Document:

Exhibit 4.1

 

CONFORMED COPY

 

€740,000,000 AND US$325,000,000

FACILITIES AGREEMENT

Dated 3 June 2004

for

LUXOTTICA GROUP S.p.A.

AND

LUXOTTICA U.S. HOLDINGS CORP.

arranged by

 

ABN AMRO BANK N.V., BANCA INTESA S.p.A., BANC OF
AMERICA SECURITIES 

LIMITED, CITIGROUP GLOBAL MARKETS LIMITED, HSBC BANK PLC, 

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

SCOTLAND PLC AND UNICREDIT BANCA MOBILIARE S.p.A.

 

with

 

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

 

UNICREDIT BANCA D’IMPRESA S.p.A.

 

acting as Agents

 

MULTICURRENCY
TERM AND REVOLVING FACILITIES 

AGREEMENT

 

 

CONTENTS

 

Clause

 

	
  1.

  	
  DEFINITIONS AND INTERPRETATION

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  THE FACILITIES

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  PURPOSE

  	
   

  
	
   

  	
   

  	
   

  
	
  4.

  	
  CONDITIONS OF UTILISATION

  	
   

  
	
   

  	
   

  	
   

  
	
  5.

  	
  UTILISATION

  	
   

  
	
   

  	
   

  	
   

  
	
  6.

  	
  UNAVAILABILITY OF CURRENCY

  	
   

  
	
   

  	
   

  	
   

  
	
  7.

  	
  REPAYMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  8.

  	
  PREPAYMENT AND CANCELLATION

  	
   

  
	
   

  	
   

  	
   

  
	
  9.

  	
  INTEREST

  	
   

  
	
   

  	
   

  	
   

  
	
  10.

  	
  INTEREST PERIODS

  	
   

  
	
   

  	
   

  	
   

  
	
  11.

  	
  CHANGES TO THE CALCULATION OF INTEREST

  	
   

  
	
   

  	
   

  	
   

  
	
  12.

  	
  FEES

  	
   

  
	
   

  	
   

  	
   

  
	
  13.

  	
  TAX GROSS-UP AND INDEMNITIES

  	
   

  
	
   

  	
   

  	
   

  
	
  14.

  	
  INCREASED COSTS

  	
   

  
	
   

  	
   

  	
   

  
	
  15.

  	
  OTHER INDEMNITIES

  	
   

  
	
   

  	
   

  	
   

  
	
  16.

  	
  MITIGATION BY THE LENDERS

  	
   

  
	
   

  	
   

  	
   

  
	
  17.

  	
  COSTS AND EXPENSES

  	
   

  
	
   

  	
   

  	
   

  
	
  18.

  	
  GUARANTEE AND INDEMNITY

  	
   

  
	
   

  	
   

  	
   

  
	
  19.

  	
  REPRESENTATIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  20.

  	
  INFORMATION UNDERTAKINGS

  	
   

  
	
   

  	
   

  	
   

  
	
  21.

  	
  FINANCIAL COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  22.

  	
  GENERAL UNDERTAKINGS

  	
   

  
	
   

  	
   

  	
   

  
	
  23.

  	
  EVENTS OF DEFAULT

  	
   

  
	
   

  	
   

  	
   

  
	
  24.

  	
  CHANGES TO THE LENDERS

  	
   

  
	
   

  	
   

  	
   

  
	
  25.

  	
  CONFIDENTIALITY

  	
   

  
	
   

  	
   

  	
   

  
	
  26.

  	
  CHANGES TO THE OBLIGORS

  	
   

  
	
   

  	
   

  	
   

  
	
  27.

  	
  ROLE OF THE AGENT AND THE MANDATED LEAD
  ARRANGER

  	
   

  
	
   

  	
   

  	
   

  
	
  28.

  	
  CONDUCT OF BUSINESS BY THE FINANCE PARTIES

  	
   

  
	
   

  	
   

  	
   

  
	
  29.

  	
  SHARING AMONG THE FINANCE PARTIES

  	
   

  
	
   

  	
   

  	
   

  
	
  30.

  	
  PAYMENT MECHANICS

  	
   

  
	
   

  	
   

  	
   

  
	
  31.

  	
  SET-OFF

  	
   

  
	
   

  	
   

  	
   

  
	
  32.

  	
  NOTICES

  	
   

  

 

 

	
  33.

  	
  CALCULATIONS AND CERTIFICATES

  	
   

  
	
   

  	
   

  	
   

  
	
  34.

  	
  PARTIAL INVALIDITY

  	
   

  
	
   

  	
   

  	
   

  
	
  35.

  	
  REMEDIES AND WAIVERS

  	
   

  
	
   

  	
   

  	
   

  
	
  36.

  	
  AMENDMENTS AND WAIVERS

  	
   

  
	
   

  	
   

  	
   

  
	
  37.

  	
  COUNTERPARTS

  	
   

  
	
   

  	
   

  	
   

  
	
  38.

  	
  GOVERNING LAW

  	
   

  
	
   

  	
   

  	
   

  
	
  39.

  	
  ENFORCEMENT

  	
   

  
	
   

  	
   

  
	
  SCHEDULE 2

  	
  CONDITIONS PRECEDENT

  	
   

  
	
   

  	
   

  	
   

  
				

 

 

THIS AGREEMENT is made in London on 3 June 2004 and
between:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

IT IS AGREED as follows:

 

SECTION 1

 

INTERPRETATION

 

1.                                 DEFINITIONS AND INTERPRETATION

 

1.1                           Definitions

 

In this Agreement:

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4

 

communicated by the Italian Borrower in writing to each of the Italian
Agent and the US Agent.

 

“Availability
Period” means:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Base
Currency” means:

 

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

 

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

 

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

 

5

 

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

 

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

 

exceeds:

 

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

 

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

 

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

 

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

 

“Cash”
has the meaning given to it in FAS95

 

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

 

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

 

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

 

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

 

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

 

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

 

6

 

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

 

“Consolidated
Pro-Forma Financial Statements” means, during the Pro-Forma Relevant
Period and with respect to the Group, the latest published audited consolidated
financial statements of the Group prepared in accordance with GAAP in respect
of its financial year, including, on a pro-forma basis, the relevant results of
Target and its Subsidiaries.

 

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

 

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

 

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

 

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

 

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

 

“Eligible
Deposit Bank” means any bank or financial institution with a
short-term rating of at least A1 granted by Standard & Poors’ Corporation
or P1 granted by Moody’s Investors Services, Inc.

 

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

 

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

 

“Environmental
Law” means any applicable law in any jurisdiction in which any
member of the Group conducts business which relates to the pollution or
protection of the environment or harm to or the protection of human health or
the health of animals or plants, including, without limitation, the National
Environmental Policy Act (42 U.S.C. §4321 et seq.), the Comprehensive
Environmental Response, Compensation and

 

7

 

Liability Act of 1980 (42 U.S.C. §9601 et seq.), as amended by the
Superfund Amendments and Reauthorization Act of 1986, the Resource Conservation
and Recovery Act (42 U.S.C. §6901 et seq.), as amended by the Hazardous and
Solid Waste Amendments of 1984, the Hazardous Materials Transport Act (49
U.S.C. §1801 et seq.), the Toxic Substances Control Act (15 U.S.C. §2601 et
seq.), the Clean Water Act (33 U.S.C. §1321 et seq.), the Clean Air Act (42
U.S.C. §7401 et seq.,), the Occupational Safety and Health Act (29 U.S.C. §651
et seq.), the Federal Water Pollution Control Act (33 U.S.C. §1251 et seq.),
the Safe Drinking Water Act (42 U.S.C. §3808 et seq.), and any similar federal,
state or local laws, ordinances or regulations implementing such laws.

 

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

 

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

 

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

 

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

 

8

 

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

 

(a)                                      the applicable Screen Rate; or

 

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

 

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

 

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

 

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

 

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

 

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

 

“Facility
A Commitment” means:

 

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

 

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

 

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

 

“Facility
A Lender” means:

 

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

 

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

 

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

 

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

 

9

 

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

 

“Facility
B Commitment” means:

 

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

 

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

 

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

 

“Facility
B Lender” means:

 

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

 

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

 

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

 

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

 

“Facility
C Commitment” means:

 

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

 

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

 

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

 

“Facility
C Lender” means:

 

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

 

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

 

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

 

10

 

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

 

“Facility
Office” means

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(g)                                     any derivative transaction entered
into in connection with protection against or benefit from fluctuation in any
rate or price (and, when calculating the value of any derivative transaction,
only the marked to market value shall be taken into

 

11

 

account) only to the extent such derivative
transactions are recorded in the balance sheet of any member of the Group in accordance
with GAAP;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

12

 

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

 

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

 

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

 

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

 

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

 

(a)                                      the applicable Screen Rate; or

 

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

 

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

 

“LMA”
means the Loan Market Association.

 

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

 

“Majority
Lenders” means:

 

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

 

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

 

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

 

“Margin”
means:

 

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

 

(b)                                     if the ratio of Consolidated Total
Net Debt to Consolidated EBITDA, as set out at any time other than during the
Relevant Pro-Forma Period in the Consolidated Financial Statements or in the
Consolidated Quarterly Financial Statements (as the case may be) or during the
Pro-Forma Relevant Period as set out in the Consolidated Pro-Forma Financial
Statements or in the Consolidated Quarterly Pro-Forma Financial Statements (as
the case may be), in each case, most recently delivered in accordance with
Clause 20.1 (Financial Statements)

 

13

 

of this Agreement (including for the avoidance
of doubt the Consolidated Quarterly Financial Statements for the quarter ending
31 March 2004), is within the range set out below, then the Margin shall
be the percentage per annum set out opposite such range in the margin grid
table below:

 

Margin Grid Table

 

	
  Ratio of Consolidated Net Debt to

  Consolidated EBITDA

  	
   

  	
  (per cent. per annum)

  	
   

  
	
  Equal to or greater than 3.0x

  	
   

  	
  0.60

  	
   

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

  	
   

  	
  0.50

  	
   

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

  	
   

  	
  0.45

  	
   

  
	
  Lower
  than 2.0x

  	
   

  	
  0.40

  	
   

  

 

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

 

(c)                                      if at any time an Event of Default
has occurred and is continuing the Margin shall be 0.60 per cent. per annum;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(b)                                     if a Subsidiary of the Italian
Borrower becomes a member of the Group after the date on which the latest
Consolidated Financial Statements or the Consolidated Quarterly Financial
Statements (as the case may be) of the Group have been

 

14

 

prepared, the total assets or turnover of that
Subsidiary will be determined from its latest financial statements;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Obligor”
means a Borrower or a Guarantor.

 

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

 

“Original
Financial Statements” means:

 

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

 

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

 

15

 

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

 

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

 

“Party”
means a party to this Agreement.

 

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

 

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

 

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

 

“Qualifying
Lender” means:

 

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

 

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

 

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

 

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

 

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

 

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

 

(ii)                     is resident (as such term is defined
in the appropriate convention (a “Double Taxation Treaty”) between the
government of the United States of America and any other government for the
avoidance of double taxation and prevention of fiscal evasion with respect to
taxes on income

 

16

 

and capital gains in a country with which the
United States of America has an appropriate Double Taxation Treaty giving
residents in that country full exemption from income tax on interest in the
United States of America, is eligible for full exemption from income tax on all
payments received or to be received under this Agreement under such double
taxation treaty and participating through a Facility Office that entitles it to
receive all payments under this Agreement free of any withholding tax on
account of income tax in the United States of America; and

 

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

 

“Qualifying
Shareholder” means:

 

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

 

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

 

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

 

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

 

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

 

(a)                                      (if the currency is euro) two TARGET
Days before the first day of that period unless market practice differs in the
Relevant Interbank Market, in which case the Quotation Day will be determined
by the Italian Agent in accordance with market practice in the Relevant
Interbank Market (and if quotations would

 

17

 

normally be given by leading banks in the
European interbank market on more than one day, the Quotation Day will be the
last of those days); or

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Screen
Rate” means:

 

18

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

19

 

“Termination
Date” means the date falling 5 years from the date of this Agreement
provided that if such day is not a Business Day, it shall be the immediately
preceding Business Day.

 

“Total
Commitments” means the aggregate of the Total Facility A
Commitments, the Total Facility B Commitments and the Total Facility C
Commitments, being €740,000,000 and US$325,000,000 at the date of this
Agreement.

 

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

 

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

 

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

 

“Total
Facility C Commitments” means the aggregate of the Facility C
Commitments being €335,000,000 at the date of this Agreement.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Utilisation”
means a utilisation of a Facility.

 

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

 

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

 

20

 

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

 

1.2                           Construction

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(ix)                   a provision of law is a reference to
that provision as amended or re-enacted; and

 

(x)                      a time of day is a reference to
Milan time.

 

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

 

(c)                                      Unless a contrary indication
appears, a term used in any other Finance Document or in any notice given under
or in connection with any Finance

 

21

 

Document has the same meaning in that Finance
Document or notice as in this Agreement.

 

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

 

1.3                           Currency Symbols and Definitions

 

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

 

1.4                           Third party rights

 

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

 

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

 

SECTION 2

 

THE FACILITIES

 

2.                                 THE FACILITIES

 

2.1                           The Facilities

 

Subject to the terms of this Agreement:

 

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

 

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

 

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

 

2.2                           Finance Parties’ rights and obligations

 

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

 

(b)                                     The rights of each Finance Party
under or in connection with the Finance Documents are separate and independent
rights and any debt arising under the

 

22

 

Finance Documents to a Finance Party from an
Obligor shall be a separate and independent debt.

 

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

 

3.                                 PURPOSE

 

3.1                           Purpose

 

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

 

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

 

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

 

3.2                           Monitoring

 

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

 

4.                                 CONDITIONS OF UTILISATION

 

4.1                           Initial conditions precedent

 

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

 

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

 

4.2                           Further conditions precedent

 

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

 

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

 

23

 

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

 

4.3                           Conditions relating to the Optional Currency

 

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

 

4.4                           Maximum number of Loans

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

SECTION 3

 

UTILISATION

 

5.                                 UTILISATION

 

5.1                           Delivery of a Utilisation Request

 

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

 

5.2                           Completion of a Utilisation Request

 

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

 

(i)                        it identifies the Facility to be
utilised;

 

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

 

24

 

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

 

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

 

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

 

5.3                           Currency and amount

 

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

 

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

 

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

 

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

 

(iii)                  in the case of Facility C:

 

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

 

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

 

or if less, the Available Facility; and

 

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

 

5.4                           Lenders’ participation

 

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

 

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

 

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

 

6.                                 UNAVAILABILITY OF CURRENCY

 

6.1                           If before the Specified Time on any
Quotation Day:

 

25

 

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

 

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

 

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

 

SECTION 4

 

REPAYMENT, PREPAYMENT AND CANCELLATION

 

7.                                 REPAYMENT

 

7.1                           Repayment of Facility A Loans

 

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

 

	
  Facility A Repayment Date

  	
   

  	
  Portion of the aggregate of the

  original principal amount of the

  Facility A Loans to be repaid

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4
  June 2007

  	
   

  	
  1/9th

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3
  September 2007

  	
   

  	
  1/9th

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3
  December 2007

  	
   

  	
  1/9th

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3
  March 2008

  	
   

  	
  1/9th

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3
  June 2008

  	
   

  	
  1/9th

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3
  September 2008

  	
   

  	
  1/9th

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3
  December 2008

  	
   

  	
  1/9th

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3
  March 2009

  	
   

  	
  1/9th

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Termination
  Date

  	
   

  	
  1/9th

  	
   

  

 

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

 

26

 

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

 

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

 

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

 

7.2                           Repayment of Facility B Loans

 

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

 

7.3                           Repayment of Facility C Loans

 

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

 

8.                                 PREPAYMENT AND CANCELLATION

 

8.1                           Illegality

 

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

 

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

 

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

 

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

 

8.2                           Change of control

 

(a)                                      If (1) any person or group of
persons (acting in concert) other than a Qualifying Shareholder (the “New
Shareholder(s)”) has gained control of the Italian Borrower (a “Control
Event”) or (2) circumstances exist that might reasonably give rise
to the occurrence of a Control Event, the Italian Borrower shall, to the

 

27

 

extent it can do so without breaching any
applicable law or regulation or contract and subject always to Clause 25 (Confidentiality),
promptly notify the Agent upon becoming aware of that event.

 

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

 

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

 

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

 

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

 

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

 

8.3                           Acquisition Documents

 

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

 

8.4                           Voluntary cancellation

 

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

 

28

 

case may be, Facility B Lenders or, as the case may be, Facility C
Lenders rateably under that Facility.

 

8.5                           Cancellation of Facility B

 

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

 

8.6                           Voluntary prepayment of Facility A Loans

 

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

 

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

 

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

 

8.7                           Voluntary Prepayment of Facility B Loans

 

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

 

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

 

8.8                           Voluntary Prepayment of Facility C Loans

 

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

 

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

 

(a)                                      If:

 

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

 

29

 

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

 

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

 

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

 

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

 

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

 

8.10                     Restrictions

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

30

 

SECTION 5

 

COSTS OF UTILISATION

 

9.                                 INTEREST

 

9.1                           Calculation of interest

 

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

 

(a)                                      Margin;

 

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

 

(c)                                      Mandatory Cost, if any.

 

9.2                           Payment of interest

 

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

 

9.3                           Default interest

 

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

 

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

 

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

 

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

 

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

 

31

 

9.4                           Notification of rates of interest

 

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

 

10.                           INTEREST PERIODS

 

10.1                     Selection of Interest Periods

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

10.2                     Changes to Interest Periods

 

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

 

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

 

32

 

10.3                     Non-Business Days

 

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

 

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

 

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

 

(i)                        relate to Facility A Loans; and

 

(ii)                     end on the same date,

 

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

 

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

 

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

 

(i)                        relate to Facility B Loans; and

 

(ii)                     end on the same date,

 

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

 

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

 

11.                           CHANGES TO THE CALCULATION OF INTEREST

 

11.1                     Absence of quotations

 

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

 

33

 

11.2                     Market disruption

 

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

 

(i)                        the Margin;

 

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

 

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

 

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

 

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

 

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

 

11.3                     Alternative basis of interest or funding

 

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

 

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

 

11.4                     Break Costs

 

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

 

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

 

34

 

12.                           FEES

 

12.1                     Commitment fee

 

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

 

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

 

(ii)

 

(1)                    in euro computed at the rate
of 40 per cent, per annum of the then applicable Margin on that Lender’s
Available Commitment over the preceding three month period under Facility C if
the average unutilised amount of Facility C over such 3 month period (or in the
case of a payment being made not at the end of a three month period (the Payment Date),
the average unutilised amount of Facility C from the date of last payment of
commitment fee up to but excluding the Payment Date) exceeded 50 per cent. of
the Lenders’ Commitment during such three month period under Facility C; or

 

(2)                    in euro computed at the rate
of 30 per cent, per annum of the then applicable Margin on that Lender’s
Available Commitment over the preceding three month period under Facility C if
the average unutilised amount of Facility C over such 3 month period (or in the
case of a payment being made not at the end of a three month period (the Payment Date),
the average unutilised amount of Facility C from the date of last payment of
commitment fee up to but excluding the Payment Date) was equal to or lower than
50 per cent. of the Lenders’ Commitment during such three month period under
Facility C.

 

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

 

12.2                     Facility fee

 

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

 

12.3                     Agency fee

 

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

 

35

 

SECTION 6

 

ADDITIONAL PAYMENT OBLIGATIONS

 

13.                           TAX GROSS-UP AND INDEMNITIES

 

13.1                     Definitions

 

(a)                                      In this Agreement:

 

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

 

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

 

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

 

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

 

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

 

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

 

13.2                     Tax gross-up

 

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

 

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

 

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

 

(d)                                     An Obligor is not required to make
an increased payment to a Lender under paragraph (c) above for a Tax Deduction
in respect of tax imposed by the

 

36

 

Republic of Italy or, as the case may be,
United States of America from any payment under this Agreement, if on the date
on which the payment falls due:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

37

 

13.3                     Tax indemnity

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

13.4                     Tax Credit

 

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

 

38

 

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

 

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

 

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

 

13.5                     Stamp taxes

 

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

 

13.6                     Value added tax

 

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

 

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

 

14.                           INCREASED COSTS

 

14.1                     Increased costs

 

(a)                                      Subject to Clause 14.3 (Exceptions)
the Borrowers shall, within five Business Days of a demand by the Agent, pay
for the account of a Finance Party the amount of any Increased Costs incurred
by that Finance Party or any of its Affiliates as a result of (i) the
introduction of or any change in (or in the interpretation, administration or
application of) any law or regulation or (ii) compliance with any law or
regulation made after the date of this Agreement.

 

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

 

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

 

(ii)                     an additional or increased cost; or

 

39

 

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

 

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

 

14.2                     Increased
cost claims

 

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

 

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

 

14.3                     Exceptions

 

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

 

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

 

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

 

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

 

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

 

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

 

15.                           OTHER INDEMNITIES

 

15.1                     Currency
indemnity

 

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

 

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

 

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

 

that Obligor shall as an
independent obligation, within five Business Days of demand, indemnify each
Finance Party to whom that Sum is due against any cost, loss or liability
arising out of or as a result of the conversion including any discrepancy
between (A) the rate of exchange used to convert that Sum from the

 

40

 

First Currency into the Second
Currency and (B) the rate or rates of exchange available to that person at the
time of its receipt of that Sum.

 

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

 

15.2                     Other
indemnities

 

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

 

(a)                                      the occurrence of any Event of
Default;

 

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

 

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

 

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

 

15.3                     Indemnity
to the Agent

 

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

 

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

 

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

 

16.                           MITIGATION BY THE LENDERS

 

16.1                     Mitigation

 

(a)                                      Each Finance Party shall, in
consultation with the Italian Borrower, take all reasonable steps to mitigate
any circumstances which arise and which would result in any amount becoming
payable under or pursuant to, or cancelled pursuant to, any of Clause 8.1 (Illegality),
Clause 13 (Tax
gross-up and indemnities), Clause 14 (Increased costs) or
paragraph 3 of Schedule 4 (Mandatory Cost formulae) including (but
not limited to) transferring its rights and obligations under the Finance
Documents to another Affiliate or Facility Office.

 

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

 

41

 

16.2                     Limitation
of liability

 

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

 

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

 

17.                           COSTS AND EXPENSES

 

17.1                     Amendment
costs

 

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

 

17.2                     Enforcement
costs

 

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

 

SECTION 7

 

GUARANTEE

 

18.                           GUARANTEE AND INDEMNITY

 

18.1                     Guarantee
and indemnity

 

Each Guarantor irrevocably and
unconditionally jointly and severally:

 

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

 

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

 

(c)                                      indemnifies each Finance Party
within five Business Days of receiving a demand against any cost, loss or
liability reasonably incurred or suffered and documented by that Finance Party
if any obligation guaranteed by it is or

 

42

 

becomes unenforceable, invalid or illegal.  The amount of the cost, loss or liability shall be equal to the
amount which that Finance Party would otherwise have been entitled to recover.

 

18.2                     Continuing
guarantee

 

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

 

18.3                     Reinstatement

 

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

 

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

 

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

 

18.4                     Waiver
of defences

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(g)                                     any insolvency or similar
proceedings.

 

43

 

18.5                     Immediate
recourse

 

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

 

18.6                     Requirement
of notice

 

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

 

18.7                     Appropriations

 

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

 

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

 

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

 

18.8                     Deferral
of Guarantors’ rights

 

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

 

(a)                                      to be indemnified by an Obligor;

 

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

 

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

 

18.9                     Additional
security

 

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

 

44

 

18.10               Limitations

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

45

 

respective Allocable Amounts in effect immediately prior to such
Guarantor Payment.

 

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

 

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

 

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

 

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

 

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

 

18.11               Additional
Guarantors

 

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

 

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

 

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

 

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

 

(c)                                      Delivery of an Accession Letter
constitutes confirmation by the relevant Subsidiary that the Repeating
Representations are true and correct in relation to

 

46

 

it as at the date of delivery as if made by reference to the facts and
circumstances then existing.

 

SECTION 8

 

REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT

 

19.                           REPRESENTATIONS

 

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

 

19.1                     Status

 

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

 

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

 

19.2                     Binding
obligations

 

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

 

19.3                     Non-conflict
with other obligations

 

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

 

(a)                                      any law or regulation applicable to
it;

 

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

 

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

 

19.4                     Power
and authority

 

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

 

19.5                     Validity
and admissibility in evidence

 

All Authorisations required:

 

47

 

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

 

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

 

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

 

19.6                     Governing
law and enforcement

 

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

 

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

 

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

 

19.7                     Deduction
of Tax

 

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

 

19.8                     No
filing or stamp taxes

 

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

 

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

 

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

 

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

 

(b)                                     if this Agreement or any Finance
Document is filed with any public body or any court in connection with the
performance of any administrative functions (caso

 

48

 

d’uso) in Italy, registration tax may
become payable in relation to this Agreement or any Finance Document which has
not been previously registered or the documentary taxes payable in respect of
which have not been franked by the payment of imposta sostitutiva in
relation to this Agreement, at a rate up to 3 per cent. on any amount outstanding
thereunder;

 

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

 

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

 

19.9                     No
default

 

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

 

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

 

19.10               No misleading
information

 

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

 

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

 

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

 

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

 

19.11               Financial
statements

 

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

 

49

 

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

 

(c)                                      There has been no material adverse
change in the business or consolidated financial condition of the Group since
the date of the Original Financial Statements which would affect the Borrowers’
ability to perform their payment obligations under the Finance Documents.

 

19.12               Pari passu ranking

 

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

 

19.13               No proceedings
pending or threatened

 

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

 

19.14               Environmental
matters

 

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

 

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

 

19.15               Taxation

 

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

 

50

 

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

 

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

 

19.16               Intellectual
Property

 

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

 

19.17               Security

 

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

 

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

 

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

 

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

 

(c)                                      Neither it, nor its direct Holding
Company, nor any Subsidiary (i) is a “holding company,” or a “subsidiary
company” of a “holding company,” or an “affiliate” of a “holding company” or of
a “subsidiary company” of a “holding company,” within the meaning of the Public
Utility Holding Company Act of 1935, or (ii) is or is required to be registered
as an “investment company” under the Investment Company Act of 1940.  Neither the making of any Loan nor the
application of the proceeds or repayment thereof by a Borrower, nor the
consummation of the other transactions contemplated by the Finance Documents,
will violate any provision of any such Act or any rule, regulation or order of
the Securities and Exchange Commission of the United States thereunder.

 

51

 

19.19               No Winding-up

 

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

 

19.20               Pension Schemes

 

Each member of the Group is in
compliance with all applicable laws and contracts relating to pension schemes
(if any) for the time being operated by it or in which it participates and each
such pension scheme is adequately funded based on reasonable actuarial
assumptions and recommendations as required by law in each case where failure
to do so is reasonably likely to have a Material Adverse Effect.

 

19.21               ERISA and
Multiemployer Plans

 

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

 

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

 

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

 

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

 

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

 

52

 

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

 

19.22               Repetition

 

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

 

20.                           INFORMATION UNDERTAKINGS

 

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

 

20.1                     Financial
statements

 

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

 

(i)                        as soon as practicable after the
same become available, but in any event within 150 days after the end of each
of its financial years its Consolidated Financial Statements for that financial
year and (during the Pro-Forma Relevant Period), the Consolidated Pro-Forma
Financial Statements; and

 

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

 

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

 

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

 

20.2                     Compliance
Certificate

 

(a)                                      The Italian Borrower shall supply or
procure to supply to the Agent, with each set of financial statements delivered
pursuant to paragraph (a) of Clause 20.1

 

53

 

(Financial
statements), a Compliance Certificate setting out (in reasonable
detail) computations as to compliance with Clause 21 (Financial covenants) as at
the date as at which those financial statements were drawn up.

 

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

 

20.3                     Requirements
as to financial statements

 

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

 

(b)

 

(i)                        The Italian Borrower shall procure
that each set of financial statements delivered pursuant to Clause 20.1 (Financial
statements) is prepared using GAAP, and in respect only of the
Consolidated Financial Statements and Consolidated Quarterly Financial
Statements using accounting practices and financial reference periods
consistent with those applied in the preparation of its Original Financial
Statements unless, in relation to any set of Consolidated Financial Statements or
Consolidated Quarterly Financial Statements (as the case may be), it notifies
the Agent that there has been a change in GAAP, or the accounting practices or
reference periods and its auditors deliver to the Agent:

 

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

 

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

 

54

 

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

 

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

 

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

 

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

 

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

 

20.4                     Information:
miscellaneous

 

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

 

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

 

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

 

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

 

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

 

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

 

55

 

20.5                     Notification
of default

 

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

 

20.6                     Use
of websites

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

If a Borrower notifies the
Agent under paragraph (c)(i) or paragraph (c)(v) above, all information to be
provided by the Borrower under this Agreement after the date of that notice
shall be supplied in paper form unless and until the

 

56

 

Agent and each Website Lender
is satisfied that the circumstances giving rise to the notification are no
longer continuing.

 

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

 

20.7                     “Know
your customer” checks

 

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

 

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

 

21.                           FINANCIAL COVENANTS

 

21.1                     Financial
definitions

 

In this Clause:

 

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

 

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

 

57

 

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

 

(i)                        bank overdrafts; plus

 

(ii)                     current portion of notes payable;
plus

 

(iii)                  current portion of long term debt;
plus

 

(iv)                 notes payable; plus

 

(v)                    long term debt,

 

less:

 

(vi)                 Cash and Cash Equivalents; and

 

(vii)              Restricted Cash.

 

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

 

21.2                     Financial
condition

 

The Italian Borrower shall
ensure that:

 

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

 

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

 

21.3                     Financial
testing

 

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

 

22.                           GENERAL UNDERTAKINGS

 

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

 

58

 

22.1                     Authorisations

 

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

 

22.2                     Compliance
with laws

 

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

 

22.3                     Negative
pledge

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

59

 

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

 

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

 

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

 

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

 

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

 

22.4                     Segregation
of assets under the Italian Civil Code

 

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

 

22.5                     Intellectual
Property

 

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

 

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

 

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

 

60

 

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

 

22.6                     Disposals

 

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

 

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

 

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

 

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

 

(iii)                  the proceeds of which are applied to
the acquisition by any member of the Group, of property or assets (including
the capital stock of any entity) that replaces the relevant property or assets
disposed of, or in property or assets that will be used or useful in the
business or operations of the Group, within 365 days;

 

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

 

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

 

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

 

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

 

(viii)           where the book value of the assets
(when aggregated with the book value of the assets for any other sale, lease,
transfer or other disposal by the Group, other than any permitted under
paragraphs (i) to (vii) above) carried out over the period from the date hereof
to the Termination Date does not exceed 15 per cent. of the Consolidated Total
Assets of the Group at the end of any Relevant Period as determined by the

 

61

 

Consolidated Financial Statements or Consolidated Quarterly Financial
Statements (as the case may be) for the Relevant Period from the date hereof to
the Termination Date.

 

22.7                     Merger

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

22.8                     Change
of business

 

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

 

22.9                     Insurance

 

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

 

62

 

22.10               Environmental
Matters

 

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

 

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

 

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

 

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

 

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

 

22.11               Taxation

 

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

 

22.12               Indebtedness for
Borrowed Money

 

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

 

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

 

(b)                                     owed by any entity acquired by any
member of the Group (including any refinancing of such Indebtedness for
Borrowed Money) provided that (i) such Indebtedness for Borrowed Money was not
created in contemplation of such acquisition; and (ii) such Indebtedness for
Borrowed Money shall be included within the basket set out in sub-paragraph (d)
of this Clause, at any time following the date falling six months after the
date of such acquisition, unless prior to the expiring of such six month
period, the relevant acquired company has acceded to this Agreement as an
Additional Guarantor pursuant to the provisions of Clause 18.11 (Additional
Guarantors);

 

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

 

63

 

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

 

22.13               Loans and
Guarantees

 

(a)                                      The Italian Borrower shall ensure
that no member of the Group that is not an Obligor will make any loans, grant
any credit (save in the ordinary course of business) or give any guarantee or
indemnity to or for the benefit of any person or otherwise voluntarily assume
any liability, whether actual or contingent, in respect of any obligation of
any person.

 

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

 

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

 

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

 

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

 

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

 

22.14               Distributions

 

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

 

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

 

64

 

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

 

22.15               Arm’s Length Basis

 

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

 

22.16               Refinancing of
Existing Financial Indebtedness

 

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

 

23.                           EVENTS OF DEFAULT

 

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

 

23.1                     Non-payment

 

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

 

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

 

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

 

23.2                     Financial
covenants

 

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

 

23.3                     Other
obligations

 

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

 

23.4                     Misrepresentation

 

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

 

65

 

23.5                     Cross
default

 

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

 

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

 

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

 

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

 

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

 

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

 

23.6                     Insolvency

 

(a)                                      Any Obligor or any of its Material
Subsidiaries are unable or admit in writing their inability to pay its debts as
they fall due, suspends making payments on any of its debts or, by reason of
actual or anticipated financial difficulties, commences negotiations with one
or more of its creditors with a view to rescheduling any of its indebtedness or
in respect of any Obligor or any of its

 

66

 

Material Subsidiaries which is a corporation incorporated in Italy, such
company is dissolved pursuant to Article 2448 of the Italian Civil Code.

 

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

 

23.7                     Insolvency
proceedings

 

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

 

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

 

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

 

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

 

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

 

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

 

23.8                     Creditors’
process and final judgment

 

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

 

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

 

in each case unless any Agreed
Exception applies.

 

67

 

23.9                     Ownership
of the Obligors

 

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

 

23.10               Unlawfulness

 

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

 

23.11               Repudiation

 

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

 

23.12               Litigation

 

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

 

23.13               Auditor’s
Qualification

 

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

 

23.14               Employee Plans

 

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

 

23.15               Cessation of
business

 

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

 

23.16               Acceleration

 

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

 

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

 

68

 

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

 

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

 

SECTION 9

 

CHANGES TO PARTIES

 

24.                           CHANGES TO THE LENDERS

 

24.1                     Assignments
and transfers by the Lenders

 

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

 

(a)                                      assign any of its rights; or

 

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

 

to a Qualifying Lender (the “New Lender”),
provided
that prior to and including 31 December 2004, each Original Lender
may only transfer or assign up to 25 per cent. of its Commitments to New
Lenders provided
further that for the avoidance of doubt, from and including 1
January 2005 no such restriction shall apply. Any assignment or transfer made
by a Lender shall only be permitted to the extent that it is made by such
Lender pro-rata across the Facilities in which it has an interest.

 

24.2                     Conditions
of assignment or transfer

 

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

 

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

 

(c)                                      An assignment will only be effective
on:

 

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

 

69

 

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

 

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

 

(e)                                      If:

 

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

 

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

 

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

 

24.3                     Assignment
or transfer fee

 

The New Lender shall, on the
date upon which an assignment or transfer takes effect, pay to the Agent (for
its own account) a fee of €3,000 with respect to an assignment or transfer
relating to all the Facilities or to Facility A and/ or Facility C and a fee of
US $ 3,000 with respect to an assignment or transfer relating to Facility B
only provided
that no such fee shall be payable with respect to any transfer made
prior to the date specified in the letter entered into on 12 May 2004 between
the Mandated Lead Arrangers.

 

24.4                     Limitation
of responsibility of Existing Lenders

 

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

 

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

 

(ii)                     the financial condition of any
Obligor;

 

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

 

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

 

and any representations or
warranties implied by law are excluded.

 

70

 

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

 

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

 

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

 

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

 

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

 

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

 

24.5                     Procedure
for transfer

 

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

 

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

 

(c)                                      On the Transfer Date:

 

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

 

71

 

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

 

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

 

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

 

24.6                     Copy
of Transfer Certificate to Borrowers

 

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

 

24.7                     Disclosure
of information

 

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

 

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

 

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

 

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

 

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

 

25.                           CONFIDENTIALITY

 

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

 

72

 

Party or any of the persons
described in paragraph (c) below, provided that,  each Finance Party shall be
entitled to make disclosure of the same:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

26.                           CHANGES TO THE OBLIGORS

 

26.1                     Assignment
and transfers by Obligors

 

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

 

73

 

SECTION 10

 

THE FINANCE PARTIES

 

27.                           ROLE OF THE AGENT AND THE MANDATED LEAD ARRANGER

 

27.1                     Appointment
of the Agent

 

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

 

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

 

27.2                     Duties
of the Agent

 

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

 

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

 

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

 

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

 

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

 

27.3                     Role
of the Mandated Lead Arranger

 

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

 

27.4                     No
fiduciary duties

 

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

 

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

 

27.5                     Business
with the Group

 

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

 

74

 

27.6                     Rights
and discretions of the Agent

 

(a)                                      The Agent may rely on:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

27.7                     Majority
Lenders’ instructions

 

(a)                                      Unless a contrary indication appears
in a Finance Document, the Agent shall (i) exercise any right, power, authority
or discretion vested in it as Agent in accordance with any instructions given
to it by the Majority Lenders (or, if so instructed by the Majority Lenders,
refrain from exercising any right, power, authority or discretion vested in it
as Agent) and (ii) not be liable for any act (or omission) if it acts (or
refrains from taking any action) in accordance with an instruction of the
Majority Lenders.

 

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

 

75

 

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

 

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

 

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

 

27.8                     Responsibility
for documentation

 

Neither the Agent nor the
Mandated Lead Arranger:

 

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

 

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

 

27.9                     Exclusion
of liability

 

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

 

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

 

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

 

(d)                                     Nothing in this Agreement shall
oblige the Agent or the Mandated Lead Arranger to carry out any “know your
customer” or other checks in relation to any person on behalf of any Lender and
each Lender confirms to the Agent and

 

76

 

the Mandated Lead Arranger that it is solely responsible for any such
checks it is required to carry out and that it may not rely on any statement in
relation to such checks made by the Agent or the Mandated Lead Arranger.

 

27.10               Lenders’ indemnity
to the Agent

 

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

 

27.11               Resignation of the
Agent

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

77

 

27.12               Confidentiality

 

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

 

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

 

27.13               Relationship with
the Lenders

 

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

 

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

 

27.14               Credit appraisal by
the Lenders

 

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

 

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

 

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

 

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

 

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

 

27.15               Reference Banks

 

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

 

78

 

Borrower) appoint another
Lender or an Affiliate of a Lender to replace that Reference Bank.

 

27.16               Deduction from
amounts payable by the Agent

 

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

 

28.                           CONDUCT OF BUSINESS BY THE FINANCE PARTIES

 

No provision of this Agreement
will:

 

(a)                                      interfere with the right of any
Finance Party to arrange its affairs (tax or otherwise) in whatever manner it
thinks fit;

 

(b)                                     oblige any Finance Party to
investigate or claim any credit, relief, remission or repayment available to it
or the extent, order and manner of any claim; or

 

(c)                                      oblige any Finance Party to disclose
any information relating to its affairs (tax or otherwise) or any computations
in respect of Tax.

 

29.                           SHARING AMONG THE FINANCE PARTIES

 

29.1                     Payments
to Finance Parties

 

If a Finance Party (a “Recovering
Finance Party”) receives or recovers any amount from an Obligor
other than in accordance with Clause 30 (Payment mechanics) and applies that amount
to a payment due under the Finance Documents then:

 

(a)                                      the Recovering Finance Party shall,
within three Business Days, notify details of the receipt or recovery, to the
Agent;

 

(b)                                     the Agent shall determine whether
the receipt or recovery is in excess of the amount the Recovering Finance Party
would have been paid had the receipt or recovery been received or made by the
Agent and distributed in accordance with Clause 30 (Payment mechanics), without
taking account of any Tax which would be imposed on the Agent in relation to
the receipt, recovery or distribution; and

 

(c)                                      the Recovering Finance Party shall,
within three Business Days of demand by the Agent, pay to the Agent an amount
(the “Sharing
Payment”) equal to such receipt or recovery less any amount which
the Agent determines may be retained by the Recovering Finance Party as its
share of any payment to be made, in accordance with Clause 30.5 (Partial payments).

 

79

 

29.2                     Redistribution
of payments

 

The Agent shall treat the
Sharing Payment as if it had been paid by the relevant Obligor and distribute
it between the Finance Parties (other than the Recovering Finance Party) in
accordance with Clause 30.5 (Partial payments).

 

29.3                     Recovering
Finance Party’s rights

 

(a)                                      On a distribution by the Agent under
Clause 29.2 (Redistribution of payments), the Recovering Finance Party
will be subrogated to the rights of the Finance Parties which have shared in
the redistribution.

 

(b)                                     If and to the extent that the
Recovering Finance Party is not able to rely on its rights under paragraph (a)
above, the relevant Obligor shall be liable to the Recovering Finance Party for
a debt equal to the Sharing Payment which is immediately due and payable.

 

29.4                     Reversal
of redistribution

 

If any part of the Sharing
Payment received or recovered by a Recovering Finance Party becomes repayable
and is repaid by that Recovering Finance Party, then:

 

(a)                                      each Finance Party which has
received a share of the relevant Sharing Payment pursuant to Clause 29.2 (Redistribution
of payments) shall, upon request of the Agent, pay to the Agent for
account of that Recovering Finance Party an amount equal to the appropriate
part of its share of the Sharing Payment (together with an amount as is
necessary to reimburse that Recovering Finance Party for its proportion of any
interest on the Sharing Payment which that Recovering Finance Party is required
to pay); and

 

(b)                                     that Recovering Finance Party’s
rights of subrogation in respect of any reimbursement shall be cancelled and
the relevant Obligor will be liable to the reimbursing Finance Party for the
amount so reimbursed.

 

29.5                     Exceptions

 

(a)                                      This Clause 29 shall not apply to
the extent that the Recovering Finance Party would not, after making any
payment pursuant to this Clause, have a valid and enforceable claim against the
relevant Obligor.

 

(b)                                     A Recovering Finance Party is not
obliged to share with any other Finance Party any amount which the Recovering
Finance Party has received or recovered as a result of taking legal or
arbitration proceedings, if:

 

(i)                        it notified that other Finance Party
of the legal or arbitration proceedings; and

 

(ii)                     that other Finance Party had an
opportunity to participate in those legal or arbitration proceedings but did
not do so as soon as reasonably practicable having received notice and did not
take separate legal or arbitration proceedings.

 

80

 

SECTION 11

 

ADMINISTRATION

 

30.                           PAYMENT MECHANICS

 

30.1                     Payments
to the Agent

 

(a)                                      On each date on which an Obligor or
a Lender is required to make a payment under a Finance Document, that Obligor
or Lender shall make the same available to the Agent (unless a contrary
indication appears in a Finance Document) for value on the due date at the time
and in such funds specified by the Agent as being customary at the time for
settlement of transactions in the relevant currency in the place of payment. A
payment made by an Obligor to the Agent which relates to moneys owed to a
Finance Party shall be deemed to be received by such Finance Party once made to
the Agent.

 

(b)                                     Payment shall be made to such
account in the principal financial centre of the country of that currency (or,
in relation to euro, in a principal financial centre in a Participating Member
State or London) with such bank as the Agent specifies.

 

30.2                     Distributions
by the Agent

 

Each payment received by the
Agent under the Finance Documents for another Party shall, subject to Clause
30.3 (Distributions
to an Obligor), Clause 30.4 (Clawback) and Clause 27.16 (Deduction
from amounts payable by the Agent) be made available by the Agent as
soon as practicable after receipt to the Party entitled to receive payment in
accordance with this Agreement (in the case of a Lender, for the account of its
Facility Office), to such account as that Party may notify to the Agent by not
less than five Business Days’ notice with a bank in the principal financial
centre of the country of that currency (or, in relation to euro, in the
principal financial centre of a Participating Member State or London).

 

30.3                     Distributions
to an Obligor

 

The Agent may (with the
consent of the Obligor or in accordance with Clause 31 (Set-off)) apply any amount
received by it for that Obligor in or towards payment (on the date and in the
currency and funds of receipt) of any amount due from that Obligor under the
Finance Documents or in or towards purchase of any amount of any currency to be
so applied.

 

30.4                     Clawback

 

(a)                                      Where a sum is to be paid to the
Agent under the Finance Documents for another Party, the Agent is not obliged
to pay that sum to that other Party (or to enter into or perform any related
exchange contract) until it has been able to establish to its satisfaction that
it has actually received that sum.

 

(b)                                     If the Agent pays an amount to
another Party and it proves to be the case that the Agent had not actually
received that amount, then the Party to whom that amount (or the proceeds of
any related exchange contract) was paid by the

 

81

 

Agent shall on demand refund the same to the Agent together with
interest on that amount from the date of payment to the date of receipt by the
Agent, calculated by the Agent to reflect its cost of funds.

 

30.5                     Partial
payments

 

(a)                                      If the Agent receives a payment that
is insufficient to discharge all the amounts then due and payable by an Obligor
under the Finance Documents, the Agent shall apply that payment towards the
obligations of that Obligor under the Finance Documents in the following order:

 

(i)                        first, in or towards payment pro rata of any unpaid fees, costs and expenses
of the Agent and the Mandated Lead Arranger under the Finance Documents;

 

(ii)                     secondly, in or towards payment pro rata of any accrued interest, fee or
commission due but unpaid under this Agreement;

 

(iii)                  thirdly, in or towards payment pro rata of any principal due but unpaid under
this Agreement; and

 

(iv)                 fourthly, in or towards payment pro rata of any other sum due but unpaid under
the Finance Documents.

 

(b)                                     The Agent shall, if so directed by
the Majority Lenders, vary the order set out in paragraphs (a)(ii) to (iv)
above.

 

(c)                                      Paragraphs (a) and (b) above will
override any appropriation made by an Obligor.

 

30.6                     No
set-off by Obligors

 

All payments to be made by an
Obligor under the Finance Documents shall be calculated and be made without
(and free and clear of any deduction for) set-off or counterclaim.

 

30.7                     Business
Days

 

(a)                                      Any payment which is due to be made
on a day that is not a Business Day shall be made on the next Business Day in
the same calendar month (if there is one) or the preceding Business Day (if
there is not).

 

(b)                                     During any extension of the due date
for payment of any principal or Unpaid Sum under this Agreement interest is
payable on the principal or Unpaid Sum at the rate payable on the original due
date.

 

30.8                     Currency
of account

 

(a)                                      Subject to paragraphs (b) to (e) below,
the Base Currency is the currency of account and payment for any sum due from
an Obligor under any Finance Document.

 

82

 

(b)                                     A repayment of a Loan or Unpaid Sum
or a part of a Loan or Unpaid Sum shall be made in the currency in which that
Loan or Unpaid Sum is denominated on its due date. For the avoidance of doubt,
a Loan advanced in an Optional Currency is denominated in the Optional Currency
and not in the Base Currency.

 

(c)                                      Each payment of interest shall be
made in the currency in which the sum in respect of which the interest is
payable was denominated when that interest accrued. For the avoidance of doubt,
interest on a Loan in an Optional Currency is payable in the Optional Currency
and not in the Base Currency.

 

(d)                                     Each payment in respect of costs,
expenses or Taxes shall be made in the currency in which the costs, expenses or
Taxes are incurred.

 

(e)                                      Any amount expressed to be payable
in a currency other than the Base Currency shall be paid in that other
currency.

 

30.9                     Change
of currency

 

(a)                                      Unless otherwise prohibited by law,
if more than one currency or currency unit are at the same time recognised by
the central bank of any country as the lawful currency of that country, then:

 

(i)                        any reference in the Finance
Documents to, and any obligations arising under the Finance Documents in, the
currency of that country shall be translated into, or paid in, the currency or
currency unit of that country designated by the Agent (after consultation with
the Italian Borrower); and

 

(ii)                     any translation from one currency or
currency unit to another shall be at the official rate of exchange recognised
by the central bank for the conversion of that currency or currency unit into
the other, rounded up or down by the Agent (acting reasonably).

 

(b)                                     If a change in any currency of a
country occurs, this Agreement will, to the extent the Agent (acting reasonably
and after consultation with the Italian Borrower) specifies to be necessary, be
amended to comply with any generally accepted conventions and market practice
in the Relevant Interbank Market and otherwise to reflect the change in
currency.

 

31.                           SET-OFF

 

A Finance Party may set off
any matured obligation due from an Obligor under the Finance Documents (to the
extent beneficially owned by that Finance Party) against any matured obligation
owed by that Finance Party to that Obligor, regardless of the place of payment,
booking branch or currency of either obligation.  If the obligations are in different currencies, the Finance Party
may convert either obligation at a market rate of exchange in its usual course
of business for the purpose of the set-off.

 

83

 

32.                           NOTICES

 

32.1                     Communications
in writing

 

Any communication to be made
under or in connection with the Finance Documents shall be made in writing and,
unless otherwise stated, may be made by fax or letter.

 

32.2                     Addresses

 

The address and fax number
(and the department or officer, if any, for whose attention the communication
is to be made) of each Party for any communication or document to be made or
delivered under or in connection with the Finance Documents is:

 

(a)                                      in the case of the Borrowers, that
identified with their respective names below;

 

(b)                                     in the case of each Lender or any
other Obligor, that notified in writing to the Agent on or prior to the date on
which it becomes a Party; and

 

(c)                                      in the case of the Agent, that
identified with its name below,

 

or any substitute address or
fax number or department or officer as the Party may notify to the Agent (or
the Agent may notify to the other Parties, if a change is made by the Agent) by
not less than five Business Days’ notice.

 

32.3                     Delivery

 

(a)                                      Any communication or document made
or delivered by one person to another under or in connection with the Finance
Documents will only be effective:

 

(i)                        if by way of fax, when received in
legible form; or

 

(ii)                     if by way of letter, when it has
been left at the relevant address or five Business Days after being deposited
in the post postage prepaid in an envelope addressed to it at that address,
and, if a particular department or officer is specified as part of its address
details provided under Clause 32.2 (Addresses), if addressed to that
department or officer.

 

(b)                                     Any communication or document to be
made or delivered to the Agent will be effective only when actually received by
the Agent and then only if it is expressly marked for the attention of the
department or officer identified with the Agent’s signature below (or any
substitute department or officer as the Agent shall specify for this purpose).

 

(c)                                      All notices from or to an Obligor
shall be sent through the Agent.

 

(d)                                     Each Obligor (other than the Italian
Borrower) irrevocably appoints the Italian Borrower to act as its agent:

 

(i)                        to give and receive all
communications under this Agreement;

 

(ii)                     to supply all information concerning
itself to any Finance Party; and

 

(iii)                  to sign all documents under or in
connection with the Finance Documents.

 

84

 

(e)                                      Any communication or document made
or delivered to the Italian Borrower in accordance with this Clause will be
deemed to have been made or delivered to each of the Obligors.

 

32.4                     Notification
of address and fax number

 

Promptly upon receipt of
notification of an address and fax number or change of address or fax number
pursuant to Clause 32.2 (Addresses) or changing its own address or
fax number, the Agent shall notify the other Parties.

 

32.5                     Electronic
communication

 

(a)                                      Any communication to be made between
the Agent and a Lender under or in connection with the Finance Documents may be
made by electronic mail or other electronic means, if the Agent and the
relevant Lender:

 

(i)                        agree that, unless and until notified
to the contrary, this is to be an accepted form of communication;

 

(ii)                     notify each other in writing of
their electronic mail address and/or any other information required to enable
the sending and receipt of information by that means; and

 

(iii)                  notify each other of any change to
their address or any other such information supplied by them.

 

(b)                                     Any electronic communication made
between the Agent and a Lender will be effective only when actually received in
readable form and in the case of any electronic communication made by a Lender
to the Agent only if it is addressed in such a manner as the Agent shall
specify for this purpose.

 

32.6                     English
language

 

(a)                                      Any notice given under or in
connection with any Finance Document must be in English.

 

(b)                                     All other documents provided under
or in connection with any Finance Document must be:

 

(i)                        in English; or

 

(ii)                     if not in English, and if so
required by the Agent, accompanied by a certified English translation and, in
this case, the English translation will prevail unless the document is a
constitutional, statutory or other official document.

 

85

 

33.                           CALCULATIONS AND CERTIFICATES

 

33.1                     Accounts

 

In any litigation or
arbitration proceedings arising out of or in connection with a Finance
Document, in the absence of manifest error the entries made in the accounts
maintained by a Finance Party are prima facie evidence of the matters to
which they relate.

 

33.2                     Certificates
and Determinations

 

Any certification or
determination by a Finance Party of a rate or amount under any Finance Document
is, in the absence of manifest error, conclusive evidence of the matters to
which it relates.

 

33.3                     Day
count convention

 

Any interest, commission or
fee accruing under a Finance Document will accrue from day to day and is
calculated on the basis of the actual number of days elapsed and a year of 360
days.

 

34.                           PARTIAL INVALIDITY

 

If, at any time, any provision
of the Finance Documents is or becomes illegal, invalid or unenforceable in any
respect under any law of any jurisdiction, neither the legality, validity or
enforceability of the remaining provisions nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction will
in any way be affected or impaired.

 

35.                           REMEDIES AND WAIVERS

 

No failure to exercise, nor
any delay in exercising, on the part of any Finance Party, any right or remedy
under the Finance Documents shall operate as a waiver, nor shall any single or
partial exercise of any right or remedy prevent any further or other exercise
or the exercise of any other right or remedy. 
The rights and remedies provided in this Agreement are cumulative and
not exclusive of any rights or remedies provided by law.

 

36.                           AMENDMENTS AND WAIVERS

 

36.1                     Required
consents

 

(a)                                      Subject to Clause 36.2 (Exceptions)
any term of the Finance Documents may be amended or waived only with the
consent of the Majority Lenders and the Obligors and any such amendment or
waiver will be binding on all Parties.

 

(b)                                     The Agent may effect, on behalf of
any Finance Party, any amendment or waiver permitted by this Clause.

 

36.2                     Exceptions

 

(a)                                      An amendment or waiver that has the
effect of changing or which relates to:

 

(i)                        the definition of “Majority Lenders”
in Clause 1.1 (Definitions);

 

(ii)                     an extension to the date of payment
of any amount under the Finance Documents;

 

86

 

(iii)                  a reduction in the Margin or a
reduction in the amount of any payment of principal, interest, fees or
commission payable;

 

(iv)                 an increase in or an extension of
any Commitment;

 

(v)                    a change to the Borrowers or
Guarantors;

 

(vi)                 any provision which expressly
requires the consent of all the Lenders;

 

(vii)              Clause 2.2 (Finance Parties’ rights and obligations),
Clause 24 (Changes
to the Lenders) or this Clause 36,

 

shall not be made without the
prior consent of all the Lenders.

 

(b)                                     An amendment or waiver which relates
to the rights or obligations of the Agent or the Mandated Lead Arranger may not
be effected without the consent of the Agent or the Mandated Lead Arranger.

 

37.                           COUNTERPARTS

 

Each Finance Document may be
executed in any number of counterparts, and this has the same effect as if the
signatures on the counterparts were on a single copy of the Finance Document.

 

SECTION 12

 

GOVERNING LAW AND ENFORCEMENT

 

38.                           GOVERNING LAW

 

This Agreement is governed by
English law.

 

39.                           ENFORCEMENT

 

39.1                     Jurisdiction

 

(a)                                      The courts of England have exclusive
jurisdiction to settle any dispute arising out of or in connection with this
Agreement (including a dispute regarding the existence, validity or termination
of this Agreement) (a “Dispute”).

 

(b)                                     The Parties agree that the courts of
England are the most appropriate and convenient courts to settle Disputes and
accordingly no Party will argue to the contrary.

 

(c)                                      This Clause 39.1 is for the benefit
of the Finance Parties only.  As a
result, no Finance Party shall be prevented from taking proceedings relating to
a Dispute in any other courts with jurisdiction.  To the extent allowed by law, the Finance Parties may take
concurrent proceedings in any number of jurisdictions.

 

39.2                     Service
of process

 

Without prejudice to any other
mode of service allowed under any relevant law, each Obligor:

 

87

 

(a)                                      irrevocably appoints Luxottica UK
Ltd. as its agent for service of process in relation to any proceedings before
the English courts in connection with any Finance Document; and

 

(b)                                     agrees that failure by a process
agent to notify the relevant Obligor of the process will not invalidate the
proceedings concerned.

 

This Agreement
has been entered into on the date stated at the beginning of this Agreement.

 

88

 

 

SCHEDULE 2

CONDITIONS PRECEDENT

 

Part I

Conditions precedent to initial Utilisation

 

1.                                 Obligors

 

(a)

 

(i)                        A copy of the constitutional
documents of the US Borrower.

 

(ii)                     In respect of each Obligor which is
a company incorporated under the laws of Italy:

 

(1)                    a copy of the relevant deed of
incorporation (atto costitutivo);

 

(2)                    a copy of the current by-laws (statuto);
and

 

(3)                    a certificate of registration (certificato
di iscrizione) of the relevant Obligor with the competent companies’
register dated not earlier than 5 days before the execution of this Agreement,
mentioning the absence of any insolvency procedures affecting such Obligor.

 

(b)                                     A copy of a resolution of the board
of directors of each Obligor:

 

(i)                        approving the terms of, and the
transactions contemplated by, the Finance Documents to which it is a party and
resolving that it execute the Finance Documents to which it is a party;

 

(ii)                     authorising a specified person or
persons to execute the Finance Documents to which it is a party on its behalf;
and

 

(iii)                  authorising a specified person or
persons, on its behalf, to sign and/or despatch all documents and notices
(including, if relevant, any Utilisation Request and Selection Notice) to be
signed and/or despatched by it under or in connection with the Finance
Documents to which it is a party.

 

(c)                                      A specimen of the signature of each
person authorised by the resolution referred to in paragraph (b) above.

 

(d)                                     A certificate of each Obligor
confirming that borrowing or guaranteeing, as appropriate, the Facility A
Commitments and the Facility C Commitments in the case of the Italian Borrower
and the Facility B Commitments and the Facility C Commitments in the case of
the US Borrower would not cause any borrowing, guaranteeing or similar limit
binding on any Obligor to be exceeded.

 

(e)                                      A certificate of an authorised
signatory of the relevant Obligor certifying that each copy document relating
to it specified in this Part 1 of Schedule 2 is correct, complete and in full
force and effect as at a date no earlier than the date of this Agreement.

 

89

 

2.                                 Legal opinions

 

(a)                                      A legal opinion of Studio Legale
Associato, in associazione con Clifford Chance as to matters of English law (in
the form circulated to the Mandated Lead Arranger prior to the date of this
Agreement).

 

(b)                                     A legal opinion of Studio Legale
Associato, in associazione con Clifford Chance as to matters of Italian law (in
the form circulated to the Mandated Lead Arranger prior to the date of this
Agreement).

 

(c)                                      A legal opinion of Allen & Overy
Studio Legale Associato Milano addressed to the Lenders at the date of this
Agreement confirming that the Obligors incorporated in the Republic of Italy
have power and authority to execute this Agreement.

 

(d)                                     A legal opinion of Allen & Overy
L.L.P. addressed to the Mandated Lead Arranger as legal advisers to the US
Borrower as to matters of US Law.

 

3.                                 Other documents and evidence

 

(a)                                      Evidence that any process agent
referred to in Clause 39.2 (Service of process) has accepted its
appointment.

 

(b)                                     A copy of any other Authorisation or
other document, opinion or assurance which the Agent considers to be necessary
or desirable (if it has notified the Italian Borrower accordingly) in
connection with the entry into and performance of the transactions contemplated
by any Finance Document or for the validity and enforceability of any Finance
Document.

 

(c)                                      The Original Financial Statements.

 

(d)                                     Acceptance by the Borrower of the
Documento di Sintesi.

 

(e)                                      Evidence that the fees, costs and
expenses then due from the Borrowers on or prior to the first Utilisation Date
pursuant to Clause 12 (Fees) and Clause 17 (Costs and expenses) have
been paid or will be paid by the first Utilisation Date.

 

90

 

Part II

Conditions precedent to Facility B initial Utilisation

 

(a)                                      Evidence that immediately following
the first Utilisation under the Facility B and application of the proceeds by
the Paying Agent (as defined in the merger agreement referred to in paragraph
(f) below), the Acquisition will be completed.

 

(b)                                     Evidence that all governmental and
regulatory consents and other clearances (including, but not limited to, tax
clearances) and all third party consents and approvals required under the
Acquisition Documents have been obtained.

 

(c)                                      A funds flow statement in a form
agreed to by the Agent detailing the proposed movement of funds to be applied
towards the Total Consideration.

 

(d)                                     A certificate of the US Borrower
(signed by an Authorised Signatory) confirming that entering into the
Acquisition Documents (and the performance of the relevant transactions
thereunder) would not conflict with: (i) any law or regulation applicable to it
or Target, (ii) its or Target’s or any of its Subsidiaries constitutional
documents, and (iii) any agreement or instrument binding upon Target or any of
its or Target’s Subsidiaries or any of its Subsidiaries’ assets except any such
conflict that would not be reasonably expected to have a Material Adverse Effect.

 

(e)                                      A structure chart in a form agreed
by the Agent showing the corporate structure of the Group (including Target and
its Subsidiaries) immediately following the Acquisition.

 

(f)                                        A copy of the merger agreement dated
as of 23 January 2004 between, inter alia, the Italian Borrower and
Target.

 

(g)                                     A copy of the latest available
audited consolidated financial statements of Target and the latest available
quarterly financial statements in each case of Target.

 

91

 

 

SIGNATURES

 

	
  THE ORIGINAL
  BORROWERS

  
	
   

  
	
  LUXOTTICA
  GROUP S.p.A.

  
	
   

  
	
  by:  ENRICO CAVATORTA

  
	
   

  
	
  Address: 

  
	
   

  
	
  Fax: 

  
	
   

  
	
  Attention: 

  
	
   

  
	
   

  
	
  LUXOTTICA
  U.S. HOLDINGS CORP.

  
	
   

  
	
  by:  ENRICO CAVATORTA

  
	
   

  
	
  Address: 

  
	
   

  
	
  Fax: 

  
	
   

  
	
  Attention: 

  
	
   

  
	
   

  
	
  THE ORIGINAL
  GUARANTORS

  
	
   

  
	
  LUXOTTICA
  GROUP S.p.A.

  
	
   

  
	
  by:  ENRICO CAVATORTA

  
	
   

  
	
  Address: 

  
	
   

  
	
  Fax: 

  
	
   

  
	
  Attention: 

  
	
   

  
	
   

  
	
  LUXOTTICA
  U.S. HOLDINGS CORP.

  
	
   

  
	
  by:  ENRICO CAVATORTA

  
	
   

  
	
  Address: 

  
	
   

  
	
  Fax: 

  
	
   

  
	
  Attention: 

  

 

92

 

	
  LUXOTTICA S.r.l.

  
	
   

  
	
  by:  ENRICO CAVATORTA

  
	
   

  
	
  Address: 

  
	
   

  
	
  Fax: 

  
	
   

  
	
  Attention: 

  
	
   

  
	
   

  
	
  THE AGENTS

  
	
   

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

  
	
   

  
	
  by:  

  
	
   

  
	
  Address: 

  
	
   

  
	
  Fax: 

  
	
   

  
	
  Attention: 

  
	
   

  
	
   

  
	
  UNICREDIT
  BANCA D’IMPRESA S.p.A.

  
	
   

  
	
  by:  PAOLO SPADA

  
	
   

  
	
  Address: 

  
	
   

  
	
  Fax: 

  
	
   

  
	
  Attention: 

  
	
   

  
	
   

  
	
  THE MANDATED
  LEAD ARRANGERS

  
	
   

  
	
  ABN AMRO BANK
  N.V.

  
	
   

  
	
  by:  

  
	
   

  
	
  Address:

  
	
   

  
	
  Fax:

  
	
   

  
	
  Attention:

  
	
   

  
	
   

  
	
  BANCA INTESA
  S.p.A.

  
	
   

  
	
  by:  

  

 

93

 

	
  Address:

  
	
   

  
	
  Fax:

  
	
   

  
	
  Attention:

  
	
   

  
	
   

  
	
  BANC OF
  AMERICA SECURITIES LIMITED

  
	
   

  
	
  by:  

  
	
   

  
	
  Address:

  
	
   

  
	
  Fax:

  
	
   

  
	
  Attention:

  
	
   

  
	
   

  
	
  CITIGROUP
  GLOBAL MARKETS LIMITED

  
	
   

  
	
  by:  

  
	
   

  
	
  Address:

  
	
   

  
	
  Fax:

  
	
   

  
	
  Attention:

  
	
   

  
	
   

  
	
  HSBC BANK PLC

  
	
   

  
	
  by:  

  
	
   

  
	
  Address:

  
	
   

  
	
  Fax:

  
	
   

  
	
  Attention:

  

 

94

 

	
  MEDIOBANCA –
  BANCA DI CREDITO FINANZIARIO S.p.A.

  
	
   

  
	
  by:  

  
	
   

  
	
  Address:

  
	
   

  
	
  Fax:

  
	
   

  
	
  Attention:

  
	
   

  
	
   

  
	
  THE ROYAL
  BANK OF SCOTLAND PLC

  
	
   

  
	
  by:  

  
	
   

  
	
  Address:

  
	
   

  
	
  Fax:

  
	
   

  
	
  Attention:

  
	
   

  
	
   

  
	
  UNICREDIT
  BANCA MOBILIARE S.p.A.

  
	
   

  
	
  by:  

  
	
   

  
	
  Address:

  
	
   

  
	
  Fax:

  
	
   

  
	
   

  
	
  THE ORIGINAL
  LENDERS

  
	
   

  
	
  ABN AMRO BANK
  N.V., MILAN BRANCH

  
	
   

  
	
  by:  

  
	
   

  
	
  Address:

  
	
   

  
	
  Fax:

  
	
   

  
	
  Attention:

  

 

95

 

	
  ABN AMRO BANK
  N.V.

  
	
   

  
	
  Facility Office for US Borrower:

  
	
   

  
	
  by:  

  
	
   

  
	
  Address:

  
	
   

  
	
  Fax:

  
	
   

  
	
  Attention:

  
	
   

  
	
   

  
	
  BANCA INTESA
  S.p.A.

  
	
   

  
	
  Facility Office for US Borrower:

  
	
   

  
	
  by:  

  
	
   

  
	
  Address:

  
	
   

  
	
  Fax:

  
	
   

  
	
  Attention:

  
	
   

  
	
   

  
	
  BANK OF
  AMERICA, N.A., MILAN BRANCH

  
	
   

  
	
  by:  

  
	
   

  
	
  Address:

  
	
   

  
	
  Fax:

  
	
   

  
	
  Attention:

  
	
   

  
	
   

  
	
  BANK OF
  AMERICA, N.A.

  
	
   

  
	
  Facility Office for US Borrower:

  
	
   

  
	
  by:  

  
	
   

  
	
  Address:

  
	
   

  
	
  Fax:

  
	
   

  
	
  Attention:

  

 

96

 

	
  CITIBANK,
  N.A., MILAN BRANCH

  
	
   

  
	
  by:  

  
	
   

  
	
  Address:

  
	
   

  
	
  Fax:

  
	
   

  
	
  Attention:

  
	
   

  
	
   

  
	
  CITIBANK,
  N.A.

  
	
   

  
	
  Facility Office for US Borrower:

  
	
   

  
	
  by:  

  
	
   

  
	
  Address:

  
	
   

  
	
  Fax:

  
	
   

  
	
  Attention:

  
	
   

  
	
   

  
	
  HSBC BANK
  PLC, MILAN BRANCH

  
	
   

  
	
  by:  

  
	
   

  
	
  Address:

  
	
   

  
	
  Fax:

  
	
   

  
	
  Attention:

  
	
   

  
	
   

  
	
  HSBC BANK PLC

  
	
   

  
	
  Facility Office for US Borrower: London

  
	
   

  
	
  by:  

  
	
   

  
	
  Address:

  
	
   

  
	
  Fax:

  
	
   

  
	
  Attention:

  

 

97

 

	
  MEDIOBANCA –
  BANCA DI CREDITO FINANZIARIO S.p.A.

  
	
   

  
	
  by:  

  
	
   

  
	
  Address:

  
	
   

  
	
  Fax:

  
	
   

  
	
  Attention:

  
	
   

  
	
   

  
	
  THE ROYAL
  BANK OF SCOTLAND PLC, MILAN BRANCH

  
	
   

  
	
  by:  

  
	
   

  
	
  Address:

  
	
   

  
	
  Fax:

  
	
   

  
	
  Attention:

  
	
   

  
	
   

  
	
  THE ROYAL
  BANK OF SCOTLAND PLC

  
	
   

  
	
  Facility Office for US Borrower:

  
	
   

  
	
  by:  

  
	
   

  
	
  Address:

  
	
   

  
	
  Fax:

  
	
   

  
	
  Attention:

  
	
   

  
	
   

  
	
  UNICREDIT
  BANCA D’IMPRESA S.p.A.

  
	
   

  
	
  by:  

  
	
   

  
	
  Address:

  
	
   

  
	
  Fax:

  
	
   

  
	
  Attention:

  

 

98

 

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

  
	
   

  
	
  by:  

  
	
   

  
	
  Address:

  
	
   

  
	
  Fax:

  
	
   

  
	
  Attention:

  

 

99Exhibit
4.2

 

AMENDMENT NO. 1 TO

AGREEMENT AND PLAN OF
MERGER

 

                THIS AMENDMENT NO. 1 TO
AGREEMENT AND PLAN OF MERGER, dated as of June 2, 2004 (this “Amendment”), is made
and entered into by and among Luxottica Group S.p.A., an Italian corporation
(“Parent”), Colorado Acquisition Corp., a Delaware corporation and an indirect
wholly-owned subsidiary of Parent (“Merger Sub”), and Cole National
Corporation, a Delaware corporation (the “Company”).  Capitalized terms used herein but otherwise not defined shall have
the meaning given to such terms in the Merger Agreement (as defined below).

 

WHEREAS, Parent, Merger Sub and the Company have
entered into that certain Agreement and Plan of Merger, dated as of January 23,
2004 (the “Merger Agreement”), which contemplates the merger of Merger Sub with
and into the Company upon the terms and subject to the conditions set forth in
the Merger Agreement; and

 

WHEREAS, Parent, Merger Sub and the Company desire to
amend the Merger Agreement as set forth below;

 

NOW, THEREFORE, in consideration of the mutual
agreements contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

 

ARTICLE
I

AMENDMENT
TO MERGER AGREEMENT

 

1.1  Definition
of Merger Price.  Notwithstanding
anything to the contrary in the Merger Agreement, if, on or prior to July 20,
2004, the Company shall have held its 2004 annual meeting of stockholders to
vote on the election of directors and at such meeting the condition set forth
in Section 6.01(a) of the Merger Agreement shall have been satisfied,
references in the Merger Agreement to “Merger Price” shall mean the sum of (a)
$22.50 in cash plus (b) an additional amount in cash, rounded to the nearest
cent, equal to (x) $22.50, multiplied by (y) 0.04, multiplied by
(z) a fraction, the numerator of which is the number of days that shall have
elapsed from the date upon which the condition set forth in Section 6.01(a) of
the Merger Agreement shall have been satisfied to and including the Closing
Date, and the denominator of which is 365.

 

ARTICLE
II

MISCELLANEOUS

 

2.1  No
Waiver.  Nothing in this Amendment
shall constitute a waiver by Parent, Merger Sub or the Company of any breach or
default on the part of any party to the Merger Agreement.

 

 

2.2  Governing
Law; Jurisdiction.  The provisions
of Section 8.05 of the Merger Agreement shall apply to this Amendment as if
references to “Agreement” therein were to this Amendment.

 

2.3  No
Other Agreements.  This Amendment
together with the Merger Agreement (as amended by this Amendment and including
the documents and instruments referred to therein), the Confidentiality
Agreement and the letter agreement dated April 23, 2004 between Parent and the
Company constitute the entire agreement of the parties with respect to the
subject matter hereof and thereof and supersedes all prior agreements or
understandings, both written and oral, 
between the parties with respect to the subject matter hereof and
thereof.

 

2.4  Effect.  Except as expressly set forth herein, this
Amendment shall not by implication or otherwise alter, modify, amend or in any
way affect any of the representations, warranties, terms, conditions,
obligations, covenants or agreements contained in the Merger Agreement, all of
which shall continue in full force and effect in accordance with their
respective terms.  For the avoidance of
doubt, the execution, delivery and effectiveness of this Amendment shall not
constitute a reaffirmation,  remaking,
withdrawal or modification as of the date of this Amendment of any of the
representations,  warranties or
covenants of any party hereto.

 

2.5  Counterparts;
Execution and Delivery by Facsimile. 
This Amendment may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which shall constitute one
and the same agreement.  This Amendment
may be executed and delivered by facsimile, with such delivery to be as
effective as delivery of an originally executed counterpart hereof.

 

 

[Signature Page Follows]

 

 

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

 

 

	
   

  	
  LUXOTTICA GROUP S.P.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Enrico Cavatorta

  
	
   

  	
  Name: Enrico Cavatorta

  
	
   

  	
  Title: Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  COLORADO ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Vito Giannola

  
	
   

  	
  Name: Vito Giannola

  
	
   

  	
  Title:  Chief
  Financial Office and Treasurer

  
	
   

  	
   

  
	
   

  	
  COLE NATIONAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Larry Pollock

  
	
   

  	
  Name:  Larry
  Pollock

  
	
   

  	
  Title: 
  President and Chief Executive Officer

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