December 11, 2006. The Derivative Action Defendants replied to plaintiff’s response on January 29, 2007. The Derivative Action Defendants believe that this complaint is without merit and intend to defend the action vigorously.

 

 

EXHIBIT A

 

NOTE

 

	
   

  	
  New
  York, New York

  
	
   

  	
   

  
	
   

  	
  ___________
  __ , 200_

  

 

For value received, ________________________, a
___________ corporation (the “Borrower”),
promises to pay to the order of ______________________ (the “Lender”), for the account of its Applicable Lending Office,
the unpaid principal amount of each Loan made by the Lender to the Borrower
pursuant to the Credit Agreement referred to below on the maturity date
provided for in the Credit Agreement. The Borrower promises to pay interest on
the unpaid principal amount of each such Loan on the dates and at the rate or
rates and in the currency provided for in the Credit Agreement.  All such payments of principal and interest
shall be made (i) if in dollars, in lawful money of the United States in
Federal or other immediately available funds at the office of JPMorgan Chase
Bank, N.A., 270 Park Avenue, New York, New York, 10017, or (ii) if in an
Alternative Currency, in such funds as may then be customary for the settlement
of international transactions in such Alternative Currency at the place
specified for payment thereof pursuant to the Credit Agreement.

 

All Loans made by the Lender, the respective types
and maturities and currencies thereof and all repayments of the principal
thereof shall be recorded by the Lender and, if the Lender so elects in
connection with any transfer or enforcement hereof, appropriate notations to
evidence the foregoing information with respect to each such Loan then
outstanding may be endorsed by the Lender on the schedule attached hereto, or
on a continuation of such schedule attached to and made a part hereof; provided that
the failure of the Lender to make any such recordation or endorsement shall not
affect the obligations of the Borrower hereunder or under the Credit Agreement.

 

This note is one of the Notes referred to in the
Credit Agreement dated as of April 26, 2007 among The Estée Lauder
Companies Inc., Estee Lauder Inc., the Eligible Subsidiaries referred to
therein, the lenders listed on the signature pages thereof, Citibank, N.A.
and Bank of America, N.A., as Syndication Agents, Bank of Tokyo-Mitsubishi UFJ
Trust Company and BNP Paribas, as Documentation Agents, and JPMorgan Chase
Bank, N.A., as Administrative Agent (as the same may be amended from time to
time, the “Credit Agreement”).  Terms defined in the Credit Agreement are
used herein with the same meanings. 
Reference is made to the Credit Agreement for provisions for the
prepayment hereof and the acceleration of the maturity hereof.

 

Pursuant to the terms of the Credit Agreement, [the
Company Guarantor][each Guarantor] has unconditionally guaranteed the full and
punctual payment of all amounts payable under this Note.

 

 

This note shall be governed by, and construed in
accordance with, the laws of the State of New York.

 

	
   

  	
  [THE
  BORROWER]

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

LOANS AND PAYMENTS OF
PRINCIPAL

 

	
  Date

  	
   

  	
  Amount
  of

  Loan

  	
   

  	
  Type
  of Loan

  	
   

  	
  Amount
  of

  Principal

  Repaid

  	
   

  	
  Notation

  Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT B

 

FORM OF
COMPETITIVE BID QUOTE REQUEST

 

[Date]

 

	
  To:

  	
  JPMorgan
  Chase Bank, N.A. (the “Administrative Agent”)

  
	
   

  	
   

  
	
  From:

  	
  [BORROWER]

  
	
   

  	
   

  
	
  Re:

  	
  Credit Agreement (as
  amended, the “Credit Agreement”) dated as of
  April 26, 2007 among The Estée Lauder Companies Inc., Estee Lauder Inc.,
  the Eligible Subsidiaries referred to therein, the lenders listed on the
  signature pages thereof, Citibank, N.A. and Bank of America, N.A., as
  Syndication Agents, Bank of Tokyo-Mitsubishi UFJ Trust Company and BNP
  Paribas, as Documentation Agents, and JPMorgan Chase Bank, N.A., as
  Administrative Agent

  

 

We hereby give notice pursuant to Section 2.03
of the Credit Agreement that we request Competitive Bid Quotes for the
following proposed Competitive Bid Borrowing(s):

 

Date of Borrowing:  __________________

 

	
  Principal
  Amount(1)

  	
   

  	
  Interest Period(2)

  	
   

  	
  Currency

  	
   

  
	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Such Competitive Bid Quotes should offer a
Competitive Bid [Margin] [Absolute Rate]. [The applicable base rate is the
London Interbank Offered Rate.]

 

Terms used herein have the meanings assigned to them
in the Credit Agreement.

 

	
   

  	
  [BORROWER]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name

  

 

(1) Amount
must be (x) in the case of a Dollar-Denominated Borrowing, in a minimum
aggregate Dollar Amount of $20,000,000 and any larger multiple of $1,000,000
and (y) in the case of an Alternative Currency Borrowing, in a minimum
aggregate Dollar Amount of $5,000,000 and in integral multiples of 500,000
units of the applicable Alternative Currency.

 

(2) Not
less than one month (LIBOR Auction) or not less than 7 days (Absolute Rate
Auction), subject to the provisions of the definition of Interest Period.

 

 

EXHIBIT C

 

FORM OF
INVITATION FOR COMPETITIVE BID QUOTES

 

	
  To:

  	
  [Name
  of Lender]

  
	
   

  	
   

  
	
   

  	
  Re:         Invitation
  for Competitive Bid Quotes to [BORROWER] (the “Borrower”)

  

 

Pursuant to Section 2.03 of the Credit
Agreement dated as of April 26, 2007 among The Estée Lauder Companies
Inc., Estee Lauder Inc., the Eligible Subsidiaries referred to therein, the
lenders listed on the signature pages thereof, Citibank, N.A. and Bank of
America, N.A., as Syndication Agents, Bank of Tokyo-Mitsubishi UFJ Trust
Company and BNP Paribas, as Documentation Agents, and the undersigned, as
Administrative Agent, we are pleased on behalf of the Borrower to invite you to
submit Competitive Bid Quotes to the Borrower for the following proposed
Competitive Bid Borrowing(s):

 

Date of Borrowing:  __________________

 

	
  Principal
  Amount(3)

  	
   

  	
  Interest Period(4)

  	
   

  	
  Currency

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Such Competitive Bid Quotes should offer a
Competitive Bid [Margin] [Absolute Rate]. 
[The applicable base rate is the London Interbank Offered Rate.]

 

Please respond to this invitation by no later than
9:30 A.M. (New York City time) on [date].

 

	
   

  	
  JPMORGAN
  CHASE BANK, N.A., as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized
  Officer

  

 

(3) Amount
must be (x) in the case of a Dollar-Denominated Borrowing, in a minimum
aggregate Dollar Amount of $20,000,000 and any larger multiple of $1,000,000
and (y) in the case of an Alternative Currency Borrowing, in a minimum
aggregate Dollar Amount of $5,000,000 and in integral multiples of 500,000
units of the applicable Alternative Currency.

 

(4) Not
less than one month (LIBOR Auction) or not less than 7 days (Absolute Rate
Auction), subject to the provisions of the definition of Interest Period.

 

 

EXHIBIT D

 

FORM OF
COMPETITIVE BID QUOTE

 

	
  To:

  	
  JPMorgan
  Chase Bank, N.A., as Administrative Agent

  
	
   

  	
   

  
	
  Re:

  	
  Competitive Bid Quote to
  [BORROWER] (the “Borrower”)

  

 

In response to your invitation on behalf of the
Borrower dated _____________ , 20__ , we hereby make the following Competitive
Bid Quote on the following terms:

 

	
  1.

  	
  Quoting
  Lender: ________________________________

  
	
  2.

  	
  Person
  to contact at Quoting Lender:

  
	
   

  	
  _____________________________

  
	
  3.

  	
  Date
  of Borrowing: ____________________*

  
	
  4.

  	
  We
  hereby offer to make Competitive Bid Loan(s) in the following principal
  amounts, for the following Interest Periods and at the following rates:

  

 

	
  Principal

  Amount**

  	
   

  	
  Currency

  	
   

  	
  Interest

  Period***

  	
   

  	
  Competitive Bid

  [Margin****]

  	
   

  	
  [Absolute Rate*****]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

[provided, that the aggregate principal amount of Competitive
Bid Loans for which the above offers may be accepted shall not exceed
$____________.]**

 

*
As specified in the related Invitation.

**
Principal amount bid for each Interest Period may not exceed principal Dollar
Amount requested.  Specify aggregate
limitation if the sum of the individual offers exceeds the amount the Lender is
willing to lend.  Bids must be made for
amounts of (x) in the case of a Dollar-Denominated Borrowing, $5,000,000
or a larger multiple of $1,000,000 and (y) in the case of an Alternative
Currency Borrowing, $500,000 or an integral multiple of 500,000 units of the
applicable Alternative Currency.

 

(notes continued on following page)

 

 

We understand and agree that the offer(s) set
forth above, subject to the satisfaction of the applicable conditions set forth
in the Credit Agreement dated as of April 26, 2007 among The Estée Lauder
Companies Inc., Estee Lauder Inc., the Eligible Subsidiaries referred to therein,
the lenders listed on the signature pages thereof, Citibank, N.A. and Bank
of America, N.A., as Syndication Agents, Bank of Tokyo-Mitsubishi UFJ Trust
Company and BNP Paribas, as Documentation Agents, and yourselves, as
Administrative Agent, irrevocably obligates us to make the Competitive Bid Loan(s) for
which any offer(s) are accepted, in whole or in part.

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  [NAME
  OF LENDER]

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized
  Officer

  
					

 

***
Not less than one month or not less than 7 days, as specified in the related
Invitation.  No more than five bids are
permitted for each Interest Period.

****
Margin over or under the London Interbank Offered Rate determined for the
applicable Interest Period.  Specify
percentage (to the nearest 1/10,000 of 1%) and specify whether “PLUS” or “MINUS”.

***** Specify rate of interest per annum (to
the nearest 1/10,000th of 1%).

 

 

EXHIBIT E-1

 

OPINION OF

COUNSEL FOR
THE OBLIGORS

 

Please see the final
opinion.

 

 

 

CONFIDENTIAL

 

JPMorgan Chase Bank, N.A.

as
Administrative Agent (as defined in the Credit Agreement defined below)

270 Park Avenue

New York, NY
10017

United States of
America

 

26 April 2007

 

Ladies and Gentlemen,

 

Re:                             ESTEE LAUDER NV - $750,000,000
CREDIT AGREEMENT

 

1.                                       INTRODUCTION

 

In
our capacity as special Belgian law counsel to Estée Lauder NV, a Belgian
limited liability company (naamloze
vennootschap/société anonyme) having its registered office at
Nijverheidsstraat 15, 2260 Westerlo (Oevel), Belgium and registered under
company number VAT BE 0403.768.933 RLP Turnhout (the “Belgian
Subsidiary”) we have been asked to issue an opinion letter (this “Opinion Letter”) in connection with certain aspects of the
transactions contemplated in a $750,000,000 Credit Agreement
dated 26 April 2007 between The Estée Lauder Companies Inc., Estée Lauder
Inc., the Eligible Subsidiaries referred to therein (which includes the Belgian
Subsidiary), the lenders listed on the signature pages thereof, Citibank,
N.A. and Bank of America, N.A., as Syndication Agents, Bank of Tokyo-Mitsubishi Trust Company and BNP
Paribas, as Documentation Agents, and JPMorgan Chase Bank, N.A., as
Administrative Agent (the “Credit Agreement”).

 

This
Opinion Letter is issued pursuant to paragraph (a) (ii) of Section 3.01
(Closing) of the Credit Agreement.

 

We have received instructions solely from and participated in discussions
solely with the Belgian Subsidiary and the Company (as defined in the Credit
Agreement).

 

 

 

2.                                       SCOPE
AND INTERPRETATION

 

2.1                                 This Opinion Letter is governed by, and shall be construed in accordance with, Belgian
law, and the Belgian courts shall have exclusive jurisdiction regarding any
matters relating to it.

 

2.2                                 This
Opinion Letter is limited to Belgian law as applied by the Belgian courts as at
the date of this Opinion Letter. We have made no investigation of the laws of
any jurisdiction other than those of Belgium and we do not express or imply any
opinion as to the laws of any jurisdiction other than those of Belgium. We do not express any opinion on European Community law as
it affects any jurisdiction other than Belgium. We express no opinion on any
matters of direct or indirect taxation. We express no opinion as
to matters of fact.

 

2.3                                 Nothing in this Opinion Letter should be construed as
implying that we are familiar with the affairs of any of the parties to the
Opinion Documents, and this Opinion Letter is based solely on the
investigations and subject to the limits stated herein. The opinions in  this Opinion
Letter are limited to the matters stated herein and do not extend
to, and are not to be read as extending by implication to, any other matter in
connection with the Opinion
Documents, the transactions to which they relate or otherwise.

 

2.4                                 In this Opinion Letter, Belgian legal concepts are
expressed in English terms and not in their original Dutch or French terms. The
concepts concerned may not be identical to the concept described by the same
English term under the laws of other jurisdictions.

 

2.5                                 Terms defined in the Credit Agreement shall,
unless otherwise defined in this Opinion Letter, have the same meanings when
used in this Opinion Letter. In addition, in this Opinion Letter “Opinion Documents” means:

 

(a)                                  the Credit
Agreement; and

 

(b)                                 each of the
Notes listed in the schedule to this Opinion Letter.

 

3.                                       DOCUMENTS

 

For the purpose of this Opinion Letter we have examined the following
documents:

 

3.1                                 a copy of an executed original of each of the Opinion
Documents;

 

2

 

3.2                                 an excerpt of the deed of incorporation of the Belgian
Subsidiary dated 18 June 1965, as published in the Annexes to the Belgian
Official Gazette of 8 July 1965 (the “Excerpt of the Deed of
Incorporation”);

 

3.3                                 a copy of the coordinated articles of association of the
Belgian Subsidiary as included in a notarial deed passed before notary public
Vincent Vroninks on 30 June 2004, certified to be a true copy by the clerk
of the commercial court of Turnhout on 18 April 2007 (the “Coordinated Articles of Association”);

 

3.4                                 a copy of the minutes of the meeting of the board of
directors of the Belgian Subsidiary held on 24 April 2007 (the “Board Resolutions”);

 

3.5                                 a copy of the resolutions of the shareholders of the
Belgian Subsidiary made on 24 April 2007, as filed with the commercial
court of Turnhout (the “Shareholders Resolutions”);

 

3.6                                 a written confirmation of the clerk of the commercial court
of Turnhout dated 26 April 2007 confirming that the Belgian Subsidiary
has, on the date thereof, not been declared bankrupt and has not entered into
judicial composition (the “Certificate of
Non-Bankruptcy”);

 

3.7                                 a “complete excerpt of an incorporated enterprise” issued
by the Crossroads Bank of Enterprises in relation to the Belgian Subsidiary and
referring to the circumstances in existence on 26 April 2007 (the “CBE Excerpt”); and

 

3.8                                 all publications in the Belgian Official Gazette in
relation to the Belgian Subsidiary made between 19 October 1999 and 25 April 2007
(the “Publications”).

 

Except for the documents listed
above, we have not examined any corporate records of the Belgian Subsidiary nor  any contracts or any other
documents entered into by or affecting, and have not made any other enquiries
or searches concerning, any party to the Opinion Documents.

 

4.                                       ASSUMPTIONS

 

For the purposes of this Opinion Letter, we have assumed (without making
any investigation) that:

 

4.1                                 all documents submitted to us as originals are authentic
and complete and all documents submitted to us in electronic form or as
photocopies or facsimile transmitted copies or other copies of originals
conform to the originals and all such originals are authentic and complete;

 

3

 

4.2                                 all signatures, stamps and seals on any documents submitted
to us are genuine;

 

4.3                                 none of the Opinion Documents have been amended,
supplemented, terminated, rescinded or declared null and void by a court or any
other person;

 

4.4                                 all search results obtained by electronic data transmission
are reliable and the results of any printed or computer search of offices of
public record are accurate;

 

4.5                                 the Excerpt of the Deed of Incorporation refers to a valid
notary deed, the contents whereof are complete and accurate, which is not void
or otherwise affected by any defects for which a court might dissolve the
Belgian Subsidiary;

 

4.6                                 the principal establishment of the Belgian Subsidiary is
located in Belgium;

 

4.7                                 the Belgian Subsidiary has not (i) resolved to enter
into liquidation, (ii) been dissolved (ontbonden/dissoute),
(iii) been annulled as a legal entity, (iv) filed an application for
or been subject to proceedings for composition with creditors (gerechtelijk akkoord/concordat judiciaire), (v) filed
an application for bankruptcy or been adjudicated bankrupt, or (vi) taken
any similar action or been the subject of any similar proceedings in any
applicable jurisdiction (although not constituting conclusive evidence, this
assumption is supported by the Publications, the CBE Excerpt and the
Certificate of Non-Bankruptcy);

 

4.8                                 the Belgian Subsidiary is not subject to measures such as
the appointment of a provisional administrator (voorlopig
bewindvoerder/administrateur provisoire) or sequestrator (sekwester/sequester);

 

4.9                                 the Coordinated Articles of Association have not been
amended since 30 June 2004 (although not constituting conclusive evidence,
this assumption is supported by the Publications);

 

4.10                           the Belgian Subsidiary is not listed on the stock exchange
in a Member State of the European Union;

 

4.11                           the Board Resolutions and Shareholders Resolutions were
duly passed, have not been amended, revoked, varied or declared null and void
and remain in full force and effect and, as regards the Board Resolutions, the
relevant meeting was properly convened, quorate and conducted in accordance
with the Coordinated Articles of Association and Belgian law;

 

4.12                           the directors of the Belgian Subsidiary have been duly
appointed;

 

4

 

4.13                           the directors of the Belgian Subsidiary who attended and
voted at the said board meeting have complied with the applicable provisions of
Articles 523 and 524 of the Belgian Company Code dealing with conflicts of
interest of directors;

 

4.14                           the directors of the Belgian Subsidiary have satisfied
themselves that the entry into the Opinion Documents is of benefit to it, and
their conclusions in this respect are not unreasonable;

 

4.15                           each party to the Opinion Documents (other than the Belgian
Subsidiary) has been duly incorporated and is validly existing as a legal
entity and, to the extent relevant in such party’s jurisdiction, is in good
standing, under all laws applicable to that party;

 

4.16                           each of the parties to the Opinion Documents (other than
the Belgian Subsidiary) has all requisite power and capacity (corporate and
otherwise) to enter into the Opinion Documents, and to perform its obligations
thereunder;

 

4.17                           the due authorisation, execution and delivery of the
Opinion Documents by each of the parties thereto (other than the Belgian
Subsidiary);

 

4.18                           the proceeds of any drawing under the Credit Agreement will
not be used for the purpose mentioned in Article 629 of the Belgian
Company Code, i.e. in view of the direct or
indirect acquisition of shares or profit certificates in the share capital of
the borrower or security provider, or any certificates in relation thereto, or
for the purposes of unlawful financial assistance under the laws of any other
applicable jurisdiction;

 

4.19                           none of the parties is or will be seeking to achieve any
purpose not apparent from the Opinion Documents which might render any Opinion
Document illegal or void;

 

4.20                           there are no dealings, agreements or arrangements, actions
or events between, by or involving any of the parties to the Opinion Documents,
which terminate, modify or supersede any of the terms of the Opinion Documents,
or which otherwise affect the opinions given in this Opinion Letter;

 

4.21                           there are no contractual or similar restrictions binding
upon any party to the Opinion Documents which would have any implication on the
opinions given in this Opinion Letter;

 

4.22                           the obligations of all parties under any applicable law
other than Belgian law are binding upon them;

 

5

 

4.23                           the exercise and performance by any party to the Opinion
Documents of its rights and obligations thereunder is lawful in the place of
exercise or performance (other than Belgium); and

 

4.24                           there are no provisions of the laws of any jurisdiction
outside Belgium which would have any implication for the opinions given in this
Opinion Letter and, insofar as the laws of any jurisdiction outside Belgium may
be relevant, such laws have been or will be complied with.

 

5.                                       OPINION

 

Based upon and subject to the assumptions, qualifications and limitations
set out in this Opinion Letter and having regard to such legal considerations
as we have deemed relevant and subject to any matters not disclosed to us, we
express the following opinions insofar as Belgian law is concerned.

 

5.1                                 Status

 

The Belgian Subsidiary is a limited liability company (naamloze vennootschap/ société anonyme) duly incorporated
and validly existing under the laws of Belgium.

 

5.2                                 Power and authority

 

The execution and delivery of the Opinion Documents and the transactions
contemplated thereby (collectively, the “Transactions”)
are within the Belgian Subsidiary’s corporate powers and have been duly
authorised by all necessary corporate action.

 

5.3                                 Due execution and binding
obligations

 

The Opinion Documents have been duly executed and delivered by the Belgian
Subsidiary and constitutes a legal, valid, binding and enforceable obligation
of the Belgian Subsidiary.

 

5.4                                 No conflicts

 

The Transactions (a) do not require any consent or approval of,
registration or filing with, or any other action by, any federal or local
governmental authority in Belgium, and (b) will not violate neither the
Coordinated Articles of Association nor any corporate law or regulation
applicable to Belgian companies generally.

 

6

 

 

6.             QUALIFICATIONS

 

The
opinions expressed in this Opinion Letter are subject to the following
qualifications:

 

6.1           By the term “valid and binding” as used herein we do not
mean every obligation of the relevant party will be given literal effect if
sued upon. Our opinion is a reference to the legal character of obligations
assumed by the relevant party and is not to be construed as a prediction of the
outcome of litigation.

 

6.2           The term “enforceable” as used herein refers a type and
form enforced by Belgian courts. The term does not address the extent to which
a judgment obtained in a court outside Belgium will be enforceable in Belgium.
It does not mean that each obligation will be enforced in accordance with its
terms in every circumstance or in foreign jurisdictions or by or against third
parties or that any particular remedy will be available.

 

6.3           The enforceability of any agreement or instrument may be
limited by bankruptcy, insolvency, liquidation, reorganisation, fraudulent
conveyance, misuse of rights, limitation and other laws of general application
relating to or affecting the rights of creditors, and claims may be or become
subject to set-off or counter-claim notwithstanding any provision to the
contrary.

 

6.4           Any provision providing for an event of default, an
acceleration or another early termination of any of the Opinion Documents by
reason of the Belgian Subsidiary being subject to proceedings for a judicial
composition with creditors (gerechtelijk
akkoord/concordat judiciaire) may not be enforceable against the
Belgian Subsidiary.

 

6.5           The enforceability in Belgium of the choice of New York law
to govern the Opinion Documents is subject to (i) the mandatory
application of rules of Belgian public policy and (ii) the possible
application (in accordance with the convention of 19 June 1980 on the laws
applicable to contractual obligations) by a Belgian court of mandatory
provisions of the law of another country with which the subject matter of the
relevant Opinion Document has a close link if and to the extent that, pursuant
to the laws of such other country, such mandatory rules must be applied
regardless of the law chosen by the parties.

 

6.6           Periods of grace for the performance of its obligations may
be granted by the courts to a debtor who has acted in good faith.

 

6.7           Equitable remedies, such as injunction and specific
performance, are discretionary and may not be awarded by the Belgian courts. In
particular, such remedies may 

 

7

 

not be available where damages are considered to be
an adequate and appropriate remedy.

 

6.8           The taking of concurrent proceedings in more than one
jurisdiction in which Council Regulation (EC) No 44/2001 of 22 December 2000
on jurisdiction and the recognition and enforcement of judgments in civil and
commercial matters or the Lugano Convention of 16 September 1988 on
judicial competence and enforcement of judgments in civil and commercial
matters is applicable may be precluded by the said Regulation or Convention.

 

6.9           In accordance with the Belgian rules and procedures
set out in the Act of 16 July 2004 holding the Code of Private
International Law (the “Code”), any
final and conclusive judgment for a fixed and definite sum of money obtained in
a competent United States court (a “Foreign Judgment”)
will be recognised and declared enforceable in Belgium (subject
to submission of a copy of the Foreign Judgement that satisfies the conditions
necessary for its authenticity, an original or certified copy of the
introductory writ of summons or equivalent document if the Foreign Judgement
was granted without the defendant appearing and any document showing that the
Foreign Judgement is enforceable and has been notified to the defendant, or
such other documents as the court deems sufficient) without investigation of
the merits of the case, unless (i) the effect of recognising the Foreign
Judgement or declaring it enforceable would be manifestly incompatible with
public policy principles or public law in Belgium, (ii) due process has
not been observed, (iii) the Foreign Judgement was obtained solely to
circumvent the application of laws that mandatorily apply on the basis of
Belgian conflict of law rules, (iv) the Foreign Judgement is not final, (v) the
Foreign Judgement is incompatible with a previous judgement rendered either in
Belgium or, if subject to potential recognition in Belgium, abroad, (vi) the
claim resulting in the Foreign Judgement was introduced after the introduction
of a claim in Belgium that is still pending in Belgium between the same parties
and with the same subject-matter, (vii) the Belgian courts have exclusive
jurisdiction to determine the matter, (viii) the court that rendered the
Foreign Judgement obtained jurisdiction solely by reason of the presence in the
jurisdiction of that court of the plaintiff or of assets not directly linked to
the dispute, or (ix) the Foreign Judgement conflicts with the parties’
rights in a collective insolvency procedure as provided in the Code.

 

6.10         The enforcement in Belgium of the Opinion Documents and any
judgement is in relation thereto is subject to Belgian rules of civil
procedure.

 

6.11         Belgian courts may demand a translation into the language
of the proceedings of the Opinion Documents submitted to them.

 

8

 

6.12         Foreign plaintiffs may be required, at the request of a
Belgian defendant, to post a bond to secure payment of any expenses or damages
for which the foreign plaintiff might be liable, unless waived in an applicable
treaty.

 

6.13         When a debtor is ordered to pay a sum of money exceeding
€12,500 by judgment obtained in a Belgian court, or by foreign judgment
recognised and rendered enforceable in Belgium (other than a foreign judgment
falling within the scope of Council Regulation (EC) No 44/2001 of 22 December 2000
on jurisdiction and the recognition and enforcement of judgments in civil and
commercial matters or the Lugano Convention of 16 September 1988 on
judicial competence and enforcement of judgments in civil and commercial
matters), a registration duty of 3% is due on any sum of money which the debtor
is ordered to pay. When due, this
registration duty can by claimed from both the debtor and the creditor, it
being understood that the maximum liability of the creditor is fixed at half of
the sum for which judgment is given in its favour and of which payment is
obtained and that, in order to secure payment of the registration tax (and
possible fines), the Belgian tax administration has a priority right on the
sums for which judgment is given.

 

6.14         A provision that a calculation, determination or
certificate will be conclusive and binding will not apply to a calculation,
determination or certificate which is given unreasonably, arbitrarily or
without good faith or which is fraudulent or manifestly inaccurate and will not
necessarily prevent judicial inquiry into the merits of any claim.

 

6.15         Failure to exercise a right may operate as a waiver of that
right notwithstanding any provision to the contrary in the Opinion Documents.

 

6.16         Where only a part of a contract is enforceable, the
enforceability of that part of the contract may be limited to circumstances in
which the unenforceable portion is not an essential part of the contract.

 

6.17         We express no opinion regarding:

 

(a)           the
accuracy or completeness of any statements or warranties of fact set out in the
Opinion Documents, which statements and
warranties we have not independently verified;

 

(b)           the enforceability against the Belgian Subsidiary in Belgium with respect to
the following:

 

(i)            the
provisions of the Opinion Documents insofar as
the application of post-maturity rates specified therein results in an increase
of the rate of interest applicable prior to maturity of any 

 

9

 

amount remaining unpaid after its
maturity by more than 0.5% per annum on the total outstanding principal amount
remaining unpaid after its maturity;

 

(ii)           the provisions of the Opinion Documents insofar as they
require payment of interest on past due interest amounts for a period of less
than one calendar year, or unless a formal demand has been served or a specific agreement has been made in
respect of interest amounts past due for a period of at least one calendar
year;

 

(iii)          the provisions of the Opinion Documents insofar as amounts due thereunder in case of prepayment exceed an
amount equal to 6 months interest on the amount prepaid calculated at the rate
applicable to such prepaid amount prior to prepayment;

 

(iv)          the provisions of the Opinion Documents insofar as they
require a party to reimburse attorneys’ fees in connection with the enforcement of rights before Belgian
courts;

 

(v)           any provision requiring written amendments and waivers insofar as it suggests that oral or other modifications, amendments or waivers could not be effectively agreed upon or granted
by or between the parties;

 

(vi)          any waiver of statutory time bar of a claim if such waiver
has been given before the relevant claim has become time barred; and

 

(vii)         the enforceability of any provisions rendering the obligations assumed by a party not meaningful.

 

We do not assume any responsibility for updating this Opinion Letter as of
any date subsequent to the date of this Opinion Letter, and assume no
responsibility for advising you of any changes with respect to any matters
described in this Opinion Letter or of the discovery subsequent to the date of
this Opinion Letter of information not previously known to us pertaining to
events occurring prior to the date of this Opinion Letter.

 

This Opinion
Letter is issued by Baker &
McKenzie, a Belgian limited liability company (CVBA/SCRL),
and not by or on behalf of Baker & McKenzie International (a Swiss Verein) or any member firm thereof. In this Opinion Letter the expressions “we”, “us”, “our” and like
expressions should be construed accordingly.

 

This Opinion
Letter is issued for the benefit of the Administrative Agent in connection 

 

10

 

with the transactions contemplated by the Opinion Documents. This Opinion
Letter is not to be disclosed to any other person nor is it to be relied upon
by any other person or for any other purpose or quoted or referred to in any
public document without our prior written consent.

 

Yours faithfully,

 

BAKER & MCKENZIE
CVBA

 

 

	
  /s/Antoine De Raeve

  	
   

  	
  /s/Alain Huyghe

  
	
  Antoine De Raeve

  	
   

  	
  Alain Huyghe

  

 

11

 

SCHEDULE

NOTES

 

1.             A Note dated 26 April 2007 issued by the Belgian
Subsidiary to the Royal Bank of Canada.

 

2.             A Note dated 26 April 2007 issued by the Belgian
Subsidiary to BNP Paribas.

 

12

 

EXHIBIT E-2

 

OPINION OF

COUNSEL FOR ESTÉE LAUDER NV

 

 

Please
see the final opinion.

 

 

April 26, 2007

 

To the Lenders and the Agents

Referred to Below

c/o JPMorgan Chase Bank, N.A., as Administrative
Agent

395 N Service Road

Melville, NY 11747

 

Ladies and Gentlemen:

 

We
have acted as counsel to The Estée Lauder Companies Inc., a Delaware
corporation (the “Company”), Estee Lauder Inc., a
Delaware corporation (the “Company Guarantor”
and together with the Company, the “Delaware Obligors”)
and Estée Lauder NV (the “Belgian Subsidiary”
and, together with the Delaware Obligors, the “Obligors”),
in connection with the preparation, authorization, execution and delivery of,
and the consummation of the transactions contemplated by, the Credit Agreement
dated as of April 26, 2007 among the Company, the Company Guarantor, the
Belgian Subsidiary and the other Eligible Subsidiaries referred to therein, the
lenders listed on the signature pages thereof (the “Lenders”),
Citibank, N.A. and Bank of America, N.A., as Syndication Agents, Bank of
Tokyo-Mitsubishi UFJ Trust Company and BNP Paribas, as Documentation Agents and
JPMorgan Chase Bank, N.A., as Administrative Agent (the “Credit
Agreement”).  This opinion is
being rendered to you at the request of our clients pursuant to Section 3.01(a) of the Credit Agreement.  Capitalized terms defined in the Credit
Agreement and used (but not otherwise defined) herein are used herein as so
defined.

 

In
so acting, we have examined originals or copies (certified or otherwise
identified to our satisfaction) of the Credit Agreement, the Notes and such
corporate records, agreements, documents and other instruments, and such
certificates or comparable documents of public officials and of officers and
representatives of each of the Delaware Obligors, and have made such inquiries
of such officers and representatives, as we have deemed relevant and necessary
as a basis for the opinions hereinafter set forth.

 

 

In
such examination, we have assumed the genuineness of all signatures, the legal
capacity of all natural persons, the authenticity of all documents submitted to
us as originals, the conformity to original documents of all documents
submitted to us as certified, conformed or photostatic copies and the
authenticity of the originals of such latter documents.  As to all questions of fact material to these
opinions that have not been independently established, we have relied upon
certificates or comparable documents of officers and representatives of the
Obligors and upon the representations and warranties of the Obligors contained
in the Credit Agreement.  We have also
assumed (i) the valid existence of the Belgian Subsidiary, (ii) that
the Belgian Subsidiary has the requisite corporate power and authority to
execute and deliver the Credit Agreement and the Notes and to perform its
obligations thereunder and (iii) the due authorization, execution and
delivery of the Credit Agreement and the Notes by the Belgian Subsidiary.  As used herein, “to our knowledge” and “of
which we are aware” mean the conscious awareness of facts or other information
by any lawyer in our firm actively involved in the transactions contemplated by
the Credit Agreement.

 

Based
on the foregoing, and subject to the qualifications stated herein, we are of
the opinion that:

 

1.       Each of the Delaware Obligors is a corporation validly
existing and in good standing under the laws of the State of Delaware and has
all requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted.

 

2.       Each of the Delaware Obligors has all requisite corporate
power and authority to execute and deliver the Credit Agreement and, in the
case of the Company, the Notes, and to perform its obligations thereunder.  The execution, delivery and performance of
the Credit Agreement by each of the Delaware Obligors and the Notes by the
Company have been duly authorized by all necessary corporate action on the part
of each of the Delaware Obligors.  The Credit
Agreement has been duly and validly executed and delivered by each of the
Delaware Obligors, and the Notes have been duly and validly executed and
delivered by the Company.  Assuming the
due authorization, execution and delivery of the Credit Agreement by the
parties thereto other than the Delaware Obligors, the Credit Agreement and the
Notes each constitute the legal, valid and binding obligation of each of the
Obligors party thereto, enforceable against each of them in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors’ rights and
remedies generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity) and except that no opinion is expressed with respect to Section 10.04 (Sharing of Set-Offs)
of the Credit Agreement.

 

2

 

3.       The execution and delivery of the Credit Agreement by each of
the Delaware Obligors and of the Notes by the Company, and the performance by
each of the Delaware Obligors of its obligations thereunder, will not conflict
with, constitute a default under or violate (i) any of the terms,
conditions or provisions of the Certificate of Incorporation or by-laws of
either of the Delaware Obligors, (ii) any of the terms, conditions or
provisions of any material document, agreement or other instrument to which
either of the Delaware Obligors is a party or by which it is bound of which we
are aware, (iii) any New York, Delaware corporate or federal law or
regulation (other than federal and state securities or blue sky laws, as to
which we express no opinion in this paragraph) or (iv) any judgment, writ,
injunction, decree, order or ruling of any court or governmental authority
binding on either of the Delaware Obligors of which we are aware.

 

4.       The execution and delivery of the Credit Agreement and of the Notes
by the Belgian Subsidiary, and the performance by the Belgian Subsidiary of its
obligations thereunder, will not conflict with, constitute a default under or
violate New York or federal law or regulation (other than federal and state
securities or blue sky laws, as to which we express no opinion in this
paragraph).

 

5.       No consent, approval, waiver, license or authorization or
other action by or filing with any New York, Delaware corporate or federal
governmental authority is required in connection with the execution and
delivery by any of the Obligors of the Credit Agreement or, in the case of the
Company and the Belgian Subsidiary, the Notes, or the consummation by any of
the Obligors of the transactions contemplated thereby or the performance by any
of the Obligors of its obligations thereunder.

 

6.       To our knowledge, there is no litigation, proceeding or
governmental investigation pending or overtly threatened against either of the
Delaware Obligors that relates to any of the transactions contemplated by the
Credit Agreement or the Notes.

 

The
opinions expressed herein are limited to the laws of the State of New York, the
corporate laws of the State of Delaware and the federal laws of the United
States, and we express no opinion as to the effect on the matters covered by
this letter of the laws of any other jurisdiction.

 

3

 

The
opinions expressed herein are rendered solely for your benefit in connection
with the transactions described herein. 
Those opinions may not be used or relied upon by any other person, nor
may this letter or any copies hereof be furnished to a third party, filed with
a governmental agency, quoted, cited or otherwise referred to without our prior
written consent.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  /s/Weil Gotshal & Manges LLP

  

 

4

 

 

EXHIBIT F

 

ASSIGNMENT AND ASSUMPTION
AGREEMENT

 

AGREEMENT dated as of _________ , 20__ among
<NAME OF ASSIGNOR> (the “Assignor”),
<NAME OF ASSIGNEE> (the “Assignee”),
[THE ESTÉE LAUDER COMPANIES INC.,] JPMORGAN CHASE BANK, N.A., as Administrative
Agent (the “Administrative Agent”) and
JPMORGAN CHASE BANK, N.A., as Issuing Lender.

 

WHEREAS, this Assignment and Assumption Agreement
(the “Agreement”) relates to the
Credit Agreement  dated as of April 26,
2007 among The Estée Lauder Companies Inc., Estee Lauder Inc., the Eligible
Subsidiaries referred to therein, the lenders listed on the signature pages thereof,
Citibank, N.A. and Bank of America, N.A., as Syndication Agents, Bank of
Tokyo-Mitsubishi UFJ Trust Company and BNP Paribas, as Documentation Agents, and
JPMorgan Chase Bank, N.A., as Administrative Agent (as amended from time to
time, the “Credit Agreement”);

 

WHEREAS, as provided under the Credit Agreement, the
Assignor has a Commitment to make Loans and participate in Letters of Credit in
an aggregate principal Dollar Amount at any time outstanding not to exceed
$__________;

 

WHEREAS, Committed Dollar Loans made to the
Borrowers by the Assignor under the Credit Agreement in the aggregate principal
amount of $__________ are outstanding at the date hereof;

 

[WHEREAS, Committed Alternative Currency
Loans denominated in [currency] made to the Borrowers under the Credit
Agreement in the aggregate principal Dollar Amount of $__________ are
outstanding on the date hereof;] [Repeat this whereas clause for loans
outstanding in more than one currency]

 

WHEREAS, Letters of Credit with a total Dollar
Amount available for drawing thereunder of $__________ are outstanding at the
date hereof;

 

WHEREAS, the Assignor proposes to assign to the
Assignee all of the rights of the Assignor under the Credit Agreement in
respect of a portion of its Commitment thereunder in a Dollars Amount equal to
$__________ (the “Assigned Amount”),
together with a corresponding portion of its outstanding Committed Dollar Loans
[, Committed Alternative Currency Loans denominated in such currency] and
Letter of Credit Liabilities, and the Assignee proposes to accept assignment of
such rights and assume the corresponding obligations from the Assignor on such
terms;

 

NOW, THEREFORE, in consideration of the foregoing
and the mutual agreements contained herein, the parties hereto agree as
follows:

 

 

SECTION 1. 
Definitions. All capitalized terms not otherwise defined herein
shall have the respective meanings set forth in the Credit Agreement.

 

SECTION 2. 
Assignment.  The Assignor
hereby assigns and sells to the Assignee all of the rights of the Assignor
under the Credit Agreement to the extent of the Assigned Amount, and the
Assignee hereby accepts such assignment from the Assignor and assumes all of
the obligations of the Assignor under the Credit Agreement to the extent of the
Assigned Amount, including the purchase from the Assignor of the corresponding
portion of the principal amount of the Committed Facility Loans [and Committed
Alternative Currency Loans denominated in [currency]] made by the Assignor
outstanding at the date hereof.  Upon the
execution and delivery hereof by the Assignor, the Assignee, [the Company,] the
Administrative Agent and each Issuing Lender and the payment of the amounts
specified in Section 3 required to be paid on the date hereof (i) the
Assignee shall, as of the date hereof, succeed to the rights and be obligated
to perform the obligations of a Lender under the Credit Agreement with
Commitments in an amount equal to the Assigned Amount, and (ii) the
Commitments of the Assignor shall, as of the date hereof, be reduced by a like
amount and the Assignor released from its obligations under the Credit
Agreement to the extent such obligations have been assumed by the Assignee.  The assignment provided for herein shall be
without recourse to the Assignor.

 

SECTION 3. 
Payments.  As consideration
for the assignment and sale contemplated in Section 2 hereof, the Assignee
shall pay to the Assignor on the date hereof in Federal funds the amount
heretofore agreed between them.  It is
understood that facility and Letter of Credit fees accrued to the date hereof
in respect of the Assigned Amount are for the account of the Assignor and such
fees accruing from and including the date hereof are for the account of the
Assignee.  Each of the Assignor and the
Assignee hereby agrees that if it receives any amount under the Credit
Agreement which is for the account of the other party hereto, it shall receive
the same for the account of such other party to the extent of such other
party’s interest therein and shall promptly pay the same to such other party.

 

SECTION 4.  Consents. 
This Agreement is conditioned upon the consent of [the Company], the
Issuing Lender and the Administrative Agent pursuant to Section 10.06(c) of
the Credit Agreement.  The execution of
this Agreement by [the Company], the Issuing Lender and the Administrative
Agent is evidence of this consent.  The
Company agrees, and agrees to cause each other applicable Borrower, if requested
by the Assignee pursuant to Section 2.05 of the Credit Agreement, to
execute and deliver a Note payable to the order of the Assignee to evidence the
assignment and assumption provided for herein.

 

SECTION 5. 
Non-Reliance on Assignor. 
The Assignor makes no representation or warranty in connection with, and
shall have no responsibility with respect to, the solvency, financial
condition, or statements of any Obligor, or the validity and enforceability of
the obligations of any Obligor in respect of the 

 

 

Credit Agreement or any Note.  The Assignee acknowledges that it has,
independently and without reliance on the Assignor, and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and will continue to be responsible for
making its own independent appraisal of the business, affairs and financial
condition of each Obligor.

 

SECTION 6. 
Governing Law.  This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York.

 

SECTION 7. 
Counterparts.  This
Agreement may be signed in any number of counterparts, each of which shall be
an original, with the same effect as if the signatures thereto and hereto were
upon the same instrument.

 

 

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

 

	
   

  	
  <NAME
  OF ASSIGNOR>

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
  <NAME
  OF ASSIGNEE>

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
  [THE
  ESTÉE LAUDER COMPANIES INC.]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
  JPMORGAN CHASE BANK, N.A., as Administrative Agent
  and Issuing Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

EXHIBIT G

 

MANDATORY COSTS RATE

 

1.             Definitions

 

In
this Exhibit:

 

“Act” means the Bank of England Act of 1998.

 

The
terms “Eligible Liabilities” and “Special Deposits” have the meanings ascribed to them under
or pursuant to the Act or by the Bank of England (as may be appropriate), on
the day of the application of the formula.

 

“Fee Base” has the meaning ascribed to it for the purposes
of, and shall be calculated in accordance with, the Fees Regulations.

 

“Fees Regulations” means, as appropriate, either:

 

(a)           the Banking Supervision
(Fees) Regulations 1998; or

 

(b)                                 such regulations as from
time to time may be in force, relating to the payment of fees for banking
supervision in respect of periods subsequent to March 31, 1999.

 

“FSA” means the Financial Services Authority.

 

Any
reference to a provision of any statute, directive, order or regulation herein
is a reference to that provision as amended or re-enacted from time to time.

 

2.             Calculation of the Mandatory Costs Rate

 

The
Mandatory Costs Rate is an addition to the interest rate on each Euro-Currency
Loan or any other sum on which interest is to be calculated to compensate the
Lenders for the cost attributable to each Euro-Currency Loan or such sum
resulting from the imposition from time to time under or pursuant to the Act
and/or by the Bank of England and/or the FSA (or other United Kingdom
governmental authorities or agencies) of a requirement to place non-interest
bearing or Special Deposits (whether interest bearing or not) with the Bank of
England and/or pay fees to the FSA calculated by reference to liabilities used
to fund the relevant Euro-Currency Loan or such sum.

 

The
“Mandatory Costs Rate” will be the rate
determined by the Administrative Agent to be equal to the arithmetic mean
(rounded upward, if necessary, to the next higher 1/100 of 1%) of the respective
rates 

 

 

notified
by each of the Reference Banks to the Administrative Agent as the rate
resulting from the application of the following formula:

 

For Sterling:

 

 

For Other Alternate Currencies:

 

 

where
on the day of application of the formula:

 

X                                                                                       is the
percentage of Eligible Liabilities (in excess of any stated minimum) by
reference to which such Reference Bank is required under or pursuant to the Act
to maintain cash ratio deposits with the Bank of England;

 

L                                                                                         is the rate of
interest (exclusive of Euro-Currency Margin and Mandatory Costs Rate) payable
on that day on the related Euro-Currency Loan or unpaid sum pursuant to this
Agreement;

 

F                                                                                         is the rate of
periodical charge payable by such Reference Bank to the FSA pursuant to the
Fees Regulations and expressed in pounds per £1 million of the Fee Base of such
Reference Bank;

 

S                                                                                         is the level of
interest-bearing Special Deposits, expressed as a percentage of Eligible
Liabilities, which such Reference Bank is required to maintain by the Bank of
England (or other United Kingdom governmental authorities or agencies); and

 

D                                                                                       is the
percentage rate per annum payable by the Bank of England to such Reference Bank
on Special Deposits.

 

(X,
L, S and D are to be expressed in the formula as numbers and not as
percentages.  A negative result obtained
from subtracting D from L shall be counted as zero.)

 

If
any Reference Bank fails to notify any such rate to the Administrative Agent,
the Mandatory Costs Rate shall be determined on the basis of the rate(s) notified
to the Administrative Agent by the remaining Reference Bank(s).

 

 

The
Mandatory Costs Rate attributable to a Euro-Currency Loan or other sum for any
period shall be calculated at or about 11:00 A.M. (London time) on the
first day of such period for the duration of such period.

 

The
determination of Mandatory Costs Rate by the Administrative Agent in relation
to any period shall, in the absence of manifest error, be conclusive and
binding on all parties hereto.

 

3.             Change of Requirements

 

If there is any change in circumstance
(including the imposition of alternative or additional requirements) which in
the reasonable opinion of the Administrative Agent renders or will render the
above formula (or any element thereof, or any defined term used therein) inappropriate
or inapplicable, the Administrative Agent (following consultation with the
Company and the Lenders) shall be entitled to vary the same.  Any such variation shall, in the absence of
manifest error, be conclusive and binding on all parties and shall apply from
the date specified in such notice.

 

 

EXHIBIT H

 

ELECTION TO PARTICIPATE

 

________________ __, 200_

 

JPMorgan Chase Bank, N.A., as 

Administrative Agent for

the Lenders party to the Credit Agreement dated as of April 26, 2007 among
The Estée Lauder Companies Inc., Estee Lauder Inc., the Eligible Subsidiaries
referred to therein, the lenders listed on the signature pages thereof,
Citibank, N.A. and Bank of America, N.A., as Syndication Agents, Bank of
Tokyo-Mitsubishi UFJ Trust Company and BNP Paribas, as Documentation Agents,
and JPMorgan Chase Bank, N.A., as Administrative Agent (as the same may be
amended from time to time, the “Credit Agreement”)

 

Dear Sirs:

 

Reference is made to the Credit Agreement described
above.  Terms not defined herein which
are defined in the Credit Agreement have for purposes hereof the meanings
provided therein.

 

The undersigned, [Name of Eligible Subsidiary], a
[Jurisdiction of Formation] [Organizational Form], hereby elects to be an
Eligible Subsidiary for purposes of the Credit Agreement, effective from the
date hereof until an Election to Terminate shall have been delivered on behalf
of the undersigned in accordance with the Credit Agreement.  The undersigned confirms that the
representations and warranties set forth in Article 9 of the Credit
Agreement are true and correct as to the undersigned as of the date hereof, and
the undersigned agrees to perform all the obligations of an Eligible Subsidiary
under, and to be bound in all respects by the terms of, the Credit Agreement,
including without limitation Section 10.08 thereof, as if the undersigned
were a signatory party thereto.

 

[Tax disclosure pursuant to Section 8.04.]

 

The address to which all notices to the undersigned
under the Credit Agreement should be directed is:

 

[Address]

 

This instrument shall be construed in accordance
with and governed by the laws of the State of New York.

 

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [NAME
  OF ELIGIBLE SUBSIDIARY]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

The undersigned represents and warrants that
[Name of Eligible Subsidiary] is an Eligible Subsidiary for purposes of the
Credit Agreement described above.  The
undersigned agrees that the Guaranty of the undersigned contained in the Credit
Agreement will apply to all obligations of [Name of Eligible Subsidiary] under
the Credit Agreement and any Note issued by [Name of Eligible Subsidiary].

 

	
   

  	
  THE
  ESTÉE LAUDER COMPANIES INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

Receipt of the above Election to Participate
is acknowledged on and as of the date set forth above.

 

	
   

  	
  JPMORGAN
  CHASE BANK, N.A., as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

EXHIBIT I

 

ELECTION TO TERMINATE

 

________________ __, 200_

 

JPMorgan Chase Bank, N.A., as 

Administrative Agent for

the Lenders party to the Credit Agreement 
dated as of April 26, 2007 among The Estée Lauder Companies Inc.,
Estee Lauder Inc., the Eligible Subsidiaries referred to therein, the lenders
listed on the signature pages thereof, Citibank, N.A. and Bank of America,
N.A., as Syndication Agents, Bank of Tokyo-Mitsubishi UFJ Trust Company and BNP
Paribas, as Documentation Agents, and JPMorgan Chase Bank, N.A., as
Administrative Agent (as the same may be amended from time to time, the “Credit Agreement”)

 

Dear Sirs:

 

Reference is made to the Credit Agreement described
above.  Terms not defined herein which
are defined in the Credit Agreement have for purposes hereof the meanings
provided therein.

 

The undersigned, [Name of Eligible Subsidiary], a
[Jurisdiction of Formation] [Organizational Form], hereby elects to terminate
its status as an Eligible Subsidiary for purposes of the Credit Agreement,
effective as of the date hereof.  The
undersigned represents and warrants that all principal and interest on all
Loans made to the undersigned and all other amounts payable by the undersigned
pursuant to the Credit Agreement have been paid in full on or before the date
hereof.  Notwithstanding the foregoing,
this Election to Terminate shall not affect any obligation of the undersigned
heretofore incurred under the Credit Agreement or any Note.

 

 

This instrument shall be construed in accordance
with and governed by the laws of the State of New York.

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [NAME
  OF ELIGIBLE SUBSIDIARY]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

The undersigned hereby agrees that the status
of [Name of Eligible Subsidiary] as an Eligible Subsidiary for purposes of the
Credit Agreement described above is terminated as of the date hereof.

 

	
   

  	
  THE
  ESTÉE LAUDER COMPANIES INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

Receipt of the above Election to Terminate is
acknowledged on and as of the date set forth above.

 

	
   

  	
  JPMORGAN
  CHASE BANK, N.A., as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00167-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00167-of-00352.parquet"}]]