EXHIBIT 10.2
 
EXECUTION COPY
 
364 DAY CREDIT AGREEMENT

 
by and among
 
 
CVS CORPORATION,
 
 
THE LENDERS PARTY HERETO,
 

LEHMAN COMMERCIAL PAPER INC. and
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Co-Syndication Agents,
 
 
and
 
THE BANK OF NEW YORK,
as Administrative Agent
 
 

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Dated as of March 12, 2007
 

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BNY CAPITAL MARKETS, INC. and BANC OF AMERICA SECURITIES LLC
as Co-Lead Arrangers and Joint Bookrunners
 

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TABLE OF CONTENTS

1.
DEFINITIONS AND PRINCIPLES OF CONSTRUCTION
1
 
1.1
Definitions
1
 
1.2
Principles of Construction
17

 
2.
AMOUNT AND TERMS OF LOANS
18
 
2.1
Revolving Credit Loans
18
 
2.2
Swing Line Loans
18
 
2.3
Notice of Borrowing Revolving Credit Loans and Swing Line Loans
20
 
2.4
Competitive Bid Loans and Procedure
21
 
2.5
Use of Proceeds
23
 
2.6
Termination or Reduction of Commitments
24
 
2.7
Prepayments of Loans
24
 
2.8
Letter of Credit Sub-facility
25
 
2.9
Letter of Credit Participation
26
 
2.10
Absolute Obligation with respect to Letter of Credit Payments
27
 
2.11
Notes
28

 
3.
PROCEEDS, PAYMENTS, CONVERSIONS, INTEREST, YIELD PROTECTION AND FEES
28
 
3.1
Disbursement of the Proceeds of the Loans
28
 
3.2
Payments
29
 
3.3
Conversions; Other Matters
30
 
3.4
Interest Rates and Payment Dates
31
 
3.5
Indemnification for Loss
32
 
3.6
Reimbursement for Costs, Etc.
33
 
3.7
Illegality of Funding
34
 
3.8
Option to Fund; Substituted Interest Rate
34
 
3.9
Certificates of Payment and Reimbursement
35
 
3.10
Taxes; Net Payments
36
 
3.11
Fees
37
 
3.12
Letter of Credit Participation Fee
38
 
3.13
Replacement of Lender
38

 
4.
REPRESENTATIONS AND WARRANTIES
39
 
4.1
Existence and Power
39
 
4.2
Authority
39
 
4.3
Binding Agreement
40
 
4.4
Litigation
40
 
4.5
No Conflicting Agreements
40

 
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4.6
Taxes
40
 
4.7
Compliance with Applicable Laws; Filings
41
 
4.8
Governmental Regulations
41
 
4.9
Federal Reserve Regulations; Use of Proceeds
41
 
4.10
No Misrepresentation
42
 
4.11
Plans
42
 
4.12
Environmental Matters
42
 
4.13
Financial Statements
43

 
5.
CONDITIONS OF LENDING - FIRST LOANS AND LETTERS OF CREDIT ON THE FIRST BORROWING
DATE
43
 
5.1
Evidence of Corporate Action
43
 
5.2
Notes
44
 
5.3
Opinion of Counsel to the Borrower
44

 
6.
CONDITIONS OF LENDING - ALL LOANS AND LETTERS OF CREDIT
44
 
6.1
Compliance
44
 
6.2
Requests
44
 
6.3
Loan Closings
45

 
7.
AFFIRMATIVE COVENANTS
45
 
7.1
Legal Existence
45
 
7.2
Taxes
45
 
7.3
Insurance
45
 
7.4
Performance of Obligations
45
 
7.5
Condition of Property
46
 
7.6
Observance of Legal Requirements
46
 
7.7
Financial Statements and Other Information
46
 
7.8
Records
47
 
7.9
Authorizations
48

 
8.
NEGATIVE COVENANTS
48
 
8.1
Subsidiary Indebtedness
48
 
8.2
Liens
48
 
8.3
Dispositions
49
 
8.4
Merger or Consolidation, Etc.
49
 
8.5
Acquisitions
49
 
8.6
Restricted Payments
49
 
8.7
Limitation on Upstream Dividends by Subsidiaries
50
 
8.8
Limitation on Negative Pledges
51
 
8.9
Ratio of Consolidated Indebtedness to Total Capitalization
51
 
8.10
Caremark Merger
51

 
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9.
DEFAULT
51
 
9.1
Events of Default
51
 
9.2
Remedies
53

 
10.
AGENT
54
 
10.1
Appointment
54
 
10.2
Delegation of Duties
55
 
10.3
Exculpatory Provisions
55
 
10.4
Reliance by Administrative Agent
55
 
10.5
Notice of Default
56
 
10.6
Non-Reliance
56
 
10.7
Administrative Agent in Its Individual Capacity
57
 
10.8
Successor Administrative Agent
57
 
10.9
Co-Syndication Agents
58

 
11.
OTHER PROVISIONS
58
 
11.1
Amendments, Waivers, Etc.
58
 
11.2
Notices
59
 
11.3
No Waiver; Cumulative Remedies
60
 
11.4
Survival of Representations and Warranties
60
 
11.5
Payment of Expenses and Taxes; Indemnified Liabilities
61
 
11.6
Lending Offices
61
 
11.7
Successors and Assigns
61
 
11.8
Counterparts
65
 
11.9
Set-off and Sharing of Payments
65
 
11.10
Indemnity
66
 
11.11
Governing Law
67
 
11.12
Severability
67
 
11.13
Integration
67
 
11.14
Treatment of Certain Information
67
 
11.15
Acknowledgments
68
 
11.16
Consent to Jurisdiction
69
 
11.17
Service of Process
69
 
11.18
No Limitation on Service or Suit
69
 
11.19
WAIVER OF TRIAL BY JURY
69
 
11.20
Effective Date
70
 
11.21
Patriot Act Notice
70

 
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EXHIBITS
 
Exhibit
A
List of Commitments
Exhibit
B
Form of Note
Exhibit
C
Form of Borrowing Request
Exhibit
D-1
Form of Opinion of Counsel to the Borrower
Exhibit
D-2
Form of Opinion of Special Counsel to the Borrower
Exhibit
E
Form of Assignment and Acceptance Agreement
Exhibit
F
Form of Competitive Bid Request
Exhibit
G
Form of Invitation to Bid
Exhibit
H
Form of Competitive Bid
Exhibit
I
Form of Competitive Bid Accept/Reject Letter
Exhibit
J
Form of Letter of Credit Request

v

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364 DAY CREDIT AGREEMENT, dated as of March 12, 2007, by and among CVS
CORPORATION, a Delaware corporation (the “Borrower”), the Lenders party hereto
from time to time (each a “Lender” and, collectively, the “Lenders”), LEHMAN
COMMERCIAL PAPER INC. and WACHOVIA BANK, NATIONAL ASSOCIATION, as co-syndication
agents (in such capacity, each a “Co-Syndication Agent”), and THE BANK OF NEW
YORK (“BNY”), as administrative agent for the Lenders (in such capacity, the
“Administrative Agent”).
 
1.
DEFINITIONS AND PRINCIPLES OF CONSTRUCTION

 

 
1.1
Definitions

 
When used in any Loan Document (as defined below), each of the following terms
shall have the meaning ascribed thereto unless the context otherwise
specifically requires:
 
“ABR Advances”: the Revolving Credit Loans (or any portions thereof) at such
time as they (or such portions) are made or are being maintained at a rate of
interest based upon the Alternate Base Rate.
 
“Accumulated Funding Deficiency”: as defined in Section 302 of ERISA.
 
“Acquisition”: with respect to any Person, the purchase or other acquisition by
such Person, by any means whatsoever (including by devise, bequest, gift,
through a dividend or otherwise), of (a) stock of, or other equity securities
of, any other Person if, immediately thereafter, such other Person would be
either a consolidated subsidiary of such Person or otherwise under the control
of such Person, (b) any business, going concern or division or segment thereof,
or (c) the Property of any other Person other than in the ordinary course of
business, provided that (i) no acquisition of substantially all of the assets,
or any division or segment, of such other Person shall be deemed to be in the
ordinary course of business and (ii) no redemption, retirement, purchase or
acquisition by any Person of the stock or other equity securities of such Person
shall be deemed to constitute an Acquisition.
 
“Administrative Agent”: as defined in the preamble.
 
“Administrative Questionnaire”: an Administrative Questionnaire in a form
supplied by the Administrative Agent.
 
“Affected Advance”: as defined in Section 3.8(b).
 
“Affiliate”: with respect to any Person at any time and from time to time, any
other Person (other than a wholly-owned subsidiary of such Person) which, at
such time (a) controls such Person, (b) is controlled by such Person or (c) is
under common control with such Person. The term “control”, as used in this
definition with respect to any Person, means the power, whether direct or
indirect through one or more intermediaries, to direct or cause the direction of
the management and policies of such Person, whether through the ownership of
voting securities or other interests, by contract or otherwise.
 

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“Aggregate Commitment Amount”: at any time, the sum of the Commitment Amounts of
the Lenders at such time under this Agreement.
 
“Aggregate Credit Exposure”: at any time, the sum at such time of (a) the
aggregate Committed Credit Exposure of the Lenders at such time under this
Agreement and (b) the aggregate outstanding principal balance of all Competitive
Bid Loans at such time under this Agreement.
 
“Agreement”: this Credit Agreement, as the same may be amended, supplemented or
otherwise modified from time to time.
 
“Alternate Base Rate”: for any day, a rate per annum equal to the greater of (a)
the BNY Rate in effect on such day, or (b) 0.50% plus the Federal Funds
Effective Rate (rounded, if necessary, to the nearest l/100th of 1% or, if there
is no nearest 1/100 of 1%, then to the next higher 1/100 of 1%) in effect on
such day.
 
“Applicable Margin”: (i) with respect to the unpaid principal balance of ABR
Advances, the applicable percentage set forth below in the column entitled “ABR
Advances”, (ii) with respect to the unpaid principal balance of Eurodollar
Advances, the applicable percentage set forth below in the column entitled
“Eurodollar Advances”, (iii) with respect to the Facility Fee, the applicable
percentage set forth below in the column entitled “Facility Fee”, (iv) with
respect to the Letter of Credit Participation Fee, the applicable percentage set
forth below in the column entitled “Participation Fee”, and (v) with respect to
the Utilization Fee, the applicable percentage set forth below in the column
entitled “Utilization Fee”, in each case opposite the applicable Pricing Level:
 
Pricing Level
 
ABR
Advances
 
Eurodollar
Advances
 
Facility
Fee   
 
Participation
Fee   
 
Utilization
Fee   
Pricing Level I
0%
0.170%
0.030%
0.170%
0.050%
Pricing Level II
0%
0.210%
0.040%
0.210%
0.050%
Pricing Level III
0%
0.250%
0.050%
0.250%
0.050%
Pricing Level IV
0%
0.290%
0.060%
0.290%
0.100%
Pricing Level V
0%
0.320%
0.080%
0.320%
0.100%
Pricing Level VI
0%
0.445%
0.105%
0.445%
0.100%
Pricing Level VII
0%
0.725%
0.150%
0.725%
0.100%

 
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Decreases in the Applicable Margin resulting from a change in Pricing Level
shall become effective upon the delivery by the Borrower to the Administrative
Agent of a notice pursuant to Section 7.7(d). Increases in the Applicable Margin
resulting from a change in Pricing Level shall become effective on the effective
date of any downgrade or withdrawal in the rating by Moody’s or S&P of the
senior unsecured long term debt rating of the Borrower.
 
“Approved Fund”: with respect to any Lender that is a fund that invests in
commercial loans, any other fund that invests in commercial loans and is managed
or advised by the same investment advisor as such Lender or by an Affiliate of
such investment advisor.
 
“Assignment and Acceptance Agreement”: an assignment and acceptance agreement
executed by an assignor and an assignee pursuant to which, subject to the terms
and conditions hereof and thereof, the assignor assigns to the assignee all or
any portion of such assignor’s Loans, Notes and Commitment, substantially in the
form of Exhibit E.
 
“Benefited Lender”: as defined in Section 11.9(b).
 
“BNY”: as defined in the preamble.
 
“BNY Rate”: a rate of interest per annum equal to the rate of interest publicly
announced in New York City by BNY from time to time as its prime commercial
lending rate, such rate to be adjusted automatically (without notice) on the
effective date of any change in such publicly announced rate.
 
“Borrower”: as defined in the preamble.
 
“Borrowing Date”: (i) in respect of Revolving Credit Loans, any Domestic
Business Day or Eurodollar Business Day, as the case may be, on which the
Lenders shall make Revolving Credit Loans pursuant to a Borrowing Request or
pursuant to a Mandatory Borrowing, (ii) in respect of Competitive Bid Loans, any
Domestic Business Day on which a Lender shall make a Competitive Bid Loan
pursuant to a Competitive Bid Request, (iii) in respect of Swing Line Loans, any
Domestic Business Day on which the Swing Line Lender shall make a Swing Line
Loan pursuant to a Borrowing Request and (iv) in respect of Letters of Credit,
any Domestic Business Day on which the Issuer shall issue a Letter of Credit
pursuant to a Letter of Credit Request.
 
“Borrowing Request”: a request for Revolving Credit Loans or Swing Line Loans in
the form of Exhibit C.
 
“Caremark”: Caremark Rx, Inc., a Delaware corporation.
 
“Caremark Merger”: the merger of Caremark with and into Twain MergerSub Corp.,
with Twain MergerSub Corp. continuing as the surviving company and a wholly
owned subsidiary of the Borrower, pursuant to the Caremark Merger Agreement.
 
“Caremark Merger Agreement”: the Agreement and Plan of Merger, dated as of
November 1, 2006, among the Borrower, Caremark and Twain MergerSub Corp., as
amended as of January
 
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16, 2007 (and as further amended, supplemented or otherwise modified from time
to time in accordance with Section 8.10).
 
“Caremark Merger Anticipatory Commercial Paper”: commercial paper issued by the
Borrower under the Commercial Paper Increase prior to and in anticipation of the
closing of the Caremark Merger to finance in part the consideration paid to the
Caremark shareholders in connection with the Caremark Merger, including any
dividends paid to the Caremark shareholders, provided that (a) such commercial
paper shall mature no later than 60 days following the initial issuance thereof
and (b) if the Caremark Merger has not been consummated prior to such maturity,
the Borrower shall not have rolled over such commercial paper.
 
“Caremark Merger Effective Date”: the date on which the Caremark Merger shall
have become effective pursuant to the Caremark Merger Agreement.
 
“Change of Control”: any of the following:
 
(i) any Person or group (as such term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended), (a) shall have or acquire
beneficial ownership of securities having 30% or more of the ordinary voting
power of the Borrower or (b) shall possess, directly or indirectly, the power to
direct or cause the direction of the management and policies of the Borrower,
whether through the ownership of voting securities, by contract or otherwise; or
 
(ii) the Continuing Directors shall cease for any reason to constitute a
majority of the board of directors of the Borrower then in office.
 
“Commercial Paper Increase”: the increase, to the extent in excess of $4.0
billion, in the Borrower’s commercial paper program for the purpose, among other
things, of providing for the short term financing of the Caremark Merger.
 
“Commitment”: in respect of any Lender, such Lender’s undertaking to make
Revolving Credit Loans, subject to the terms and conditions hereof, in an
aggregate outstanding principal amount not to exceed the Commitment Amount of
such Lender.
 
“Commitment Amount”: at any time and with respect to any Lender, the amount set
forth adjacent to such Lender’s name under the heading “Commitment Amount” in
Exhibit A at such time or, in the event that such Lender is not listed on
Exhibit A, the “Commitment Amount” which such Lender shall have assumed from
another Lender in accordance with Section 11.7 on or prior to such time, as the
same may be adjusted from time to time pursuant to Sections 2.6 and 11.7(c).
 
“Commitment Percentage”: at any time and with respect to any Lender, a fraction
the numerator of which is such Lender’s Commitment Amount at such time, and the
denominator of which is the Aggregate Commitment Amount at such time.
 
“Commitment Period”: the period commencing on the Effective Date and ending on
the Commitment Termination Date, or on such earlier date as all of the
Commitments shall have been terminated in accordance with the terms hereof.
 
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“Commitment Termination Date”: the earliest of (i) November 1, 2007, in the
event that the Caremark Merger Effective Date has not occurred on or before
November 1, 2007, (ii) March 10, 2008 and (iii) the date on which the Loans
shall become due and payable, whether by acceleration, notice of intention to
prepay or otherwise.
 
“Committed Credit Exposure”: with respect to any Lender at any time, the sum at
such time of (a) the outstanding principal balance of such Lender’s Revolving
Credit Loans, (b) the Swing Line Exposure of such Lender and (c) the Letter of
Credit Exposure of such Lender.
 
“Compensatory Interest Payment”: as defined in Section 3.4(c).
 
“Competitive Bid”: an offer by a Lender, in the form of Exhibit H, to make one
or more Competitive Bid Loans.
 
“Competitive Bid Accept/Reject Letter”: a notification made by the Borrower
pursuant to Section 2.4(d) in the form of Exhibit I.
 
“Competitive Bid Loan”: as defined in Section 2.4(a).
 
“Competitive Bid Rate”: as to any Competitive Bid made by a Lender pursuant to
Section 2.4(b), the fixed rate of interest (which shall be expressed in the form
of a decimal to no more than four decimal places) offered by such Lender and
accepted by the Borrower.
 
“Competitive Bid Request”: a request by the Borrower, in the form of Exhibit F,
for Competitive Bids.
 
“Competitive Interest Period”: as to any Competitive Bid Loan, the period
commencing on the date of such Competitive Bid Loan and ending on the date
requested in the Competitive Bid Request with respect thereto, which shall not
be earlier than 3 days after the date of such Competitive Bid Loan or later than
180 days after the date of such Competitive Bid Loan, provided that if any
Competitive Interest Period would end on a day other than a Domestic Business
Day, such Interest Period shall be extended to the next succeeding Domestic
Business Day, unless such next succeeding Domestic Business Day would be a date
on or after the Commitment Termination Date, in which case such Competitive
Interest Period shall end on the next preceding Domestic Business Day. Interest
shall accrue from and including the first day of a Competitive Interest Period
to but excluding the last day of such Competitive Interest Period.
 
“Consolidated”: the Borrower and the Subsidiaries on a consolidated basis in
accordance with GAAP.
 
“Contingent Obligation”: as to any Person (the “secondary obligor”), any
obligation of such secondary obligor (a) guaranteeing or in effect guaranteeing
any return on any investment made by another Person, or (b) guaranteeing or in
effect guaranteeing any Indebtedness, lease, dividend or other obligation
(“primary obligation”) of any other Person (the “primary obligor”) in any
manner, whether directly or indirectly, including any obligation of such
secondary obligor, whether or not contingent, (i) to purchase any such primary
obligation or any Property constituting direct or indirect security therefor,
(ii) to advance or supply funds (A) for the purchase or payment
 
5

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of any such primary obligation or (B) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase Property, securities or
services primarily for the purpose of assuring the beneficiary of any such
primary obligation of the ability of the primary obligor to make payment of such
primary obligation, (iv) otherwise to assure or hold harmless the beneficiary of
such primary obligation against loss in respect thereof, and (v) in respect of
the Indebtedness of any partnership in which such secondary obligor is a general
partner, except to the extent that such Indebtedness of such partnership is
nonrecourse to such secondary obligor and its separate Property, provided that
the term “Contingent Obligation” shall not include the indorsement of
instruments for deposit or collection in the ordinary course of business.
 
“Continuing Director”: any member of the board of directors of the Borrower who
(i) is a member of that board of directors on the Effective Date or (ii) was
nominated for election by the board of directors a majority of whom were
directors on the Effective Date or whose election or nomination for election was
previously approved by one or more of such directors.
 
“Control Person”: as defined in Section 3.6.
 
“Convert”, “Conversion” and “Converted”: each, a reference to a conversion
pursuant to Section 3.3 of one Type of Revolving Credit Loan into another Type
of Revolving Credit Loan.
 
“Costs”: as defined in Section 3.6.
 
“Co-Syndication Agents”: as defined in the preamble.
 
“Credit Exposure”: with respect to any Lender at any time, the sum at such time
of (a) the Committed Credit Exposure of such Lender at such time under this
Agreement and (b) the outstanding principal balance of all Competitive Bid Loans
of such Lender at such time under this Agreement.
 
“Credit Parties” means the Administrative Agent, the Co-Syndication Agents, the
Swing Line Lender, the Issuer and the Lenders.
 
“Default”: any of the events specified in Section 9.1, whether any requirement
for the giving of notice, the lapse of time, or both, or any other condition,
has been satisfied.
 
“Disposition”: with respect to any Person, any sale, assignment, transfer or
other disposition by such Person by any means, of:
 
(a) the Stock of, or other equity interests of, any other Person,
 
(b) any business, operating entity, division or segment thereof, or
 
(c) any other Property of such Person, other than (i) the sale of inventory
(other than in connection with bulk transfers), (ii) the disposition of
equipment and (iii) the sale of cash investments.
 
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“Dividend Restrictions”: as defined in Section 8.7.
 
“Dollar” or “$”: lawful currency of the United States of America.
 
“Domestic Business Day”: any day (other than a Saturday, Sunday or legal holiday
in the State of New York) on which banks are open for business in New York City.
 
“Effective Date”: as defined in Section 11.20.
 
“Eligible Assignee”: (i) any commercial bank, investment bank, trust company,
banking association, financial institution, mutual fund, pension fund or any
Approved Fund or (ii) any Lender or any Affiliate or any Approved Fund of such
Lender.
 
“Eligible SPC”: a special purpose corporation that (i) is organized under the
laws of the United States or any state thereof, (ii) is engaged in making,
purchasing or otherwise investing in commercial loans in the ordinary course of
its business and (iii) issues (or the parent of which issues) commercial paper
rated at least A-1 or the equivalent thereof by S&P or at least P-1 or the
equivalent thereof by Moody’s.
 
“Employee Benefit Plan”: an employee benefit plan, within the meaning of
Section 3(3) of ERISA, maintained, sponsored or contributed to by the Borrower,
any Subsidiary or any ERISA Affiliate.
 
“Environmental Laws”: all laws, rules, regulations, codes, ordinances, orders,
decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, release or threatened release of any Hazardous Material or to health
and safety matters.
 
“Environmental Liability”: as to any Person, any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of such Person directly or
indirectly resulting from or based upon (i) violation of any Environmental Law,
(ii) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (iii) exposure to any Hazardous Materials,
(iv) the release or threatened release of any Hazardous Materials into the
environment or (v) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
 
“ERISA”: the Employee Retirement Income Security Act of 1974, as amended from
time to time, or any successor thereto, and the rules and regulations issued
thereunder, as from time to time in effect.
 
“ERISA Affiliate”: when used with respect to an Employee Benefit Plan, ERISA,
the PBGC or a provision of the Internal Revenue Code pertaining to employee
benefit plans, any Person that is a member of any group of organizations within
the meaning of Sections 414(b) or (c) of the Internal Revenue Code or, solely
with respect to the applicable provisions of the Internal Revenue Code, Sections
414(m) or (o) of the Internal Revenue Code, of which the Borrower or any
Subsidiary is a member.
 
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“ESOP Guaranty”: the guaranty of the 8.52% ESOP Note maturing 2008 in the
aggregate unpaid principal amount, as of December 30, 2006, of $82,100,000.
 
“Eurodollar Advance”: a portion of the Revolving Credit Loans selected by the
Borrower to bear interest during a Eurodollar Interest Period selected by the
Borrower at a rate per annum based upon a Eurodollar Rate determined with
reference to such Interest Period, all pursuant to and in accordance with
Section 2.1 or 3.3.
 
“Eurodollar Business Day”: any Domestic Business Day, other than a Domestic
Business Day on which banks are not open for dealings in Dollar deposits in the
interbank eurodollar market.
 
“Eurodollar Interest Period”: the period commencing on any Eurodollar Business
Day selected by the Borrower in accordance with Section 2.3 or Section 3.3 and
ending one, two, three or six months thereafter, as selected by the Borrower in
accordance with either such Sections, subject to the following:
 
(i) if any Eurodollar Interest Period would otherwise end on a day which is not
a Eurodollar Business Day, such Interest Period shall be extended to the
immediately succeeding Eurodollar Business Day unless the result of such
extension would be to carry the end of such Interest Period into another
calendar month, in which event such Interest Period shall end on the Eurodollar
Business Day immediately preceding such day; and
 
(ii) if any Eurodollar Interest Period shall begin on the last Eurodollar
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period),
such Interest Period shall end on the last Eurodollar Business Day of such
latter calendar month.
 
“Eurodollar Rate”: with respect to each Eurodollar Advance and as determined by
the Administrative Agent, the rate of interest per annum (rounded, if necessary,
to the nearest 1/100 of 1% or, if there is no nearest 1/100 of 1%, then to the
next higher 1/100 of 1%) equal to a fraction, the numerator of which is the rate
per annum quoted by BNY at approximately 11:00 A.M. (or as soon thereafter as
practicable) two Eurodollar Business Days prior to the first day of such
Interest Period to leading banks in the interbank eurodollar market as the rate
at which BNY is offering Dollar deposits in an amount approximately equal to its
Commitment Percentage of such Eurodollar Advance and having a period to maturity
approximately equal to the Interest Period applicable to such Eurodollar
Advance, and the denominator of which is an amount equal to 1.00 minus the
aggregate of the then stated maximum rates during such Interest Period of all
reserve requirements (including marginal, emergency, supplemental and special
reserves), expressed as a decimal, established by the Board of Governors of the
Federal Reserve System and any other banking authority to which BNY and other
major United States money center banks are subject, in respect of eurocurrency
liabilities.
 
“Event of Default”: any of the events specified in Section 9.1, provided that
any requirement for the giving of notice, the lapse of time, or both, or any
other condition has been satisfied.
 
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“Existing 2004 Five Year Credit Agreement”: the Five Year Credit Agreement,
dated as of June 11, 2004, by and among the Borrower, the lenders party thereto,
Bank of America, N.A., Credit Suisse First Boston, and Wachovia Securities,
Inc., as co-syndication agents, ABN AMRO Bank N.V., as documentation agent, and
BNY, as administrative agent, as the same may be amended, supplemented, replaced
or otherwise modified from time to time.
 
“Existing 2005 Five Year Credit Agreement”: the Five Year Credit Agreement,
dated as of June 3, 2005, by and among the Borrower, the lenders party thereto,
Bank of America, N.A., Credit Suisse First Boston, and Wachovia Bank, National
Association, as co-syndication agents, SunTrust Bank, as documentation agent,
and BNY, as administrative agent, as the same may be amended, supplemented,
replaced or otherwise modified from time to time.

“Existing 2006 Five Year Credit Agreement”: the Five Year Credit Agreement,
dated as of May 12, 2006, by and among the Borrower, the lenders party thereto,
Bank of America, N.A., Lehman Brothers Inc. and Wachovia Bank, National
Association, as co-syndication agents, KeyBank National Association, as
documentation agent, and BNY, as administrative agent, as the same may be
amended, supplemented, replaced or otherwise modified from time to time.

“Expiration Date”: the first date, occurring on or after the date the
Commitments shall have terminated or been terminated in accordance herewith,
upon which there shall be no Loans or Letters of Credit outstanding.
 
“Facility Fee”: as defined in Section 3.11(a).
 
“Federal Funds Effective Rate”: for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Domestic Business Day, for the next preceding Domestic Business
Day) by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Domestic Business Day, the average (rounded, if
necessary, to the nearest 1/100 of 1% or, if there is no nearest 1/100 of 1%,
then to the next higher 1/100 of 1%) of the quotations for such day on such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by the Administrative Agent.
 
“Fees”: as defined in Section 3.2(a).
 
“Financial Statements”: as defined in Section 4.13.
 
“Foreign Lender”: any Lender that is organized under the laws of a jurisdiction
other than the United States of America, any State thereof or the District of
Columbia.
 
“GAAP”: generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or such other principles as may be approved by a
significant segment of the accounting profession, which are applicable to the
circumstances as of the date of determination, consistently applied.
 
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“Governmental Authority”: any foreign, federal, state, municipal or other
government, or any department, commission, board, bureau, agency, public
authority or instrumentality thereof, or any court or arbitrator.
 
“Granting Lender”:  as defined in Section 11.7(h).
 
“Hazardous Materials”: all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including petroleum
or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.
 
“Highest Lawful Rate”: as to any Lender, the maximum rate of interest, if any,
which at any time or from time to time may be contracted for, taken, charged or
received on the Loans or the Notes or which may be owing to such Lender pursuant
to this Agreement under the laws applicable to such Lender and this Agreement.
 
“Indebtedness”: as to any Person at a particular time, all items of such Person
which constitute, without duplication, (a) indebtedness for borrowed money or
the deferred purchase price of Property (other than trade payables and accrued
expenses incurred in the ordinary course of business), (b) indebtedness
evidenced by notes, bonds, debentures or similar instruments, (c) indebtedness
with respect to any conditional sale or other title retention agreement, (d)
indebtedness arising under acceptance facilities and the amount available to be
drawn under all letters of credit (excluding for purposes of Sections 8.1 and
8.9 letters of credit obtained in the ordinary course of business by the
Borrower or any Subsidiary) issued for the account of such Person and, without
duplication, all drafts drawn thereunder to the extent such Person shall not
have reimbursed the issuer in respect of the issuer’s payment of such drafts,
(e) that portion of any obligation of such Person, as lessee, which in
accordance with GAAP is required to be capitalized on a balance sheet of such
Person, (f) all indebtedness described in (a) - (e) above secured by any Lien on
any Property owned by such Person even though such Person shall not have assumed
or otherwise become liable for the payment thereof (other than carriers’,
warehousemen’s, mechanics’, repairmen’s or other like non-consensual Liens
arising in the ordinary course of business), and (g) Contingent Obligations in
respect of any indebtedness described in items (a) - (f) above, provided that,
for purposes of this definition, Indebtedness shall not include Intercompany
Debt and obligations in respect of interest rate caps, collars, exchanges, swaps
or other, similar agreements.
 
“Indemnified Liabilities”: as defined in Section 11.5.
 
“Indemnified Person”: as defined in Section 11.10.
 
“Intercompany Debt”: (i) Indebtedness of the Borrower to one or more of the
Subsidiaries of the Borrower and (ii) demand Indebtedness of one or more of the
Subsidiaries of the Borrower to the Borrower or any one or more of the other
Subsidiaries of the Borrower.
 
“Intercompany Disposition”: a Disposition by the Borrower or any of the
Subsidiaries of the Borrower to the Borrower or to any of the other Subsidiaries
of the Borrower.
 
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“Interest Payment Date”: (i) as to any ABR Advance, the last day of each March,
June, September and December, commencing on the first of such days to occur
after such ABR Advance is made or any Eurodollar Advance is converted to an ABR
Advance, (ii) as to any Swing Line Loan, the day on which the outstanding
principal balance of such Swing Line Loan shall become due and payable in
accordance with Section 2.2(a), (iii) as to any Eurodollar Advance in respect of
which the Borrower has selected a Eurodollar Interest Period of one, two or
three months, the last day of such Eurodollar Interest Period, (iv) as to any
Competitive Bid Loan in respect of which the Borrower has selected a Competitive
Interest Period of 90 days or less the last day of such Competitive Interest
Period and (v) as to any Eurodollar Advance or Competitive Bid Loan in respect
of which the Borrower has selected an Interest Period greater than three months
or 90 days, as the case may be, the last day of the third month or the 90th day,
as the case may be, of such Interest Period and the last day of such Interest
Period.
 
“Interest Period”: a Eurodollar Interest Period, a Swing Line Interest Period or
a Competitive Interest Period, as the case may be.
 
“Internal Revenue Code”: the Internal Revenue Code of 1986, as amended from time
to time, or any successor thereto, and the rules and regulations issued
thereunder, as from time to time in effect.
 
“Invitation to Bid”: an invitation by the Administrative Agent to the Lenders to
make Competitive Bids in the form of Exhibit G.
 
“issue” or “issuance”: when used with respect to a Letter of Credit, shall be
deemed to include any increase in the amount of such Letter of Credit.
 
“Issuer”: BNY.
 
“Lender”: as defined in the preamble; such term to also include the Swing Line
Lender and the Issuer where the context hereof requires or permits such
inclusion.
 
“Letter of Credit”: as defined in Section 2.8.
 
“Letter of Credit Commitment”: the commitment of the Issuer to issue Letters of
Credit in accordance with the terms hereof in an aggregate outstanding face
amount not exceeding $150,000,000 (or, if less, the Aggregate Commitment Amount)
at any time, as the same may be reduced pursuant to Section 2.6.
 
“Letter of Credit Exposure”: at any time, (a) in respect of all Lenders, the
sum, without duplication, of (i) the maximum aggregate amount which may be drawn
under all unexpired Letters of Credit at such time (whether the conditions for
drawing thereunder have or may be satisfied), (ii) the aggregate amount, at such
time, of all unpaid drafts (which have not been dishonored) drawn under all
Letters of Credit, and (iii) the aggregate unpaid principal amount of the
Reimbursement Obligations at such time, and (b) in respect of any Lender, an
amount equal to such Lender’s Commitment Percentage at such time multiplied by
the amount determined under clause (a) of this definition.
 
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“Letter of Credit Participation”: with respect to each Lender, its obligations
to the Issuer under Section 2.9.
 
“Letter of Credit Participation Fee”: as defined in Section 3.12.
 
“Letter of Credit Request”: a request in the form of Exhibit J.
 
“Lien”: any mortgage, pledge, hypothecation, assignment, lien, deposit
arrangement, charge, encumbrance or other security arrangement or security
interest of any kind, or the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement.
 
“Loan”: a Revolving Credit Loan, a Competitive Bid Loan or a Swing Line Loan, as
the case may be.
 
“Loan Documents”: this Agreement and, upon the execution and delivery thereof,
the Notes, if any, and the Reimbursement Agreements.
 
“Loans”: the Revolving Credit Loans, the Competitive Bid Loans and the Swing
Line Loans.
 
“Mandatory Borrowing”: as defined in Section 2.2(b).
 
“Margin Stock”: any “margin stock”, as said term is defined in Regulation U of
the Board of Governors of the Federal Reserve System, as the same may be amended
or supplemented from time to time.
 
“Material Adverse”: with respect to any change or effect, a material adverse
change in, or effect on, as the case may be, (i) the financial condition,
operations, business, or Property of the Borrower and the Subsidiaries taken as
a whole, (ii) the ability of the Borrower to perform its obligations under the
Loan Documents, or (iii) the ability of the Administrative Agent, the Issuer or
any Lender to enforce the Loan Documents.
 
“Moody’s”: Moody’s Investors Service, Inc.
 
“Multiemployer Plan”: a Pension Plan which is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
 
“Negotiated Rate”: with respect to each Swing Line Loan, the rate per annum
agreed to in writing by the Borrower and the Swing Line Lender as the interest
rate which such Swing Line Loan shall bear.
 
“Net Worth”: at any date of determination, the sum of all amounts which would be
included under shareholders’ equity on a Consolidated balance sheet of the
Borrower and the Subsidiaries determined in accordance with GAAP as at such
date.
 
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“Note”: with respect to each Lender that has requested one, a promissory note
evidencing such Lender’s Loans payable to the order of such Lender (or, if
required by such Lender, to such Lender and its registered assigns),
substantially in the form of Exhibit B.
 
“Participant”: as defined in Section 11.7(e).
 
“Patriot Act”: as defined in Section 11.22.
 
“PBGC”: the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA, or any Governmental Authority succeeding to the
functions thereof.
 
“Pension Plan”: at any time, any Employee Benefit Plan (including a
Multiemployer Plan) subject to Section 302 of ERISA or Section 412 of the
Internal Revenue Code, the funding requirements of which are, or at any time
within the six years immediately preceding the time in question, were in whole
or in part, the responsibility of the Borrower, any Subsidiary or an ERISA
Affiliate.
 
“Person”: any individual, firm, partnership, limited liability company, joint
venture, corporation, association, business trust, joint stock company,
unincorporated association, trust, Governmental Authority or any other entity,
whether acting in an individual, fiduciary, or other capacity, and for the
purpose of the definition of “ERISA Affiliate”, a trade or business.
 
“Pricing Level”: Pricing Level I, Pricing Level II, Pricing Level III, Pricing
Level IV, Pricing Level V or Pricing Level VI, as the case may be.
 
“Pricing Level I”: any time when the senior unsecured long term debt rating of
the Borrower by (x) S&P is A+ or higher or (y) Moody’s is A1 or higher.
 
“Pricing Level II”: any time when (i) the senior unsecured long term debt rating
of the Borrower by (x) S&P is A or higher or (y) Moody’s is A2 or higher and
(ii) Pricing Level I does not apply.
 
“Pricing Level III”: any time when (i) the senior unsecured long term debt
rating of the Borrower by (x) S&P is A- or higher or (y) Moody’s is A3 or higher
and (ii) neither Pricing Level I nor II applies.
 
“Pricing Level IV”: any time when (i) the senior unsecured long term debt rating
of the Borrower by (x) S&P is BBB+ or higher or (y) Moody’s is Baa1 or higher
and (ii) none of Pricing Level I, II or III applies.
 
“Pricing Level V”: any time when (i) the senior unsecured long term debt rating
of the Borrower by (x) S&P is BBB or higher or (y) Moody’s is Baa2 or higher and
(ii) none of Pricing Level I, II, III or IV applies.
 
“Pricing Level VI”: any time when (i) the senior unsecured long term debt rating
of the Borrower by (x) S&P is BBB- or higher or (y) Moody’s is Baa3 or higher
and (ii) none of Pricing Level I, II, III, IV or V applies.
 
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“Pricing Level VII”: any time when none of Pricing Level I, II, III, IV, V or VI
applies.
 
Notwithstanding each definition of Pricing Level set forth above, if at any time
the senior unsecured long term debt ratings of the Borrower by S&P and Moody’s
differ by more than one equivalent rating level, then the applicable Pricing
Level shall be determined based upon the lower such rating adjusted upwards to
the next higher rating level.
 
“Principal Office”: from time to time, the principal office of BNY, located on
the date hereof in New York, New York.
 
“Prohibited Transaction”: a transaction that is prohibited under Section 4975 of
the Internal Revenue Code or Section 406 of ERISA and not exempt under Section
4975 of the Internal Revenue Code or Section 408 of ERISA.
 
“Property”: in respect of any Person, all types of real, personal or mixed
property and all types of tangible or intangible property owned or leased by
such Person.
 
“Regulatory Change”: (a) the introduction or phasing in of any law, rule or
regulation after the date hereof, (b) the issuance or promulgation after the
date hereof of any directive, guideline or request from any central bank or
United States or foreign Governmental Authority (whether or not having the force
of law), or (c) any change after the date hereof in the interpretation of any
existing law, rule, regulation, directive, guideline or request by any central
bank or United States or foreign Governmental Authority charged with the
administration thereof, in each case applicable to the transactions contemplated
by this Agreement.
 
“Reimbursement Agreement”: as defined in Section 2.8(b).
 
“Reimbursement Obligations”: all obligations and liabilities of the Borrower due
and to become due (a) under the Reimbursement Agreements and (b) hereunder in
respect of Letters of Credit.
 
“Related Parties”: with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person’s Affiliates.
 
“Replaced Lender”: as defined in Section 3.13.
 
“Replacement Lender”: as defined in Section 3.13.
 
“Reportable Event”: with respect to any Pension Plan, (a) any event set forth in
Sections 4043(c) (other than a Reportable Event as to which the 30 day notice
requirement is waived by the PBGC under applicable regulations), 4062(e) or
4063(a) of ERISA, or the regulations thereunder, (b) an event requiring the
Borrower, any Subsidiary or any ERISA Affiliate to provide security to a Pension
Plan under Section 401(a)(29) of the Internal Revenue Code, or (c) the failure
to make any payment required by Section 412(m) of the Internal Revenue Code.
 
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“Required Lenders”: (a) at any time prior to the Commitment Termination Date or
such earlier date as all of the Commitments shall have terminated or been
terminated in accordance herewith, Lenders having Commitment Amounts equal to or
more than 51% of the Aggregate Commitment Amount, and (b) at all other times,
Lenders having Credit Exposure equal to or more than 51% of the Aggregate Credit
Exposure.
 
“Restricted Payment”: with respect to any Person, any of the following, whether
direct or indirect: (a) the declaration or payment by such Person of any
dividend or distribution on any class of Stock of such Person, other than a
dividend payable solely in shares of that class of Stock to the holders of such
class, (b) the declaration or payment by such Person of any distribution on any
other type or class of equity interest or equity investment in such Person, and
(c) any redemption, retirement, purchase or acquisition of, or sinking fund or
other similar payment in respect of, any class of Stock of, or other type or
class of equity interest or equity investment in, such Person.
 
“Restrictive Agreement”: as defined in Section 8.7.
 
“Revolving Credit Loans”: as defined in Section 2.1(a).
 
“S&P”: Standard & Poor’s, a division of The McGraw-Hill Companies, Inc.
 
“Solvent”: with respect to any Person on a particular date, the condition that
on such date, (i) the fair value of the Property of such Person is greater than
the total amount of liabilities, including, without limitation, contingent
liabilities, of such Person, (ii) the present fair salable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (iii) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person’s ability to pay as such
debts and liabilities mature, and (iv) such Person is not engaged in business or
a transaction, and is not about to engage in business or a transaction, for
which such Person’s Property would constitute an unreasonably small amount of
capital. For purposes of this definition, the amount of any contingent liability
at any time shall be computed as the amount that, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability after taking into account
probable payments by co-obligors.
 
“Special Counsel”: such counsel as the Administrative Agent may engage from time
to time.
 
“Subsidiary”: at any time and from time to time, any corporation, association,
partnership, limited liability company, joint venture or other business entity
of which the Borrower and/or any Subsidiary of the Borrower, directly or
indirectly at such time, either (a) in respect of a corporation, owns or
controls more than 50% of the outstanding stock having ordinary voting power to
elect a majority of the board of directors or similar managing body,
irrespective of whether a class or classes shall or might have voting power by
reason of the happening of any contingency, or (b) in respect of an association,
partnership, limited liability company, joint venture or other business entity,
is entitled to share in more than 50% of the profits and losses, however
determined.
 
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“Swing Line Commitment”: the commitment of the Swing Line Lender to make Swing
Line Loans in accordance with the terms hereof in an aggregate outstanding
principal amount not exceeding $100,000,000 (or, if less, the Aggregate
Commitment Amount) at any time, as the same may be reduced pursuant to Section
2.6.
 
“Swing Line Commitment Period”: the period from the Effective Date to, but
excluding, the Swing Line Termination Date.
 
“Swing Line Exposure”: at any time, in respect of any Lender, an amount equal to
the aggregate principal balance of Swing Line Loans at such time multiplied by
such Lender’s Commitment Percentage at such time.
 
“Swing Line Interest Period”: as to any Swing Line Loan, the period commencing
on the date of such Swing Line loan and ending on the date set forth by the
Borrower in the Borrowing Request with respect to such Swing Line Loan, provided
that the last day of any Swing Line Interest Period shall not be earlier than
one day after the date of such Swing Line Loan or later than 7 days after the
date of such Swing Line Loan and in no event later than the Swing Line
Termination Date, and provided further that if any Swing Line Interest Period
would end on a day other than a Domestic Business Day, such Interest Period
shall be extended to the next succeeding Domestic Business Day.
 
“Swing Line Lender”: BNY.
 
“Swing Line Loan” and “Swing Line Loans”: as defined in Section 2.2(a).
 
“Swing Line Maturity Date”: as defined in Section 2.2(a).
 
“Swing Line Participation Amount”: as defined in Section 2.2(c).
 
“Swing Line Termination Date”: the date which is 7 Domestic Business Days prior
to the Commitment Termination Date.
 
“Tangible Net Worth”: at any date of determination, Net Worth less all assets of
the Borrower and its Subsidiaries included in such Net Worth, determined on a
Consolidated basis at such date, that would be classified as intangible assets
in accordance with GAAP.
 
“Termination Event”: with respect to any Pension Plan, (a) a Reportable Event,
(b) the termination of a Pension Plan under Section 4041(c) of ERISA, or the
filing of a notice of intent to terminate a Pension Plan under Section 4041(c)
of ERISA, or the treatment of a Pension Plan amendment as a termination under
Section 4041(e) of ERISA (except an amendment made after such Pension Plan
satisfies the requirement for a standard termination under Section 4041(b) of
ERISA), (c) the institution of proceedings by the PBGC to terminate a Pension
Plan under Section 4042 of ERISA, or (d) the appointment of a trustee to
administer any Pension Plan under Section 4042 of ERISA.
 
“Total Capitalization”: at any date, the sum of the Borrower’s Consolidated
Indebtedness and shareholders’ equity on such date, determined in accordance
with GAAP.
 
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“2007 Bridge Credit Agreement”: the 364 Day Credit Agreement, dated as of March,
2007, by and among the Borrower, the lenders party thereto, Morgan Stanley
Senior Funding, Inc., as syndication agent, and Lehman Commercial Paper Inc., as
administrative agent, as the same may be amended, supplemented, replaced or
otherwise modified from time to time.
 
“2007 Five Year Credit Agreement”: the Five Year Credit Agreement, dated as of
March 12, 2007, by and among the Borrower, the lenders party thereto, Lehman
Commercial Paper Inc. and Wachovia Bank, National Association, as co-syndication
agents, Morgan Stanley Senior Funding, Inc., as documentation agent, and The
Bank of New York, as administrative agent, as the same may be amended,
supplemented, replaced or otherwise modified from time to time.
 
“Type”: with respect to any Revolving Credit Loan, the characteristic of such
Loan as an ABR Advance or a Eurodollar Advance, each of which constitutes a Type
of Revolving Credit Loan.
 
“Unqualified Amount”: as defined in Section 3.4(c).
 
“Upstream Dividends”: as defined in Section 8.7.
 
“Utilization Fee”: as defined in Section 3.11(b).
 

 
1.2
Principles of Construction

 
(a) All capitalized terms defined in this Agreement shall have the meanings
given such capitalized terms herein when used in the other Loan Documents or in
any certificate, opinion or other document made or delivered pursuant hereto or
thereto, unless otherwise expressly provided therein.
 
(b) Unless otherwise expressly provided herein, the word “fiscal” when used
herein shall refer to the relevant fiscal period of the Borrower. As used in the
Loan Documents and in any certificate, opinion or other document made or
delivered pursuant thereto, accounting terms not defined in Section 1.1, and
accounting terms partly defined in Section 1.1, to the extent not defined, shall
have the respective meanings given to them under GAAP.
 
(c) The words “hereof”, “herein”, “hereto” and “hereunder” and similar words
when used in each Loan Document shall refer to such Loan Document as a whole and
not to any particular provision of such Loan Document, and Section, schedule and
exhibit references contained therein shall refer to Sections thereof or
schedules or exhibits thereto unless otherwise expressly provided therein.
 
(d) All references herein to a time of day shall mean the then applicable time
in New York, New York, unless otherwise expressly provided herein.
 
(e) Section headings have been inserted in the Loan Documents for convenience
only and shall not be construed to be a part thereof. Unless the context
otherwise requires, words in the singular number include the plural, and words
in the plural include the singular.
 
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(f) Whenever in any Loan Document or in any certificate or other document made
or delivered pursuant thereto, the terms thereof require that a Person sign or
execute the same or refer to the same as having been so signed or executed, such
terms shall mean that the same shall be, or was, duly signed or executed by (i)
in respect of any Person that is a corporation, any duly authorized officer
thereof, and (ii) in respect of any other Person (other than an individual), any
analogous counterpart thereof.
 
(g) The words “include” and “including”, when used in each Loan Document, shall
mean that the same shall be included “without limitation”, unless otherwise
specifically provided.
 
2.
AMOUNT AND TERMS OF LOANS

 

 
2.1
Revolving Credit Loans

 
(a) Subject to the terms and conditions hereof, each Lender severally (and not
jointly) agrees to make loans under this Agreement (each a “Revolving Credit
Loan” and, collectively with each other Revolving Credit Loan of such Lender
and/or with each Revolving Credit Loan of each other Lender, the “Revolving
Credit Loans”) to the Borrower from time to time during the Commitment Period,
during which period the Borrower may borrow, prepay and reborrow in accordance
with the provisions hereof. Immediately after making each Revolving Credit Loan
and after giving effect to all Swing Line Loans and Competitive Bid Loans repaid
and all Reimbursement Obligations paid on the same date, the Aggregate Credit
Exposure will not exceed the Aggregate Commitment Amount. With respect to each
Lender, at the time of the making of any Revolving Credit Loan, the sum of (I)
the principal amount of such Lender’s Revolving Credit Loan constituting a part
of the Revolving Credit Loans to be made, (II) the aggregate principal balance
of all other Revolving Credit Loans (exclusive of Revolving Credit Loans which
are repaid with the proceeds of, and simultaneously with the incidence of, the
Revolving Credit Loans to be made) then outstanding from such Lender and (III)
the product of (A) such Lender’s Commitment Percentage and (B) the sum of (1)
the aggregate principal balance of all Swing Line Loans (exclusive of Swing Line
Loans which are repaid with the proceeds of, and simultaneously with the
incurrence of, the Revolving Credit Loans to be made) then outstanding and (2)
the Letter of Credit Exposure of all Lenders, will not exceed the Commitment of
such Lender at such time. At the option of the Borrower, indicated in a
Borrowing Request, Revolving Credit Loans may be made as ABR Advances or
Eurodollar Advances.
 
(b) The aggregate outstanding principal balance of all Revolving Credit Loans
shall be due and payable on the Commitment Termination Date or on such earlier
date upon which all of the Commitments shall have been terminated in accordance
with Section 2.6.
 

 
2.2
Swing Line Loans

 
(a) Subject to the terms and conditions hereof, the Swing Line Lender agrees to
make loans under this Agreement (each a “Swing Line Loan” and, collectively, the
“Swing Line Loans”) to the Borrower from time to time during the Swing Line
Commitment Period.
 
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Swing Line Loans (i) may be repaid and reborrowed in accordance with the
provisions hereof, (ii) shall not, immediately after giving effect thereto,
result in the Aggregate Credit Exposure exceeding the Aggregate Commitment
Amount, and (iii) shall not, immediately after giving effect thereto, result in
the aggregate outstanding principal balance of all Swing Line Loans exceeding
the Swing Line Commitment. The Swing Line Lender shall not be obligated to make
any Swing Line Loan at a time when any Lender shall be in default of its
obligations under this Agreement unless the Swing Line Lender has entered into
arrangements satisfactory to it and the Borrower to eliminate the Swing Line
Lender’s risk with respect to such defaulting Lender’s participation in such
Swing Line Loan. The Swing Line Lender will not make a Swing Line Loan if the
Administrative Agent, or any Lender by notice to the Swing Line Lender and the
Borrower no later than one Domestic Business Day prior to the Borrowing Date
with respect to such Swing Line Loan, shall have determined that the conditions
set forth in Sections 5 and/or 6, as applicable, have not been satisfied and
such conditions remain unsatisfied as of the requested time of the making of
such Loan. Each Swing Line Loan shall be due and payable on the day (the “Swing
Line Maturity Date”) being the earliest of the last day of the Swing Line
Interest Period applicable thereto, the date on which the Swing Line Commitment
shall have been terminated in accordance with Section 2.6, and the date on which
the Loans shall become due and payable pursuant to the provisions hereof,
whether by acceleration or otherwise. Each Swing Line Loan shall bear interest
at the Negotiated Rate applicable thereto. The Swing Line Lender shall disburse
the proceeds of Swing Line Loans at its office designated in Section 11.2 by
crediting such proceeds to an account of the Borrower maintained with the Swing
Line Lender.
 
(b) On any Domestic Business Day, the Swing Line Lender may, in its sole
discretion, give notice to the Lenders and the Borrower that such outstanding
Swing Line Loan shall be funded with a borrowing of Revolving Credit Loans
(provided that such notice shall be deemed to have been automatically given upon
the occurrence of a Default or an Event of Default under Sections 9.1(h), (i) or
(j)), in which case a borrowing of Revolving Credit Loans made as ABR Advances
(each such borrowing, a “Mandatory Borrowing”), shall be made by all Lenders pro
rata based on each such Lender’s Commitment Percentage on the Domestic Business
Day immediately succeeding the giving of such notice. The proceeds of each
Mandatory Borrowing shall be remitted directly to the Swing Line Lender to repay
such outstanding Swing Line Loan. Each Lender irrevocably agrees to make a
Revolving Credit Loan pursuant to each Mandatory Borrowing in the amount and in
the manner specified in the preceding sentence and on the date specified in
writing by the Swing Line Lender notwithstanding: (i) whether the amount of such
Mandatory Borrowing complies with the minimum amount for Loans otherwise
required hereunder, (ii) whether any condition specified in Section 6 is then
unsatisfied, (iii) whether a Default or an Event of Default then exists, (iv)
the Borrowing Date of such Mandatory Borrowing, (v) the aggregate principal
amount of all Loans then outstanding, (vi) the Aggregate Credit Exposure at such
time and (vii) the amount of the Commitments at such time.
 
(c) Upon each receipt by a Lender of notice from the Administrative Agent, such
Lender shall purchase unconditionally, irrevocably, and severally (and not
jointly) from the Swing Line Lender a participation in the outstanding Swing
Line Loans (including accrued interest thereon) in an amount equal to the
product of its Commitment Percentage and the outstanding balance of the Swing
Line Loans (each, a “Swing Line Participation Amount”).
 
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Each Lender shall also be liable for an amount equal to the product of its
Commitment Percentage and any amounts paid by the Borrower pursuant to this
Section that are subsequently rescinded or avoided, or must otherwise be
restored or returned. Such liabilities shall be unconditional and without regard
to the occurrence of any Default or Event of Default or the compliance by the
Borrower with any of its obligations under the Loan Documents.
 
(d) In furtherance of Section 2.2(c), upon each receipt by a Lender of notice
from the Administrative Agent, such Lender shall promptly make available to the
Administrative Agent for the account of the Swing Line Lender its Swing Line
Participation Amount at the office of the Administrative Agent specified in
Section 11.2, in lawful money of the United States and in immediately available
funds. The Administrative Agent shall deliver the payments made by each Lender
pursuant to the immediately preceding sentence to the Swing Line Lender promptly
upon receipt thereof in like funds as received. Each Lender hereby indemnifies
and agrees to hold harmless the Administrative Agent and the Swing Line Lender
from and against any and all losses, liabilities (including liabilities for
penalties), actions, suits, judgments, demands, costs and expenses resulting
from any failure on the part of such Lender to pay, or from any delay in paying,
the Administrative Agent any amount such Lender is required by notice from the
Administrative Agent to pay in accordance with this Section (except in respect
of losses, liabilities or other obligations suffered by the Administrative Agent
or the Swing Line Lender, as the case may be, resulting from the gross
negligence or willful misconduct of the Administrative Agent or the Swing Line
Lender, as the case may be), and such Lender shall pay interest to the
Administrative Agent for the account of the Swing Line Lender from the date such
amount was due until paid in full, on the unpaid portion thereof, at a rate of
interest per annum, whether before or after judgment, equal to (i) from the date
such amount was due until the third day therefrom, the Federal Funds Effective
Rate, and (ii) thereafter, the Federal Funds Effective Rate plus 2%, payable
upon demand by the Swing Line Lender. The Administrative Agent shall distribute
such interest payments to the Swing Line Lender upon receipt thereof in like
funds as received.
 
(e) Whenever the Administrative Agent is reimbursed by the Borrower for the
account of the Swing Line Lender for any payment in connection with Swing Line
Loans and such payment relates to an amount previously paid by a Lender pursuant
to this Section, the Administrative Agent will promptly remit such payment to
such Lender.
 

 
2.3
Notice of Borrowing Revolving Credit Loans and Swing Line Loans

 
The Borrower agrees to notify the Administrative Agent (and with respect to a
Swing Line Loan, the Swing Line Lender), which notification shall be
irrevocable, no later than (a) 12:00 Noon on the proposed Borrowing Date in the
case of Swing Line Loans, (b) 10:00 A.M. on the proposed Borrowing Date in the
case of Revolving Credit Loans to consist of ABR Advances and (c) 10:00 A.M. at
least two Eurodollar Business Days prior to the proposed Borrowing Date in the
case of Revolving Credit Loans to consist of Eurodollar Advances. Each such
notice shall specify (i) the aggregate amount requested to be borrowed under the
Commitments or the Swing Line Commitment, (ii) the proposed Borrowing Date,
(iii) whether a borrowing of Revolving Credit Loans is to be of ABR Advances or
Eurodollar Advances, and the amount of each thereof (iv) the Eurodollar Interest
Period for such Eurodollar Advances and (v)
 
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the Swing Line Interest Period for, and the amount of, each Swing Line Loan.
Each such notice shall be promptly confirmed by delivery to the Administrative
Agent (and, with respect to a Swing Line Loan, the Swing Line Lender) of a
Borrowing Request. Each Eurodollar Advance to be made on a Borrowing Date, when
aggregated with all amounts to be Converted to Eurodollar Advances on such date
and having the same Interest Period as such Eurodollar Advance, shall equal no
less than $10,000,000, or an integral multiple of $1,000,000 in excess thereof.
Each ABR Advance made on each Borrowing Date shall equal no less than $5,000,000
or an integral multiple of $500,000 in excess thereof. Each Swing Line Loan made
on each Borrowing Date shall equal no less than $1,000,000 or an integral
multiple of $500,000 in excess thereof. The Administrative Agent shall promptly
notify each Lender (by telephone or otherwise, such notification to be confirmed
by fax or other writing) of each such Borrowing Request. Subject to its receipt
of each such notice from the Administrative Agent and subject to the terms and
conditions hereof, (A) each Lender shall make immediately available funds
available to the Administrative Agent at the address therefor set forth in
Section 11.2 not later than 1:00 P.M. on each Borrowing Date in an amount equal
to such Lender’s Commitment Percentage of the Revolving Credit Loans requested
by the Borrower on such Borrowing Date and/or (B) the Swing Line Lender shall
make immediately available funds available to the Borrower on such Borrowing
Date in an amount equal to the Swing Line Loan requested by the Borrower.
 

 
2.4
Competitive Bid Loans and Procedure

 
(a) Subject to the terms and conditions hereof, the Borrower may request
competitive bid loans under this Agreement (each a “Competitive Bid Loan”)
during the Commitment Period. In order to request Competitive Bids, the Borrower
shall deliver by hand or fax to the Administrative Agent a duly completed
Competitive Bid Request not later than 11:00 A.M., one Domestic Business Day
before the proposed Borrowing Date therefor. A Competitive Bid Request that does
not conform substantially to the format of Exhibit F may be rejected by the
Administrative Agent in the Administrative Agent’s reasonable discretion, and
the Administrative Agent shall promptly notify the Borrower of such rejection by
fax and telephone. Each Competitive Bid Request shall specify (x) the proposed
Borrowing Date for the Competitive Bid Loans then being requested (which shall
be a Domestic Business Day) and the aggregate principal amount thereof and (y)
the Competitive Interest Period or Interest Periods (which shall not exceed ten
different Interest Periods in a single Competitive Bid Request), with respect
thereto (which may not end after the Domestic Business Day immediately preceding
the Commitment Termination Date). Promptly after its receipt of each Competitive
Bid Request that is not rejected as aforesaid, the Administrative Agent shall
invite by fax (in the form of Exhibit G) the Lenders to bid, on the terms and
conditions of this Agreement, to make Competitive Bid Loans pursuant to such
Competitive Bid Request.
 
(b) Each Lender, in its sole and absolute discretion, may make one or more
Competitive Bids to the Borrower responsive to a Competitive Bid Request. Each
Competitive Bid by a Lender must be received by the Administrative Agent not
later than 10:00 A.M. on the proposed Borrowing Date for the relevant
Competitive Bid Loan. Multiple bids will be accepted by the Administrative
Agent. Bids to make Competitive Bid Loans that do not conform substantially to
the format of Exhibit H may be rejected by the Administrative Agent after
conferring with, and upon the instruction of, the Borrower, and the
Administrative Agent shall
 
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notify the Lender making such nonconforming bid of such rejection as soon as
practicable. Each Competitive Bid shall be irrevocable and shall specify (x) the
principal amount (which (1) shall be in a minimum principal amount of $5,000,000
or an integral multiple of $1,000,000 in excess thereof, and (2) may equal the
entire principal amount requested by the Borrower) of the Competitive Bid Loan
or Competitive Bid Loans that the Lender is willing to make to the Borrower, (y)
the Competitive Bid Rate or Rates at which the Lender is prepared to make such
Competitive Bid Loan or Competitive Bid Loans, and (z) the Competitive Interest
Period with respect to each such Competitive Bid Loan and the last day thereof.
If any Lender shall elect not to make a Competitive Bid, such Lender shall so
notify the Administrative Agent by fax not later than 10:00 A.M. on the proposed
Borrowing Date therefor, provided that the failure by any Lender to give any
such notice shall not obligate such Lender to make any Competitive Bid Loan in
connection with the relevant Competitive Bid Request.
 
(c) With respect to each Competitive Bid Request, the Administrative Agent shall
(i) notify the Borrower by fax by 11:00 A.M. on the proposed Borrowing Date with
respect thereto of each Competitive Bid made, the Competitive Bid Rate
applicable thereto and the identity of the Lender that made such Competitive
Bid, and (ii) send a list of all Competitive Bids to the Borrower for its
records as soon as practicable after completion of the bidding process. Each
notice and list sent by the Administrative Agent pursuant to this Section 2.4(c)
shall list the Competitive Bids in ascending yield order.
 
(d) The Borrower may in its sole and absolute discretion, subject only to the
provisions of this Section 2.4(d), accept or reject any Competitive Bid made in
accordance with the procedures set forth in this Section 2.4, and the Borrower
shall notify the Administrative Agent by telephone, confirmed by fax in the form
of a Competitive Bid Accept/Reject Letter, whether and to what extent it has
decided to accept or reject any or all of such Competitive Bids not later than
12:00 Noon on the proposed Borrowing Date therefor, provided that the failure by
the Borrower to give such notice shall be deemed to be a rejection of all such
Competitive Bids. In connection with each acceptance of one or more Competitive
Bids by the Borrower:
 
(1) the Borrower shall not accept a Competitive Bid made at a particular
Competitive Bid Rate if the Borrower has decided to reject a Competitive Bid
made at a lower Competitive Bid Rate unless the acceptance of such lower
Competitive Bid would subject the Borrower to any requirement to withhold any
taxes or deduct any amount from any amounts payable under the Loan Documents, in
which case the Borrower may reject such lower Competitive Bid,
 
(2) the aggregate amount of the Competitive Bids accepted by the Borrower shall
not exceed the principal amount specified in the Competitive Bid Request
therefor,
 
(3) if the Borrower shall desire to accept a Competitive Bid made at a
particular Competitive Bid Rate, it must accept all other Competitive Bids at
such Competitive Bid Rate, except for any such Competitive Bid the acceptance of
which would subject the Borrower to any requirement to withhold any taxes or
deduct any amount from any amounts payable under the Loan Documents, provided
that if the acceptance of all such other Competitive
 
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Bids would cause the aggregate amount of all such accepted Competitive Bids to
exceed the amount requested, then such acceptance shall be made pro rata in
accordance with the amount of each such Competitive Bid at such Competitive Bid
Rate,
 
(4) except pursuant to clause (3) above, no Competitive Bid shall be accepted
unless the Competitive Bid Loan with respect thereto shall be in a minimum
principal amount of $5,000,000 or an integral multiple of $1,000,000 in excess
thereof, and
 
(5) no Competitive Bid shall be accepted and no Competitive Bid Loan shall be
made, if immediately after giving effect thereto, the Aggregate Credit Exposure
would exceed the Aggregate Commitment Amount.
 
(e) The Administrative Agent shall promptly fax to each bidding Lender (with a
copy to the Borrower) a Competitive Bid Accept/Reject Letter advising such
Lender whether its Competitive Bid has been accepted (and if accepted, in what
amount and at what Competitive Bid Rate), and each successful bidder so notified
will thereupon become bound, subject to the other applicable conditions hereof,
to make the Competitive Bid Loan in respect of which each of its Competitive
Bids has been accepted by making immediately available funds available to the
Administrative Agent at its address set forth in Section 11.2 not later than
1:00 P.M. on the Borrowing Date for such Competitive Bid Loan in the amount
thereof.
 
(f) Anything herein to the contrary notwithstanding, if the Administrative Agent
shall elect to submit a Competitive Bid in its capacity as a Lender, it shall
submit such bid directly to the Borrower not later than 9:30 A.M. on the
relevant proposed Borrowing Date.
 
(g) All notices required by this Section shall be given in accordance with
Section 11.2.
 
(h) Each Competitive Bid Loan shall be due and payable on the last day of the
Interest Period applicable thereto or on such earlier date upon which the Loans
shall become due and payable pursuant to the provisions hereof, whether by
acceleration or otherwise.
 

 
2.5
Use of Proceeds

 
The Borrower agrees that the proceeds of the Loans and Letters of Credit shall
be used solely for its general corporate purposes not inconsistent with the
provisions hereof, including as a backup for commercial paper issued by the
Borrower and to finance in part the consideration paid to the Caremark
shareholders in connection with the Caremark Merger, including any dividends
paid to the Caremark shareholders, provided that prior to the consummation of
the Caremark Merger, the Borrower shall not be permitted to borrow hereunder
except in anticipation of the proposed direct or indirect financing in part of
the consideration paid or to be paid to the Caremark shareholders in connection
with the Caremark Merger, including any dividends paid or to be paid to the
Caremark shareholders (which may include a borrowing for the purpose of
refunding Caremark Merger Anticipatory Commercial Paper). Notwithstanding
anything to the contrary contained in any Loan Document, the Borrower further
agrees that no part of the proceeds of any Loan or Letter of Credit will be
used, directly or
 
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indirectly, and whether immediately, incidentally or ultimately (i) for a
purpose which violates any law, rule or regulation of any Governmental
Authority, including the provisions of Regulations U or X of the Board of
Governors of the Federal Reserve System, as amended or any provision of this
Agreement, including, without limitation, the provisions of Section 4.9 and (ii)
to make a loan to any director or executive officer of the Borrower or any
Subsidiary.
 

 
2.6
Termination or Reduction of Commitments

 
(a) Voluntary Termination or Reductions. At the Borrower’s option and upon at
least three Domestic Business Days’ prior irrevocable notice to the
Administrative Agent, the Borrower may (i) terminate the Commitments, the Swing
Line Commitment and the Letter of Credit Commitment, at any time, or (ii)
permanently reduce the Aggregate Commitment Amount, the Swing Line Commitment or
the Letter of Credit Commitment, in part at any time and from time to time,
provided that (1) each such partial reduction shall be in an amount equal to at
least (A) in the case of the Aggregate Commitment Amount $10,000,000 or an
integral multiple of $1,000,000 in excess thereof, (B) in the case of the Swing
Line Commitment, $1,000,000, or an integral multiple of $1,000,000 in excess
thereof, and (C) in the case of the Letter of Credit Commitment, $1,000,000, or
an integral multiple of $1,000,000 in excess thereof, and (2) immediately after
giving effect to each such reduction, (A) the Aggregate Commitment Amount shall
equal or exceed the Aggregate Credit Exposure, (B) the Swing Line Commitment
shall equal or exceed the aggregate outstanding principal balance of all Swing
Line Loans and (C) the Letter of Credit Commitment shall equal or exceed the
Letter of Credit Exposure of all Lenders, and provided further that a notice of
termination of the Commitments, the Swing Line Commitment and the Letter of
Credit Commitment delivered by the Borrower may state that such notice is
conditioned upon the effectiveness of other credit facilities or the
consummation of the issuance of long term Indebtedness or equity securities
(such notice to specify the proposed effective date), in which case such notice
may be revoked by the Borrower (by notice to the Administrative Agent on or
prior to such specified effective date) if such condition is not satisfied and
the Borrower shall indemnify the Lenders in accordance with Section 3.5.
 
(b) Mandatory Termination or Reductions. If for any reason the Caremark Merger
Effective Date has not occurred on or before November 1, 2007, the Commitments,
the Swing Line Commitment and the Letter of Credit Commitment shall be
automatically terminated and the Aggregate Commitment Amount shall be reduced to
zero on November 1, 2007.
 
(c) In General. Each reduction of the Aggregate Commitment Amount shall be made
by reducing each Lender’s Commitment Amount by a sum equal to such Lender’s
Commitment Percentage of the amount of such reduction.
 

 
2.7
Prepayments of Loans

 
(a) Voluntary Prepayments. The Borrower may prepay Revolving Credit Loans,
Competitive Bid Loans and Swing Line Loans, in whole or in part, without premium
or penalty, but subject to Section 3.5 at any time and from time to time, by
notifying the Administrative Agent, which notification shall be irrevocable, at
least two Eurodollar Business
 
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Days, in the case of a prepayment of Eurodollar Advances, two Domestic Business
Days, in the case of Competitive Bid Loans, or one Domestic Business Day, in the
case of a prepayment of Swing Line Loans and ABR Advances, prior to the proposed
prepayment date specifying (i) the Loans to be prepaid, (ii) the amount to be
prepaid, and (iii) the date of prepayment. Upon receipt of each such notice, the
Administrative Agent shall promptly notify each Lender thereof. Each such notice
given by the Borrower pursuant to this Section shall be irrevocable, provided
that, if a notice of prepayment is given in connection with a conditional notice
of termination of the Commitments, the Swing Line Commitment and the Letter of
Credit Commitment as contemplated by Section 2.6, then such notice of prepayment
may be revoked if such notice of termination is revoked in accordance with
Section 2.6, and the Borrower shall indemnify the Lenders in accordance with
Section 3.5. Each partial prepayment under this Section shall be in a minimum
amount of $1,000,000 ($500,000 in the case of ABR Advances and Swing Line Loans)
or an integral multiple of $1,000,000 ($100,000 in the case of ABR Advances and
Swing Line Loans) in excess thereof.
 
(b) Caremark Merger Prepayment. In the event that the Borrower borrows Loans
hereunder in anticipation of the proposed direct or indirect financing in part
of the consideration paid or to be paid to the Caremark shareholders in
connection with the Caremark Merger, including any dividends paid or to be paid
to the Caremark shareholders (which may include a borrowing for the purpose of
refunding Caremark Merger Anticipatory Commercial Paper), and the closing of the
Caremark Merger does not occur within four Business Days after such borrowing,
then the Borrower shall prepay such Loans in full no later than the fifth
Business Day following such borrowing.
 
(c) In General. Simultaneously with each prepayment hereunder, the Borrower
shall prepay all accrued interest on the amount prepaid through the date of
prepayment and indemnify the Lenders in accordance with Section 3.5.
 

 
2.8
Letter of Credit Sub-facility

 
(a) Subject to the terms and conditions hereof and the payment by the Borrower
to the Issuer of such fees as the Borrower and the Issuer shall have agreed in
writing, the Issuer agrees, in reliance on the agreement of the other Lenders
set forth in Section 2.9, to issue standby letters of credit (each a “Letter of
Credit” and, collectively, the “Letters of Credit”) during the Commitment Period
for the account of the Borrower, provided that immediately after the issuance of
each Letter of Credit (i) the Letter of Credit Exposure of all Lenders shall not
exceed the Letter of Credit Commitment, and (ii) the Aggregate Credit Exposure
shall not exceed the Aggregate Commitment Amount. Each Letter of Credit shall
have an expiration date which shall be not later than the earlier to occur of
one year from the date of issuance thereof or 5 days prior to the Commitment
Termination Date. No Letter of Credit shall be issued if the Administrative
Agent, or any Lender by notice to the Administrative Agent and the Issuer no
later than 3:00 P.M. one Domestic Business Day prior to the requested date of
issuance of such Letter of Credit, shall have determined that the conditions set
forth in Sections 5 and/or 6, as applicable have not been satisfied.
 
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(b) Each Letter of Credit shall be issued for the account of the Borrower in
support of an obligation of the Borrower in favor of a beneficiary who has
requested the Issuance of such Letter of Credit as a condition to a transaction
entered into in connection with the Borrower’s ordinary course of business. The
Borrower shall give the Administrative Agent a Letter of Credit Request for the
issuance of each Letter of Credit by 12:00 Noon at least two Domestic Business
Days prior to the requested date of issuance. Such Letter of Credit Request
shall be accompanied by the Issuer’s standard Application and Agreement for
Standby Letter of Credit (each a “Reimbursement Agreement”) executed by the
Borrower, and shall specify (i) the beneficiary of such Letter of Credit and the
obligations of the Borrower in respect of which such Letter of Credit is to be
issued, (ii) the Borrower’s proposal as to the conditions under which a drawing
may be made under such Letter of Credit and the documentation to be required in
respect thereof, (iii) the maximum amount to be available under such Letter of
Credit, and (iv) the requested date of issuance. Upon receipt of such Letter of
Credit Request from the Borrower, the Administrative Agent shall promptly notify
the Issuer and each other Lender thereof. The Issuer shall, on the proposed date
of issuance and subject to the other terms and conditions of this Agreement,
issue the requested Letter of Credit. Each Letter of Credit shall be in form and
substance reasonably satisfactory to the Issuer, with such provisions with
respect to the conditions under which a drawing may be made thereunder and the
documentation required in respect of such drawing as the Issuer shall reasonably
require. Each Letter of Credit shall be used solely for the purposes described
therein.
 
(c) Each payment by the Issuer of a draft drawn under a Letter of Credit shall
give rise to the obligation of the Borrower to immediately reimburse the Issuer
for the amount thereof. The Issuer shall promptly notify the Borrower of such
payment by the Issuer of a draft drawn under a Letter of Credit, but any failure
to so notify shall not in any manner affect the obligation of the Borrower to
make reimbursement when due. In lieu of such notice, if the Borrower has not
made reimbursement prior to the end of the Domestic Business Day when due, the
Borrower hereby authorizes the Issuer to deduct the amount of any such
reimbursement from such account(s) as the Borrower may from time to time
designate in writing to the Issuer, upon which the Issuer shall apply the amount
of such deduction to such reimbursement. If all or any portion of any
reimbursement obligation in respect of a Letter of Credit shall not be paid when
due (whether at the stated maturity thereof, by acceleration or otherwise), such
overdue amount shall bear interest, payable upon demand, at a rate per annum
equal to the Alternate Base Rate plus the Applicable Margin applicable to ABR
Advances plus 2%, from the date of such nonpayment until paid in full (whether
before or after the entry of a judgment thereon).
 

 
2.9
Letter of Credit Participation

 
(a) Each Lender hereby unconditionally and irrevocably, severally (and not
jointly) takes an undivided participating interest in the obligations of the
Issuer under and in connection with each Letter of Credit in an amount equal to
such Lender’s Commitment Percentage of the amount of such Letter of Credit. Each
Lender shall be liable to the Issuer for its Commitment Percentage of the
unreimbursed amount of any draft drawn and honored under each Letter of Credit.
Each Lender shall also be liable for an amount equal to the product of its
Commitment Percentage and any amounts paid by the Borrower pursuant to Sections
2.8 and 2.10 that are subsequently rescinded or avoided, or must otherwise be
restored or returned. Such
 
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liabilities shall be unconditional and without regard to the occurrence of any
Default or Event of Default or the compliance by the Borrower with any of its
obligations under the Loan Documents.
 
(b) The Issuer shall promptly notify the Administrative Agent, and the
Administrative Agent shall promptly notify each Lender (which notice shall be
promptly confirmed in writing), of the date and the amount of each draft paid
under each Letter of Credit with respect to which full reimbursement payment
shall not have been made by the Borrower as provided in Section 2.8(c), and
forthwith upon receipt of such notice, such Lender shall promptly make available
to the Administrative Agent for the account of the Issuer its Commitment
Percentage of the amount of such unreimbursed draft at the office of the
Administrative Agent specified in Section 11.2 in lawful money of the United
States and in immediately available funds. The Administrative Agent shall
distribute the payments made by each Lender pursuant to the immediately
preceding sentence to the Issuer promptly upon receipt thereof in like funds as
received. Each Lender shall indemnify and hold harmless the Administrative Agent
and the Issuer from and against any and all losses, liabilities (including
liabilities for penalties), actions, suits, judgments, demands, costs and
expenses (including, without limitation, reasonable attorneys’ fees and
expenses) resulting from any failure on the part of such Lender to provide, or
from any delay in providing, the Administrative Agent with such Lender’s
Commitment Percentage of the amount of any payment made by the Issuer under a
Letter of Credit in accordance with this clause (b) above (except in respect of
losses, liabilities or other obligations suffered by the Administrative Agent or
the Issuer, as the case may be, resulting from the gross negligence or willful
misconduct of the Administrative Agent or the Issuer, as the case may be). If a
Lender does not make available to the Administrative Agent when due such
Lender’s Commitment Percentage of any unreimbursed payment made by the Issuer
under a Letter of Credit, such Lender shall be required to pay interest to the
Administrative Agent for the account of the Issuer on such Lender’s Commitment
Percentage of such payment at a rate of interest per annum equal to (i) from the
date such Lender should have made such amount available until the third day
therefrom, the Federal Funds Effective Rate, and (ii) thereafter, the Federal
Funds Effective Rate plus 2%, in each case payable upon demand by the Issuer.
The Administrative Agent shall distribute such interest payments to the Issuer
upon receipt thereof in like funds as received.
 
(c) Whenever the Administrative Agent is reimbursed by the Borrower, for the
account of the Issuer, for any payment under a Letter of Credit and such payment
relates to an amount previously paid by a Lender in respect of its Commitment
Percentage of the amount of such payment under such Letter of Credit, the
Administrative Agent (or the Issuer, if such payment by a Lender was paid by the
Administrative Agent to the Issuer) will promptly pay over such payment to such
Lender.
 

 
2.10
Absolute Obligation with respect to Letter of Credit Payments

 
The Borrower’s obligation to reimburse the Administrative Agent for the account
of the Issuer for each payment under or in respect of each Letter of Credit
shall be absolute and unconditional under any and all circumstances and
irrespective of any set-off, counterclaim or defense to payment which the
Borrower may have or have had against the beneficiary of such Letter
 
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of Credit, the Administrative Agent, the Issuer, the Swing Line Lender, any
Lender or any other Person, including, without limitation, any defense based on
the failure of any drawing to conform to the terms of such Letter of Credit, any
drawing document proving to be forged, fraudulent or invalid, or the legality,
validity, regularity or enforceability of such Letter of Credit, provided that,
with respect to any Letter of Credit, the foregoing shall not relieve the Issuer
of any liability it may have to the Borrower for any actual damages sustained by
the Borrower arising from a wrongful payment (or failure to pay) under such
Letter of Credit made as a result of the Issuer’s gross negligence or willful
misconduct.
 

 
2.11
Notes

 
Any Lender may request that the Loans made by it be evidenced by a Note. In such
event, the Borrower shall prepare, execute and deliver to such Lender a Note
payable to the order of such Person or, if requested by such Person, such Person
and its registered assigns. Thereafter, all Loans evidenced by such Note and
interest thereon shall at all times (including after assignment pursuant to
Section 11.7) be represented by a Note in like form payable to the order of the
payee named therein and its registered assigns.

3.
PROCEEDS, PAYMENTS, CONVERSIONS, INTEREST, YIELD PROTECTION AND FEES

 

 
3.1
Disbursement of the Proceeds of the Loans

 
The Administrative Agent shall disburse the proceeds of the Loans (other than
the Swing Line Loans) at its office specified in Section 11.2 by crediting to
the Borrower’s general deposit account with the Administrative Agent the funds
received from each Lender. Unless the Administrative Agent shall have received
prior notice from a Lender (by telephone or otherwise, such notice to be
confirmed by fax or other writing) that such Lender will not make available to
the Administrative Agent such Lender’s Commitment Percentage of the Revolving
Credit Loans, or the amount of any Competitive Bid Loan, to be made by it on a
Borrowing Date, the Administrative Agent may assume that such Lender has made
such amount available to the Administrative Agent on such Borrowing Date in
accordance with this Section, provided that, in the case of a Revolving Credit
Loan, such Lender received notice thereof from the Administrative Agent in
accordance with the terms hereof, and the Administrative Agent may, in reliance
upon such assumption, make available to the Borrower on such Borrowing Date a
corresponding amount. If and to the extent such Lender shall not have so made
such amount available to the Administrative Agent, such Lender and the Borrower
severally agree to pay to the Administrative Agent, forthwith on demand, such
corresponding amount (to the extent not previously paid by the other), together
with interest thereon for each day from the date such amount is made available
to the Borrower until the date such amount is paid to the Administrative Agent,
at a rate per annum equal to, in the case of the Borrower, the applicable
interest rate set forth in Section 3.4(a) and, in the case of such Lender, the
Federal Funds Effective Rate from the date such payment is due until the third
day after such date and, thereafter, at the Federal Funds Effective Rate plus
2%. Any such payment by the Borrower shall be without prejudice to its rights
against such Lender. If such Lender shall pay to the Administrative Agent such
corresponding amount, such amount so paid shall constitute such
 
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Lender’s Loan as part of such Loans for purposes of this Agreement, which Loan
shall be deemed to have been made by such Lender on the Borrowing Date
applicable to such Loans.
 

 
3.2
Payments

 
(a) Each payment, including each prepayment, of principal and interest on the
Loans and of the Facility Fee, the Utilization Fee and the Letter of Credit
Participation Fee (collectively, together with all of the other fees to be paid
to the Administrative Agent, the Lenders, the Issuer and the Swing Line Lender
in connection with the Loan Documents, the “Fees”), and of all of the other
amounts to be paid to the Administrative Agent and the Lenders in connection
with the Loan Documents shall be made by the Borrower to the Administrative
Agent at its office specified in Section 11.2 without setoff, deduction or
counterclaim in funds immediately available in New York by 3:00 P.M. on the due
date for such payment. The failure of the Borrower to make any such payment by
such time shall not constitute a default hereunder, provided that such payment
is made on such due date, but any such payment made after 3:00 P.M. on such due
date shall be deemed to have been made on the next Domestic Business Day or
Eurodollar Business Day, as the case may be, for the purpose of calculating
interest on amounts outstanding on the Loans. If the Borrower has not made any
such payment prior to 3:00 P.M., the Borrower hereby authorizes the
Administrative Agent to deduct the amount of any such payment from such
account(s) as the Borrower may from time to time designate in writing to the
Administrative Agent, upon which the Administrative Agent shall apply the amount
of such deduction to such payment. Promptly upon receipt thereof by the
Administrative Agent, each payment of principal and interest on the: (i)
Revolving Credit Loans shall be remitted by the Administrative Agent in like
funds as received to each Lender (a) first, pro rata according to the amount of
interest which is then due and payable to the Lenders, and (b) second, pro rata
according to the amount of principal which is then due and payable to the
Lenders, (ii) Competitive Bid Loans shall be remitted by the Administrative
Agent in like funds as received to each applicable Lender and (iii) Swing Line
Loans shall be remitted by the Administrative Agent in like funds as received to
the Swing Line Lender. Each payment of the Facility Fee and the Letter of Credit
Participation Fee payable to the Lenders shall be promptly transmitted by the
Administrative Agent in like funds as received to each Lender pro rata according
to such Lender’s Commitment Amount or, if the Commitments shall have terminated
or been terminated, according to the outstanding principal amount of such
Lender’s Revolving Credit Loans. Each payment of the Utilization Fee payable to
the Lenders shall be promptly transmitted by the Administrative Agent in like
funds as received to each Lender in accordance with Section 3.11(b).
 
(b) If any payment hereunder or under the Loans shall be due and payable on a
day which is not a Domestic Business Day or Eurodollar Business Day, as the case
may be, the due date thereof (except as otherwise provided in the definition of
Eurodollar Interest Period or Competitive Interest Period) shall be extended to
the next Domestic Business Day or Eurodollar Business Day, as the case may be,
and (except with respect to payments in respect of the Facility Fee, the
Utilization Fee and the Letter of Credit Participation Fee) interest shall be
payable at the applicable rate specified herein during such extension.
 
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3.3
Conversions; Other Matters

 
(a) The Borrower may elect at any time and from time to time to Convert one or
more Eurodollar Advances to an ABR Advance by giving the Administrative Agent at
least one Domestic Business Day’s prior irrevocable notice of such election,
specifying the amount to be so Converted. In addition, the Borrower may elect at
any time and from time to time to Convert an ABR Advance to any one or more new
Eurodollar Advances or to Convert any one or more existing Eurodollar Advances
to any one or more new Eurodollar Advances by giving the Administrative Agent no
later than 10:00 a.m. at least two Eurodollar Business Days’ prior irrevocable
notice, in the case of a Conversion to Eurodollar Advances, of such election,
specifying the amount to be so Converted and the initial Interest Period
relating thereto, provided that any Conversion of an ABR Advance to Eurodollar
Advances shall only be made on a Eurodollar Business Day. The Administrative
Agent shall promptly provide the Lenders with notice of each such election. Each
Conversion of Loans from one Type to another shall be made pro rata according to
the outstanding principal amount of the Loans of each Lender. ABR Advances and
Eurodollar Advances may be Converted pursuant to this Section in whole or in
part, provided that the amount to be Converted to each Eurodollar Advance, when
aggregated with any Eurodollar Advance to be made on such date in accordance
with Section 2.1 and having the same Interest Period as such first Eurodollar
Advance, shall equal no less than $10,000,000 or an integral multiple of
$1,000,000 in excess thereof.
 
(b) Notwithstanding anything in this Agreement to the contrary, upon the
occurrence and during the continuance of a Default or an Event of Default, the
Borrower shall have no right to elect to Convert any existing ABR Advance to a
new Eurodollar Advance or to Convert any existing Eurodollar Advance to a new
Eurodollar Advance. In such event, such ABR Advance shall be automatically
continued as an ABR Advance or such Eurodollar Advance shall be automatically
Converted to an ABR Advance on the last day of the Interest Period applicable to
such Eurodollar Advance. The foregoing shall not affect any other rights or
remedies that the Administrative Agent or any Lender may have under this
Agreement or any other Loan Document.
 
(c) Each Conversion shall be effected by each Lender by applying the proceeds of
each new ABR Advance or Eurodollar Advance, as the case may be, to the existing
Advance (or portion thereof) being Converted (it being understood that such
Conversion shall not constitute a borrowing for purposes of Sections 4, 5 or 6).
 
(d) Notwithstanding any other provision of any Loan Document:
 
(i) if the Borrower shall have failed to elect a Eurodollar Advance under
Section 2.3 or this Section 3.3, as the case may be, in connection with any
borrowing of new Revolving Credit Loans or expiration of an Interest Period with
respect to any existing Eurodollar Advance, the amount of the Revolving Credit
Loans subject to such borrowing or such existing Eurodollar Advance shall
thereafter be an ABR Advance until such time, if any, as the Borrower shall
elect a new Eurodollar Advance pursuant to this Section 3.3,
 
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(ii) the Borrower shall not be permitted to select a Eurodollar Advance the
Interest Period in respect of which ends later than the Commitment Termination
Date or such earlier date upon which all of the Commitments shall have been
terminated in accordance with Section 2.6, and
 
(iii) the Borrower shall not be permitted to have more than 15 Eurodollar
Advances and Competitive Bid Loans, in the aggregate, outstanding at any one
time, it being understood and agreed that each borrowing of Eurodollar Advances
or Competitive Bid Loans pursuant to a single Borrowing Request or Competitive
Bid Request, as the case may be, shall constitute the making of one Eurodollar
Advance or Competitive Bid Loan for the purpose of calculating such limitation.
 

 
3.4
Interest Rates and Payment Dates

 
(a) Prior to Maturity. Except as otherwise provided in Sections 3.4(b) and
3.4(c), the Loans shall bear interest on the unpaid principal balance thereof at
the applicable interest rate or rates per annum set forth below:
 
LOANS
RATE
Revolving Credit Loans constituting ABR Advances
Alternate Base Rate applicable thereto plus the Applicable Margin.
Revolving Credit Loans constituting Eurodollar Advances
Eurodollar Rate applicable thereto plus the Applicable Margin.
Competitive Bid Loans
Fixed rate of interest applicable thereto accepted by the Borrower pursuant to
Section 2.4(d).
Swing Line Loans
Negotiated Rate applicable thereto as provided in Section 2.2(a).

(b) After Maturity, Late Payment Rate. After maturity, whether by acceleration,
notice of intention to prepay or otherwise, the outstanding principal balance of
the Loans shall bear interest at the Alternate Base Rate plus 2% per annum until
paid (whether before or after the entry of any judgment thereon). Any payment of
principal, interest or any Fees not paid on the date when due and payable shall
bear interest at the Alternate Base Rate plus 2% per annum from the due date
thereof until the date such payment is made (whether before or after the entry
of any judgment thereon).
 
(c) Highest Lawful Rate. Notwithstanding anything to the contrary contained in
this Agreement, at no time shall the interest rate payable to any Lender on any
of its Loans, together with the Fees and all other amounts payable hereunder to
such Lender to the extent the same constitute or are deemed to constitute
interest, exceed the Highest Lawful Rate. If in respect of any period during the
term of this Agreement, any amount paid to any Lender
 
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hereunder, to the extent the same shall (but for the provisions of this Section
3.4) constitute or be deemed to constitute interest, would exceed the maximum
amount of interest permitted by the Highest Lawful Rate during such period (such
amount being hereinafter referred to as an “Unqualified Amount”), then (i) such
Unqualified Amount shall be applied or shall be deemed to have been applied as a
prepayment of the Loans of such Lender, and (ii) if, in any subsequent period
during the term of this Agreement, all amounts payable hereunder to such Lender
in respect of such period which constitute or shall be deemed to constitute
interest shall be less than the maximum amount of interest permitted by the
Highest Lawful Rate during such period, then the Borrower shall pay to such
Lender in respect of such period an amount (each a “Compensatory Interest
Payment”) equal to the lesser of (x) a sum which, when added to all such
amounts, would equal the maximum amount of interest permitted by the Highest
Lawful Rate during such period, and (y) an amount equal to the aggregate sum of
all Unqualified Amounts less all other Compensatory Interest Payments.
 
(d) General. Interest shall be payable in arrears on each Interest Payment Date,
on the Commitment Termination Date and, to the extent provided in Section
2.7(c), upon each prepayment of the Loans. Any change in the interest rate on
the Loans resulting from an increase or a decrease in the Alternate Base Rate or
any reserve requirement shall become effective as of the opening of business on
the day on which such change shall become effective. The Administrative Agent
shall, as soon as practicable, notify the Borrower and the Lenders of the
effective date and the amount of each change in the BNY Rate, but any failure to
so notify shall not in any manner affect the obligation of the Borrower to pay
interest on the Loans in the amounts and on the dates set forth herein. Each
determination by the Administrative Agent of the Alternate Base Rate, the
Eurodollar Rate and the Competitive Rate pursuant to this Agreement shall be
conclusive and binding on the Borrower absent manifest error. The Borrower
acknowledges that to the extent interest payable on the Loans is based on the
Alternate Base Rate, such rate is only one of the bases for computing interest
on loans made by the Lenders, and by basing interest payable on ABR Advances on
the Alternate Base Rate, the Lenders have not committed to charge, and the
Borrower has not in any way bargained for, interest based on a lower or the
lowest rate at which the Lenders may now or in the future make extensions of
credit to other Persons. All interest (other than interest calculated with
reference to the BNY Rate) shall be calculated on the basis of a 360-day year
for the actual number of days elapsed, and all interest determined with
reference to the BNY Rate shall be calculated on the basis of a 365/366-day year
for the actual number of days elapsed.
 

 
3.5
Indemnification for Loss

 
Notwithstanding anything contained herein to the contrary, if: (i) the Borrower
shall fail to borrow a Eurodollar Advance or if the Borrower shall fail to
Convert a Eurodollar Advance after it shall have given notice to do so in which
it shall have requested a Eurodollar Advance pursuant to Section 2.3 or 3.3, as
the case may be, (ii) the Borrower shall fail to borrow a Competitive Bid Loan
after it shall have accepted any offer with respect thereto in accordance with
Section 2.4 or a Swing Line Loan after it shall have agreed to a Negotiated Rate
with respect thereto in accordance with Section 2.2(a), (iii) a Eurodollar
Advance, Competitive Bid Loan or Swing Line Loan shall be terminated for any
reason prior to the last day of the Interest Period applicable thereto (other
than the termination of a Swing Line Loan resulting from a Mandatory Borrowing
at a time when no Default or Event of Default shall exist), (iv) any repayment
or prepayment of the principal amount of a Eurodollar Advance, Competitive Bid
Loan or Swing Line Loan is made for any reason on a date which is prior to the
last day of the Interest Period applicable thereto (other than the repayment or
prepayment of a Swing Line Loan resulting from a Mandatory Borrowing at a time
 
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when no Default or Event of Default shall exist), or (v) the Borrower shall have
revoked a notice of prepayment or notice of termination of the Commitments, the
Swing Line Commitment and the Letter of Credit Commitment that was conditioned
upon the effectiveness of other credit facilities or the consummation of the
issuance of long term Indebtedness or equity securities pursuant to Section 2.6
or 2.7, the Borrower agrees to indemnify each Lender against, and to pay on
demand directly to such Lender the amount (calculated by such Lender using any
method chosen by such Lender which is customarily used by such Lender for such
purpose) equal to any loss or expense suffered by such Lender as a result of
such failure to borrow or Convert, or such termination, repayment, prepayment or
revocation, including any loss, cost or expense suffered by such Lender in
liquidating or employing deposits acquired to fund or maintain the funding of
such Eurodollar Advance, Competitive Bid Loan or Swing Line Loan, as the case
may be, or redeploying funds prepaid or repaid, in amounts which correspond to
such Eurodollar Advance, Competitive Bid Loan or Swing Line Loan, as the case
may be, and any reasonable internal processing charge customarily charged by
such Lender in connection therewith.
 

 
3.6
Reimbursement for Costs, Etc.

 
If at any time or from time to time there shall occur a Regulatory Change and
the Issuer or any Lender shall have reasonably determined that such Regulatory
Change (i) shall have had or will thereafter have the effect of reducing (A) the
rate of return on the Issuer’s or such Lender’s capital or the capital of any
Person directly or indirectly owning or controlling the Issuer or such Lender
(each a “Control Person”), or (B) the asset value (for capital purposes) to the
Issuer, such Lender or such Control Person, as applicable, of the Reimbursement
Obligations, or any participation therein, or the Loans, or any participation
therein, in any case to a level below that which the Issuer, such Lender or such
Control Person could have achieved or would thereafter be able to achieve but
for such Regulatory Change (after taking into account the Issuer’s, such
Lender’s or such Control Person’s policies regarding capital), (ii) will impose,
modify or deem applicable any reserve, asset, special deposit or special
assessment requirements on deposits obtained in the interbank eurodollar market
in connection with the Loan Documents (excluding, with respect to any Eurodollar
Advance, any such requirement which is included in the determination of the rate
applicable thereto), (iii) will subject the Issuer, such Lender or such Control
Person, as applicable, to any tax (documentary, stamp or otherwise) with respect
to this Agreement, any Note, or any Reimbursement Agreement, or (iv) will change
the basis of taxation of payments to the Issuer, such Lender or such Control
Person, as applicable, of principal, interest or fees payable under the Loan
Documents (except, in the case of clauses (iii) and (iv) above, for any tax or
changes in the rate of tax on the Issuer’s, such Lender’s or such Control
Person’s net income) then, in each such case, within ten days after demand by
the Issuer or such Lender, as applicable, the Borrower shall pay to the Issuer,
such Lender or such Control Person, as the case may be, such additional amount
or amounts as shall be sufficient to compensate the Issuer, such Lender or such
Control Person, as the case may be, for any such reduction, reserve or other
requirement, tax, loss, cost or expense (excluding general administrative and
overhead costs) (collectively, “Costs”) attributable to the Issuer’s, such
Lender’s or such Control Person’s
 
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compliance during the term hereof with such Regulatory Change. The Issuer and
each Lender may make multiple requests for compensation under this Section.
 
Notwithstanding the foregoing, the Borrower will not be required to compensate
any Lender for any Costs under this Section 3.6 arising prior to 45 days
preceding the date of demand, unless the applicable Regulatory Change giving
rise to such Costs is imposed retroactively. In the case of retroactivity, such
notice shall be provided to the Borrower not later than 45 days from the date
that such Lender learned of such Regulatory Change. The Borrower’s obligation to
compensate such Lender shall be contingent upon the provision of such timely
notice (but any failure by such Lender to provide such timely notice shall not
affect the Borrower’s obligations with respect to (i) Costs incurred from the
date as of which such Regulatory Change became effective to the date that is 45
days after the date such Lender reasonably should have learned of such
Regulatory Change and (ii) Costs incurred following the provision of such
notice).
 

 
3.7
Illegality of Funding

 
Notwithstanding any other provision hereof, if any Lender shall reasonably
determine that any law, regulation, treaty or directive, or any change therein
or in the interpretation or application thereof, shall make it unlawful for such
Lender to make or maintain any Eurodollar Advance as contemplated by this
Agreement, such Lender shall promptly notify the Borrower and the Administrative
Agent thereof, and (a) the commitment of such Lender to make such Eurodollar
Advances or Convert ABR Advances to such Eurodollar Advances shall forthwith be
suspended, (b) such Lender shall fund its portion of each requested Eurodollar
Advance as an ABR Advance and (c) such Lender’s Loans then outstanding as such
Eurodollar Advances, if any, shall be Converted automatically to an ABR Advance
on the last day of the then current Interest Period applicable thereto or at
such earlier time as may be required. If the commitment of any Lender with
respect to Eurodollar Advances is suspended pursuant to this Section and such
Lender shall have obtained actual knowledge that it is once again legal for such
Lender to make or maintain Eurodollar Advances, such Lender shall promptly
notify the Administrative Agent and the Borrower thereof and, upon receipt of
such notice by each of the Administrative Agent and the Borrower, such Lender’s
commitment to make or maintain Eurodollar Advances shall be reinstated. If the
commitment of any Lender with respect to Eurodollar Advances is suspended
pursuant to this Section, such suspension shall not otherwise affect such
Lender’s Commitment.
 

 
3.8
Option to Fund; Substituted Interest Rate

 
(a) Each Lender has indicated that, if the Borrower requests a Swing Line Loan,
a Eurodollar Advance or a Competitive Bid Loan, such Lender may wish to purchase
one or more deposits in order to fund or maintain its funding of its Commitment
Percentage of such Eurodollar Advance or its Swing Line Loan or Competitive Bid
Loan during the Interest Period with respect thereto; it being understood that
the provisions of this Agreement relating to such funding are included only for
the purpose of determining the rate of interest to be paid in respect of such
Swing Line Loan, Eurodollar Advance or Competitive Bid Loan and any amounts
owing under Sections 3.5 and 3.6. The Swing Line Lender and each Lender shall be
entitled to fund and maintain its funding of all or any part of each Swing Line
Loan, Eurodollar Advance and Competitive Bid Loan in any manner it sees fit, but
all such determinations hereunder shall be
 
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made as if such Lender had actually funded and maintained its Commitment
Percentage of each Eurodollar Advance or its Swing Line Loan or Competitive Bid
Loan, as the case may be, during the applicable Interest Period through the
purchase of deposits in an amount equal to the amount of its Commitment
Percentage of such Eurodollar Advance or the amount of such Swing Line Loan or
Competitive Bid Loan, as the case may be, and having a maturity corresponding to
such Interest Period. Each Lender may fund its Loans from or for the account of
any branch or office of such Lender as such Lender may choose from time to time,
subject to Section 3.10.
 
(b) In the event that (i) the Administrative Agent shall have determined in good
faith (which determination shall be conclusive and binding upon the Borrower)
that by reason of circumstances affecting the interbank eurodollar market either
adequate and reasonable means do not exist for ascertaining the Eurodollar Rate
applicable pursuant to Section 2.3 or Section 3.3, or (ii) the Required Lenders
shall have notified the Administrative Agent that they have in good faith
determined (which determination shall be conclusive and binding on the Borrower)
that the applicable Eurodollar Rate will not adequately and fairly reflect the
cost to such Lenders of maintaining or funding loans bearing interest based on
such Eurodollar Rate with respect to any portion of the Loans that the Borrower
has requested be made as Eurodollar Advances or any Eurodollar Advance that will
result from the requested conversion of any portion of the Loans into Eurodollar
Advances (each, an “Affected Advance”), the Administrative Agent shall promptly
notify the Borrower and the Lenders (by telephone or otherwise, to be promptly
confirmed in writing) of such determination on or, to the extent practicable,
prior to the requested Borrowing Date or conversion date for such Affected
Advances. If the Administrative Agent shall give such notice, (A) any Affected
Advances shall be made as ABR Advances (or, subject to the terms and conditions
hereof, Competitive Bid Loans), (B) the Loans (or any portion thereof) that were
to have been Converted to Affected Advances shall be Converted to or continued
as ABR Advances (or, subject to the terms and conditions hereof, Competitive Bid
Loans), and (C) any outstanding Affected Advances shall be Converted, on the
last day of the then current Interest Period with respect thereto, to ABR
Advances (or, subject to the terms and conditions hereof, Competitive Bid
Loans). Until any notice under clauses (i) or (ii), as the case may be, of this
Section 3.8(b) has been withdrawn by the Administrative Agent (by notice to the
Borrower) promptly upon either (x) the Administrative Agent having determined
that such circumstances affecting the relevant market no longer exist and that
adequate and reasonable means do exist for determining the Eurodollar Rate
pursuant to Section 2.3 or Section 3.3, or (y) the Administrative Agent having
been notified by such Required Lenders that circumstances no longer render the
Loans (or any portion thereof) Affected Advances, no further Eurodollar Advances
shall be required to be made by the Lenders nor shall the Borrower have the
right to Convert all or any portion of the Loans to Eurodollar Advances.
 

 
3.9
Certificates of Payment and Reimbursement

 
Each Issuer and each Lender agrees, in connection with any request by it for
payment or reimbursement pursuant to Section 3.5 or 3.6, to provide the Borrower
with a certificate, signed by an officer of the Issuer or such Lender, as the
case may be, setting forth a description in reasonable detail of any such
payment or reimbursement. Each determination by the
 
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Issuer and each Lender of such payment or reimbursement shall be conclusive
absent manifest error.
 

 
3.10
Taxes; Net Payments

 
(a) All payments made by the Borrower under the Loan Documents shall be made
free and clear of, and without reduction for or on account of, any taxes
required by law to be withheld from any amounts payable under the Loan
Documents. In the event that the Borrower is prohibited by law from making such
payments free of deductions or withholdings, then the Borrower shall pay such
additional amounts to the Administrative Agent, for the benefit of the Issuer
and the Lenders, as may be necessary in order that the actual amounts received
by the Issuer and the Lenders in respect of interest and any other amounts
payable under the Loan Documents after deduction or withholding (and after
payment of any additional taxes or other charges due as a consequence of the
payment of such additional amounts) shall equal the amount that would have been
received if such deduction or withholding were not required. In the event that
any such deduction or withholding can be reduced or nullified as a result of the
application of any relevant double taxation convention, the Lenders, the Issuer
and the Administrative Agent will, at the expense of the Borrower, cooperate
with the Borrower in making application to the relevant taxing authorities
seeking to obtain such reduction or nullification, provided that the Lenders,
the Issuer and the Administrative Agent shall have no obligation to (i) engage
in any litigation, hearing or proceeding with respect thereto or (ii) disclose
any tax return or other confidential information. If the Borrower shall make any
payment under this Section or shall make any deduction or withholding from
amounts paid under any Loan Document, the Borrower shall forthwith forward to
the Administrative Agent original or certified copies of official receipts or
other evidence acceptable to the Administrative Agent establishing each such
payment, deduction or withholding, as the case may be, and the Administrative
Agent in turn shall distribute copies thereof to the Issuer and each Lender. If
any payment to the Issuer or any Lender under any Loan Document is or becomes
subject to any withholding, the Issuer or such Lender, as the case may be, shall
(unless otherwise required by a Governmental Authority or as a result of any
law, rule, regulation, order or similar directive applicable to the Issuer or
such Lender, as the case may be) designate a different office or branch to which
such payment is to be made from that initially selected thereby, if such
designation would avoid such withholding and would not be otherwise
disadvantageous to the Issuer or such Lender, as the case may be, in any
respect. In the event that the Issuer or any Lender determines that it received
a refund or credit for taxes paid by the Borrower under this Section, the Issuer
or such Lender, as the case may be, shall promptly notify the Administrative
Agent and the Borrower of such fact and shall remit to the Borrower the amount
of such refund or credit applicable to the payments made by the Borrower in
respect of the Issuer or such Lender, as the case may be, under this Section.
 
(b) Any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under the Loan Documents shall deliver to the Borrower (with a copy to
the Administrative Agent), at the time or times prescribed by applicable law,
such properly completed and executed documentation prescribed by applicable law
or reasonably requested by the Borrower as will permit such payments to be made
without withholding or at a reduced rate. Notwithstanding any provision herein
to the contrary, the
 
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Borrower shall have no obligation to pay to any Lender any amount which the
Borrower is liable to withhold due to the failure of such Lender to file any
statement of exemption required by the Internal Revenue Code.
 

 
3.11
Fees

 
(a) Facility Fee. The Borrower agrees to pay to the Administrative Agent for the
pro rata account of each Lender a fee (the “Facility Fee”) during the period
commencing on the earlier to occur of the Caremark Merger Effective Date and
July 31, 2007 and ending on the Expiration Date, payable quarterly in arrears on
the last day of each March, June, September and December of each year,
commencing on the last day of the calendar quarter during which the Facility Fee
shall commence to accrue, and on the Expiration Date, at a rate per annum equal
to the Applicable Margin of (a) prior to the Commitment Termination Date or such
earlier date upon which all of the Commitments shall have been terminated in
accordance with Section 2.6, the Commitment Amount of such Lender (whether used
or unused), and (b) thereafter, the sum of (i) the outstanding principal balance
of all Revolving Credit Loans of such Lender, (ii) such Lender’s Swing Line
Exposure and (iii) such Lender’s Letter of Credit Exposure. Notwithstanding
anything to the contrary contained in this Section, on and after the Commitment
Termination Date, the Facility Fee shall be payable upon demand. In addition,
upon each reduction of the Aggregate Commitment Amount, the Borrower shall pay
the Facility Fee accrued on the amount of such reduction through the date of
such reduction. The Facility Fee shall be computed on the basis of a 360-day
year for the actual number of days elapsed.
 
(b) Utilization Fee. The Borrower agrees to pay to the Administrative Agent for
the account of each Lender a fee (the “Utilization Fee”) for each day during the
period commencing on the Effective Date and ending on the Expiration Date (or,
if later, the date when the Committed Credit Exposure of such Lender is $0) that
the sum of (i) the Aggregate Credit Exposure, (ii) the Aggregate Credit Exposure
(as defined in the Existing 2004 Five Year Credit Agreement), (iii) the
Aggregate Credit Exposure (as defined in the Existing 2005 Five Year Credit
Agreement), (iv) the Aggregate Credit Exposure (as defined in the Existing 2006
Five Year Credit Agreement) and (v) the Aggregate Credit Exposure (as defined in
the 2007 Five Year Credit Agreement) on such date exceeds 50% of the sum of (i)
the Aggregate Commitment Amount, (ii) the Aggregate Commitment Amount (as
defined in the Existing 2004 Five Year Credit Agreement), (iii) the Aggregate
Commitment Amount (as defined in the Existing 2005 Five Year Credit Agreement),
(iv) the Aggregate Commitment Amount (as defined in the Existing 2006 Five Year
Credit Agreement) and (v) the Aggregate Commitment Amount (as defined in the
2007 Five Year Credit Agreement) on such date, payable on each Interest Payment
Date (other than an Interest Payment Date applicable solely to Competitive Bid
Loans) or if Letters of Credit are outstanding, but no Revolving Credit Loans or
Swing Line Loans are outstanding, payable on each date that the Letter of Credit
Participation Fee is payable, at a rate per annum equal to the Applicable Margin
of the sum of (i) the Committed Credit Exposure of such Lender, (ii) the
Committed Credit Exposure (as defined in the Existing 2004 Five Year Credit
Agreement) of such Lender, (iii) the Committed Credit Exposure (as defined in
the Existing 2005 Five Year Credit Agreement) of such Lender, (iv) the Committed
Credit Exposure (as defined in the Existing 2006 Five Year Credit Agreement) and
(v) the Committed Credit Exposure (as defined in the 2007 Five Year Credit
Agreement) of such Lender on such date, less
 
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the sum of (i) the Utilization Fee (as defined in the Existing 2004 Five Year
Credit Agreement), (ii) the Utilization Fee (as defined in the Existing 2005
Five Year Credit Agreement), (iii) the Utilization Fee (as defined in the
Existing 2006 Five Year Credit Agreement) and (iv) the Utilization Fee (as
defined in the 2007 Five Year Credit Agreement), in each case payable to such
Lender for such day. Notwithstanding anything to the contrary contained in this
Section, on and after the Commitment Termination Date, the Utilization Fee shall
be payable upon demand. The Utilization Fee shall be computed on the basis of a
360-day year for the actual number of days elapsed.
 

 
3.12
Letter of Credit Participation Fee

 
The Borrower agrees to pay to the Administrative Agent for the pro rata account
of each Lender a fee (the “Letter of Credit Participation Fee”) with respect to
the Letters of Credit during the period commencing on the Effective Date and
ending on the Commitment Termination Date or, if later, the date when the Letter
of Credit Exposure of all Lenders is $0, payable quarterly in arrears on the
last day of each March, June, September and December of each year, commencing on
the last day of the calendar quarter in which the Effective Date shall have
occurred, and on the last date of such period, at a rate per annum equal to the
Applicable Margin of the average daily aggregate amount which may be drawn under
the Letters of Credit during such period (whether or not the conditions for
drawing thereunder have or may be satisfied) multiplied by such Lender’s
Commitment Percentage. The Letter of Credit Participation Fee shall be computed
on the basis of a 360-day year for the actual number of days elapsed.
 

 
3.13
Replacement of Lender

 
If the Borrower is obligated to pay to any Lender any amount under Section 3.6
or 3.10, the Borrower shall have the right within 90 days thereafter, in
accordance with the requirements of Section 11.7(b), if no Default or Event of
Default shall exist, to replace such Lender (the “Replaced Lender”) with one or
more other assignees (each a “Replacement Lender”), reasonably acceptable to the
Swing Line Lender and the Issuer, provided that (i) at the time of any
replacement pursuant to this Section, the Replacement Lender shall enter into
one or more Assignment and Acceptance Agreements pursuant to Section 11.7(b)
(with the processing and recordation fee referred to in Section 11.7(b) payable
pursuant to said Section 11.7(b) to be paid by the Replacement Lender) pursuant
to which the Replacement Lender shall acquire the Commitment, the outstanding
Loans, the Swing Line Exposure and the Letter of Credit Exposure of the Replaced
Lender and, in connection therewith, shall pay the following: (a) to the
Replaced Lender, an amount equal to the sum of (A) an amount equal to the
principal of, and all accrued interest on, all outstanding Loans and Swing Line
Participation Amounts of the Replaced Lender, (B) an amount equal to all
drawings on all Letters of Credit that have been funded by (and not reimbursed
to) such Replaced Lender, together with all then unpaid interest with respect
thereto at such time, and (C) an amount equal to all accrued, but unpaid, fees
owing to the Replaced Lender, (b) to the Issuer, an amount equal to such
Replaced Lender’s Commitment Percentage of all drawings (which at such time
remain unpaid drawings) to the extent such amount was not funded by such
Replaced Lender, (c) to the Swing Line Lender, an amount equal to such Replaced
Lender’s Commitment Percentage of any Mandatory Borrowing to the extent such
amount was not funded by such Replaced Lender, and (d) to the Administrative
Agent an amount equal to all
 
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amounts owed by such Replaced Lender to the Administrative Agent under this
Agreement, including, without limitation, an amount equal to the principal of,
and all accrued interest on, all outstanding Loans of the Replaced Lender, a
corresponding amount of which was made available by the Administrative Agent to
the Borrower pursuant to Section 3.1 and which has not been repaid to the
Administrative Agent by such Replaced Lender or the Borrower, and (ii) all
obligations of the Borrower owing to the Replaced Lender (other than those
specifically described in clause (i) above in respect of which the assignment
purchase price has been, or is concurrently being, paid) shall be paid in full
to such Replaced Lender concurrently with such replacement. Upon the execution
of the respective Assignment and Acceptance Agreements and the payment of
amounts referred to in clauses (i) and (ii) of this Section 3.13, the
Replacement Lender shall become a Lender hereunder and the Replaced Lender shall
cease to constitute a Lender hereunder, except with respect to indemnification
provisions under this Agreement that are intended to survive the termination of
the Commitments and the repayment of the Loans.
 
4.
REPRESENTATIONS AND WARRANTIES

 
In order to induce the Administrative Agent, the Lenders and the Issuer to enter
into this Agreement, the Lenders to make the Loans and the Issuer to issue
Letters of Credit, the Borrower hereby makes the following representations and
warranties to the Administrative Agent, the Lenders and the Issuer:
 

 
4.1
Existence and Power

 
Each of the Borrower and the Subsidiaries is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or
formation (except, in the case of the Subsidiaries, where the failure to be in
such good standing could not reasonably be expected to have a Material Adverse
effect), has all requisite corporate power and authority to own its Property and
to carry on its business as now conducted, and is qualified to do business as a
foreign corporation and is in good standing in each jurisdiction in which it
owns or leases real Property or in which the nature of its business requires it
to be so qualified (except those jurisdictions where the failure to be so
qualified or to be in good standing could not reasonably be expected to have a
Material Adverse effect).
 

 
4.2
Authority

 
The Borrower has full corporate power and authority to enter into, execute,
deliver and perform the terms of the Loan Documents, all of which have been duly
authorized by all proper and necessary corporate action and are not in
contravention of any applicable law or the terms of its Certificate of
Incorporation and By-Laws. No consent or approval of, or other action by,
shareholders of the Borrower, any Governmental Authority, or any other Person
(which has not already been obtained) is required to authorize in respect of the
Borrower, or is required in connection with the execution, delivery, and
performance by the Borrower of the Loan Documents or is required as a condition
to the enforceability of the Loan Documents against the Borrower.
 
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4.3
Binding Agreement

 
The Loan Documents constitute the valid and legally binding obligations of the
Borrower, enforceable in accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by equitable principles relating to the
availability of specific performance as a remedy.
 

 
4.4
Litigation

 
As at February 2, 2007, there were no actions, suits, arbitration proceedings or
claims (whether purportedly on behalf of the Borrower, any Subsidiary or
otherwise) pending or, to the knowledge of the Borrower, threatened against the
Borrower or any Subsidiary or any of their respective Properties, or maintained
by the Borrower or any Subsidiary, at law or in equity, before any Governmental
Authority which could reasonably be expected to have a Material Adverse effect.
There are no proceedings pending or, to the knowledge of the Borrower,
threatened against the Borrower or any Subsidiary (a) which call into question
the validity or enforceability of any Loan Document, or otherwise seek to
invalidate, any Loan Document, or (b) which might, individually or in the
aggregate, materially and adversely affect any of the transactions contemplated
by any Loan Document (it being understood that the Caremark Merger is not a
transaction contemplated by any Loan Document for purposes of this clause (b)).
 

 
4.5
No Conflicting Agreements

 
(a) Neither the Borrower nor any Subsidiary is in default under any agreement to
which it is a party or by which it or any of its Property is bound the effect of
which could reasonably be expected to have a Material Adverse effect. No notice
to, or filing with, any Governmental Authority is required for the due
execution, delivery and performance by the Borrower of the Loan Documents.
 
(b) No provision of any existing material mortgage, material indenture, material
contract or material agreement or of any existing statute, rule, regulation,
judgment, decree or order binding on the Borrower or any Subsidiary or affecting
the Property of the Borrower or any Subsidiary conflicts with, or requires any
consent which has not already been obtained under, or would in any way prevent
the execution, delivery or performance by the Borrower of the terms of, any Loan
Document. The execution, delivery or performance by the Borrower of the terms of
each Loan Document will not constitute a default under, or result in the
creation or imposition of, or obligation to create, any Lien upon the Property
of the Borrower or any Subsidiary pursuant to the terms of any such mortgage,
indenture, contract or agreement.
 

 
4.6
Taxes

 
The Borrower and each Subsidiary has filed or caused to be filed all tax
returns, and has paid, or has made adequate provision for the payment of, all
taxes shown to be due and payable on said returns or in any assessments made
against them, the failure of which to file or pay could reasonably be expected
to have a Material Adverse effect, and no tax Liens (other than Liens
 
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permitted under Section 8.2) have been filed against the Borrower or any
Subsidiary and no claims are being asserted with respect to such taxes which are
required by GAAP to be reflected in the Financial Statements and are not so
reflected, except for taxes which have been assessed but which are not yet due
and payable. The charges, accruals and reserves on the books of the Borrower and
each Subsidiary with respect to all federal, state, local and other taxes are
considered by the management of the Borrower to be adequate, and the Borrower
knows of no unpaid assessment which (a) could reasonably be expected to have a
Material Adverse effect, or (b) is or might be due and payable against it or any
Subsidiary or any Property of the Borrower or any Subsidiary, except such
thereof as are being contested in good faith and by appropriate proceedings
diligently conducted, and for which adequate reserves have been set aside in
accordance with GAAP or which have been assessed but are not yet due and
payable.
 

 
4.7
Compliance with Applicable Laws; Filings

 
Neither the Borrower nor any Subsidiary is in default with respect to any
judgment, order, writ, injunction, decree or decision of any Governmental
Authority which default could reasonably be expected to have a Material Adverse
effect. The Borrower and each Subsidiary is complying with all applicable
statutes, rules and regulations of all Governmental Authorities, a violation of
which could reasonably be expected to have a Material Adverse effect. The
Borrower and each Subsidiary has filed or caused to be filed with all
Governmental Authorities all reports, applications, documents, instruments and
information required to be filed pursuant to all applicable laws, rules,
regulations and requests which, if not so filed, could reasonably be expected to
have a Material Adverse effect.
 

 
4.8
Governmental Regulations

 
Neither the Borrower nor any Subsidiary nor any corporation controlling the
Borrower or any Subsidiary or under common control with the Borrower or any
Subsidiary is subject to regulation under the Investment Company Act of 1940, as
amended, or is subject to any statute or regulation which regulates the
incurrence of Indebtedness.
 

 
4.9
Federal Reserve Regulations; Use of Proceeds

 
The Borrower is not engaged principally, or as one of its important activities,
in the business of extending credit for the purpose of purchasing or carrying
any margin stock within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System, as amended. No part of the proceeds of the Loans or
the Letters of Credit has been or will be used, directly or indirectly, and
whether immediately, incidentally or ultimately, for a purpose which violates
any law, rule or regulation of any Governmental Authority, including, without
limitation, the provisions of Regulations T, U or X of the Board of Governors of
the Federal Reserve System, as amended. Anything in this Agreement to the
contrary notwithstanding, neither the Issuer nor any Lender shall be obligated
to extend credit to or on behalf of the Borrower in violation of any limitation
or prohibition provided by any applicable law, regulation or statute, including
said Regulation U. Following application of the proceeds of each Loan and the
issuance of each Letter of Credit, not more than 25% (or such greater or lesser
percentage as is provided in the exclusions from the definition of “Indirectly
Secured” contained in said Regulation U as in effect at the time of the
 
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making of such Loan or issuance of such Letter of Credit) of the value of the
assets of the Borrower and the Subsidiaries on a Consolidated basis that are
subject to Section 8.2 will be Margin Stock. In addition, no part of the
proceeds of any Loan or Letter of Credit will be used, whether directly or
indirectly, and whether immediately, incidentally or ultimately, to make a loan
to any director or executive officer of the Borrower or any Subsidiary.
 

 
4.10
No Misrepresentation

 
No representation or warranty contained in any Loan Document and no certificate
or written report furnished by the Borrower to the Administrative Agent or any
Lender pursuant to any Loan Document contains or will contain, as of its date, a
misstatement of material fact, or omits or will omit to state, as of its date, a
material fact required to be stated in order to make the statements therein
contained not misleading in the light of the circumstances under which made (it
being understood that the Borrower makes no representation or warranty hereunder
with respect to any projections or other forward looking information).
 

 
4.11
Plans

 
Each Employee Benefit Plan of the Borrower, each Subsidiary and each ERISA
Affiliate is in compliance with ERISA and the Internal Revenue Code, where
applicable, except where the failure to so comply would not be material. The
Borrower, each Subsidiary and each ERISA Affiliate have complied with the
material requirements of Section 515 of ERISA with respect to each Pension Plan
which is a Multiemployer Plan, except where the failure to so comply would not
be material. The Borrower, each Subsidiary and each ERISA Affiliate has, as of
the date hereof, made all contributions or payments to or under each Pension
Plan required by law or the terms of such Pension Plan or any contract or
agreement. No liability to the PBGC has been, or is reasonably expected by the
Borrower, any Subsidiary or any ERISA Affiliate to be, incurred by the Borrower,
any Subsidiary or any ERISA Affiliate. Liability, as referred to in this Section
4.11, includes any joint and several liability, but excludes any current or, to
the extent it represents future liability in the ordinary course, any future
liability for premiums under Section 4007 of ERISA. Each Employee Benefit Plan
which is a group health plan within the meaning of Section 5000(b)(1) of the
Internal Revenue Code is in material compliance with the continuation of health
care coverage requirements of Section 4980B of the Internal Revenue Code and
with the portability, nondiscrimination and other requirements of Sections 9801,
9802, 9803, 9811 and 9812 of the Internal Revenue Code.
 

 
4.12
Environmental Matters

 
Neither the Borrower nor any Subsidiary (a) has received written notice or
otherwise learned of any claim, demand, action, event, condition, report or
investigation indicating or concerning any potential or actual liability which
individually or in the aggregate could reasonably be expected to have a Material
Adverse effect, arising in connection with (i) any non-compliance with or
violation of the requirements of any applicable federal, state or local
environmental health or safety statute or regulation, or (ii) the release or
threatened release of any toxic or hazardous waste, substance or constituent, or
other substance into the environment, (b) to the best knowledge of the Borrower,
has any threatened or actual liability in connection with the release or
threatened
 
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release of any toxic or hazardous waste, substance or constituent, or other
substance into the environment which individually or in the aggregate could
reasonably be expected to have a Material Adverse effect, (c) has received
notice of any federal or state investigation evaluating whether any remedial
action is needed to respond to a release or threatened release of any toxic or
hazardous waste, substance or constituent or other substance into the
environment for which the Borrower or any Subsidiary is or would be liable,
which liability would reasonably be expected to have a Material Adverse effect,
or (d) has received notice that the Borrower or any Subsidiary is or may be
liable to any Person under the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, 42 U.S.C. Section 9601 et seq., or
any analogous state law, which liability would reasonably be expected to have a
Material Adverse effect. The Borrower and each Subsidiary is in compliance with
the financial responsibility requirements of federal and state environmental
laws to the extent applicable, including those contained in 40 C.F.R., parts 264
and 265, subpart H, and any analogous state law, except in those cases in which
the failure so to comply would not reasonably be expected to have a Material
Adverse effect.
 
4.13 Financial Statements
 
The Borrower has heretofore delivered to the Lenders through the Administrative
Agent copies of the audited Consolidated Balance Sheet of the Borrower and its
Subsidiaries as of December 30, 2006, and the related Consolidated Statements of
Operations, Shareholders’ Equity and Cash Flows for the fiscal year then ended.
The financial statements referred to immediately above, including all related
notes and schedules, are herein referred to collectively as the “Financial
Statements”. The Financial Statements fairly present the Consolidated financial
condition and results of the operations of the Borrower and the Subsidiaries as
of the dates and for the periods indicated therein and, except as noted therein,
have been prepared in conformity with GAAP as then in effect. Neither the
Borrower nor any of the Subsidiaries has any obligation or liability of any kind
(whether fixed, accrued, contingent, unmatured or otherwise) which, in
accordance with GAAP as then in effect, should have been disclosed in the
Financial Statements and was not. During the period from December 30, 2006 to
and including February 2, 2007 there was no Material Adverse change, including
as a result of any change in law, in the consolidated financial condition,
operations, business or Property of the Borrower and the Subsidiaries taken as a
whole.
 
5.
CONDITIONS OF LENDING - FIRST LOANS AND LETTERS OF CREDIT ON THE FIRST BORROWING
DATE

 
In addition to the requirements set forth in Section 6, the obligation of each
Lender on the first Borrowing Date to make one or more Revolving Credit Loans,
the Swing Line Lender to make one or more Swing Line Loans, the Issuer to issue
one or more Letters of Credit and any Lender to make a Competitive Bid Loan are
subject to the fulfillment of the following conditions precedent prior to or
simultaneously with the Effective Date:
 
5.1 Evidence of Corporate Action
 
The Administrative Agent shall have received a certificate, dated the Effective
Date, of the Secretary or an Assistant Secretary of the Borrower (i) attaching a
true and complete copy of
 
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the resolutions of its Board of Directors and of all documents evidencing all
other necessary corporate action (in form and substance reasonably satisfactory
to the Administrative Agent) taken by the Borrower to authorize the Loan
Documents and the transactions contemplated thereby, (ii) attaching a true and
complete copy of its Certificate of Incorporation and By-Laws, (iii) setting
forth the incumbency of the officer or officers of the Borrower who may sign the
Loan Documents and any other certificates, requests, notices or other documents
now or in the future required thereunder, and (iv) attaching a certificate of
good standing of the Secretary of State of the State of Delaware.
 
5.2 Notes
 
The Administrative Agent shall have received a Note for each Lender that shall
have requested one, executed by the Borrower.
 
5.3 Opinion of Counsel to the Borrower
 
The Administrative Agent shall have received:
 
(a)  an opinion of Zenon Lankowsky, counsel to the Borrower, dated the Effective
Date, and in the form of Exhibit D-1; and
 
(b) an opinion of Davis Polk & Wardwell, special counsel to the Borrower, dated
the Effective Date, and in the form of Exhibit D-2.
 
6.
CONDITIONS OF LENDING - ALL LOANS AND LETTERS OF CREDIT

 
The obligation of each Lender on any Borrowing Date to make each Revolving
Credit Loan (other than a Revolving Credit Loan constituting a Mandatory
Borrowing), the Swing Line Lender to make each Swing Line Loan, the Issuer to
issue each Letter of Credit and any Lender to make a Competitive Bid Loan are
subject to the fulfillment of the following conditions precedent:
 
6.1 Compliance
 
On each Borrowing Date, and after giving effect to the Loans to be made or the
Letters of Credit to be issued on such Borrowing Date, (a) there shall exist no
Default or Event of Default, and (b) the representations and warranties
contained in this Agreement shall be true and correct with the same effect as
though such representations and warranties had been made on such Borrowing Date,
except those which are expressly specified to be made as of an earlier date.
 
6.2 Requests
 
The Administrative Agent shall have received either or both, as applicable, of a
Borrowing Request or a Letter of Credit Request from the Borrower.
 
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6.3 Loan Closings
 
All documents required by the provisions of this Agreement to have been executed
or delivered by the Borrower to the Administrative Agent, any Lender or the
Issuer on or before the applicable Borrowing Date shall have been so executed or
delivered on or before such Borrowing Date.
 
7.
AFFIRMATIVE COVENANTS

 
The Borrower covenants and agrees that on and after the Effective Date and until
the later to occur of (a) the Commitment Termination Date and (b) the payment in
full of the Loans, the Reimbursement Obligations, the Fees and all other sums
payable under the Loan Documents, the Borrower will:
 
7.1 Legal Existence
 
Except as may otherwise be permitted by Sections 8.3 and 8.4, maintain, and
cause each Subsidiary to maintain, its corporate existence in good standing in
the jurisdiction of its incorporation or formation and in each other
jurisdiction in which the failure so to do could reasonably be expected to have
a Material Adverse effect, except that the corporate existence of Subsidiaries
operating closing or discontinued operations may be terminated.
 
7.2 Taxes
 
Pay and discharge when due, and cause each Subsidiary so to do, all taxes,
assessments, governmental charges, license fees and levies upon or with respect
to the Borrower and such Subsidiary, and upon the income, profits and Property
thereof unless, and only to the extent, that either (i)(a) such taxes,
assessments, governmental charges, license fees and levies shall be contested in
good faith and by appropriate proceedings diligently conducted by the Borrower
or such Subsidiary, and (b) such reserve or other appropriate provision as shall
be required by GAAP shall have been made therefor, or (ii) the failure to pay or
discharge such taxes, assessments, governmental charges, license fees and levies
could not reasonably be expected to have a Material Adverse effect.
 
7.3 Insurance
 
Keep, and cause each Subsidiary to keep, insurance with responsible insurance
companies in such amounts and against such risks as is usually carried by the
Borrower or such Subsidiary.
 
7.4 Performance of Obligations
 
Pay and discharge promptly when due, and cause each Subsidiary so to do, all
lawful Indebtedness, obligations and claims for labor, materials and supplies or
otherwise which, if unpaid, could reasonably be expected to (a) have a Material
Adverse effect, or (b) become a Lien on the Property of the Borrower or any
Subsidiary, except those Liens permitted under Section 8.2, provided that
neither the Borrower nor such Subsidiary shall be required to pay or discharge
or
 
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cause to be paid or discharged any such Indebtedness, obligation or claim so
long as (i) the validity thereof shall be contested in good faith and by
appropriate proceedings diligently conducted by the Borrower or such Subsidiary,
and (ii) such reserve or other appropriate provision as shall be required by
GAAP shall have been made therefor.
 
7.5 Condition of Property
 
Except for ordinary wear and tear, at all times, maintain, protect and keep in
good repair, working order and condition, all material Property necessary for
the operation of its business (other than Property which is replaced with
similar Property) as then being operated, and cause each Subsidiary so to do.
 
7.6 Observance of Legal Requirements
 
Observe and comply in all material respects, and cause each Subsidiary so to do,
with all laws, ordinances, orders, judgments, rules, regulations,
certifications, franchises, permits, licenses, directions and requirements of
all Governmental Authorities, which now or at any time hereafter may be
applicable to it or to such Subsidiary, a violation of which could reasonably be
expected to have a Material Adverse effect.
 
7.7 Financial Statements and Other Information
 
Maintain, and cause each Subsidiary to maintain, a standard system of accounting
in accordance with GAAP, and furnish to each Lender:
 
(a) As soon as available and, in any event, within 120 days after the close of
each fiscal year, a copy of (x) the Borrower’s 10-K in respect of such fiscal
year, and (y) (i) the Borrower’s Consolidated Balance Sheet as of the end of
such fiscal year, and (ii) the related Consolidated Statements of Operations,
Shareholders’ Equity and Cash Flows, as of and through the end of such fiscal
year, setting forth in each case in comparative form the corresponding figures
in respect of the previous fiscal year, all in reasonable detail, and
accompanied by a report of the Borrower’s auditors, which report shall state
that (A) such auditors audited such financial statements, (B) such audit was
made in accordance with generally accepted auditing standards in effect at the
time and provides a reasonable basis for such opinion, and (C) said financial
statements have been prepared in accordance with GAAP;
 
(b) As soon as available, and in any event within 60 days after the end of each
of the first three fiscal quarters of each fiscal year, a copy of (x) the
Borrower’s 10-Q in respect of such fiscal quarter, and (y) (i) the Borrower’s
Consolidated Balance Sheet as of the end of such quarter and (ii) the related
Consolidated Statements of Operations, Shareholders’ Equity and Cash Flows for
(A) such quarter and (B) the period from the beginning of the then current
fiscal year to the end of such quarter, in each case in comparable form with the
prior fiscal year, all in reasonable detail and prepared in accordance with GAAP
(without footnotes and subject to year-end adjustments);
 
(c) Simultaneously with the delivery of the financial statements required by
clauses (a) and (b) above, a certificate of the chief financial officer or
treasurer of the Borrower
 
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certifying that no Default or Event of Default shall have occurred or be
continuing or, if so, specifying in such certificate all such Defaults and
Events of Default, and setting forth computations in reasonable detail
demonstrating compliance with Sections 8.1 and 8.9.
 
(d) Prompt notice upon the Borrower becoming aware of any change in a Pricing
Level;
 
(e) Promptly upon becoming available, copies of all regular or periodic reports
(including current reports on Form 8-K) which the Borrower or any Subsidiary may
now or hereafter be required to file with or deliver to the Securities and
Exchange Commission, or any other Governmental Authority succeeding to the
functions thereof, and copies of all material news releases sent to all
stockholders;
 
(f) Prompt written notice of: (i) any citation, summons, subpoena, order to show
cause or other order naming the Borrower or any Subsidiary a party to any
proceeding before any Governmental Authority which could reasonably be expected
to have a Material Adverse effect, and include with such notice a copy of such
citation, summons, subpoena, order to show cause or other order, (ii) any lapse
or other termination of any license, permit, franchise or other authorization
issued to the Borrower or any Subsidiary by any Governmental Authority, (iii)
any refusal by any Governmental Authority to renew or extend any license,
permit, franchise or other authorization, and (iv) any dispute between the
Borrower or any Subsidiary and any Governmental Authority, which lapse,
termination, refusal or dispute, referred to in clause (ii), (iii) or (iv)
above, could reasonably be expected to have a Material Adverse effect;
 
(g) Prompt written notice of the occurrence of (i) each Default, (ii) each Event
of Default and (iii) each Material Adverse change;
 
(h) Promptly upon receipt thereof, copies of any audit reports delivered in
connection with the statements referred to in Section 7.7(a);
 
(i) From time to time, such other information regarding the financial position
or business of the Borrower and the Subsidiaries as the Administrative Agent, at
the request of any Lender, may reasonably request; and
 
(j) Prompt written notice of such other information with documentation required
by bank regulatory authorities under applicable “know your customer” and
Anti-Money Laundering rules and regulations (including, without limitation, the
Patriot Act), as from time to time may be reasonably requested by the
Administrative Agent or any Lender.
 
7.8 Records
 
Upon reasonable notice and during normal business hours, permit representatives
of the Administrative Agent and each Lender to visit the offices of the Borrower
and each Subsidiary, to examine the books and records (other than tax returns
and work papers related to tax returns) thereof and auditors’ reports relating
thereto, to discuss the affairs of the Borrower and each Subsidiary with the
respective officers thereof, and to meet and discuss the affairs of the Borrower
and each Subsidiary with the Borrower’s auditors.
 
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7.9 Authorizations
 
Maintain and cause each Subsidiary to maintain, in full force and effect, all
copyrights, patents, trademarks, trade names, franchises, licenses, permits,
applications, reports, and other authorizations and rights, which, if not so
maintained, would individually or in the aggregate have a Material Adverse
effect.
 
8.
NEGATIVE COVENANTS

 
The Borrower covenants and agrees that on and after the Effective Date and until
the later to occur of (a) the Commitment Termination Date and (b) the payment in
full of the Loans, the Reimbursement Obligations, the Fees and all other sums
which are payable under the Loan Documents, the Borrower will not:
 
8.1 Subsidiary Indebtedness
 
Permit the Indebtedness of all Subsidiaries (excluding the ESOP Guaranty) to
exceed (on a combined basis) 10% of Tangible Net Worth.
 
8.2 Liens
 
Create, incur, assume or suffer to exist any Lien against or on any Property now
owned or hereafter acquired by the Borrower or any of the Subsidiaries, or
permit any of the Subsidiaries so to do, except any one or more of the following
types of Liens: (a) Liens in connection with workers’ compensation, unemployment
insurance or other social security obligations (which phrase shall not be
construed to refer to ERISA or the minimum funding obligations under Section 412
of the Code), (b) Liens to secure the performance of bids, tenders, letters of
credit, contracts (other than contracts for the payment of Indebtedness),
leases, statutory obligations, surety, customs, appeal, performance and payment
bonds and other obligations of like nature, in each such case arising in the
ordinary course of business, (c) mechanics’, workmen’s, carriers’,
warehousemen’s, materialmen’s, landlords’ or other like Liens arising in the
ordinary course of business with respect to obligations which are not due or
which are being contested in good faith and by appropriate proceedings
diligently conducted, (d) Liens for taxes, assessments, fees or governmental
charges the payment of which is not required by Section 7.2, (e) easements,
rights of way, restrictions, leases of Property to others, easements for
installations of public utilities, title imperfections and restrictions, zoning
ordinances and other similar encumbrances affecting Property which in the
aggregate do not materially impair its use for the operation of the business of
the Borrower or such Subsidiary, (f) Liens on Property of the Subsidiaries under
capital leases and Liens on Property of the Subsidiaries acquired (whether as a
result of purchase, capital lease, merger or other acquisition) and either
existing on such Property when acquired, or created contemporaneously with or
within 12 months of such acquisition to secure the payment or financing of the
purchase price of such Property (including the construction, development,
substantial repair, alteration or improvement thereof), and any renewals
thereof, provided that such Liens attach only to the Property so purchased or
acquired (including any such construction, development, substantial repair,
alteration or improvement thereof) and provided further that the Indebtedness
secured by such Liens is permitted by Section 8.1, (g) statutory Liens in favor
of
 
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lessors arising in connection with Property leased to the Borrower or any of the
Subsidiaries, (h) Liens of attachments, judgments or awards against the Borrower
or any of the Subsidiaries with respect to which an appeal or proceeding for
review shall be pending or a stay of execution or bond shall have been obtained,
or which are otherwise being contested in good faith and by appropriate
proceedings diligently conducted, and in respect of which adequate reserves
shall have been established in accordance with GAAP on the books of the Borrower
or such Subsidiary, (i) Liens securing Indebtedness of a Subsidiary to the
Borrower or another Subsidiary, (j) Liens (other than Liens permitted by any of
the foregoing clauses) arising in the ordinary course of its business which do
not secure Indebtedness and do not, in the aggregate, materially detract from
the value of the business of the Borrower and its Subsidiaries, taken as a
whole, and (k) additional Liens securing Indebtedness of the Borrower and the
Subsidiaries in an aggregate outstanding Consolidated principal amount not
exceeding 10% of Tangible Net Worth.
 
8.3 Dispositions
 
Make any Disposition, or permit any of its Subsidiaries so to do, of all or
substantially all of the assets of the Borrower and the Subsidiaries on a
Consolidated basis.
 
8.4 Merger or Consolidation, Etc.
 
The Borrower will not consolidate with, be acquired by, or merge into or with
any Person unless (x) immediately after giving effect thereto no Default or
Event of Default shall or would exist and (y) either (i) the Borrower or (ii) a
corporation organized and existing under the laws of one of the States of the
United States of America shall be the survivor of such consolidation or merger,
provided that if the Borrower is not the survivor, the corporation which is the
survivor shall expressly assume, pursuant to an instrument executed and
delivered to the Administrative Agent, and in form and substance satisfactory to
the Administrative Agent, all obligations of the Borrower under the Loan
Documents and the Administrative Agent shall have received such documents,
opinions and certificates as it shall have reasonable requested in connection
therewith.
 
8.5 Acquisitions
 
Make any Acquisition, or permit any of the Subsidiaries so to do, except any one
or more of the following: (a) Intercompany Dispositions permitted by Section 8.3
and (b) Acquisitions by the Borrower or any of the Subsidiaries (including the
Caremark Merger), provided that immediately before and after giving effect to
each such Acquisition no Default or Event of Default shall or would exist.
 
8.6 Restricted Payments
 
Make any Restricted Payment or permit any of the Subsidiaries so to do, except
any one or more of the following Restricted Payments: (a) any direct or indirect
Subsidiary may make dividends or other distributions to the Borrower or to any
other direct or indirect Subsidiary, and (b) the Borrower may make Restricted
Payments, provided that, in the case of this clause (b), immediately before and
after giving effect thereto, no Event of Default shall or would exist.
 
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Nothing in this Section 8.6 shall prohibit or restrict the declaration or
payment of dividends in respect of the Series One ESOP Convertible Preferred
Stock of the Borrower.
 
8.7 Limitation on Upstream Dividends by Subsidiaries
 
Permit or cause any of the Subsidiaries to enter into or agree, or otherwise be
or become subject, to any agreement, contract or other arrangement (other than
this Agreement) with any Person (each a “Restrictive Agreement”) pursuant to the
terms of which (a) such Subsidiary is or would be prohibited from declaring or
paying any cash dividends on any class of its stock owned directly or indirectly
by the Borrower or any of the other Subsidiaries or from making any other
distribution on account of any class of any such stock (herein referred to as
“Upstream Dividends”), or (b) the declaration or payment of Upstream Dividends
by a Subsidiary to the Borrower or another Subsidiary, on an annual or
cumulative basis, is or would be otherwise limited or restricted (“Dividend
Restrictions”). Notwithstanding the foregoing, nothing in this Section 8.7 shall
prohibit:
 
(i) Dividend Restrictions set forth in any Restrictive Agreement in effect on
the date hereof and any extensions, refinancings, renewals or replacements
thereof, provided that the Dividend Restrictions in any such extensions,
refinancings, renewals or replacements are no less favorable in any material
respect to the Lenders than those Dividend Restrictions that are then in effect
and that are being extended, refinanced, renewed or replaced;
 
(ii) Dividend Restrictions existing with respect to any Person acquired by the
Borrower or any Subsidiary and existing at the time of such acquisition, which
Dividend Restrictions are not applicable to any Person or the property or assets
of any Person other than such Person or its property or assets acquired, and any
extensions, refinancings, renewals or replacements of any of the foregoing,
provided that the Dividend Restrictions in any such extensions, refinancings,
renewals or replacements are no less favorable in any material respect to the
Lenders than those Dividend Restrictions that are then in effect and that are
being extended, refinanced, renewed or replaced;
 
(iii) Dividend Restrictions consisting of customary net worth, leverage and
other financial covenants, customary covenants regarding the merger of or sale
of assets of a Subsidiary, customary restrictions on transactions with
affiliates, and customary subordination provisions governing Indebtedness owed
to the Borrower or any Subsidiary, in each case contained in, or required by,
any agreement governing Indebtedness incurred by a Subsidiary in accordance with
Section 8.1; or
 
(iv) Dividend Restrictions contained in any other credit agreement so long as
such Dividend Restrictions are no more restrictive than those contained in this
Agreement (including Dividend Restrictions contained in the Existing 2004 Five
Year Credit Agreement, the Existing 2005 Five Year Credit Agreement, the
Existing 2006 Five Year Credit Agreement, the 2007 Bridge Credit Agreement and
the 2007 Five Year Credit Agreement).
 
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8.8 Limitation on Negative Pledges
 
Enter into any agreement, other than (i) this Agreement, (ii) the 2007 Bridge
Credit Agreement, (iii) the 2007 Five Year Credit Agreement, (iv) any other
credit agreement that is substantially similar to this Agreement, and (v)
purchase money mortgages or capital leases permitted by this Agreement (in which
cases, any prohibition or limitation shall only be effective against the assets
financed thereby), or permit any Subsidiary so to do, which prohibits or limits
the ability of the Borrower or such Subsidiary to create, incur, assume or
suffer to exist any Lien upon any of its Property or revenues, whether now owned
or hereafter acquired to secure the obligations of the Borrower hereunder.
 
8.9 Ratio of Consolidated Indebtedness to Total Capitalization
 
Permit its ratio of Consolidated Indebtedness to Total Capitalization at the end
of any fiscal quarter to exceed 0.6 : 1.0.
 
8.10 Caremark Merger
 
(a) Amend the Caremark Merger Agreement if such amendment has the effect of (i)
increasing the purchase price to be paid by the Borrower thereunder by a
material amount, (ii) increasing the liabilities of the Borrower thereunder by a
material amount, or (iii) decreasing the assets being acquired thereunder by the
Borrower by a material amount, in each case, without the consent of the
Administrative Agent.
 
(b) Waive any material condition to the obligations of the sellers under the
Caremark Merger Agreement to consummate the transactions contemplated by the
Caremark Merger Agreement without the consent of the Administrative Agent.
 
9.
DEFAULT

 
9.1 Events of Default
 
The following shall each constitute an “Event of Default” hereunder:
 
(a) The failure of the Borrower to make any payment of principal on any Loan or
any reimbursement payment in respect of any Letter of Credit when due and
payable; or
 
(b) The failure of the Borrower to make any payment of interest on any Loan or
of any Fee on any date when due and payable and such default shall continue
unremedied for a period of 5 Domestic Business Days after the same shall be due
and payable; or
 
(c) The failure of the Borrower to observe or perform any covenant or agreement
contained in Sections 2.5, 7.1 or in Section 8; or
 
(d) The failure of the Borrower to observe or perform any other covenant or
agreement contained in this Agreement, and such failure shall have continued
unremedied for a period of 30 days after the Borrower shall have become aware of
such failure; or
 
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(e) An Event of Default (as defined in any Reimbursement Agreement) shall occur
under any Reimbursement Agreement; or
 
(f) Any representation or warranty of the Borrower (or of any of its officers on
its behalf) made in any Loan Document, or made in any certificate, report,
opinion (other than an opinion of counsel) or other document delivered on or
after the date hereof shall in any such case prove to have been incorrect or
misleading (whether because of misstatement or omission) in any material respect
when made; or
 
(g) (i) Obligations in an aggregate Consolidated amount in excess of $25,000,000
of the Borrower (other than its obligations hereunder and under the Notes) and
the Subsidiaries, whether as principal, guarantor, surety or other obligor, for
the payment of any Indebtedness or any net liability under interest rate swap,
collar, exchange or cap agreements, (A) shall become or shall be declared to be
due and payable prior to the expressed maturity thereof, or (B) shall not be
paid when due or within any grace period for the payment thereof, or (ii) any
holder of any such obligations shall have the right to declare the Indebtedness
evidenced thereby due and payable prior to its stated maturity; or
 
(h) An involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of the Borrower or any Subsidiary or its debts, or of a substantial part
of its assets, under any federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any Subsidiary or for a substantial part of its assets, and,
in any such case, such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing shall be
entered; or
 
(i) The Borrower or any Subsidiary shall (i) voluntarily commence any proceeding
or file any petition seeking liquidation, reorganization or other relief under
any federal, state or foreign bankruptcy, insolvency, receivership or similar
law now or hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition described
in clause (h) of this Article, (iii) apply for or consent to the appointment of
a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any Subsidiary or for a substantial part of its assets, (iv)
file an answer admitting the material allegations of a petition filed against it
in any such proceeding, (v) make a general assignment for the benefit of
creditors or (vi) take any action for the purpose of effecting any of the
foregoing; or
 
(j) The Borrower or any Subsidiary shall (i) suspend or discontinue its business
(except for store closings in the ordinary course of business and except in
connection with a permitted Disposition under Section 8.3 and as may otherwise
be expressly permitted herein), or (ii) generally not be paying its debts as
such debts become due, or (iii) admit in writing its inability to pay its debts
as they become due; or
 
(k) Judgments or decrees in an aggregate Consolidated amount in excess of
$25,000,000 against the Borrower and the Subsidiaries shall remain unpaid,
unstayed on appeal,
 
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undischarged, unbonded or undismissed for a period of 60 days during which
execution shall not be effectively stayed, or any action shall be legally taken
by a judgment creditor to attach or levy upon any assets of the Borrower or any
Subsidiary to enforce any such judgment; or
 
(l) After the Effective Date a Change of Control shall occur; or
 
(m) (i) Any Termination Event shall occur (x) with respect to any Pension Plan
(other than a Multiemployer Plan) or (y) with respect to any other retirement
plan subject to Section 302 of ERISA or Section 412 of the Internal Revenue
Code, which plan, during the five year period prior to such Termination Event,
was the responsibility in whole or in part of the Borrower, any Subsidiary or
any ERISA Affiliate, provided that this clause (y) shall only apply if, in
connection with such Termination Event, it is reasonably likely that liability
in an aggregate Consolidated amount in excess of $25,000,000 will be imposed
upon the Borrower, any Subsidiary or any ERISA Affiliate; (ii) any Accumulated
Funding Deficiency, whether or not waived, in an aggregate Consolidated amount
in excess of $25,000,000 shall exist with respect to any Pension Plan (other
than that portion of a Multiemployer Plan’s Accumulated Funding Deficiency to
the extent such Accumulated Funding Deficiency is attributable to employers
other than Borrower, any Subsidiary or any ERISA Affiliate); (iii) any Person
shall engage in any Prohibited Transaction involving any Employee Benefit Plan;
(iv) the Borrower, any Subsidiary or any ERISA Affiliate shall fail to pay when
due an amount which is payable by it to the PBGC or to a Pension Plan (including
a Multiemployer Plan) under Title IV of ERISA; (v) the imposition of any tax
under Section 4980(B)(a) of the Internal Revenue Code; or (vi) the assessment of
a civil penalty with respect to any Employee Benefit Plan under Section 502(c)
of ERISA; in each case, to the extent such event or condition would have a
Material Adverse effect.
 
9.2 Remedies
 
(a) Upon the occurrence of an Event of Default or at any time thereafter during
the continuance of an Event of Default, the Administrative Agent, at the written
request of the Required Lenders, shall notify the Borrower that the Commitments,
the Swing Line Commitment and the Letter of Credit Commitment have been
terminated and/or that all of the Loans, the Notes and the Reimbursement
Obligations and all accrued and unpaid interest on any thereof and all other
amounts owing under the Loan Documents have been declared immediately due and
payable, provided that upon the occurrence of an Event of Default under Section
9.1(h), (i) or (j) with respect to the Borrower, the Commitments, the Swing Line
Commitment and the Letter of Credit Commitment shall automatically terminate and
all of the Loans, the Notes and the Reimbursement Obligations and all accrued
and unpaid interest on any thereof and all other amounts owing under the Loan
Documents shall become immediately due and payable without declaration or notice
to the Borrower. To the fullest extent not prohibited by law, except for the
notice provided for in the preceding sentence, the Borrower expressly waives any
presentment, demand, protest, notice of protest or other notice of any kind in
connection with the Loan Documents and its obligations thereunder. To the
fullest extent not prohibited by law, the Borrower further expressly waives and
covenants not to assert any appraisement, valuation, stay, extension, redemption
or similar law, now or at any time hereafter in force which might delay, prevent
or otherwise impede the performance or enforcement of the Loan Documents.
 
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(b) In the event that the Commitments, the Swing Line Commitment and the Letter
of Credit Commitment shall have been terminated or all of the Loans, the Notes
and the Reimbursement Obligations shall have been declared due and payable
pursuant to the provisions of this Section, (i) the Borrower shall forthwith
deposit an amount equal to the Letter of Credit Exposure in a cash collateral
account with and under the exclusive control of the Administrative Agent, and
(ii) the Administrative Agent, the Issuer and the Lenders agree, among
themselves, that any funds received from or on behalf of the Borrower under any
Loan Document by the Issuer or any Lender (except funds received by the Issuer
or any Lender as a result of a purchase from the Issuer or such Lender, as the
case may be, pursuant to the provisions of Section 11.9(b)) shall be remitted to
the Administrative Agent, and shall be applied by the Administrative Agent in
payment of the Loans, the Reimbursement Obligations and the other obligations of
the Borrower under the Loan Documents in the following manner and order: (1)
first, to reimburse the Administrative Agent, the Issuer and the Lenders, in
that order, for any expenses due from the Borrower pursuant to the provisions of
Section 11.5 and the Reimbursement Agreements, (2) second, to the payment of the
Fees, (3) third, to the payment of any expenses or amounts (other than the
principal of and interest on the Loans and the Notes and the Reimbursement
Obligations) payable by the Borrower to the Administrative Agent, the Issuer or
any of the Lenders under the Loan Documents, (4) fourth, to the payment, pro
rata according to the outstanding principal balance of the Loans and the Letter
of Credit Exposure of each Lender, of interest due on the Loans and the
Reimbursement Obligations, (5) fifth, to the payment, pro rata according to the
sum of (A) the aggregate outstanding principal balance of the Loans of each
Lender plus (B) the aggregate outstanding balance of the Reimbursement
Obligations of each Lender, of the aggregate outstanding principal balance of
the Loans and the aggregate outstanding balance of the Reimbursement
Obligations, and (6) sixth, any remaining funds shall be paid to whosoever shall
be entitled thereto or as a court of competent jurisdiction shall direct.
 
(c) In the event that the Loans and the Notes and the Reimbursement Obligations
shall have been declared due and payable pursuant to the provisions of this
Section 9.2, the Administrative Agent upon the written request of the Required
Lenders, shall proceed to enforce the Reimbursement Obligations and the rights
of the holders of the Loans and the Notes by suit in equity, action at law
and/or other appropriate proceedings, whether for payment or the specific
performance of any covenant or agreement contained in the Loan Documents. In the
event that the Administrative Agent shall fail or refuse so to proceed, the
Issuer and each Lender shall be entitled to take such action as the Required
Lenders shall deem appropriate to enforce its rights under the Loan Documents.
 
10.
AGENT

 
10.1 Appointment
 
Each Lender hereby irrevocably designates and appoints BNY as the Administrative
Agent of such Lender under the Loan Documents and each Lender irrevocably
authorizes the Administrative Agent to take such action on its behalf under the
provisions of the Loan Documents and to exercise such powers and perform such
duties as are expressly delegated to the Administrative Agent by the terms of
the Loan Documents, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary contained in the Loan
 
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Documents, the Administrative Agent shall not have any duties or
responsibilities except those expressly set forth in the Loan Documents, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into the Loan
Documents or otherwise exist against the Administrative Agent.
 
10.2 Delegation of Duties
 
The Administrative Agent may execute any of its duties under the Loan Documents
by or through agents or attorneys-in-fact and shall be entitled to rely upon the
advice of counsel concerning all matters pertaining to such duties, and shall
not be liable for any action taken or omitted to be taken in good faith upon the
advice of such counsel.
 
10.3 Exculpatory Provisions
 
None of the Administrative Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates shall be (i) liable for any action
lawfully taken or omitted to be taken by the Administrative Agent or such Person
under or in connection with the Loan Documents (except the Administrative Agent
for its own gross negligence or willful misconduct), or (ii) responsible in any
manner to any of the Lenders for any recitals, statements, representations or
warranties made by any party contained in the Loan Documents or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, the Loan
Documents or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of any of the Loan Documents or for any failure of the Borrower
or any other Person to perform its obligations thereunder. The Administrative
Agent shall not be under any obligation to any Lender to ascertain or to inquire
into the observance or performance of any of the covenants or agreements
contained in, or conditions of, the Loan Documents, or to inspect the Property,
books or records of the Borrower or any Subsidiary. The Administrative Agent
shall not be under any liability or responsibility to the Borrower or any other
Person as a consequence of any failure or delay in performance, or any breach,
by any Lender of any of its obligations under any of the Loan Documents. The
Lenders acknowledge that the Administrative Agent shall not be under any duty to
take any discretionary action permitted under the Loan Documents unless the
Administrative Agent shall be requested in writing to do so by the Required
Lenders.
 
10.4 Reliance by Administrative Agent
 
The Administrative Agent shall be entitled to rely, and shall be fully protected
in relying, upon any writing, resolution, notice, request, consent, certificate,
affidavit, opinion, letter, cablegram, telegram, fax, telex or teletype message,
statement, order or other document or conversation reasonably believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including
counsel to the Borrower), independent accountants and other experts selected by
the Administrative Agent. The Administrative Agent shall not be under any duty
to examine or pass upon the validity, effectiveness or genuineness of the Loan
Documents or any instrument, document or communication furnished pursuant
thereto or in connection therewith, and the Administrative Agent shall be
entitled to assume that the same are valid, effective and genuine, have been
signed or
 
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sent by the proper parties and are what they purport to be. The Administrative
Agent shall be fully justified in failing or refusing to take any action not
expressly required under the Loan Documents unless it shall first receive such
advice or concurrence of the Required Lenders as it deems appropriate. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under the Loan Documents in accordance with a request of
the Required Lenders or, if required by Section 11.1, all Lenders, and such
request and any action taken or failure to act pursuant thereto shall be binding
upon the Borrower, all the Lenders and all future holders of the Notes.
 
10.5 Notice of Default
 
The Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default unless the Administrative Agent
shall have received written notice thereof from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating such notice is a “Notice of Default.” In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall
promptly give notice thereof to the Lenders. The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders, provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action or give such
directions, or refrain from taking such action or giving such directions, with
respect to such Default or Event of Default as it shall deem to be in the best
interests of the Lenders.
 
10.6 Non-Reliance
 
Each Lender expressly acknowledges that neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or Affiliates
has made any representations or warranties to such Lender and that no act by the
Administrative Agent hereafter, including any review of the affairs of the
Borrower or the Subsidiaries, shall be deemed to constitute any representation
or warranty by the Administrative Agent to any Lender. Each Lender represents to
the Administrative Agent that such Lender has, independently and without
reliance upon the Administrative Agent or any other Lender, and based on such
documents and information as it has deemed appropriate, made its own evaluation
of and investigation into the business, operations, Property, financial and
other condition and creditworthiness of the Borrower and the Subsidiaries and
has made its own decision to enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, evaluations and decisions in taking or not taking action under
the Loan Documents, and to make such investigation as it deems necessary to
inform itself as to the business, operations, Property, financial and other
condition and creditworthiness of the Borrower and the Subsidiaries. Each Lender
acknowledges that a copy of this Agreement and all exhibits and schedules hereto
have been made available to it and its individual counsel for review, and each
Lender acknowledges that it is satisfied with the form and substance thereof.
Except for notices, reports and other documents expressly required to be
furnished to the Lenders by the Administrative Agent hereunder, the
Administrative Agent shall have no duty or responsibility to provide any Lender
with any credit or other information concerning the business,
 
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operations, Property, financial and other condition or creditworthiness of the
Borrower or the Subsidiaries which may come into the possession of the
Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
 
10.7 Administrative Agent in Its Individual Capacity
 
BNY and each Affiliate thereof, may make loans to, accept deposits from, issue
letters of credit for the account of and generally engage in any kind of
business with the Borrower and the Subsidiaries as though it were not the
Administrative Agent. With respect to the Commitment made or renewed by BNY and
each Note issued to BNY (if any), BNY shall have the same rights and powers
under the Loan Documents as any Lender and may exercise the same as though it
were not the Administrative Agent, the Issuer and the Swing Line Lender, and the
term “Lender” shall include BNY.
 
10.8 Successor Administrative Agent
 
If at any time the Administrative Agent deems it advisable, in its sole
discretion, it may submit to each Lender a written notification of its
resignation as Administrative Agent under the Loan Documents, such resignation
to be effective on the earlier to occur of (a) the thirtieth day after the date
of such notice, and (b) the date upon which any successor to the Administrative
Agent, in accordance with the provisions of this Section, shall have accepted in
writing its appointment as successor Administrative Agent. Upon any such
resignation, the Required Lenders shall have the right to appoint from among the
Lenders a successor Administrative Agent, which successor Administrative Agent,
provided that no Default or Event of Default shall then exist, shall be
reasonably satisfactory to the Borrower. If no such successor Administrative
Agent shall have been so appointed by the Required Lenders and accepted such
appointment within 30 days after the retiring Administrative Agent’s giving of
notice of resignation, then the retiring Administrative Agent may, on behalf of
the Lenders, appoint a successor Administrative Agent, which successor
Administrative Agent shall be a commercial bank organized or licensed under the
laws of the United States of America or of any State thereof and having a
combined capital and surplus of at least $500,000,000. Upon the written
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall automatically
become a party to this Agreement and shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent’s rights, powers,
privileges and duties as Administrative Agent under the Loan Documents shall be
terminated. The Borrower and the Lenders shall execute such documents as shall
be necessary to effect such appointment. After any retiring Administrative
Agent’s resignation as Administrative Agent, the provisions of this Section 10
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was the Administrative Agent. If at any time there shall not be a duly
appointed and acting Administrative Agent, upon notice duly given, the Borrower
agrees to make each payment when due under the Loan Documents directly to the
Lenders entitled thereto during such time.
 
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10.9 Co-Syndication Agents
 
The Co-Syndication Agents shall have no duties or obligations under the Loan
Documents in their capacities as Co-Syndication Agents.
 
11.
OTHER PROVISIONS

 
11.1 Amendments, Waivers, Etc.
 
With the written consent of the Required Lenders, the Administrative Agent and
the Borrower may, from time to time, enter into written amendments, supplements
or modifications of the Loan Documents and, with the written consent of the
Required Lenders, the Administrative Agent on behalf of the Lenders may execute
and deliver to any such parties a written instrument waiving or consenting to
the departure from, on such terms and conditions as the Administrative Agent may
specify in such instrument, any of the requirements of the Loan Documents or any
Default or Event of Default and its consequences, provided that no such
amendment, supplement, modification, waiver or consent shall (i) increase the
Commitment Amount of any Lender without the consent of such Lender (provided
that no waiver of a Default or Event of Default shall be deemed to constitute
such an increase), (ii) extend the Commitment Period without the consent of each
Lender directly affected thereby, (iii) reduce the amount, or extend the time of
payment, of the Fees without the consent of each Lender directly affected
thereby, (iv) reduce the rate, or extend the time of payment of, interest on any
Revolving Credit Loan, any Note or any Reimbursement Obligation (other than the
applicability of any post-default increase in such rate of interest) without the
consent of each Lender directly affected thereby, (v) reduce the amount, or
extend the time of payment of any payment of any Reimbursement Obligation or
principal on any Revolving Credit Loan or any Note without the consent of each
Lender directly affected thereby, (vi) decrease or forgive the principal amount
of any Revolving Credit Loan, any Note or any Reimbursement Obligation without
the consent of each Lender directly affected thereby, (vii) consent to any
assignment or delegation by the Borrower of any of its rights or obligations
under any Loan Document without the consent of each Lender, (viii) change the
provisions of this Section 11.1 without the consent of each Lender, (ix) change
the definition of Required Lenders without the consent of each Lender, (x)
change the several nature of the obligations of the Lenders without the consent
of each Lender, (xi) change the sharing provisions among Lenders without the
consent of each Lender, or (xii) extend the expiration date of a Letter of
Credit beyond the Commitment Termination Date without the consent of each
Lender. Notwithstanding the foregoing, no such amendment, supplement,
modification, waiver or consent shall (A) amend, modify or waive any provision
of Section 10 or otherwise change any of the rights or obligations of the
Administrative Agent, the Issuer or the Swing Line Lender under any Loan
Document without the written consent of the Administrative Agent, the Issuer or
the Swing Line Lender, as the case may be, (B) change the Letter of Credit
Commitment, change the amount or the time of payment of the Letter of Credit
Commissions, or change any other term or provision which relates to the Letter
of Credit Commitment or the Letters of Credit without the written consent of the
Issuer, (C) change the Swing Line Commitment, change the amount or the time of
payment of the Swing Line Loans or interest thereon or change any other term or
provision which relates to the Swing Line Commitment or the Swing Line Loans
without the written consent of the Swing Line Lender or (D) change the amount or
the time of payment of any Competitive Bid Loan or interest thereon without the
written
 
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consent of the Lender holding such Competitive Bid Loan. Any such amendment,
supplement, modification, waiver or consent shall apply equally to each of the
Lenders and shall be binding upon the parties to the applicable Loan Document,
the Lenders, the Administrative Agent and all future holders of the Loans and
the Notes and the Reimbursement Obligations. In the case of any waiver, the
Borrower, the Lenders and the Administrative Agent shall be restored to their
former position and rights under the Loan Documents, but any Default or Event of
Default waived shall not extend to any subsequent or other Default or Event of
Default, or impair any right consequent thereon.
 
11.2 Notices
 
Except in the case of notices and other communications expressly permitted to be
given by telephone, all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by facsimile, as follows:
 
If to the Borrower:
 
CVS Corporation
1 CVS Drive
Woonsocket, Rhode Island 02895
Attention: Carol A. DeNale
Treasury Department
Facsimile: (401) 770-5768
Telephone: (401) 770-4407
 
with a copy, in the case of a notice of Default or Event of Default, to:
 
CVS Corporation
1 CVS Drive
Woonsocket, Rhode Island 02895
Attention: Legal Department
Facsimile: (401) 765-7887
Telephone: (401) 765-1500
 
If to the Administrative Agent, the Swing Line Lender and the Issuer:
 
in the case of each Borrowing Request, each notice of prepayment under
Section 2.7, each Letter of Credit Request, each Competitive Bid Request, each
Competitive Bid, and each Competitive Bid Accept/Reject Letter:
 
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The Bank of New York
One Wall Street
New York, New York 10286
Attention: Kareen Sinclair,
Agency Function Administration
Facsimile: (212) 635-6365, 6366 or 6367
Telephone: (212) 635-4696,
 
and in all other cases:
 
The Bank of New York
Retailing Industry Division
19th Floor
One Wall Street
New York, New York 10286
Attention: William M. Barnum,
Managing Director
Facsimile: (212) 635-1481
Telephone: (212) 635-1019
 
If to any Lender: to it at its address (or facsimile number) set forth in its
Administrative Questionnaire.
 
Any party hereto may change its address or facsimile number for notices and
other communications hereunder by notice to the other parties hereto (or, in the
case of any Lender, by notice to the Administrative Agent and the Borrower). All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt. Any party to a Loan Document may rely on signatures of the parties
thereto which are transmitted by fax or other electronic means as fully as if
originally signed.
 
11.3 No Waiver; Cumulative Remedies
 
No failure to exercise and no delay in exercising, on the part of the
Administrative Agent, any Lender or the Issuer, any right, remedy, power or
privilege under any Loan Document shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, remedy, power or privilege under
any Loan Document preclude any other or further exercise thereof or the exercise
of any other right, remedy, power or privilege. The rights, remedies, powers and
privileges under the Loan Documents are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
 
11.4 Survival of Representations and Warranties
 
All representations and warranties made in the Loan Documents and in any
document, certificate or statement delivered pursuant thereto or in connection
therewith shall survive the execution and delivery of the Loan Documents.
 
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11.5 Payment of Expenses and Taxes; Indemnified Liabilities
 
The Borrower agrees, promptly upon presentation of a statement or invoice
therefor setting forth in reasonable detail the items thereof, and whether any
Loan is made or Letter of Credit is issued, (a) to pay or reimburse the
Administrative Agent and its Affiliates for all its reasonable costs and
expenses actually incurred in connection with the development, syndication,
preparation and execution of, and any amendment, waiver, consent, supplement or
modification to, the Loan Documents, any documents prepared in connection
therewith and the consummation of the transactions contemplated thereby, whether
such Loan Documents or any such amendment, waiver, consent, supplement or
modification to the Loan Documents or any documents prepared in connection
therewith are executed and whether the transactions contemplated thereby are
consummated, including the reasonable fees and disbursements of Special Counsel,
(b) to pay, indemnify, and hold the Administrative Agent, the Lenders and the
Issuer harmless from any and all recording and filing fees and any and all
liabilities and penalties with respect to, or resulting from any delay (other
than penalties to the extent attributable to the negligence of the
Administrative Agent, the Lenders or the Issuer, as the case may be, in failing
to pay such fees or other liabilities when due) in paying, stamp, excise and
other similar taxes, if any, which may be payable or determined to be payable in
connection with the execution and delivery of, or consummation of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, the Loan Documents and any such
other documents, and (c) to pay, reimburse, indemnify and hold each Indemnified
Person harmless from and against any and all other liabilities, obligations,
claims, losses, damages, penalties, actions, judgments, suits, costs, expenses
and disbursements of any kind or nature whatsoever (including reasonable counsel
fees and disbursements of counsel (including the allocated costs of internal
counsel) and such local counsel as may be required) actually incurred with
respect to the enforcement, performance of, and preservation of rights under,
the Loan Documents (all the foregoing, collectively, the “Indemnified
Liabilities”) and, if and to the extent that the foregoing indemnity may be
unenforceable for any reason, the Borrower agrees to make the maximum payment
permitted under applicable law, provided that the Borrower shall have no
obligation hereunder to pay Indemnified Liabilities to an Indemnified Person to
the extent arising from its gross negligence or willful misconduct. The
agreements in this Section shall survive the termination of the Commitments and
the payment of the Loans and the Notes and all other amounts payable under the
Loan Documents.
 
11.6 Lending Offices
 
Each Lender shall have the right at any time and from time to time to transfer
any Loan to a different office of such Lender, subject to Section 3.10.
 
11.7 Successors and Assigns
 
(a) The provisions of the Loan Documents shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender (and any attempted assignment or transfer by the Borrower without
such consent shall be null and void). Nothing in the Loan Documents, expressed
or implied, shall be construed to confer upon any Person (other than the
 
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parties hereto, their respective successors and assigns permitted hereby and, to
the extent expressly contemplated hereby, the Related Parties of each Credit
Party) any legal or equitable right, remedy or claim under or by reason of any
Loan Document.
 
(b) Any Lender may assign all or a portion of its rights and obligations under
the Loan Documents (including all or a portion of its Commitment or obligations
in respect of its Letter of Credit Exposure or Swing Line Exposure and the
applicable Loans at the time owing to it), to an Eligible Assignee, provided
that (i) except in the case of an assignment to a Lender or an Affiliate of a
Lender, each of the Borrower and the Administrative Agent (and, in the case of
an assignment of all or any portion of its Commitment or obligations in respect
of its Letter of Credit Exposure or Swing Line Exposure, the Issuing Bank and/or
the Swing Line Lender, as the case may be) must give its prior written consent
to such assignment (which consent shall not be unreasonably withheld or
delayed), (ii) except in the case of an assignment to a Lender or an Affiliate
or an Approved Fund of a Lender or an assignment of the entire remaining amount
of the assigning Lender’s Commitment, the amount of the Commitment of the
assigning Lender subject to each such assignment (determined as of the date the
Assignment and Acceptance Agreement with respect to such assignment is delivered
to the Administrative Agent) shall not be less than $5,000,000, unless the
Borrower and the Administrative Agent otherwise consent (which consent shall not
be unreasonably withheld or delayed) and shall be for a pro rata portion of such
Lender’s Commitment and such Lender’s then outstanding Revolving Credit Loans,
(iii) no assignments to the Borrower or any of its Affiliates shall be permitted
(and any attempted assignment or transfer to the Borrower or any of its
Affiliates shall be null and void), (iv) the parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Acceptance
Agreement together with, unless otherwise agreed by the Administrative Agent, a
processing and recordation fee of $3,500, and (v) the assignee, if it shall not
be a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire, and provided further that any consent of the Borrower otherwise
required under this subsection shall not be required if an Event of Default has
occurred and is continuing. Subject to acceptance and recording thereof pursuant
to subsection (d) of this Section, from and after the effective date specified
in each Assignment and Acceptance Agreement, the assignee thereunder shall be a
party hereto and, to the extent of the interest assigned by such Assignment and
Acceptance Agreement, have the rights and obligations of a Lender under the Loan
Documents, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Acceptance Agreement, be released from
its obligations under the Loan Documents (and, in the case of an Assignment and
Acceptance Agreement covering all of the assigning Lender’s rights and
obligations under the Loan Documents, such Lender shall cease to be a party
hereto but shall continue to be entitled to the benefits of Sections 3.5, 3.6,
3.7, 3.10 and 11.10). Except as otherwise provided under clause (iii) of this
subsection, any assignment or transfer by a Lender of rights or obligations
under the Loan Documents that does not comply with this subsection shall be
treated for purposes of the Loan Documents as a sale by such Lender of a
participation in such rights and obligations in accordance with subsection (e)
of this Section.
 
(c) The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain a copy of each Assignment and Acceptance Agreement
delivered to it and a register for the recordation of the names and addresses of
the Lenders, and the Commitments of, and principal amount of the Loans owing to,
each Lender pursuant to the terms
 
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hereof from time to time (the “Register”). The entries in the Register shall be
conclusive absent clearly demonstrable error, and the Borrower and each Credit
Party may treat each Person whose name is recorded in the Register pursuant to
the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower and any Credit Party, at any reasonable time and from
time to time upon reasonable prior notice.
 
(d) Upon its receipt of a duly completed Assignment and Acceptance Agreement
executed by an assigning Lender and an assignee, the assignee’s completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in subsection (b) of
this Section and any written consent to such assignment required by subsection
(b) of this Section, the Administrative Agent shall accept such Assignment and
Acceptance Agreement and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement unless
it has been recorded in the Register as provided in this subsection.
 
(e) Any Lender may, without the consent of the Borrower or any Credit Party,
sell participations to Eligible Assignees (each a “Participant”) in all or a
portion of such Lender’s rights and obligations under the Loan Documents
(including all or a portion of its Commitments, Letter of Credit Exposure, Swing
Line Exposure and outstanding Loans owing to it), provided that (i) such
Lender’s obligations under the Loan Documents shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) the Borrower and the Credit Parties shall
continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under the Loan Documents and (iv) no
participations to the Borrower or any of its Affiliates shall be permitted (and
any attempted participation to the Borrower or any of its Affiliates shall be
null and void). Any agreement or instrument pursuant to which a Lender sells
such a participation shall provide that such Lender shall retain the sole right
to enforce the Loan Documents and to approve any amendment, modification or
waiver of any provision of any Loan Documents, provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the
proviso to Section 11.1 that affects such Participant. Subject to subsection (f)
of this Section, the Borrower agrees that each Participant shall be entitled to
the benefits of Sections 3.5, 3.6, 3.7 and 3.10 to the same extent as if it were
a Lender and had acquired its interest by assignment pursuant to subsection (b)
of this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 11.9(a) as though it were a Lender, provided
that such Participant agrees to be subject to Section 11.9(b) as though it were
a Lender.
 
(f) A Participant shall not be entitled to receive any greater payment under
Section 3.6, 3.7 or 3.10 than the Lender that sold the participation to such
Participant would have been entitled to receive with respect to the interest in
the Loan Documents subject to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower’s
prior written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 3.10 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 3.10(b) as
though it were a Lender.
 
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(g) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under the Loan Documents to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank, and this Section shall not apply to any such pledge or assignment
of a security interest, provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations under the Loan
Documents or substitute any such pledgee or assignee for such Lender as a party
hereto.
 
(h) Notwithstanding anything to the contrary contained herein, any Lender (a
“Granting Lender”) may grant to an Eligible SPC the option to fund all or any
part of any Loan that such Granting Lender would otherwise be obligated to fund
pursuant to this Agreement, provided that (i) such designation shall not be
effective unless the Borrower consents thereto (which consent shall not be
unreasonably withheld), (ii) nothing herein shall constitute a commitment by any
Eligible SPC to fund any Loan, and (iii) if an Eligible SPC elects not to
exercise such option or otherwise fails to fund all or any part of such Loan,
the Granting Lender shall be obligated to fund such Loan pursuant to the terms
hereof. The funding of a Loan by an Eligible SPC hereunder shall utilize the
Commitment of the Granting Lender to the same extent, and as if, such Loan were
funded by such Granting Lender. As to any Loans or portion thereof made by it,
each Eligible SPC shall have all the rights that a Lender making such Loans or
portion thereof would have had under this Agreement and otherwise, provided that
(x) its voting rights under this Agreement shall be exercised solely by its
Granting Lender and (y) its Granting Lender shall remain solely responsible to
the other parties hereto for the performance of such Granting Lender’s
obligations under this Agreement, including its obligations in respect of the
Loans or portion thereof made by it. Each Granting Lender shall act as
administrative agent for its Eligible SPC and give and receive notices and other
communications on its behalf. Any payments for the account of any Eligible SPC
shall be paid to its Granting Lender as administrative agent for such Eligible
SPC and neither the Borrower nor the Administrative Agent shall be responsible
for any Granting Lender’s application of such payments. Each party hereto hereby
agrees that no Eligible SPC shall be liable for any indemnity or payment under
this Agreement for which a Lender would otherwise be liable for so long as, and
to the extent, the Granting Lender provides such indemnity or makes such
payment. Notwithstanding anything to the contrary contained in this Agreement,
any Eligible SPC may (i) at any time, subject to payment of the processing and
recordation fee referred to in Section 11.7(b), assign all or a portion of its
interests in any Loans to its Granting Lender (but nothing contained herein
shall be construed in derogation of the obligation of the Granting Lender to
make Loans hereunder) or to any financial institutions providing liquidity
and/or credit support to or for the account of such Eligible SPC to support the
funding or maintenance of Loans, and (ii) disclose on a confidential basis any
non-public information relating to its funding of Loans to any rating agency,
commercial paper dealer or provider of any surety or guarantee or credit or
liquidity enhancements to such Eligible SPC. This Section may not be amended
without the prior written consent of each Granting Lender, all or any part of
whose Loans is being funded by an Eligible SPC at the time of such amendment.
 
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11.8 Counterparts
 
Each of the Loan Documents (other than the Notes) may be executed on any number
of separate counterparts and all of said counterparts taken together shall be
deemed to constitute one and the same agreement. It shall not be necessary in
making proof of any Loan Document to produce or account for more than one
counterpart signed by the party to be charged. A set of the copies of this
Agreement signed by all of the parties hereto shall be lodged with each of the
Borrower and the Administrative Agent. Any party to a Loan Document may rely
upon the signatures of any other party thereto which are transmitted by fax or
other electronic means to the same extent as if originally signed.
 
11.9 Set-off and Sharing of Payments
 
(a) In addition to any rights and remedies of the Lenders and the Issuer
provided by law, upon the occurrence of an Event of Default under Section 9.1(a)
or (b) or upon the acceleration of the Loans, each Lender and the Issuer shall
have the right, without prior notice to the Borrower, any such notice being
expressly waived by the Borrower, to set-off and apply against any indebtedness
or other liability, whether matured or unmatured, of the Borrower to such Lender
or the Issuer arising under the Loan Documents, any amount owing from such
Lender or the Issuer to the Borrower. To the extent permitted by applicable law,
the aforesaid right of set-off may be exercised by such Lender or the Issuer
against the Borrower or against any trustee in bankruptcy, custodian, debtor in
possession, assignee for the benefit of creditors, receiver, or execution,
judgment or attachment creditor of the Borrower, or against anyone else claiming
through or against the Borrower or such trustee in bankruptcy, custodian, debtor
in possession, assignee for the benefit of creditors, receivers, or execution,
judgment or attachment creditor, notwithstanding the fact that such right of
set-off shall not have been exercised by such Lender or the Issuer prior to the
making, filing or issuance of, service upon such Lender or the Issuer of, or
notice to such Lender or the Issuer of, any petition, assignment for the benefit
of creditors, appointment or application for the appointment of a receiver, or
issuance of execution, subpoena, order or warrant. Each Lender and the Issuer
agree promptly to notify the Borrower and the Administrative Agent after each
such set-off and application made by such Lender or the Issuer, provided that
the failure to give such notice shall not affect the validity of such set-off
and application.
 
(b) If any Lender or the Issuer (each a “Benefited Lender”) shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of its Loans or its Notes or the Reimbursement
Obligations in excess of its pro rata share (in accordance with the outstanding
principal balance of all Loans or the Reimbursement Obligations) of payments
then due and payable on account of the Loans and Notes received by all the
Lenders or the Reimbursement Obligations, such Lender or the Issuer, as the case
may be, shall forthwith purchase, without recourse, for cash, from the other
Lenders such participations in their Loans and Notes or the Reimbursement
Obligations as shall be necessary to cause such purchasing Lender or the Issuer
to share the excess payment with each of them according to their pro rata share
(in accordance with the outstanding principal balance of all Loans or the
Reimbursement Obligations), provided that if all or any portion of such excess
payment is thereafter recovered from such purchasing Lender or the Issuer, such
purchase from
 
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each Lender shall be rescinded and each such Lender shall repay to the
purchasing Lender or the Issuer the purchase price to the extent of such
recovery, together with an amount equal to such Lender’s pro rata share
(according to the proportion of (i) the amount of such Lender’s required
repayment to (ii) the total amount so recovered from the purchasing Lender or
the Issuer) of any interest or other amount paid or payable by the purchasing
Lender in respect of the total amount so recovered. The Borrower agrees, to the
fullest extent permitted by law, that any Lender or the Issuer so purchasing a
participation from another Lender pursuant to this Section may exercise such
rights to payment (including the right of set-off) with respect to such
participation as fully as if such Lender or the Issuer were the direct creditor
of the Borrower in the amount of such participation.
 
11.10 Indemnity
 
(a) The Borrower shall indemnify each Credit Party and each Related Party
thereof (each such Person being called an “Indemnified Person”) against, and
hold each Indemnified Person harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the reasonable fees, charges and
disbursements of any counsel for any Indemnified Person, incurred by or asserted
against any Indemnified Person arising out of, in connection with, or as a
result of (i) the execution or delivery of any Loan Document or any agreement or
instrument contemplated thereby, the performance by the parties to the Loan
Documents of their respective obligations thereunder or the consummation of the
transactions contemplated hereby or any other transactions contemplated thereby
(including the Caremark Merger), (ii) any Loan or Letter of Credit or the use of
the proceeds thereof, (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by the Borrower or
any of the Subsidiaries, or any Environmental Liability related in any way to
the Borrower or any of the Subsidiaries or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnified Person is a party thereto, provided that such indemnity shall
not, as to any Indemnified Person, be available to the extent that such losses,
claims, damages, liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted
primarily from the gross negligence or willful misconduct of such Indemnified
Person. Notwithstanding the above, the Borrower shall have no liability under
clause (i) of this Section to indemnify or hold harmless any Indemnified Person
for any losses, claims, damages, liabilities and related expenses relating to
income or withholding taxes or any tax in lieu of such taxes.
 
(b) To the extent that the Borrower fails to promptly pay any amount required to
be paid by it to the Administrative Agent under subsection (a) of this Section,
each Lender severally agrees to pay to the Administrative Agent an amount equal
to the product of such unpaid amount multiplied by (i) at any time when no Loans
are outstanding, its Commitment Percentage, or if no Commitments then exist, its
Commitment Percentage on the last day on which Commitments did exist, and (ii)
at any time when Loans are outstanding (x) if the Commitments then exist, its
Commitment Percentage or (y) if the Commitments have been terminated or
otherwise no longer exist, the percentage equal to the fraction, (A) the
numerator of which is the sum of such Lender’s Credit Exposure and (B) the
denominator of which is the sum of the Aggregate Credit Exposure (in each case
determined as of the time that the applicable
 
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unreimbursed expense or indemnity payment is sought), provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as applicable, was incurred by or asserted against the Administrative
Agent in its capacity as such.
 
(c) The obligations of the Borrower and the Lenders under this Section 11.10
shall survive the termination of the Commitments and the payment of the Loans
and the Notes and all other amounts payable under the Loan Documents.
 
(d) To the extent permitted by applicable law, the Borrower shall not assert,
and hereby waives, any claim against any Indemnified Person, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct and actual damages) arising out of, in connection with, or as a result
of, any Loan Document or any agreement, instrument or other document
contemplated thereby, the transactions contemplated hereby or any Loan or any
Letter of Credit or the use of the proceeds thereof.
 
11.11 Governing Law
 
The Loan Documents and the rights and obligations of the parties thereto shall
be governed by, and construed and interpreted in accordance with, the laws of
the State of New York.
 
11.12 Severability
 
Every provision of the Loan Documents is intended to be severable, and if any
term or provision thereof shall be invalid, illegal or unenforceable for any
reason, the validity, legality and enforceability of the remaining provisions
thereof shall not be affected or impaired thereby, and any invalidity,
illegality or unenforceability in any jurisdiction shall not affect the
validity, legality or enforceability of any such term or provision in any other
jurisdiction.
 
11.13 Integration
 
All exhibits to the Loan Documents shall be deemed to be a part thereof. Each
Loan Document embodies the entire agreement and understanding between or among
the parties thereto with respect to the subject matter thereof and supersedes
all prior agreements and understandings between or among the parties thereto
with respect to the subject matter thereof.
 
11.14 Treatment of Certain Information
 
Each Lender, the Issuer and the Administrative Agent agrees to maintain as
confidential and not to disclose, publish or disseminate to any third parties
any financial or other information relating to the business, operations and
condition, financial or otherwise, of the Borrower provided to it, except if and
to the extent that:
 
(a) such information is in the public domain at the time of disclosure;
 
(b) such information is required to be disclosed by subpoena or similar process
or applicable law or regulations;
 
67

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(c) such information is required or requested to be disclosed to any regulatory
or administrative body or commission to whose jurisdiction it may be subject;
 
(d) such information is disclosed to its counsel, auditors or other professional
advisors;
 
(e) such information is disclosed to (and, unless and until it receives written
objection from the Borrower, the Borrower shall be deemed to have consented to
disclosure of such information to) its affiliates (and its affiliates’ officers,
directors and employees), provided that such information shall be used in
connection with this Agreement and the transactions contemplated hereby;
 
(f) such information is disclosed to its officers, directors and employees;
 
(g) such information is disclosed with the prior written consent of the party
furnishing the information;
 
(h) such information is disclosed in connection with any litigation or dispute
involving the Borrower and/or it;
 
(i) such information is disclosed in connection with the sale of a participation
or other disposition by it of any of its interest in this Agreement, provided
that such information shall not be disclosed unless and until the party to whom
it shall be disclosed shall have agreed to keep such information confidential as
set forth herein;
 
(j) such information was in its possession or in its affiliate’s possession as
shown by clear and convincing evidence prior to any of the Borrower and/or any
or the Borrower’s representatives or agents furnishing such information to it;
or
 
(k) such information is received by it, without restriction as to its disclosure
or use, from a Person who, to its knowledge or reasonable belief, was not
prohibited from disclosing such information by any duty of confidentiality.
 
Except to the extent prohibited or restricted by law or Governmental Authority,
each Lender shall notify the Borrower promptly of any disclosures of information
made by it as permitted pursuant to (h) above.
 
11.15 Acknowledgments
 
The Borrower acknowledges that (a) it has been advised by counsel in the
negotiation, execution and delivery of the Loan Documents, (b) by virtue of the
Loan Documents, none of the Administrative Agent, the Issuer, or any Lender has
any fiduciary relationship to the Borrower, and the relationship between the
Administrative Agent, the Issuer, and the Lenders, on the one hand, and the
Borrower, on the other hand, is solely that of debtor and creditor, and (c) by
virtue of the Loan Documents, no joint venture exists among the Lenders or among
the Borrower and the Lenders.
 
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11.16 Consent to Jurisdiction
 
The Borrower irrevocably submits to the non-exclusive jurisdiction of any New
York State or Federal Court sitting in the City of New York over any suit,
action or proceeding arising out of or relating to the Loan Documents. The
Borrower irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding brought in such a court and any claim that any
such suit, action or proceeding brought in such a court has been brought in an
inconvenient forum. The Borrower agrees that a final judgment in any such suit,
action or proceeding brought in such a court, after all appropriate appeals,
shall be conclusive and binding upon it.
 
11.17 Service of Process
 
The Borrower agrees that process may be served against it in any suit, action or
proceeding referred to in Section 11.16 by sending the same by first class mail,
return receipt requested or by overnight courier service, with receipt
acknowledged, to the address of the Borrower set forth in Section 11.2. The
Borrower agrees that any such service (i) shall be deemed in every respect
effective service of process upon it in any such suit, action, or proceeding,
and (ii) shall to the fullest extent enforceable by law, be taken and held to be
valid personal service upon and personal delivery to it.
 
11.18 No Limitation on Service or Suit
 
Nothing in the Loan Documents or any modification, waiver, or amendment thereto
shall affect the right of the Administrative Agent, the Issuer or any Lender to
serve process in any manner permitted by law or limit the right of the
Administrative Agent, the Issuer or any Lender to bring proceedings against the
Borrower in the courts of any jurisdiction or jurisdictions.
 
11.19 WAIVER OF TRIAL BY JURY
 
THE ADMINISTRATIVE AGENT, THE ISSUER, THE LENDERS AND THE BORROWER KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER OR IN CONNECTION WITH THE
LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY. FURTHER, THE BORROWER
HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF THE ADMINISTRATIVE AGENT,
THE ISSUER, OR THE LENDERS, OR COUNSEL TO THE ADMINISTRATIVE AGENT, THE ISSUER,
OR THE LENDERS, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE ADMINISTRATIVE
AGENT, THE ISSUER, OR THE LENDERS WOULD NOT, IN THE EVENT OF SUCH LITIGATION,
SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION. THE BORROWER
ACKNOWLEDGES THAT THE ADMINISTRATIVE AGENT, THE ISSUER, AND THE LENDERS HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, INTER ALIA, THE PROVISIONS OF THIS
SECTION.
 
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11.20 Effective Date
 
This Agreement shall be effective at such time (the “Effective Date”) as the
Administrative Agent shall have received executed counterparts hereof by the
Borrower, the Administrative Agent, the Issuer, and each Lender and the
conditions set forth in Sections 5.1 through 5.3 have been or simultaneously
will be satisfied, provided that this Agreement shall not become effective or be
binding on any party hereto unless all of such conditions are satisfied not
later than April 30, 2007.
 
11.21 Patriot Act Notice
 
Each Lender and the Administrative Agent (for itself and not on behalf of any
Lender) hereby notifies the Borrower that pursuant to the requirements of the
USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001),
as amended from time to time) (the “Patriot Act”), it is required to obtain,
verify and record information that identifies the Borrower, which information
includes the name and address of the Borrower and other information that will
allow such Lender or the Administrative Agent, as applicable, to identify the
Borrower in accordance with the Patriot Act.

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AS EVIDENCE of the agreement by the parties hereto to the terms and conditions
herein contained, each such party has caused this 364 Day Credit Agreement to be
executed on its behalf.
 

        CVS CORPORATION  
   
   
    By:   /s/ Carol A. DeNale    

--------------------------------------------------------------------------------

Name:   Carol A. DeNale   Title:   Vice President and Treasurer

 

--------------------------------------------------------------------------------

        THE BANK OF NEW YORK, in its capacity as a Lender and in its capacity as
the Administrative Agent  
   
   
    By:   /s/ Erin Morrissey    

--------------------------------------------------------------------------------

Name:   Erin Morrissey    Title:   Assistant Vice President 

 

--------------------------------------------------------------------------------

        LEHMAN COMMERCIAL PAPER INC., in its capacity as a Co-Syndication Agent
 
   
   
    By:   /s/ Janine M. Shugan    

--------------------------------------------------------------------------------

Name:   Janine M. Shugan     Title:   Authorized Signatory  

              LEHMAN BROTHERS BANK, FSB, in its capacity as a Lender  
   
   
    By:   /s/ Gary T. Taylor    

--------------------------------------------------------------------------------

Name:   Gary T. Taylor   Title:   Senior Vice President  

 

--------------------------------------------------------------------------------

 

        BANK OF AMERICA, N.A  
   
   
    By:   /s/ John Pocalyko    

--------------------------------------------------------------------------------

Name:   John Pocalyko   Title:   Senior Vice President  

 

--------------------------------------------------------------------------------

 

        WACHOVIA BANK, NATIONAL ASSOCIATION, in its capacity as a Lender and in
its capacity as a Co-Syndication Agent  
   
   
    By:   /s/ Denis Waltrich    

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Name:   Denis Waltrich      Title:   Vice President   

 

--------------------------------------------------------------------------------

 

        MORGAN STANLEY BANK  
   
   
    By:   /s/ Dawn M. Dawson    

--------------------------------------------------------------------------------

Name:   Dawn M. Dawson     Title:   Authorized Signatory 

 

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EXHIBIT A

2007 364 DAY CREDIT AGREEMENT
EXHIBIT A
LIST OF COMMITMENTS
 

Lender
 
Commitment Amount
The Bank of New York
 
$ 100,000,000
Bank of America, N.A.
 
$ 100,000,000
Lehman Brothers Bank, FSB
 
$ 100,000,000
Morgan Stanley Bank
 
$ 100,000,000
Wachovia Bank, National Association
 
$ 100,000,000
 
TOTAL
$ 500,000,000

 

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EXHIBIT B

2007 364 DAY CREDIT AGREEMENT
EXHIBIT B
FORM OF NOTE

 [____], 2007
New York, New York

FOR VALUE RECEIVED, the undersigned, CVS CORPORATION, a Delaware corporation
(the “Borrower”), hereby promises to pay to the order of
_________________________ (the “Lender”) the outstanding principal balance of
the Lender’s Loans, together with interest thereon, at the rate or rates, in the
amounts and at the time or times set forth in the 364 Day Credit Agreement (as
the same may be amended, supplemented or otherwise modified from time to time,
the “Credit Agreement”), dated as of March 12, 2007, by and among the Borrower,
the Lenders party thereto, the co-syndication agents named therein, and The Bank
of New York, as administrative agent (in such capacity, the “Administrative
Agent”), in each case at the office of the Administrative Agent located at One
Wall Street, New York, New York, or at such other place as the Administrative
Agent may specify from time to time, in lawful money of the United States of
America in immediately available funds.

Capitalized terms used herein that are not otherwise defined herein shall have
the respective meanings ascribed thereto in the Credit Agreement.

The Loans evidenced by this Note are prepayable in the amounts, and on the
dates, set forth in the Credit Agreement. This Note is one of the Notes under
the Credit Agreement, and is subject to, and shall be construed in accordance
with, the provisions thereof, and is entitled to the benefits set forth in the
Loan Documents.

The Lender is hereby authorized to record on the schedule annexed hereto, and
any continuation sheets which the Lender may attach thereto (a) the date and
amount of each Revolving Credit Loan, Competitive Bid Loan and Swing Line Loan
made by the Lender, (b) the Interest Period for each Revolving Credit Loan
(Eurodollar Advance only), Competitive Bid Loan and Swing Line Loan made by the
Lender, (c) the Type of each Revolving Credit Loan made by the Lender as one or
more ABR Advances, one or more Eurodollar Advances, or a combination thereof,
(d) the Eurodollar Rate applicable to each Revolving Credit Loan (Eurodollar
Advance only), the Competitive Bid Rate applicable to each Competitive Bid Loan
and the Negotiated Rate applicable to each Swing Line Loan made by the Lender
and (e) the date and amount of each Conversion of each Revolving Credit Loan
made by the Lender, and each payment or prepayment of principal of, each Loan
made by the Lender. The failure to so record or any error in so recording shall
not affect the
 

--------------------------------------------------------------------------------

 
obligation of the Borrower to repay the Loans, together with interest thereon,
as provided in the Credit Agreement.

Except as specifically otherwise provided in the Credit Agreement, the Borrower
hereby waives presentment, demand, notice of dishonor, protest, notice of
protest and all other demands, protests and notices in connection with the
execution, delivery, performance, collection and enforcement of this Note.

This Note is being delivered in, is intended to be performed in, shall be
construed and interpreted in accordance with, and be governed by the laws of,
the State of New York.

This Note may only be amended by an instrument in writing executed pursuant to
the provisions of Section 11.1 of the Credit Agreement.

CVS CORPORATION
 
By:______________________________     
Name:____________________________      
Title:_____________________________     
 

--------------------------------------------------------------------------------

CVS CORPORATION
364 DAY CREDIT AGREEMENT
 
SCHEDULE TO NOTE

 
Date of Loan
Type and Amount of Loan
Interest Period
(If other than an
ABR Advance)
Type of Revolving Credit Loan (ABR or Eurodollar)
Interest Rate
(If other than an ABR Advance)
Date and Amount of Conversion of Revolving Credit Loan
Date and Amount of Principal Payment or Prepayment
Notation Made by
                                                                               
                                                                               
                                                                               

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               EXHIBIT C

2007 364 DAY CREDIT AGREEMENT
EXHIBIT C
FORM OF BORROWING REQUEST

[Date]

The Bank of New York, as Administrative Agent
One Wall Street
New York, New York 10286
Attention: ______________,
______________
 

  Re: 364 Day Credit Agreement, dated as of March 12, 2007, by and among CVS
Corporation, the Lenders party thereto, the co-syndication agents named therein,
and The Bank of New York, as Administrative Agent (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement")

    
Capitalized terms used herein that are not otherwise defined herein shall have
the respective meanings ascribed thereto in the Credit Agreement.

Pursuant to Section 2.3 of the Credit Agreement, the Borrower hereby gives
notice of its intention to borrow Revolving Credit Loans in the aggregate sum of
$____________ on ____________, and/or a Swing Line Loan in the sum of
$____________ on ____________, which borrowing shall consist of the following:
 

 
Revolving Credit Loans
     
(ABR Advance or Eurodollar
 
Interest Period
 
Advance) or Swing Line Loan
Amount
(Other than ABR)

The Borrower hereby certifies that on the Borrowing Date set forth above, and
after giving effect to the Loans requested hereby:

(a) There shall exist no Default or Event of Default.
 

--------------------------------------------------------------------------------

 
(b) The representations and warranties contained in the Credit Agreement shall
be true and correct, except those which are expressly specified to be made as of
an earlier date.

IN EVIDENCE of the foregoing, the undersigned has caused this Borrowing Request
to be duly executed on its behalf.
 
CVS CORPORATION
 
By:______________________________     
Name:____________________________      
Title:_____________________________ 
 
 

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EXHIBIT D-1

[Date]
 
 
2007 364 DAY CREDIT AGREEMENT
EXHIBIT D-1
FORM OF OPINION OF COUNSEL TO THE BORROWER

 
The Lenders, the Co-Syndication Agents,
and the Administrative Agent Referred to Below
c/o The Bank of New York,
as Administrative Agent
One Wall Street
New York, New York 10286
 
 
Ladies and Gentlemen:
 
I am general counsel of CVS Corporation, a Delaware corporation (the
"Borrower"), and have acted as such in connection with the 364 Day Credit
Agreement, dated as of March 12, 2007, by and among the Borrower, the lenders
party thereto, Lehman Commercial Paper Inc. and Wachovia Bank, National
Association, as Co-Syndication Agents, and The Bank of New York, as
Administrative Agent (the "364 Day Credit Agreement"). Capitalized terms not
otherwise defined herein shall have the meanings assigned to them in the 364 Day
Credit Agreement.
 
I have examined originals or copies, certified or otherwise identified to my
satisfaction, of such documents, corporate records, certificates of public
officials and other instruments and have conducted such other investigations of
fact and law as I have deemed necessary or advisable for purposes of this
opinion. In rendering my opinions set forth below, I have assumed (i) the due
authorization, execution and delivery by all parties thereto (other than the
Borrower) of the 364 Day Credit Agreement, (ii) the authenticity of all
documents submitted to me as originals and (iii) the conformity to original
documents of all documents submitted to me as copies.
 
Based upon the foregoing, I am of the opinion that:
 
1. The Borrower is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware. The Borrower has all requisite
corporate power and authority to own its Property and to carry on its business
as now conducted.
 
2. The Borrower is qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which it owns or leases real Property or
in which the nature of its business requires it to be so qualified (except those
jurisdictions where the failure to be so
 

--------------------------------------------------------------------------------

 
qualified or to be in good standing could not reasonably be expected to have a
Material Adverse effect).
 
3. The execution, delivery and performance by the Borrower of the Five Year
Credit Agreement and the Notes are within the Borrower's corporate powers and
have been duly authorized by all necessary corporate action on the part of the
Borrower.
 
4. The execution, delivery and performance by the Borrower of the Five Year
Credit Agreement and Notes do not require any action or approval on the part of
the shareholders of the Borrower or any action by or in respect of, or filing
with, any governmental body, agency or official under United States federal law
or the Delaware General Corporation Law, and do not contravene, or constitute a
default under, any provision of (i) United States federal law or the Delaware
General Corporation Law, (ii) the Certificate of Incorporation or bylaws of the
Borrower or (iii) any existing material mortgage, material indenture, material
contract or material agreement, in each case binding on the Borrower or any
Subsidiary or affecting the Property of the Borrower or any Subsidiary.
 
5. The Five Year Credit Agreement and the Notes delivered by the Borrower on or
prior to the date hereof have been duly executed and delivered by the Borrower
and each constitutes the valid and binding agreement of the Borrower, in each
case enforceable in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
from time to time in effect affecting the enforcement of creditors' rights
generally and to general principles of equity.
 
6. The Borrower is not an "investment company" (as such term is defined in the
United States Investment Company Act of 1940, as amended).
 
7. To the best of my knowledge, as at February 2, 2007, there were no actions,
suits, arbitration proceedings or claims (whether purportedly on behalf of the
Borrower, any Subsidiary or otherwise) pending or threatened against the
Borrower or any Subsidiary or any of their respective Properties, or maintained
by the Borrower or any Subsidiary, at law or in equity, before any Governmental
Authority which could reasonably be expected to have a Material Adverse effect.
To the best of my knowledge, there are no proceedings pending or threatened
against the Borrower or any Subsidiary (a) which call into question the validity
or enforceability of, or otherwise seek to invalidate, any Loan Document or (b)
which could reasonably be expected to, individually or in the aggregate,
materially and adversely affect any of the transactions contemplated by any Loan
Document (it being understood that the Caremark Merger is not a transaction
contemplated by any Loan Document for purposes of this clause (b)).
 
8. To the best of my knowledge, the Borrower is not in default under any
agreement to which it is a party or by which it or any of its Property is bound
the effect of which could reasonably be expected to have a Material Adverse
effect.
 
9. To the best of my knowledge, no provision of any judgment, decree or order,
in each case binding on the Borrower or any Subsidiary or affecting the Property
of the Borrower or any Subsidiary conflicts with, or requires any consent which
has not already been obtained under,
 

--------------------------------------------------------------------------------

 
or would in any way prevent the execution, delivery or performance by the
Borrower of the terms of, any Loan Document.
 
The foregoing opinion is subject to the following qualifications:
 
(a)  I express no opinion as to the effect (if any) of any law of any
jurisdiction (except the Commonwealth of Massachusetts) in which any Lender is
located which may limit the rate of interest that such Lender may charge or
collect.
 
(b)  I express no opinion as to provisions in the Five Year Credit Agreement
which purport to create rights of set-off in favor of participants or which
provide for set-off to be made otherwise than in accordance with applicable
laws.
 
(c)  I note that public policy considerations or court decisions may limit the
rights of any party to obtain indemnification under the Five Year Credit
Agreement.
 
I am a member of the bar of the Commonwealth of Massachusetts and the foregoing
opinion is limited to the laws of the Commonwealth of Massachusetts, the federal
law of the United States of America and the Delaware General Corporation Law.
For purposes of paragraph 5 of this opinion, I have assumed that, with your
permission and without any research or investigation, the laws of the State of
New York are identical to the law of the Commonwealth of Massachusetts.
 
This opinion is rendered solely to you in connection with the above matter. This
opinion may not be relied upon by you for any other purpose or relied upon by
any other person without my prior written consent, except that any person that
becomes a Lender in accordance with the provisions of the Five Year Credit
Agreement may rely upon this opinion as if it were specifically addressed and
delivered to such person on the date hereof.
 
Very truly yours,
 

--------------------------------------------------------------------------------

 
EXHIBIT D-2

 
[Date]
 
 
2007 364 DAY CREDIT AGREEMENT
EXHIBIT D-2
FORM OF OPINION OF SPECIAL COUNSEL TO THE BORROWER
 

The Co-Syndication Agents,
    the Administrative Agent
    and the lenders party
    to the 364 Day Credit Agreement referred to below
c/o The Bank of New York,
as Administrative Agent

Re:
CVS Corporation

Ladies and Gentlemen:

We have acted as special New York counsel to CVS Corporation, a Delaware
corporation (the “Company”), in connection with the 364 Day Credit Agreement
dated as of March 12, 2007 among the Company, the lenders listed on the
signature pages thereof (the “Lenders”), Lehman Commercial Paper Inc. and
Wachovia Bank, National Association, as Co-Syndication Agents, and The Bank of
New York, as Administrative Agent (in such capacity, the “Administrative Agent”)
(as in effect on the date hereof, the “364 Day Credit Agreement”). Capitalized
terms defined in the 364 Day Credit Agreement and not otherwise defined herein
are used herein as therein defined.
 
We have reviewed an executed copy of the 364 Day Credit Agreement. In addition,
we have examined originals or copies, certified or otherwise identified to our
satisfaction, of such documents, corporate records, certificates of public
officials and other instruments, and have conducted such other investigations of
fact and law, as we have deemed necessary or advisable for purposes of this
opinion.
 
Based upon the foregoing, and subject to the qualifications and assumptions set
forth herein, we are of the opinion that (i) the 364 Day Credit Agreement
constitutes a valid and binding agreement of the Company, enforceable against
the Company in accordance with its
 

--------------------------------------------------------------------------------

 
terms, and (ii) the execution, delivery and performance by the Company of the
364 Day Credit Agreement (x) require no consent or other action by or in respect
of, or filing with, any governmental body, agency or official under New York
State law, and (y) do not contravene, or constitute a default under, any
provision of New York State law or regulation that in our experience is normally
applicable to general business corporations in relation to transactions of the
type contemplated by the 364 Day Credit Agreement.
 
The foregoing opinions are subject to the following qualifications and
assumptions:
 
(a)  Our opinions are subject to the effects of applicable bankruptcy,
insolvency and similar laws affecting creditors’ rights generally and equitable
principles of general applicability, and the enforceability of indemnification
provisions may be limited by Federal or State laws or policies underlying such
laws.
 
(b)  We express no opinion as to the effect (if any) of any law of any
jurisdiction (except the State of New York) in which any Lender is located that
may limit the rate of interest that such Lender may charge or collect.
 
(c)  We express no opinion as to the effect of Section 548 of the United States
Bankruptcy Code or any similar provisions of State law.
 
(d)  We have assumed, with your permission and without independent
investigation, that (i) the Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware, (ii) the
execution, delivery and performance by the Company of the 364 Day Credit
Agreement are within its corporate powers and have been duly authorized by all
necessary corporate and other action, and (iii) the execution, delivery and
performance by the Company of the 364 Day Credit Agreement (x) require no
consent or other action by or in respect of, or filing with, any governmental
body, agency or official under United States federal law or the Delaware General
Corporation Law and (y) do not contravene, or constitute a default under, any
provision of (a) United States federal law or regulation or the Delaware General
Corporation Law, or (b) the certificate of incorporation or bylaws of the
Company.
 
We are members of the bar of the State of New York and the foregoing opinion is
limited to the laws of the State of New York.
 
This opinion is rendered solely to you in connection with the above matter. This
opinion may not be relied upon by you for any other purpose or relied upon by
any other person (other than an assignee permitted under Section 11.7 of the 364
Day Credit Agreement) without our prior written consent.
 
Very truly yours,
 

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EXHIBIT E
 
2007 364 DAY CREDIT AGREEMENT
EXHIBIT E
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
 

Reference is made to the 364 Day Credit Agreement, dated as of March 12, 2007
(as amended and in effect on the date hereof, the “Credit Agreement”), by and
among CVS Corporation, the Lenders party thereto, the co-syndication agents
named therein, and The Bank of New York, as Administrative Agent. Capitalized
terms used herein that are not otherwise defined herein shall have the
respective meanings ascribed thereto in the Credit Agreement.
 
The Assignor named below hereby sells and assigns, without recourse, to the
Assignee named below, and the Assignee hereby purchases and assumes, without
recourse, from the Assignor, effective as of the Assignment Date (defined
below), the interests set forth below in the Assignor’s rights and obligations
under the Credit Agreement, including, without limitation, the interests set
forth below in the Commitment and the Revolving Credit Loans and Competitive Bid
Loans owing to the Assignor that are outstanding on the Assignment Date,
together with, in the case of such Commitment, all of the related participations
held by the Assignor in respect of the Letters of Credit (including its LC
Exposure) and Swingline Loans (including its Swingline Exposure), but excluding
accrued interest and fees to and excluding the Assignment Date (collectively,
the “Assigned Interest”). The Assignee hereby acknowledges receipt of a copy of
the Credit Agreement. From and after the Assignment Date, (i) the Assignee shall
be a party to and be bound by the provisions of the Credit Agreement and, to the
extent of the Assigned Interest, have the rights and obligations of a Lender
under the Loan Documents and (ii) the Assignor shall, to the extent of the
Assigned Interest, relinquish its rights and be released from its obligations
under the Loan Documents.
 
This Assignment and Acceptance is being delivered to the Administrative Agent,
together with (i) if the Assignee is a Foreign Lender, any documentation
required to be delivered by the Assignee pursuant to Section 3.10(b) of the
Credit Agreement, duly completed and executed by the Assignee, and (ii) if the
Assignee is not already a Lender under the Credit Agreement, an Administrative
Questionnaire in the form supplied by the Administrative Agent, duly completed
by the Assignee. The [Assignee/Assignor]1 shall pay the fee payable to the
Administrative Agent pursuant to Section 11.7(b) of the Credit Agreement.
 
THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
 
Date of Assignment:
 
______________________________
1Delete inapplicable term.
 

--------------------------------------------------------------------------------

 
Legal Name of Assignor:
 
Legal Name of Assignee:
 
Assignee’s Address for Notices:
 
Effective Date of
Assignment (the “Assignment Date”):
 
Commitment Assigned:
 
Principal Amount of Revolving Credit Loans Assigned:
 
Principal Amount of each Competitive Bid Loan Assigned:
 
[SIGNATURE PAGE FOLLOWS]
 

--------------------------------------------------------------------------------

 
The terms set forth above are hereby agreed to:
 
[Name of Assignor], as Assignor

By: ___________________________
Name: _________________________
Title: __________________________
 
 
[Name of Assignee], as Assignee

By: ___________________________
Name: _________________________
Title: __________________________

The undersigned hereby consent to the within assignment:
 
CVS CORPORATION

By: ___________________________
Name: _________________________
Title: __________________________

THE BANK OF NEW YORK,
as Administrative Agent

By: ___________________________
Name: _________________________
Title: __________________________
 
 

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EXHIBIT F
 
2007 364 DAY CREDIT AGREEMENT
EXHIBIT F
FORM OF COMPETITIVE BID REQUEST
 
 
[Date]
 
The Bank of New York, as Administrative Agent
One Wall Street
New York, New York 10286
Attention: ______________,
           ______________

 

  Re: 364 Day Credit Agreement, dated as of March 12, 2007, by and among CVS
Corporation, the Lenders party thereto, the co-syndication agents named therein,
and The Bank of New York, as Administrative Agent (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement")   

  
Capitalized terms used herein that are not otherwise defined herein shall have
the respective meanings ascribed thereto in the Credit Agreement.
 
Pursuant to Section 2.4 of the Credit Agreement, the Borrower hereby gives
notice of its request to borrow Competitive Bid Loans in the aggregate sum of
$____________ on ____________, which borrowing shall consist of the following:
 
 

    Competitive   Amount Interest Period      

 
The Borrower hereby certifies that on the Borrowing Date set forth above, and
after giving effect to the Competitive Bid Loans requested hereby:
 
(a) There shall exist no Default or Event of Default.
 
(b) The representations and warranties contained in the Credit Agreement shall
be true and correct, except those which are expressly specified to be made as of
an earlier date.
 

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IN EVIDENCE of the foregoing, the undersigned has caused this Competitive Bid
Request to be duly executed on its behalf.
 
CVS CORPORATION

By: ___________________________
Name: _________________________
Title: __________________________

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EXHIBIT G
 
2007 364 DAY YEAR CREDIT AGREEMENT
EXHIBIT G
FORM OF INVITATION TO BID

[Date]

To the Lenders party
from time to time to the
captioned Credit Agreement
 

  Re: 364 Day Credit Agreement, dated as of March 12, 2007, by and among CVS
Corporation, the Lenders party thereto, the co-syndication agents named therein,
and The Bank of New York, as Administrative Agent (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement")

 
Capitalized terms used herein that are not otherwise defined herein shall have
the respective meanings ascribed thereto in the Credit Agreement.

Pursuant to a Competitive Bid Request, the Borrower gave notice of its request
to borrow Competitive Bid Loans in the aggregate sum of $____________ on
____________, which borrowing would consist of the following:
 

    Competitive   Amount Interest Period      

The Lenders are hereby invited to bid, pursuant to the terms and conditions of
the Credit Agreement, on such requested Competitive Bid Loans.

THE BANK OF NEW YORK,
as Administrative Agent

By: ___________________________
Name: _________________________
Title: __________________________
    

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EXHIBIT H
 
2007 364 DAY CREDIT AGREEMENT
EXHIBIT H
FORM OF COMPETITIVE BID

[Date]

The Bank of New York, as Administrative Agent
One Wall Street
New York, New York 10286
Attention:  _________________,
_________________
 
 

  Re: 364 Day Credit Agreement, dated as of March 12, 2007, by and among CVS
Corporation, the Lenders party thereto, the co-syndication agents named therein,
and The Bank of New York, as Administrative Agent (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement")

Capitalized terms used herein that are not otherwise defined herein shall have
the respective meanings ascribed thereto in the Credit Agreement.

In response to a Competitive Bid Request, the undersigned Lender hereby offers
to make Competitive Bid Loan(s) in the aggregate sum of $____________ on
____________, which borrowing would consist of the following:
 

  Competitive    
 
Interest 
Competitive
 
Amount
Period
Bid Rate
             
[fixed rate]

[LENDER]
 
 
By: ___________________________
Name: _________________________
Title: __________________________
   

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EXHIBIT I
 
2007 364 DAY CREDIT AGREEMENT
EXHIBIT I
FORM OF COMPETITIVE BID ACCEPT/REJECT LETTER

[Date]

The Bank of New York, as Administrative Agent
One Wall Street
New York, New York 10286
Attention: ______________,
______________
 

  Re:
364 Day Credit Agreement, dated as of March 12, 2007, by and among CVS
Corporation, the Lenders party thereto, the co-syndication agents named therein,
and The Bank of New York, as Administrative Agent (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement") 

 
Capitalized terms used herein that are not otherwise defined herein shall have
the respective meanings ascribed thereto in the Credit Agreement.

Pursuant to Section 2.4(d) of the Credit Agreement, the Borrower hereby gives
notice of its acceptance of the following Competitive Bids:

_____________     _______________

_____________                                   
                _______________,

and its rejection of all other Competitive Bids, in each case made pursuant to
the Competitive Bid Request, dated _______________.

IN EVIDENCE of the foregoing, the undersigned has caused this Competitive Bid
Accept/Reject Letter to be duly executed on its behalf.

CVS CORPORATION

By: ___________________________
Name: _________________________
Title: __________________________    
 

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EXHIBIT J

 
2007 364 DAY CREDIT AGREEMENT 
EXHIBIT J
FORM OF LETTER OF CREDIT REQUEST
 
[Date]
 
 
The Bank of New York, as Administrative Agent
One Wall Street
New York, New York 10286
Attention: _____________,
_____________
 

  Re: 364 Day Credit Agreement, dated as of March 12, 2007, by and among CVS
Corporation, the Lenders party thereto, the co-syndication agents named therein,
and The Bank of New York, as Administrative Agent (as amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”)

  
Capitalized terms used herein that are not otherwise defined herein shall have
the respective meanings ascribed thereto in the Credit Agreement.
 
Pursuant to Section 2.8(b) of the Credit Agreement, the Borrower hereby gives
notice of its request for the issuance by the Issuer of a Letter of Credit for
the account of the Borrower and for the benefit of ____________________ on
_______________ in connection with ___________________ in the maximum amount of
$_____________. A drawing may be made under such Letter of Credit under the
following conditions: _______________________________________.
 
The Borrower hereby certifies that on the above requested date of issuance of
such Letter of Credit, and after giving effect to the issuance of such Letter of
Credit:
 
(a) There shall exist no Default or Event of Default.
 
(b) The representations and warranties contained in the Credit Agreement shall
be true and correct, except those which are expressly specified to be made as of
an earlier date.
 

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IN EVIDENCE of the foregoing, the undersigned has caused this Letter of Credit
Request to be duly executed on its behalf.
 
CVS CORPORATION

 
By: ___________________________
Name: _________________________
Title: __________________________ 

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