Execution Copy

 

Exhibit 10.2

 

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5-YEAR CREDIT AGREEMENT

 

Dated as of November 19, 2004

 

among

 

ANTHEM, INC.,

as the Borrower,

 

BANK OF AMERICA, N.A.,

as Administrative Agent, Swing Line Lender

and

L/C Issuer,

and

The Other Lenders Party Hereto

 

JPMORGAN CHASE BANK,

as Syndication Agent

 

UBS LOAN FINANCE LLC

and

WILLIAMS STREET COMMITMENT CORPORATION,

as Co-Documentation Agents

 

BANC OF AMERICA SECURITIES LLC

and

J.P.MORGAN SECURITIES INC.,

as Joint Lead Arrangers

and

Joint Book Managers

 

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TABLE OF CONTENTS

 

          Page

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ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS

   1

1.01

  

Defined Terms

   1

1.02

  

Other Interpretive Provisions

   18

1.03

  

Accounting Terms

   18

1.04

  

Rounding

   18

1.05

  

Times of Day

   18

1.06

  

Letter of Credit Amounts

   19

ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS

   19

2.01

  

Committed Loans

   19

2.02

  

Borrowings, Conversions and Continuations of Committed Loans

   19

2.03

  

Bid Loans

   20

2.04

  

Letters of Credit

   22

2.05

  

Swing Line Loans

   28

2.06

  

Prepayments

   30

2.07

  

Termination or Reduction of Commitments

   31

2.08

  

Repayment of Loans

   31

2.09

  

Interest

   31

2.10

  

Fees

   32

2.11

  

Computation of Interest and Fees

   32

2.12

  

Evidence of Debt

   32

2.13

  

Payments Generally; Administrative Agent’s Clawback

   33

2.14

  

Sharing of Payments by Lenders

   34

ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY

   35

3.01

  

Taxes

   35

3.02

  

Illegality

   37

3.03

  

Inability to Determine Rates

   37

3.04

  

Increased Costs; Reserves on Eurodollar Rate Loans

   37

3.05

  

Compensation for Losses

   39

3.06

  

Mitigation Obligations; Replacement of Lenders

   39

3.07

  

Survival

   39

ARTICLE IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

   40

4.01

  

Conditions of Initial Credit Extension

   40

4.02

  

Conditions to all Credit Extensions

   41

ARTICLE V. REPRESENTATIONS AND WARRANTIES

   42

5.01

  

Corporate Existence and Standing

   42

5.02

  

Authorization and Validity

   42

5.03

  

Compliance with Laws and Contracts

   42

5.04

  

Governmental Consents

   42

5.05

  

Financial Statements

   42

5.06

  

Material Adverse Change

   43

 

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5.07

  

Properties

   43

5.08

  

Litigation and Environmental Matters

   43

5.09

  

Taxes

   43

5.10

  

ERISA Compliance

   43

5.11

  

Federal Reserve Regulations

   44

5.12

  

Investment Company

   44

5.13

  

Material Agreements

   44

5.14

  

Disclosure

   44

5.15

  

Purpose of Loans and Letters of Credit

   44

ARTICLE VI. AFFIRMATIVE COVENANTS

   45

6.01

  

Financial Reporting

   45

6.02

  

Notices

   46

6.03

  

Use of Proceeds

   47

6.04

  

Conduct of Business

   47

6.05

  

Taxes

   47

6.06

  

Insurance

   47

6.07

  

Compliance with Laws

   47

6.08

  

Maintenance of Properties

   47

6.09

  

Inspection

   47

6.10

  

Payment of Material Obligations

   47

6.11

  

Actions Prior to and Following the Merger

   48

ARTICLE VII. NEGATIVE COVENANTS

   48

7.01

  

Liens

   48

7.02

  

Fundamental Changes

   48

7.03

  

Investments and Purchases

   49

7.04

  

Transactions With Affiliates

   49

7.05

  

Subsidiary Debt

   49

7.06

  

Change in Corporate Structure; Fiscal Year; Nature of Business

   49

7.07

  

Inconsistent Agreements

   49

7.08

  

ERISA Compliance

   50

7.09

  

Merger Agreement; Existing Credit Agreements

   50

7.10

  

Financial Covenants

   50

ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES

   50

8.01

  

Events of Default

   50

8.02

  

Remedies Upon Event of Default

   52

8.03

  

Application of Funds

   52

ARTICLE IX. ADMINISTRATIVE AGENT

   53

9.01

  

Appointment and Authority

   53

9.02

  

Rights as a Lender

   53

9.03

  

Exculpatory Provisions

   53

9.04

  

Reliance by Administrative Agent

   54

9.05

  

Delegation of Duties

   54

9.06

  

Resignation of Administrative Agent

   54

9.07

  

Non-Reliance on Administrative Agent and Other Lenders

   55

9.08

  

No Other Duties, Etc.

   55

 

ii

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ARTICLE X. MISCELLANEOUS

   55

10.01

  

Amendments, Etc.

   55

10.02

  

Notices; Effectiveness; Electronic Communication

   56

10.03

  

No Waiver; Cumulative Remedies

   57

10.04

  

Expenses; Indemnity; Damage Waiver

   57

10.05

  

Payments Set Aside

   59

10.06

  

Successors and Assigns

   59

10.07

  

Treatment of Certain Information; Confidentiality

   62

10.08

  

Right of Setoff

   63

10.09

  

Interest Rate Limitation

   63

10.10

  

Counterparts; Integration; Effectiveness

   63

10.11

  

Survival of Representations and Warranties

   63

10.12

  

Severability

   64

10.13

  

Replacement of Lenders

   64

10.14

  

Governing Law; Jurisdiction; Etc.

   64

10.15

  

Waiver of Jury Trial

   65

10.16

  

USA PATRIOT Act Notice

   65

10.17

  

Time of the Essence

   65

10.18

  

Entire Agreement

   65

 

iii

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SCHEDULES

 

1.01

  

Existing Letters of Credit

2.01

  

Commitments and Applicable Percentages

5.08

  

Disclosed Matters

5.10

  

ERISA Matters

5.13

  

Material Agreements

7.01

  

Existing Liens

7.03

  

Other Permitted Investments

7.05

  

Subsidiary Debt

10.02

  

Administrative Agent’s Office; Certain Addresses for Notices

 

EXHIBITS

 

Form of

 

A

  

Committed Loan Notice

B-1

  

Bid Request

B-2

  

Competitive Bid

C

  

Swing Line Loan Notice

D

  

Note

E

  

Assignment and Assumption

F

  

Guaranty

G

  

Opinion Matters

 

iv

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CREDIT AGREEMENT

 

This CREDIT AGREEMENT (“Agreement”) is entered into as of November 19, 2004,
among ANTHEM, INC., an Indiana corporation which as of the Merger Effective Date
(as hereinafter defined) is to be renamed “WellPoint, Inc.” (the “Borrower”),
each lender from time to time party hereto (collectively, the “Lenders” and
individually, a “Lender”), JPMORGAN CHASE BANK as Syndication Agent (the
“Syndication Agent”), UBS LOAN FINANCE LLC and WILLIAMS STREET COMMITMENT
CORPORATION as Co-Documentation Agents (the “Co-Documentation Agents”), BANC OF
AMERICA SECURITIES LLC (“BAS”) and J.P. MORGAN SECURITIES INC. (“JPMSI”) as
Joint Lead Arrangers and Joint Book Managers, and BANK OF AMERICA, N.A., as
Administrative Agent, Swing Line Lender and L/C Issuer.

 

The Borrower has requested that the Lenders provide a revolving credit facility,
and the Lenders are willing to do so on the terms and conditions set forth
herein.

 

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

 

ARTICLE I.

DEFINITIONS AND ACCOUNTING TERMS

 

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

 

“364-Day Credit Agreement” means the 364-Day Credit Agreement dated on or about
the date of this Agreement among the Borrower, Bank of America, as
administrative agent, and the lenders party thereto.

 

“Absolute Rate” means a fixed rate of interest expressed in multiples of 1/100th
of one basis point.

 

“Absolute Rate Loan” means a Bid Loan that bears interest at a rate determined
with reference to an Absolute Rate.

 

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

 

“Administrative Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 10.02, or such other address or
account as the Administrative Agent may from time to time notify to the Borrower
and the Lenders.

 

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

 

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

 

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

 

“Agreement” means this Credit Agreement.

 

“AICI” means Anthem Insurance Companies, Inc., an Indiana stock insurance
company and a wholly-owned Subsidiary of the Borrower.

 

“Applicable Percentage” means with respect to any Lender at any time, the
percentage (carried out to the ninth decimal place) of the Aggregate Commitments
represented by such Lender’s Commitment at such time. If

 

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the commitment of each Lender to make Loans and the obligation of the L/C Issuer
to make L/C Credit Extensions have been terminated pursuant to Section 8.02 or
if the Aggregate Commitments have expired, then the Applicable Percentage of
each Lender shall be determined based on the Applicable Percentage of such
Lender most recently in effect, giving effect to any subsequent assignments. The
initial Applicable Percentage of each Lender is set forth opposite the name of
such Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to
which such Lender becomes a party hereto, as applicable.

 

“Applicable Rate” means, from time to time, the following percentages per annum
in respect of the facility fee pursuant to Section 2.10, the Eurodollar Rate
Committed Loans, the Letter of Credit Fee and the Base Rate Committed Loans, as
the case may be, based upon the Debt Rating as set forth below:

 

Applicable Rate

 

Pricing Level

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Debt Ratings
S&P/Moody’s

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

 

Facility Fee

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

 

Eurodollar Rate +

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

 

Base Rate +

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

     

Letter of Credit Fee

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1

  A+/A1 or better   0.080%   0.220%   0.0%

2

  A/A2   0.085%   0.290%   0.0%

3

  A-/A3   0.100%   0.400%   0.0%

4

  BBB+/Baa1   0.125%   0.500%   0.0%

5

  BBB/Baa2   0.155%   0.595%   0.0%

6

  BBB-/Baa3 or worse   0.200%   0.800%   0.0%

 

“Debt Rating” means, as of any date of determination, the rating as determined
by either S&P or Moody’s (collectively, the “Debt Ratings”) of the Borrower’s
non-credit-enhanced, senior unsecured long-term debt; provided that if a Debt
Rating is issued by each of the foregoing rating agencies, then the higher of
such Debt Ratings shall apply (with the Debt Rating for Pricing Level 1 being
the highest and the Debt Rating for Pricing Level 6 being the lowest) unless
there is a split in Debt Ratings of more than one level, in which case the
Pricing Level that is one level lower than the Pricing Level of the higher Debt
Rating shall apply. Initially, the Applicable Rate shall be determined based
upon the Debt Rating specified in the certificate delivered pursuant to Section
4.01(a)(vi). Thereafter, each change in the Applicable Rate resulting from a
publicly announced change in the Debt Rating shall be effective during the
period commencing on the date of the public announcement thereof and ending on
the date immediately preceding the effective date of the next such change. If
either S&P or Moody’s shall cease to have in effect a rating of the Borrower’s
non-credit enhanced, senior unsecured long-term debt and Fitch Ratings shall
have in effect a rating of such debt, then the ratings of Fitch Ratings will be
substituted for the ratings of such agency for all the purposes of the foregoing
provisions of this definition of “Applicable Rate”.

 

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

 

“Arrangers” means BAS and JPMSI, in their respective capacities as joint lead
arrangers and joint book managers.

 

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

 

“Audited Financial Statements” means the audited consolidated balance sheet of
the Borrower and its Subsidiaries for the fiscal year ended December 31, 2003
and the related consolidated statements of income or operations, shareholders’
equity and cash flows for such fiscal year of the Borrower and its Subsidiaries,
including the notes thereto.

 

2

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“Authorized Officer” the chief executive officer, president, chief financial
officer or treasurer of a Loan Party, acting singly. Any document delivered
hereunder that is signed by an Authorized Officer of a Loan Party shall be
conclusively presumed to have been authorized by all necessary corporate,
partnership and/or other action on the part of such Loan Party and such
Authorized Officer shall be conclusively presumed to have acted on behalf of
such Loan Party.

 

“Availability Period” means the period from and including the Closing Date to
the earliest of (a) the Maturity Date, (b) the date of termination of the
Aggregate Commitments pursuant to Section 2.07, and (c) the date of termination
of the commitment of each Lender to make Loans and of the obligation of the L/C
Issuer to make L/C Credit Extensions pursuant to Section 8.02.

 

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

 

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

 

“Base Rate Committed Loan” means a Committed Loan that is a Base Rate Loan.

 

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.

 

“Bid Borrowing” means a borrowing consisting of simultaneous Bid Loans of the
same Type from each of the Lenders whose offer to make one or more Bid Loans as
part of such borrowing has been accepted under the auction bidding procedures
described in Section 2.03.

 

“Bid Loan” has the meaning specified in Section 2.03(a).

 

“Bid Loan Lender” means, in respect of any Bid Loan, the Lender making such Bid
Loan to the Borrower.

 

“Bid Request” means a written request for one or more Bid Loans substantially in
the form of Exhibit B-1.

 

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

 

“Borrowing” means a Committed Borrowing, a Bid Borrowing or a Swing Line
Borrowing, as the context may require.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent’s Office is located and, if
such day relates to any Eurodollar Rate Loan, means any such day on which
dealings in Dollar deposits are conducted by and between banks in the London
interbank eurodollar market.

 

“Capitalized Lease” of a Person means any lease of property by such Person as
lessee which would be capitalized on a balance sheet of such Person prepared in
accordance with GAAP.

 

“Capitalized Lease Obligations” of a Person means the amount of the obligations
of such Person under Capitalized Leases which would be shown as a liability on a
balance sheet of such Person prepared in accordance with GAAP.

 

“Cash Collateralize” has the meaning specified in Section 2.04(g).

 

3

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“Cash Equivalents” means any of the following types of investments, to the
extent owned by the Borrower free and clear of all Liens:

 

(a) readily marketable obligations issued or directly and fully guaranteed or
insured by the United States or any agency or instrumentality thereof having
maturities of not more than 360 days from the date of acquisition thereof;
provided that the full faith and credit of the United States is pledged in
support thereof;

 

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

 

(c) commercial paper issued by any Person organized under the laws of any state
of the United States and rated at least “Prime-1” (or the then equivalent grade)
by Moody’s or at least “A-1” (or the then equivalent grade) by S&P, in each case
with maturities of not more than 180 days from the date of acquisition thereof;
and

 

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

 

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental
Authority or (c) compliance by any Lender (or, for the purpose of Section
3.04(b), any Lending Office of such Lender or by such Lender’s holding company,
if any) with any request, guideline or directive (whether or not having the
force of law) of any Governmental Authority.

 

“Change of Control” means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof), of equity
interests representing more than 35% of the aggregate ordinary voting power
represented by the issued and outstanding equity interests in the Borrower or
(b) the occupation of a majority of the seats (other than vacant seats) on the
board of directors of the Borrower by Persons who were not (i) directors of the
Borrower on the date of this Agreement, (ii) nominated by the board of directors
of the Borrower, or (iii) appointed by directors referred to in the preceding
clauses (i) and (ii).

 

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

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

“Commitment” means, as to each Lender, its obligation to (a) make Committed
Loans to the Borrower pursuant to Section 2.01, (b) purchase participations in
L/C Obligations, and (c) purchase participations in Swing Line Loans, in an
aggregate principal amount at any one time outstanding not to exceed the amount
set forth opposite such Lender’s name on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable,
as such amount may be adjusted from time to time in accordance with this
Agreement.

 

4

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

 

“Committed Loan” has the meaning specified in Section 2.01.

 

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

 

“Competitive Bid” means a written offer by a Lender to make one or more Bid
Loans, substantially in the form of Exhibit B-2, duly completed and signed by a
Lender.

 

“Contingent Obligation” of a Person means any obligation arising under any
agreement, undertaking or arrangement by which (a) such Person assumes,
guarantees, endorses, contingently agrees to purchase or provide funds for the
payment of, or otherwise becomes or is contingently liable upon, the financial
obligation or liability of any other Person, or (b) agrees to maintain the net
worth or working capital or other financial condition of any other Person, or
(c) otherwise assures any creditor of such other Person against loss, including,
without limitation, in each case, any comfort letter, operating agreement or
take-or-pay contract or application for a letter of credit, but excluding in
each case obligations incurred by either Loan Party or any Insurance Subsidiary
under insurance policies or contracts entered into in the ordinary course of
business.

 

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

 

“Controlled Group” means all members of a controlled group of corporations and
all trades or businesses (whether or not incorporated) under common control
which, together with one or both of the Loan Parties and/or one or more of the
Subsidiaries, are treated as a single employer (i) under Section 414(b) or (c)
of the Code or (ii) for the purposes of Section 302 of ERISA or Section 412 of
the Code, under Section 414(b), (c), (m) or (o) of the Code.

 

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

 

“Debt” of a Person means such Person’s (a) obligations for borrowed money, (b)
obligations representing the deferred purchase price of property or services
(other than accounts payable arising in the ordinary course of such Person’s
business payable on terms customary in the trade), (c) obligations, whether or
not assumed, secured by Liens or payable out of the proceeds or production from
property now or hereafter owned or acquired by such Person, (d) obligations
which are evidenced by notes, bonds, or similar instruments, (e) Capitalized
Lease Obligations, (f) Contingent Obligations and (g) obligations for which such
Person is obligated pursuant to or in respect of a letter of credit.

 

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

 

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

 

“Default Rate” means (a) when used with respect to Obligations other than Letter
of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the
Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2%

 

5

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per annum; provided, however, that with respect to a Eurodollar Rate Loan, the
Default Rate shall be an interest rate equal to the interest rate (including any
Applicable Rate) otherwise applicable to such Loan plus 2% per annum, and (b)
when used with respect to Letter of Credit Fees, a rate equal to the Applicable
Rate plus 2% per annum.

 

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

 

“Disclosed Matter” means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 5.08 hereto.

 

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

 

“Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c) an
Approved Fund; and (d) any other Person (other than a natural person) approved
by (i) the Administrative Agent, the L/C Issuer and the Swing Line Lender, and
(ii) unless an Event of Default has occurred and is continuing, the Borrower
(each such approval not to be unreasonably withheld or delayed); provided that
notwithstanding the foregoing, “Eligible Assignee” shall not include the
Borrower or any of the Borrower’s Affiliates or Subsidiaries.

 

“Environmental Laws” means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees or
binding agreements relating to the environment or the release of any Hazardous
Materials into the environment.

 

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

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

 

“Eurodollar Bid Margin” means the margin above or below the Eurodollar Rate to
be added to or subtracted from the Eurodollar Rate, which margin shall be
expressed in multiples of 1/100th of one basis point.

 

“Eurodollar Margin Bid Loan” means a Bid Loan that bears interest at a rate
based upon the Eurodollar Rate.

 

“Eurodollar Rate” means for any Interest Period with respect to a Eurodollar
Rate Loan:

 

(a) the rate per annum equal to the rate determined by the Administrative Agent
to be the offered rate that appears on the page of the Telerate screen (or any
successor thereto) that displays an average British Bankers Association Interest
Settlement Rate for deposits in Dollars (for delivery on the first day of such
Interest Period) with a term equivalent to such Interest Period, determined as
of approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period, or

 

(b) if the rate referenced in the preceding clause (a) does not appear on such
page or service or such page or service shall not be available, the rate per
annum equal to the rate determined by the Administrative

 

6

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Agent to be the offered rate on such other page or other service that displays
an average British Bankers Association Interest Settlement Rate for deposits in
Dollars (for delivery on the first day of such Interest Period) with a term
equivalent to such Interest Period, determined as of approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest Period,
or

 

(c) if the rates referenced in the preceding clauses (a) and (b) are not
available, the rate per annum determined by the Administrative Agent as the rate
of interest at which deposits in Dollars for delivery on the first day of such
Interest Period in same day funds in the approximate amount of the Eurodollar
Rate Loan being made, continued or converted by Bank of America (or, in the case
of a Bid Loan, the applicable Bid Loan Lender) and with a term equivalent to
such Interest Period would be offered by Bank of America’s (or such Bid Loan
Lender’s, as provided to the Administrative Agent) London Branch to major banks
in the London interbank eurodollar market at their request at approximately 4:00
p.m. (London time) two Business Days prior to the first day of such Interest
Period.

 

“Eurodollar Rate Committed Loan” means a Committed Loan that bears interest at a
rate based on the Eurodollar Rate.

 

“Eurodollar Rate Loan” means a Eurodollar Rate Committed Loan or a Eurodollar
Margin Bid Loan.

 

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

 

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender,
the L/C Issuer or any other recipient of any payment to be made by or on account
of any obligation of the Borrower hereunder, (a) taxes imposed on or measured by
its overall net income (however denominated), and franchise taxes imposed on it
(in lieu of net income taxes), by the jurisdiction (or any political subdivision
thereof) under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable Lending Office is located, (b) any branch profits taxes imposed by
the United States or any similar tax imposed by any other jurisdiction in which
the Borrower is located and (c) in the case of a Foreign Lender (other than an
assignee pursuant to a request by the Borrower under Section 10.13), any
withholding tax imposed by the jurisdiction in which the Borrower is resident
that is imposed on amounts payable to such Foreign Lender at the time such
Foreign Lender becomes a party hereto (or designates a new Lending Office) or
the date on which a Participant becomes entitled to the benefits of Section 3.01
pursuant to Section 10.06(d) or is attributable to such Foreign Lender’s failure
or inability (other than as a result of a Change in Law) to comply with Section
3.01(e), except to the extent that such Foreign Lender (or its assignor, if any)
was entitled, at the time of designation of a new Lending Office (or
assignment), to receive additional amounts from the Borrower with respect to
such withholding tax pursuant to Section 3.01(a).

 

“Existing 364-Day Credit Agreement” means the amended and restated 364-Day
Credit Agreement dated as of July 1, 2003 among the Borrower, JPMorgan Chase
Bank, as administrative agent, and the lenders party thereto.

 

“Existing 5-Year Credit Agreement” means the Five-Year Credit Agreement dated as
of November 5, 2001 among the Borrower, AICI, The Chase Manhattan Bank, as
administrative agent, and the lenders party thereto (as amended by the First
Amendment thereto dated July 2, 2002).

 

“Existing Credit Agreements” means the Existing 364-Day Credit Agreement and the
Existing 5-Year Credit Agreement.

 

“Existing Letters of Credit” means all outstanding letters of credit issued for
the account of the Borrower pursuant to the Existing Credit Agreements and all
letters of credit issued for the account of WellPoint pursuant to the WellPoint
Credit Agreements. The Existing Letters of Credit outstanding as of the Closing
Date are as listed on Schedule 1.01 hereto (including the amounts, beneficiaries
and expiry dates of such Existing Letters of Credit).

 

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

 

“Fee Letters” means the letter agreement, dated May 27, 2004, among the
Borrower, the Administrative Agent and BAS and the letter agreement between the
Borrower and JPMSI in connection with the entry into this Agreement.

 

“Financial Officer” of a Person means the chief financial officer, principal
accounting officer, treasurer or controller of such Person or any officer having
substantially the same position for such Person.

 

“Fiscal Quarter” means one of the four three-month accounting periods comprising
a Fiscal Year.

 

“Fiscal Year” means the twelve-month accounting period ending December 31 of
each year.

 

“Fitch Ratings” means Fitch Ratings, a wholly-owned subsidiary of Fimalac, S.A.,
and any successor thereto.

 

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

 

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

 

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

 

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

 

“Governmental Authority” means any government (foreign or domestic) or any state
or other political subdivision thereof or any governmental body, agency,
authority, department or commission (including any board of insurance, insurance
department or insurance commission and any taxing authority or political
subdivision) or any instrumentality thereof (including any court or tribunal)
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government and any corporation, partnership or
other entity directly or indirectly owned or controlled by or subject to the
control of any of the foregoing (including any supra-national bodies such as the
European Union or the European Central Bank).

 

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

 

“Guarantor” means Anthem Holding Corp., a wholly-owned Subsidiary of the
Borrower.

 

“Guaranty” means the Guaranty made by the Guarantor in favor of the
Administrative Agent and the Lenders, substantially in the form of Exhibit F.

 

8

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

 

“Hedging Agreement” means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement or
puts and calls on any of the foregoing and with respect to equity securities.

 

“HMO” means a health maintenance organization (or similar entity) doing business
as such (or required to qualify or to be licensed as such) under HMO
Regulations.

 

“HMO Regulation” means all laws, regulations, directives and administrative
orders applicable under federal or state law to health maintenance organizations
(or similar entities) and any regulations, orders and directives promulgated or
issued pursuant thereto.

 

“HMO Regulator” means any Person charged with the administration, oversight or
enforcement of an HMO Regulation and the Blue Cross Blue Shield Association.

 

“Indemnified Taxes” means Taxes other than Excluded Taxes.

 

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

 

“Indiana Insurance Law” means the Indiana Insurance Law (Title 27 of the Indiana
Code), as the same may be amended or supplemented from time to time.

 

“Insurance Regulations” means any Laws applicable to an insurance company.

 

“Insurance Regulator” means any Person charged with the administration,
oversight or enforcement of any Insurance Regulation.

 

“Insurance Subsidiary” means any Subsidiary that is now or hereafter engaged in
the insurance business or is an HMO, and includes AICI.

 

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

 

“Interest Period” means (a) as to each Eurodollar Rate Loan, the period
commencing on the date such Eurodollar Rate Loan is disbursed or (in the case of
any Eurodollar Rate Committed Loan) converted to or continued as a Eurodollar
Rate Loan and ending on the date one, two, three or six months thereafter, as
selected by the Borrower in its Committed Loan Notice or Bid Request, as the
case may be; and (b) as to each Absolute Rate Loan, a period of not less than 14
days and not more than 180 days as selected by the Borrower in its Bid Request;
provided that:

 

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

 

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

 

9

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

 

“Investment” of a Person means any loan, advance (other than commission, travel
and similar advances to officers and employees made in the ordinary course of
business), extension of credit (other than accounts receivable arising in the
ordinary course of business) or contribution of capital by such Person to any
other Person or any investment in, or purchase or other acquisition of, the
stock, partnership interests, notes, debentures or other securities of any other
Person made by such Person.

 

“IRS” means the United States Internal Revenue Service.

 

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

 

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

 

“Laws” means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority.

 

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

 

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

 

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

 

“L/C Issuer” means Bank of America in its capacity as issuer of Letters of
Credit hereunder, or any successor issuer of Letters of Credit hereunder.

 

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

 

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

 

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

 

“Letter of Credit” means any letter of credit issued hereunder and shall include
the Existing Letters of Credit. A Letter of Credit may be a commercial letter of
credit or a standby letter of credit but shall not include provisions for the
issuance of time drafts, issuance of bankers’ acceptances or issuance of other
deferred payment obligations upon any drawing thereunder.

 

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

 

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

 

“Letter of Credit Fee” has the meaning specified in Section 2.04(i).

 

“Letter of Credit Sublimit” means an amount equal to $100,000,000. The Letter of
Credit Sublimit is part of, and not in addition to, the Aggregate Commitments.

 

“License” means any license, certificate of authority, permit or other
authorization which is required to be obtained from any Governmental Authority
in connection with the operation, ownership or transaction of insurance
business.

 

“Lien” means any security interest, lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement); provided, however, that a “Lien” shall not be deemed to arise from
repurchase transactions or reverse repurchase transactions or from programs
where the Borrower or any Subsidiary lends securities.

 

“Liquidity” means an amount equal to (a) the sum of (i) the unrestricted cash,
Cash Equivalents and Permitted Investments set forth in clause (j) of the
definition thereof of the Borrower and the Guarantor, (ii) the Aggregate
Commitments minus the Total Outstandings and (iii) the “Aggregate Commitments”
minus “Total Outstandings”, as such terms are defined in the 364-Day Credit
Agreement minus (b) the aggregate principal amount of outstanding commercial
paper issued by the Borrower.

 

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

 

“Loan Documents” means this Agreement, each Note, each Issuer Document, and the
Guaranty.

 

“Loan Parties” means, collectively, the Borrower and the Guarantor.

 

“Margin Stock” has the meaning assigned to such term under Regulation U of the
FRB.

 

“Material Adverse Effect” means any material adverse effect on (a) the business,
property, financial condition or operations of the Borrower and its
Subsidiaries, taken as a whole, (b) the ability of either of the Loan Parties to
perform any of the Obligations or (c) the rights or remedies available to the
Lenders under this Agreement.

 

“Material Insurance Subsidiary” means any Insurance Subsidiary that is a
Material Subsidiary.

 

“Material Subsidiary” means, at any time, any Subsidiary of the Borrower which,
together with its Subsidiaries, has either assets or revenues from operations
that exceed 10% of the combined assets or combined revenues from operations,
respectively, of the Borrower and its Subsidiaries taken as a whole.

 

“Maturity Date” means the earliest of (a) the fifth anniversary of the Closing
Date, (b) the second Business Day after the Closing Date if by such Business Day
the Merger Effective Date has not occurred, and (c) the date of the termination
in whole of the Commitments pursuant to Section 2.07 or 8.02.

 

“Merger” means the merger of the Guarantor with WellPoint Health Networks Inc.
in accordance with Merger Agreement in which the Guarantor will be the surviving
corporation.

 

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“Merger Agreement” means the Amended and Restated Agreement and Plan of Merger,
effective as of October 26, 2003, among the Borrower, WellPoint and the
Guarantor.

 

“Merger Effective Date” means the Effective Time (as defined in the Merger
Agreement).

 

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

 

“Multiemployer Plan” means a Plan maintained pursuant to a collective bargaining
agreement or any other arrangement to which either Loan Party or any member of
the Controlled Group is a party to which more than one employer is obligated to
make contributions.

 

“NAIC” means the National Association of Insurance Commissioners or any
successor thereto, or in lieu thereof, any other association, agency or other
organization performing advisory, coordination or other like functions among
insurance departments, insurance commissioners and similar Governmental
Authorities of the various states of the United States toward the promotion of
uniformity in the practices of such Governmental Authorities.

 

“Net Income” means, for any computation period, with respect to the Borrower on
a consolidated basis with the Subsidiaries, cumulative net income earned during
such period as determined in accordance with GAAP.

 

“Net Tangible Assets” means the consolidated assets of the Borrower and its
Subsidiaries, determined in accordance with GAAP less: (i) all current
liabilities and minority interests and (ii) goodwill and other intangibles
(other than patents, trademarks, licenses, copyrights and other intellectual
property and prepaid assets).

 

“Net Worth” means the consolidated shareholders’ equity of the Borrower
determined in accordance with GAAP.

 

“Note” means a promissory note made by the Borrower in favor of a Lender
evidencing Loans made by such Lender, substantially in the form of Exhibit D.

 

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

 

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

 

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

 

“Outstanding Amount” means (i) with respect to Committed Loans and Swing Line
Loans on any date, the aggregate outstanding principal amount thereof after
giving effect to any borrowings and prepayments or

 

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repayments of Committed Loans and Swing Line Loans, as the case may be,
occurring on such date; and (ii) with respect to any L/C Obligations on any
date, the amount of such L/C Obligations on such date after giving effect to any
L/C Credit Extension occurring on such date and any other changes in the
aggregate amount of the L/C Obligations as of such date, including as a result
of any reimbursements by the Borrower of Unreimbursed Amounts.

 

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

 

“PBGC” means the Pension Benefit Guaranty Corporation.

 

“Permitted Investments” means:

 

(a) cash and Cash Equivalents;

 

(b) receivables owing to the Borrower or any of its Subsidiaries or any
receivables and advances to clients, customers or suppliers, in each case if
created, acquired or made in the ordinary course of business;

 

(c) Investments (including debt obligations) received in connection with the
bankruptcy or reorganization of suppliers and customers and in settlement of
delinquent obligations of, and other disputes with, customers and suppliers
arising in the ordinary course of business;

 

(d) Investments set forth in Schedule 7.03;

 

(e) loans to employees, directors or officers of the Borrower or any Subsidiary
in the ordinary course of business, including, without limitation, in connection
with the award of convertible bonds or stock under a stock incentive plan, stock
option plan or other equity-based compensation plan or arrangement in the
ordinary course of business;

 

(f) guarantees by the Borrower of the obligations of any Subsidiary or by any
Subsidiary of the obligations of any other Subsidiary;

 

(g) equity Investments by the Borrower and its Subsidiaries in Subsidiaries of
the Borrower and Indebtedness permitted under clause (iii) of Section 7.05;

 

(h) Hedging Agreements in the ordinary course of business;

 

(i) Purchases;

 

(j) readily marketable securities acquired in conformance with the Borrower’s
“investment policy” as of the Closing Date or, in the case of any Subsidiary,
such Subsidiary’s investment policy as of the Closing Date (a copy of which
respective investment policies has been delivered to the Administrative Agent
and the Lenders) and any successors or amendments to such investment policies so
long as such amendments do not substantially modify such investment policies;
provided, however that (i) the amount invested in equity securities (other than
such securities of Subsidiaries of the Borrower) at any one time shall not
exceed 30% of the amount invested in all securities (other than securities of
Subsidiaries of the Borrower) and (ii) the amount invested in repurchase
agreements or reverse repurchase agreements at any one time shall not exceed 30%
of the amount invested in all securities (other than securities of Subsidiaries
of the Borrower); and

 

(k) additional loan advances and/or investments not included within the
foregoing clauses hereof, provided that such loans, advances and/or investments
made pursuant to this clause (k) shall not exceed an aggregate amount of more
than 10% of the consolidated assets of the Borrower and its Subsidiaries,
determined in accordance with GAAP as of the end of the immediately preceding
Fiscal Quarter of the Borrower.

 

“Permitted Liens” means, as applied to the Borrower and the Subsidiaries:

 

(a) any Lien in favor of the Administrative Agent or the Lenders given to secure
the payment and performance of the Obligations;

 

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(b) Liens securing obligations in an aggregate amount not in excess at any time
of 10% of Net Tangible Assets at the end of the immediately preceding Fiscal
Quarter of the Borrower;

 

(c) (i) Liens on real estate for real estate taxes not yet delinquent and (ii)
Liens for taxes, assessments, judgments, governmental charges or levies, or
claims that are not yet due or the non-payment of which is being diligently
contested in good faith by appropriate proceedings;

 

(d) Liens of carriers, warehousemen, mechanics, laborers, and materialmen
incurred in the ordinary course of business for sums that are not overdue by
more than 60 days or being diligently contested in good faith by appropriate
proceedings;

 

(e) Liens incurred in the ordinary course of business in connection with
worker’s compensation and unemployment insurance and other social security laws
and regulations;

 

(f) restrictions on the transfer of assets imposed by any applicable federal,
state or local statute, regulation or ordinance;

 

(g) easements, rights-of-way, zoning restrictions and other similar encumbrances
on the use of real property which do not interfere with the ordinary conduct of
the business of the Borrower or any Subsidiary, or Liens incidental to the
conduct of the business of the Borrower or any Subsidiary or to the ownership of
its properties which were not incurred in connection with Debt or other
extensions of credit and which do not in the aggregate materially detract from
the value of such properties or materially impair their use in the operation of
the business of the Borrower or any Subsidiary;

 

(h) purchase money mortgages or security interests, conditional sale
arrangements and other similar security interests (hereinafter referred to
individually as a “Purchase Money Security Interest”); provided, however, that:

 

(i) the transaction in which any Purchase Money Security Interest is proposed to
be created is not otherwise prohibited by this Agreement;

 

(ii) any Purchase Money Security Interest shall attach only to the property or
assets acquired in such transaction and shall not extend to or cover any other
assets or properties of such Loan Party or Subsidiary; and

 

(iii) the Debt secured or covered by any Purchase Money Security Interest shall
not exceed the lesser of the cost or fair market value of the property or asset
acquired and shall not be renewed or extended by such Loan Party or Subsidiary;

 

(i) judgment Liens arising in connection with court proceedings which do not
exceed the Threshold Amount in the aggregate, provided that the execution or
other enforcement of such Liens is effectively stayed;

 

(j) Liens consisting of deposits made by the Borrower or any Insurance
Subsidiary with the insurance authority in its jurisdiction of domicile or other
statutory Liens or Liens or claims, reserves or contingent payment arrangements
imposed or required by applicable insurance law or regulation against the assets
of the Borrower or such Insurance Subsidiary or securing regulatory capital or
other financial responsibility requirements;

 

(k) Purchase Money Security Interests in equipment constituting inventory of the
Borrower or any Subsidiary which is leased (or held for lease) by the Borrower
or such Subsidiary to its customers in the ordinary course of business and other
Liens on lease receivables, equipment and cash collateral accounts established
in connection therewith;

 

(l) deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business;

 

(m) Liens securing obligations to share with the federal Center for Medicare and
Medicaid Services potential gains from the sale or other disposition of
depreciable assets used in the administration of the Medicare program;

 

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(n) Liens on the property or assets of a corporation which becomes a Subsidiary
after the date of this Agreement securing obligations (and any extension,
renewal or replacement thereof that does not increase the outstanding principal
amount thereof) which is not prohibited by this Agreement (after giving effect
to the acquisition of such Subsidiary), provided that (i) such Liens existed at
the time such corporation became a Subsidiary and were not created in
anticipation thereof, (ii) any such Lien is not spread to cover any additional
property or assets of such corporation after the time such corporation becomes a
Subsidiary, and (iii) no additional amount of Debt shall be secured by such
Liens in reliance upon the provisions of this clause;

 

(o) Liens arising solely by virtue of any statutory or common law provisions
relating to bankers’ liens, rights of setoff or similar rights and remedies as
to deposit accounts or other funds maintained with a creditor depository
institution; provided that (i) such deposit account is not a dedicated cash
collateral account and is not subject to restrictions against access by the
Borrower in excess of those set forth by regulations promulgated by the FRB and
(ii) such deposit account is not intended by the Borrower or any of its
Subsidiaries to provide collateral to the depository institution in respect of
specifically identified or contemplated obligations; and

 

(p) any Lien on any property or asset of the Borrower or any Subsidiary existing
on the date hereof and set forth in Schedule 7.01; provided that (i) such Lien
shall not apply to any other property or asset of the Borrower or any Subsidiary
(except proceeds thereof) and (ii) such Lien shall secure only those obligations
which it secures on the date hereof and extensions, renewals and replacements
thereof that do not increase the outstanding principal amount thereof.

 

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

 

“Plan” means an employee pension benefit plan, as defined in Section 3(2) of
ERISA, as to which either Loan Party or any member of the Controlled Group may
have any liability.

 

“Pre-Commitment Information” has the meaning given in Section 4.01(a)(vi)(D).

 

“Purchase” means any transaction, or any series of related transactions,
consummated on or after the date of this Agreement, by which either Loan Party
or any Subsidiary (a) acquires any going business or all or substantially all of
the assets of any firm, corporation or division or line of business thereof,
whether through purchase of assets, merger or otherwise, or (b) directly or
indirectly acquires (in one transaction or as of the most recent transaction in
a series of transactions) at least a majority (in number of votes) of the
securities of a corporation which have ordinary voting power for the election of
directors (other than securities having such power only by reason of the
happening of a contingency) or a majority (by percentage or voting power) of the
outstanding partnership interests of a partnership.

 

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

 

“Registration Statement” means the registration statement (Registration No.
333-110830) on Form S-4 under the Securities Act filed with the Securities and
Exchange Commission in connection with the Merger on November 26, 2003, as
subsequently amended or supplemented from time to time.

 

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

 

“Reportable Event” means a reportable event as defined in Section 4043 of ERISA
and the regulations issued under such section, with respect to a Single Employer
Plan, excluding, however, such events as to which the PBGC has by regulation
waived the requirement of Section 4043(a) of ERISA that it be notified within 30
days of the occurrence of such event; provided, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.

 

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

 

“Required Lenders” means, as of any date of determination, Lenders having more
than 50% of the Aggregate Commitments or, if the commitment of each Lender to
make Loans and the obligation of the L/C Issuer to make L/C Credit Extensions
have been terminated pursuant to Section 8.02, Lenders holding in the aggregate
more than 50% of the Total Outstandings (with the aggregate amount of each
Lender’s risk participation and funded participation in L/C Obligations and
Swing Line Loans being deemed “held” by such Lender for purposes of this
definition); provided that the Commitment of, and the portion of the Total
Outstandings held or deemed held by, any Defaulting Lender shall be excluded for
purposes of making a determination of Required Lenders.

 

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

 

“SAP” means, with respect to any Insurance Subsidiary, the statutory accounting
practices prescribed or permitted by the insurance commissioner (or other
similar authority) in the jurisdiction of such Insurance Subsidiary for the
preparation of annual statements and other financial reports by insurance
companies of the same type as such Insurance Subsidiary in effect from time to
time.

 

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

 

“Single Employer Plan” means a Plan subject to Title IV of ERISA maintained by
either Loan Party or any member of the Controlled Group for employees of such
Loan Party or member of the Controlled Group, other than a Multiemployer Plan.

 

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

 

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

 

“Surplus Notes” of AICI means all notes evidencing obligations of AICI which may
from time to time be issued by AICI and which under SAP in effect on the date of
this Agreement would be included in the “Liabilities, Surplus and Other Funds”
statement of AICI’s Annual Statement.

 

“Swing Line” means the revolving credit facility made available by the Swing
Line Lender pursuant to Section 2.05.

 

“Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to
Section 2.05.

 

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

 

“Swing Line Loan” has the meaning specified in Section 2.05(a).

 

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“Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to
Section 2.05(b), which, if in writing, shall be substantially in the form of
Exhibit C.

 

“Swing Line Sublimit” means an amount equal to the lesser of (a) $50,000,000 and
(b) the Aggregate Commitments. The Swing Line Sublimit is part of, and not in
addition to, the Aggregate Commitments.

 

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

 

“Termination Event” means, with respect to a Plan which is subject to Title IV
of ERISA, (a) a Reportable Event, (b) the withdrawal of a Loan Party or any
other member of the Controlled Group from such Plan during a plan year in which
such Loan Party or member of the Controlled Group was a “substantial employer”
as defined in Section 4001(a)(2) of ERISA, (c) the termination of such Plan, the
filing of a notice of intent to terminate such Plan or the treatment of an
amendment of such Plan as a termination under Section 4041 of ERISA, (d) the
institution by the PBGC of proceedings to terminate such Plan or (e) any event
or condition which could reasonably be expected to constitute grounds under
Section 4042 of ERISA for the termination of, or appointment of a trustee to
administer, such Plan.

 

“Threshold Amount” means $50,000,000.

 

“Total Debt” means, at any time, all Debt that would be required to appear as
liabilities on the consolidated balance sheet of the Borrower and its
Subsidiaries prepared in accordance with GAAP (including, in any event, Surplus
Notes of AICI and surplus notes issued by any other Insurance Subsidiary) plus
all guarantee obligations (or obligations having the economic effect of
guarantee obligations) of the Borrower or any Subsidiary in respect of Debt of
Persons other than the Borrower or any Subsidiary.

 

“Total Debt to Capital Ratio” means, at any time, the ratio of (a) the Total
Debt at such time to (b) the sum of Total Debt plus the Borrower’s Net Worth at
such time.

 

“Total Outstandings” means the aggregate Outstanding Amount of all Loans and all
L/C Obligations.

 

“Transactions” means the execution, delivery and performance by the Loan Parties
of the Loan Documents, the borrowing of Loans, the use of the proceeds thereof,
the completion of the Merger and the other transactions contemplated hereby.

 

“Type” means (a) with respect to a Committed Loan, its character as a Base Rate
Loan or a Eurodollar Rate Loan, and (b) with respect to a Bid Loan, its
character as an Absolute Rate Loan or a Eurodollar Margin Bid Loan.

 

“Unfunded Liability” means the amount (if any) by which the present value of all
vested and unvested accrued benefits under a Single Employer Plan exceeds the
fair market value of assets allocable to such benefits, all determined as of the
then most recent valuation date for such Plans based on the actuarial
assumptions used by the Plan’s actuary in the most recent annual valuation of
the Plan.

 

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

 

“Unreimbursed Amount” has the meaning specified in Section 2.04(c)(i).

 

“WellPoint” means WellPoint Health Networks Inc.

 

“WellPoint Credit Agreements” means the Five-Year Credit Agreement dated as of
March 30, 2001 among WellPoint, Bank of America, as administrative agent, and
the lenders party thereto (as amended by the First Amendment thereto, dated as
of March 28, 2003) and the 364-Day Credit Agreement dated as of March 30, 2001
among the Borrower, Bank of America, as administrative agent, and the lenders
party thereto (as amended by the First Amendment thereto, dated as of March 29,
2002, by the Second Amendment thereto, dated as of March 28, 2003 and the Third
Amendment thereto, dated as of March 26, 2004).

 

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“WellPoint Notes” means WellPoint’s Senior unsecured 6 3/8% notes due 2006,
issued on June 15, 2001, and WellPoint’s 6 3/8% Senior notes due 2012, issued on
January 16, 2002.

 

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

 

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

 

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

 

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

 

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

 

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

 

1.04 Rounding. Any financial ratios required to be maintained by the Borrower
pursuant to this Agreement shall be calculated by dividing the appropriate
component by the other component, carrying the result to one place more than the
number of places by which such ratio is expressed herein and rounding the result
up or down to the nearest number (with a rounding-up if there is no nearest
number).

 

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

 

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1.06 Letter of Credit Amounts. Unless otherwise specified, all references herein
to the amount of a Letter of Credit at any time shall be deemed to mean the
maximum face amount of such Letter of Credit after giving effect to all
increases thereof contemplated by such Letter of Credit or the Issuer Documents
related thereto, whether or not such maximum face amount is in effect at such
time.

 

ARTICLE II.

THE COMMITMENTS AND CREDIT EXTENSIONS

 

2.01 Committed Loans. Subject to the terms and conditions set forth herein, each
Lender severally agrees to make loans (each such loan, a “Committed Loan”) to
the Borrower from time to time, on any Business Day during the Availability
Period, in an aggregate amount not to exceed at any time outstanding the amount
of such Lender’s Commitment; provided, however, that after giving effect to any
Committed Borrowing, (i) the Total Outstandings shall not exceed the Aggregate
Commitments, and (ii) the aggregate Outstanding Amount of the Committed Loans of
any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount
of all L/C Obligations, plus such Lender’s Applicable Percentage of the
Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s
Commitment; provided, further, that during the period from the Closing Date to
the Merger Effective Date, the Aggregate Commitments hereunder shall be deemed
to be reduced by an amount equal to the aggregate amount of outstanding
commercial paper issued by the Borrower multiplied by the fraction in which the
numerator is the Aggregate Commitments hereunder and the denominator is the sum
of (x) the Aggregate Commitments hereunder and (y) the “Aggregate Commitments”
as defined in the 364-Day Credit Agreement. Within the limits of each Lender’s
Commitment, and subject to the other terms and conditions hereof, the Borrower
may borrow under this Section 2.01, prepay under Section 2.06, and reborrow
under this Section 2.01. At the option of the Borrower, Committed Loans may be
Base Rate Loans or Eurodollar Rate Loans, as further provided herein.

 

2.02 Borrowings, Conversions and Continuations of Committed Loans.

 

(a) Each Committed Borrowing, each conversion of Committed Loans from one Type
to the other, and each continuation of Eurodollar Rate Committed Loans shall be
made upon the Borrower’s irrevocable notice to the Administrative Agent, which
may be given by telephone. Each such notice must be received by the
Administrative Agent not later than 11:00 a.m. (i) three Business Days prior to
the requested date of any Borrowing of, conversion to or continuation of
Eurodollar Rate Committed Loans or of any conversion of Eurodollar Rate
Committed Loans to Base Rate Committed Loans, and (ii) on the requested date of
any Borrowing of Base Rate Committed Loans. Each telephonic notice by the
Borrower pursuant to this Section 2.02(a) must be confirmed promptly by delivery
to the Administrative Agent of a written Committed Loan Notice, appropriately
completed and signed by an Authorized Officer of the Borrower. Each Borrowing
of, conversion to or continuation of Eurodollar Rate Committed Loans shall be in
a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess
thereof. Except as provided in Sections 2.04(c) and 2.05(c), each Borrowing of
or conversion to Base Rate Committed Loans shall be in a principal amount of
$500,000 or a whole multiple of $100,000 in excess thereof. Each Committed Loan
Notice (whether telephonic or written) shall specify (i) whether the Borrower is
requesting a Committed Borrowing, a conversion of Committed Loans from one Type
to the other, or a continuation of Eurodollar Rate Committed Loans, (ii) the
requested date of the Borrowing, conversion or continuation, as the case may be
(which shall be a Business Day), (iii) the principal amount of Committed Loans
to be borrowed, converted or continued, (iv) the Type of Committed Loans to be
borrowed or to which existing Committed Loans are to be converted, and (v) if
applicable, the duration of the Interest Period with respect thereto. If the
Borrower fails to specify a Type of Committed Loan in a Committed Loan Notice or
if the Borrower fails to give a timely notice requesting a conversion or
continuation, then the applicable Committed Loans shall be made as, or converted
to, Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be
effective as of the last day of the Interest Period then in effect with respect
to the applicable Eurodollar Rate Committed Loans. If the Borrower requests a
Borrowing of, conversion to, or continuation of Eurodollar Rate Committed Loans
in any such Committed Loan Notice, but fails to specify an Interest Period, it
will be deemed to have specified an Interest Period of one month.

 

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

 

(c) Except as otherwise provided herein, a Eurodollar Rate Committed Loan may be
continued or converted only on the last day of an Interest Period for such
Eurodollar Rate Committed Loan. During the existence of an Event of Default, no
Loans may be requested as, converted to or continued as Eurodollar Rate
Committed Loans without the consent of the Required Lenders.

 

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

 

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

 

2.03 Bid Loans.

 

(a) General. Subject to the terms and conditions set forth herein, each Lender
agrees that the Borrower may from time to time request the Lenders to submit
offers to make loans (each such loan, a “Bid Loan”) to the Borrower prior to the
Maturity Date pursuant to this Section 2.03; provided, however, that after
giving effect to any Bid Borrowing the Total Outstandings shall not exceed the
Aggregate Commitments. There shall not be more than ten different Interest
Periods in effect with respect to Bid Loans at any time.

 

(b) Requesting Competitive Bids. The Borrower may request the submission of
Competitive Bids by delivering a Bid Request to the Administrative Agent not
later than 12:00 noon (i) one Business Day prior to the requested date of any
Bid Borrowing that is to consist of Absolute Rate Loans, or (ii) four Business
Days prior to the requested date of any Bid Borrowing that is to consist of
Eurodollar Margin Bid Loans. Each Bid Request shall specify (i) the requested
date of the Bid Borrowing (which shall be a Business Day), (ii) the aggregate
principal amount of Bid Loans requested (which must be at least $5,000,000 or a
whole multiple of $1,000,000 in excess thereof), (iii) the Type of Bid Loans
requested, and (iv) the duration of the Interest Period with respect thereto,
and shall be signed by an Authorized Officer of the Borrower. No Bid Request
shall contain a request for (i) more than one Type of Bid Loan or (ii) Bid Loans
having more than three different Interest Periods. Unless the Administrative
Agent otherwise agrees in its sole and absolute discretion, the Borrower may not
submit a Bid Request if it has submitted another Bid Request within the prior
five Business Days.

 

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(c) Submitting Competitive Bids.

 

(i) The Administrative Agent shall promptly notify each Lender of each Bid
Request received by it from the Borrower and the contents of such Bid Request.

 

(ii) Each Lender may (but shall have no obligation to) submit a Competitive Bid
containing an offer to make one or more Bid Loans in response to such Bid
Request. Such Competitive Bid must be delivered to the Administrative Agent not
later than 10:30 a.m. (A) on the requested date of any Bid Borrowing that is to
consist of Absolute Rate Loans, and (B) three Business Days prior to the
requested date of any Bid Borrowing that is to consist of Eurodollar Margin Bid
Loans; provided, however, that any Competitive Bid submitted by Bank of America
in its capacity as a Lender in response to any Bid Request must be submitted to
the Administrative Agent not later than 10:15 a.m. on the date on which
Competitive Bids are required to be delivered by the other Lenders in response
to such Bid Request. Each Competitive Bid shall specify (A) the proposed date of
the Bid Borrowing; (B) the principal amount of each Bid Loan for which such
Competitive Bid is being made, which principal amount (x) may be equal to,
greater than or less than the Commitment of the bidding Lender, (y) must be
$5,000,000 or a whole multiple of $1,000,000 in excess thereof, and (z) may not
exceed the principal amount of Bid Loans for which Competitive Bids were
requested; (C) if the proposed Bid Borrowing is to consist of Absolute Rate Bid
Loans, the Absolute Rate offered for each such Bid Loan and the Interest Period
applicable thereto; (D) if the proposed Bid Borrowing is to consist of
Eurodollar Margin Bid Loans, the Eurodollar Bid Margin with respect to each such
Eurodollar Margin Bid Loan and the Interest Period applicable thereto; and (E)
the identity of the bidding Lender.

 

(iii) Any Competitive Bid shall be disregarded if it (A) is received after the
applicable time specified in clause (ii) above, (B) is not substantially in the
form of a Competitive Bid as specified herein, (C) contains qualifying,
conditional or similar language, (D) proposes terms other than or in addition to
those set forth in the applicable Bid Request, or (E) is otherwise not
responsive to such Bid Request. Any Lender may correct a Competitive Bid
containing a manifest error by submitting a corrected Competitive Bid
(identified as such) not later than the applicable time required for submission
of Competitive Bids. Any such submission of a corrected Competitive Bid shall
constitute a revocation of the Competitive Bid that contained the manifest
error. The Administrative Agent may, but shall not be required to, notify any
Lender of any manifest error it detects in such Lender’s Competitive Bid.

 

(iv) Subject only to the provisions of Sections 3.02, 3.03 and 4.02 and clause
(iii) above, each Competitive Bid shall be irrevocable.

 

(d) Notice to Borrower of Competitive Bids. Not later than 11:00 a.m. (i) on the
requested date of any Bid Borrowing that is to consist of Absolute Rate Loans,
or (ii) three Business Days prior to the requested date of any Bid Borrowing
that is to consist of Eurodollar Margin Bid Loans, the Administrative Agent
shall notify the Borrower of the identity of each Lender that has submitted a
Competitive Bid that complies with Section 2.03(c) and of the terms of the
offers contained in each such Competitive Bid.

 

(e) Acceptance of Competitive Bids. Not later than 11:30 a.m. (i) on the
requested date of any Bid Borrowing that is to consist of Absolute Rate Loans,
and (ii) three Business Days prior to the requested date of any Bid Borrowing
that is to consist of Eurodollar Margin Bid Loans, the Borrower shall notify the
Administrative Agent of its acceptance or rejection of the offers notified to it
pursuant to Section 2.03(d). The Borrower shall be under no obligation to accept
any Competitive Bid and may choose to reject all Competitive Bids. In the case
of acceptance, such notice shall specify the aggregate principal amount of
Competitive Bids for each Interest Period that is accepted. The Borrower may
accept any Competitive Bid in whole or in part; provided that:

 

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

 

(ii) the principal amount of each Bid Loan must be $5,000,000 or a whole
multiple of $1,000,000 in excess thereof;

 

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(iii) the acceptance of offers may be made only on the basis of ascending
Absolute Rates or Eurodollar Bid Margins within each Interest Period; and

 

(iv) the Borrower may not accept any offer that is described in Section
2.03(c)(iii) or that otherwise fails to comply with the requirements hereof.

 

(f) Procedure for Identical Bids. If two or more Lenders have submitted
Competitive Bids at the same Absolute Rate or Eurodollar Bid Margin, as the case
may be, for the same Interest Period, and the result of accepting all of such
Competitive Bids in whole (together with any other Competitive Bids at lower
Absolute Rates or Eurodollar Bid Margins, as the case may be, accepted for such
Interest Period in conformity with the requirements of Section 2.03(e)(iii))
would be to cause the aggregate outstanding principal amount of the applicable
Bid Borrowing to exceed the amount specified therefor in the related Bid
Request, then, unless otherwise agreed by the Borrower, the Administrative Agent
and such Lenders, such Competitive Bids shall be accepted as nearly as possible
in proportion to the amount offered by each such Lender in respect of such
Interest Period, with such accepted amounts being rounded to the nearest whole
multiple of $1,000,000.

 

(g) Notice to Lenders of Acceptance or Rejection of Bids. The Administrative
Agent shall promptly notify each Lender having submitted a Competitive Bid
whether or not its offer has been accepted and, if its offer has been accepted,
of the amount of the Bid Loan or Bid Loans to be made by it on the date of the
applicable Bid Borrowing. Any Competitive Bid or portion thereof that is not
accepted by the Borrower by the applicable time specified in Section 2.03(e)
shall be deemed rejected.

 

(h) Notice of Eurodollar Rate. If any Bid Borrowing is to consist of Eurodollar
Margin Loans, the Administrative Agent shall determine the Eurodollar Rate for
the relevant Interest Period, and promptly after making such determination,
shall notify the Borrower and the Lenders that will be participating in such Bid
Borrowing of such Eurodollar Rate.

 

(i) Funding of Bid Loans. Each Lender that has received notice pursuant to
Section 2.03(g) that all or a portion of its Competitive Bid has been accepted
by the Borrower shall make the amount of its Bid Loan(s) available to the
Administrative Agent in immediately available funds at the Administrative
Agent’s Office not later than 1:00 p.m. on the date of the requested Bid
Borrowing. Upon satisfaction of the applicable conditions set forth in Section
4.02, the Administrative Agent shall make all funds so received available to the
Borrower in like funds as received by the Administrative Agent.

 

(j) Notice of Range of Bids. After each Competitive Bid auction pursuant to this
Section 2.03, the Administrative Agent shall notify each Lender that submitted a
Competitive Bid in such auction of the ranges of bids submitted (without the
bidder’s name) and accepted for each Bid Loan and the aggregate amount of each
Bid Borrowing.

 

2.04 Letters of Credit.

 

(a) The Letter of Credit Commitment.

 

(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer
agrees, in reliance upon the agreements of the Lenders set forth in this Section
2.04, (1) from time to time on any Business Day during the period from the
Merger Effective Date until the Letter of Credit Expiration Date, to issue
Letters of Credit for the account of the Borrower, and to amend Letters of
Credit previously issued by it, in accordance with Section 2.04(b), and (2) to
honor drawings under the Letters of Credit; and (B) the Lenders severally agree
to participate in Letters of Credit issued for the account of the Borrower and
any drawings thereunder; provided that after giving effect to any L/C Credit
Extension with respect to any Letter of Credit, (x) the Total Outstandings shall
not exceed the Aggregate Commitments, (y) the aggregate Outstanding Amount of
the Committed Loans of any Lender, plus such Lender’s Applicable Percentage of
the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable
Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed
such Lender’s Commitment, and (z) the Outstanding Amount of the L/C

 

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Obligations shall not exceed the Letter of Credit Sublimit. Each request by the
Borrower for the issuance or amendment of a Letter of Credit shall be deemed to
be a representation by the Borrower that the L/C Credit Extension so requested
complies with the conditions set forth in the proviso to the preceding sentence.
Within the foregoing limits, and subject to the terms and conditions hereof, the
Borrower’s ability to obtain Letters of Credit shall be fully revolving, and
accordingly the Borrower may, during the foregoing period, obtain Letters of
Credit to replace Letters of Credit that have expired or that have been drawn
upon and reimbursed. As of the Merger Effective Date, if the Total Outstandings
(including the aggregate amount of all Existing Letters of Credit) is less than
the Aggregate Commitments (or the first Business Day thereafter on which the
Total Outstandings (including the aggregate amount of all Existing Letters of
Credit) is less than the Aggregate Commitments), all Existing Letters of Credit
shall be deemed to have been issued pursuant hereto, and from and after the
Merger Effective Date (or such later Business Day) shall be subject to and
governed by the terms and conditions hereof. Within two Business Days after the
Merger Effective Date (or such later date), the Borrower shall provide the
Administrative Agent with a list of the Existing Letters of Credit as of the
Merger Effective Date, including therein the amounts, beneficiaries and expiry
dates of the Existing Letters of Credit and, if requested by the Administrative
Agent, copies thereof.

 

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

 

(A) the expiry date of such requested Letter of Credit would occur more than
twelve months after the date of issuance, unless the Required Lenders have
approved such expiry date; or

 

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

 

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

 

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

 

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

 

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

 

(D) such Letter of Credit is to be denominated in a currency other than Dollars;

 

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

 

(F) a default of any Lender’s obligations to fund under Section 2.04(c) exists
or any Lender is at such time a Defaulting Lender hereunder, unless the L/C
Issuer has entered into satisfactory arrangements with the Borrower or such
Lender to eliminate the L/C Issuer’s risk with respect to such Lender.

 

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

 

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

 

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(vi) The L/C Issuer shall act on behalf of the Lenders with respect to any
Letters of Credit issued by it and the documents associated therewith, and the
L/C Issuer shall have all of the benefits and immunities (A) provided to the
Administrative Agent in Article IX with respect to any acts taken or omissions
suffered by the L/C Issuer in connection with Letters of Credit issued by it or
proposed to be issued by it and Issuer Documents pertaining to such Letters of
Credit as fully as if the term “Administrative Agent” as used in Article IX
included the L/C Issuer with respect to such acts or omissions, and (B) as
additionally provided herein with respect to the L/C Issuer.

 

(b) Procedures for Issuance and Amendment of Letters of Credit.

 

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

 

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

 

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

 

(c) Drawings and Reimbursements; Funding of Participations.

 

(i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a
drawing under such Letter of Credit, the L/C Issuer shall notify the Borrower
and the Administrative Agent thereof. Not later than 11:00 a.m. on the date of
any payment by the L/C Issuer under a Letter of Credit (each such date, an
“Honor Date”), the Borrower shall reimburse the L/C Issuer through the
Administrative Agent in an amount equal to the amount of such drawing. If the
Borrower fails to so reimburse the L/C Issuer by such time, the

 

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Administrative Agent shall promptly notify each Lender of the Honor Date, the
amount of the unreimbursed drawing (the “Unreimbursed Amount”), and the amount
of such Lender’s Applicable Percentage thereof. In such event, the Borrower
shall be deemed to have requested a Committed Borrowing of Base Rate Loans to be
disbursed on the Honor Date in an amount equal to the Unreimbursed Amount,
without regard to the minimum and multiples specified in Section 2.02 for the
principal amount of Base Rate Loans, but subject to the amount of the unutilized
portion of the Aggregate Commitments and the conditions set forth in Section
4.02 (other than the delivery of a Committed Loan Notice). Any notice given by
the L/C Issuer or the Administrative Agent pursuant to this Section 2.04(c)(i)
may be given by telephone if immediately confirmed in writing; provided that the
lack of such an immediate confirmation shall not affect the conclusiveness or
binding effect of such notice.

 

(ii) Each Lender shall upon any notice pursuant to Section 2.04(c)(i) make funds
available to the Administrative Agent for the account of the L/C Issuer at the
Administrative Agent’s Office in an amount equal to its Applicable Percentage of
the Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified
in such notice by the Administrative Agent, whereupon, subject to the provisions
of Section 2.04(c)(iii), each Lender that so makes funds available shall be
deemed to have made a Base Rate Committed Loan to the Borrower in such amount.
The Administrative Agent shall remit the funds so received to the L/C Issuer.

 

(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a
Committed Borrowing of Base Rate Loans because the conditions set forth in
Section 4.02 cannot be satisfied or for any other reason, the Borrower shall be
deemed to have incurred from the L/C Issuer an L/C Borrowing in the amount of
the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be
due and payable on demand (together with interest) and shall bear interest at
the Default Rate. In such event, each Lender’s payment to the Administrative
Agent for the account of the L/C Issuer pursuant to Section 2.04(c)(ii) shall be
deemed payment in respect of its participation in such L/C Borrowing and shall
constitute an L/C Advance from such Lender in satisfaction of its participation
obligation under this Section 2.04.

 

(iv) Until each Lender funds its Committed Loan or L/C Advance pursuant to this
Section 2.04(c) to reimburse the L/C Issuer for any amount drawn under any
Letter of Credit, interest in respect of such Lender’s Applicable Percentage of
such amount shall be solely for the account of the L/C Issuer.

 

(v) Each Lender’s obligation to make Committed Loans or L/C Advances to
reimburse the L/C Issuer for amounts drawn under Letters of Credit, as
contemplated by this Section 2.04(c), shall be absolute and unconditional and
shall not be affected by any circumstance, including (A) any setoff,
counterclaim, recoupment, defense or other right which such Lender may have
against the L/C Issuer, the Borrower or any other Person for any reason
whatsoever; (B) the occurrence or continuance of a Default, or (C) any other
occurrence, event or condition, whether or not similar to any of the foregoing;
provided, however, that each Lender’s obligation to make Committed Loans
pursuant to this Section 2.04(c) is subject to the conditions set forth in
Section 4.02 (other than delivery by the Borrower of a Committed Loan Notice).
No such making of an L/C Advance shall relieve or otherwise impair the
obligation of the Borrower to reimburse the L/C Issuer for the amount of any
payment made by the L/C Issuer under any Letter of Credit, together with
interest as provided herein.

 

(vi) If any Lender fails to make available to the Administrative Agent for the
account of the L/C Issuer any amount required to be paid by such Lender pursuant
to the foregoing provisions of this Section 2.04(c) by the time specified in
Section 2.04(c)(ii), the L/C Issuer shall be entitled to recover from such
Lender (acting through the Administrative Agent), on demand, such amount with
interest thereon for the period from the date such payment is required to the
date on which such payment is immediately available to the L/C Issuer at a rate
per annum equal to the greater of the Federal Funds Rate and a rate determined
by the L/C Issuer in accordance with banking industry rules on interbank
compensation. A certificate of the L/C Issuer submitted to any Lender (through
the Administrative Agent) with respect to any amounts owing under this clause
(vi) shall be conclusive absent manifest error.

 

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(d) Repayment of Participations.

 

(i) At any time after the L/C Issuer has made a payment under any Letter of
Credit and has received from any Lender such Lender’s L/C Advance in respect of
such payment in accordance with Section 2.04(c), if the Administrative Agent
receives for the account of the L/C Issuer any payment in respect of the related
Unreimbursed Amount or interest thereon (whether directly from the Borrower or
otherwise, including proceeds of Cash Collateral applied thereto by the
Administrative Agent), the Administrative Agent will distribute to such Lender
its Applicable Percentage thereof (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such Lender’s L/C
Advance was outstanding) in the same funds as those received by the
Administrative Agent.

 

(ii) If any payment received by the Administrative Agent for the account of the
L/C Issuer pursuant to Section 2.04(c)(i) is required to be returned under any
of the circumstances described in Section 10.05 (including pursuant to any
settlement entered into by the L/C Issuer in its discretion), each Lender shall
pay to the Administrative Agent for the account of the L/C Issuer its Applicable
Percentage thereof on demand of the Administrative Agent, plus interest thereon
from the date of such demand to the date such amount is returned by such Lender,
at a rate per annum equal to the Federal Funds Rate from time to time in effect.
The obligations of the Lenders under this clause shall survive the payment in
full of the Obligations and the termination of this Agreement.

 

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

 

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

 

(ii) the existence of any claim, counterclaim, setoff, defense or other right
that the Borrower or any Subsidiary may have at any time against any beneficiary
or any transferee of such Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), the L/C Issuer or any other
Person, whether in connection with this Agreement, the transactions contemplated
hereby or by such Letter of Credit or any agreement or instrument relating
thereto, or any unrelated transaction;

 

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

 

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

 

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

 

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

 

(f) Role of L/C Issuer. Each Lender and the Borrower agree that, in paying any
drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft,

 

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certificates and documents expressly required by the Letter of Credit) or to
ascertain or inquire as to the validity or accuracy of any such document or the
authority of the Person executing or delivering any such document. None of the
L/C Issuer, the Administrative Agent, any of their respective Related Parties
nor any correspondent, participant or assignee of the L/C Issuer shall be liable
to any Lender for (i) any action taken or omitted in connection herewith at the
request or with the approval of the Lenders or the Required Lenders, as
applicable; (ii) any action taken or omitted in the absence of gross negligence
or willful misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or
Issuer Document. The Borrower hereby assumes all risks of the acts or omissions
of any beneficiary or transferee with respect to its use of any Letter of
Credit; provided, however, that this assumption is not intended to, and shall
not, preclude the Borrower’s pursuing such rights and remedies as it may have
against the beneficiary or transferee at law or under any other agreement. None
of the L/C Issuer, the Administrative Agent, any of their respective Related
Parties nor any correspondent, participant or assignee of the L/C Issuer shall
be liable or responsible for any of the matters described in clauses (i) through
(v) of Section 2.04(e); provided, however, that anything in such clauses to the
contrary notwithstanding, the Borrower may have a claim against the L/C Issuer,
and the L/C Issuer may be liable to the Borrower, to the extent, but only to the
extent, of any direct, as opposed to consequential or exemplary, damages
suffered by the Borrower which the Borrower proves were caused by the L/C
Issuer’s willful misconduct or gross negligence or the L/C Issuer’s willful
failure to pay under any Letter of Credit after the presentation to it by the
beneficiary of a sight draft and certificate(s) strictly complying with the
terms and conditions of a Letter of Credit. In furtherance and not in limitation
of the foregoing, the L/C Issuer may accept documents that appear on their face
to be in order, without responsibility for further investigation, regardless of
any notice or information to the contrary, and the L/C Issuer shall not be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason.

 

(g) Cash Collateral. Upon the request of the Administrative Agent, (i) if the
L/C Issuer has honored any full or partial drawing request under any Letter of
Credit and such drawing has resulted in an L/C Borrowing, or (ii) if, as of the
Letter of Credit Expiration Date (or the Maturity Date in the case of the
Maturity Date occurring as provided in subclause (b) of the definition thereof),
any L/C Obligation for any reason remains outstanding, the Borrower shall, in
each case, immediately Cash Collateralize the then Outstanding Amount of all L/C
Obligations. Sections 2.06 and 8.02(c) set forth certain additional requirements
to deliver Cash Collateral hereunder. For purposes of this Section 2.04, Section
2.06 and Section 8.02(c), “Cash Collateralize” means to pledge and deposit with
or deliver to the Administrative Agent, for the benefit of the L/C Issuer and
the Lenders, as collateral for the L/C Obligations, cash or deposit account
balances pursuant to documentation in form and substance satisfactory to the
Administrative Agent and the L/C Issuer (which documents are hereby consented to
by the Lenders). Derivatives of such term have corresponding meanings. The
Borrower hereby grants to the Administrative Agent, for the benefit of the L/C
Issuer and the Lenders, a security interest in all such cash, deposit accounts
and all balances therein and all proceeds of the foregoing. Cash Collateral
shall be maintained in blocked, non-interest bearing deposit accounts at Bank of
America.

 

(h) Applicability of ISP and UCP. Unless otherwise expressly agreed by the L/C
Issuer and the Borrower when a Letter of Credit is issued (including any such
agreement applicable to an Existing Letter of Credit), (i) the rules of the ISP
shall apply to each standby Letter of Credit, and (ii) the rules of the Uniform
Customs and Practice for Documentary Credits, as most recently published by the
International Chamber of Commerce at the time of issuance shall apply to each
commercial Letter of Credit.

 

(i) Letter of Credit Fees. The Borrower shall pay to the Administrative Agent
for the account of each Lender in accordance with its Applicable Percentage a
Letter of Credit fee (the “Letter of Credit Fee”) for each Letter of Credit
equal to the respective Applicable Rate times the daily maximum amount available
to be drawn under such Letter of Credit (whether or not such maximum amount is
then in effect under such Letter of Credit). Letter of Credit Fees shall be (i)
computed on a quarterly basis in arrears and (ii) due and payable on the first
Business Day after the end of each March, June, September and December,
commencing with the first such date to occur

 

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after the issuance of such Letter of Credit, on the Letter of Credit Expiration
Date and thereafter on demand. If there is any change in such Applicable Rate
during any quarter, the daily maximum amount of each Letter of Credit shall be
computed and multiplied by the Applicable Rate separately for each period during
such quarter that such Applicable Rate was in effect. Notwithstanding anything
to the contrary contained herein, upon the request of the Required Lenders,
while any Event of Default exists, all Letter of Credit Fees shall accrue at the
Default Rate.

 

(j) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer.
The Borrower shall pay directly to the L/C Issuer for its own account a fronting
fee with respect to each Letter of Credit, at the rate of 0.125% per annum,
computed on the actual daily maximum amount available to be drawn under such
Letter of Credit (whether or not such maximum amount is then in effect under
such Letter of Credit) and on a quarterly basis in arrears, and due and payable
on the first Business Day after the end of each March, June, September and
December, commencing with the first such date to occur after the issuance of
such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on
demand. In addition, the Borrower shall pay directly to the L/C Issuer for its
own account the customary issuance, presentation, amendment and other processing
fees, and other standard costs and charges, of the L/C Issuer relating to
letters of credit as from time to time in effect. Such customary fees and
standard costs and charges are due and payable on demand and are nonrefundable.

 

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

 

2.05 Swing Line Loans.

 

(a) The Swing Line. Subject to the terms and conditions set forth herein, the
Swing Line Lender agrees, in reliance upon the agreements of the other Lenders
set forth in this Section 2.05, to make loans (each such loan, a “Swing Line
Loan”) to the Borrower from time to time on any Business Day during the
Availability Period in an aggregate amount not to exceed at any time outstanding
the amount of the Swing Line Sublimit, notwithstanding the fact that such Swing
Line Loans, when aggregated with the Applicable Percentage of the Outstanding
Amount of Committed Loans and L/C Obligations of the Lender acting as Swing Line
Lender, may exceed the amount of such Lender’s Commitment; provided, however,
that after giving effect to any Swing Line Loan, (i) the Total Outstandings
shall not exceed the Aggregate Commitments, and (ii) the aggregate Outstanding
Amount of the Committed Loans of any Lender, plus such Lender’s Applicable
Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s
Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall
not exceed such Lender’s Commitment, and provided, further, that the Borrower
shall not use the proceeds of any Swing Line Loan to refinance any outstanding
Swing Line Loan. Within the foregoing limits, and subject to the other terms and
conditions hereof, the Borrower may borrow under this Section 2.05, prepay under
Section 2.06, and reborrow under this Section 2.05. Each Swing Line Loan shall
be a Base Rate Loan. Immediately upon the making of a Swing Line Loan, each
Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the Swing Line Lender a risk participation in such Swing Line Loan
in an amount equal to the product of such Lender’s Applicable Percentage times
the amount of such Swing Line Loan.

 

(b) Borrowing Procedures. Each Swing Line Borrowing shall be made upon the
Borrower’s irrevocable notice to the Swing Line Lender and the Administrative
Agent, which may be given by telephone. Each such notice must be received by the
Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the
requested borrowing date, and shall specify (i) the amount to be borrowed, which
shall be a minimum of $100,000, and (ii) the requested borrowing date, which
shall be a Business Day. Each such telephonic notice must be confirmed promptly
by delivery to the Swing Line Lender and the Administrative Agent of a written
Swing Line Loan Notice, appropriately completed and signed by an Authorized
Officer of the Borrower. Promptly after receipt by the Swing Line Lender of any
telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with the
Administrative Agent (by telephone or in writing) that the Administrative Agent
has also received such Swing Line Loan Notice and, if not, the Swing Line Lender
will notify the Administrative

 

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Agent (by telephone or in writing) of the contents thereof. Unless the Swing
Line Lender has received notice (by telephone or in writing) from the
Administrative Agent (including at the request of any Lender) prior to 2:00 p.m.
on the date of the proposed Swing Line Borrowing (A) directing the Swing Line
Lender not to make such Swing Line Loan as a result of the limitations set forth
in the proviso to the first sentence of Section 2.05(a), or (B) that one or more
of the applicable conditions specified in Article IV is not then satisfied,
then, subject to the terms and conditions hereof, the Swing Line Lender will,
not later than 3:00 p.m. on the borrowing date specified in such Swing Line Loan
Notice, make the amount of its Swing Line Loan available to the Borrower.

 

(c) Refinancing of Swing Line Loans.

 

(i) The Swing Line Lender at any time in its sole and absolute discretion may
request, on behalf of the Borrower (which hereby irrevocably authorizes the
Swing Line Lender to so request on its behalf), that each Lender make a Base
Rate Committed Loan in an amount equal to such Lender’s Applicable Percentage of
the amount of Swing Line Loans then outstanding. Such request shall be made in
writing (which written request shall be deemed to be a Committed Loan Notice for
purposes hereof) and in accordance with the requirements of Section 2.02,
without regard to the minimum and multiples specified therein for the principal
amount of Base Rate Loans, but subject to the unutilized portion of the
Aggregate Commitments and the conditions set forth in Section 4.02. The Swing
Line Lender shall furnish the Borrower with a copy of the applicable Committed
Loan Notice promptly after delivering such notice to the Administrative Agent.
Each Lender shall make an amount equal to its Applicable Percentage of the
amount specified in such Committed Loan Notice available to the Administrative
Agent in immediately available funds for the account of the Swing Line Lender at
the Administrative Agent’s Office not later than 1:00 p.m. on the day specified
in such Committed Loan Notice, whereupon, subject to Section 2.05(c)(ii), each
Lender that so makes funds available shall be deemed to have made a Base Rate
Committed Loan to the Borrower in such amount. The Administrative Agent shall
remit the funds so received to the Swing Line Lender.

 

(ii) If for any reason any Swing Line Loan cannot be refinanced by such a
Committed Borrowing in accordance with Section 2.05(c)(i), the request for Base
Rate Committed Loans submitted by the Swing Line Lender as set forth herein
shall be deemed to be a request by the Swing Line Lender that each of the
Lenders fund its risk participation in the relevant Swing Line Loan and each
Lender’s payment to the Administrative Agent for the account of the Swing Line
Lender pursuant to Section 2.05(c)(i) shall be deemed payment in respect of such
participation.

 

(iii) If any Lender fails to make available to the Administrative Agent for the
account of the Swing Line Lender any amount required to be paid by such Lender
pursuant to the foregoing provisions of this Section 2.05(c) by the time
specified in Section 2.05(c)(i), the Swing Line Lender shall be entitled to
recover from such Lender (acting through the Administrative Agent), on demand,
such amount with interest thereon for the period from the date such payment is
required to the date on which such payment is immediately available to the Swing
Line Lender at a rate per annum equal to the greater of the Federal Funds Rate
and a rate determined by the Swing Line Lender n accordance with banking
industry rules on interbank compensation. A certificate of the Swing Line Lender
submitted to any Lender (through the Administrative Agent) with respect to any
amounts owing under this clause (iii) shall be conclusive absent manifest error.

 

(iv) Each Lender’s obligation to make Committed Loans or to purchase and fund
risk participations in Swing Line Loans pursuant to this Section 2.05(c) shall
be absolute and unconditional and shall not be affected by any circumstance,
including (A) any setoff, counterclaim, recoupment, defense or other right which
such Lender may have against the Swing Line Lender, the Borrower or any other
Person for any reason whatsoever, (B) the occurrence or continuance of a
Default, or (C) any other occurrence, event or condition, whether or not similar
to any of the foregoing; provided, however, that each Lender’s obligation to
make Committed Loans pursuant to this Section 2.05(c) is subject to the
conditions set forth in Section 4.02. No such funding of risk participations
shall relieve or otherwise impair the obligation of the Borrower to repay Swing
Line Loans, together with interest as provided herein.

 

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(d) Repayment of Participations.

 

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

 

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

 

(e) Interest for Account of Swing Line Lender. The Swing Line Lender shall be
responsible for invoicing the Borrower for interest on the Swing Line Loans.
Until each Lender funds its Base Rate Committed Loan or risk participation
pursuant to this Section 2.05 to refinance such Lender’s Applicable Percentage
of any Swing Line Loan, interest in respect of such Applicable Percentage shall
be solely for the account of the Swing Line Lender.

 

(f) Payments Directly to Swing Line Lender. The Borrower shall make all payments
of principal and interest in respect of the Swing Line Loans directly to the
Swing Line Lender.

 

2.06 Prepayments.

 

(a) The Borrower may, upon notice to the Administrative Agent, at any time or
from time to time voluntarily prepay Committed Loans in whole or in part without
premium or penalty; provided that (i) such notice must be received by the
Administrative Agent not later than 11:00 a.m. (A) three Business Days prior to
any date of prepayment of Eurodollar Rate Committed Loans and (B) on the date of
prepayment of Base Rate Committed Loans; (ii) any prepayment of Eurodollar Rate
Committed Loans shall be in a principal amount of $5,000,000 or a whole multiple
of $1,000,000 in excess thereof; and (iii) any prepayment of Base Rate Committed
Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000
in excess thereof or, in each case, if less, the entire principal amount thereof
then outstanding. Each such notice shall specify the date and amount of such
prepayment and the Type(s) of Committed Loans to be prepaid. The Administrative
Agent will promptly notify each Lender of its receipt of each such notice, and
of the amount of such Lender’s Applicable Percentage of such prepayment. If such
notice is given by the Borrower, the Borrower shall make such prepayment and the
payment amount specified in such notice shall be due and payable on the date
specified therein. Any prepayment of a Eurodollar Rate Loan shall be accompanied
by all accrued interest on the amount prepaid, together with any additional
amounts required pursuant to Section 3.05. Each such prepayment shall be applied
to the Committed Loans of the Lenders in accordance with their respective
Applicable Percentages.

 

(b) No Bid Loan may be prepaid without the prior consent of the applicable Bid
Loan Lender.

 

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

 

(d) If for any reason the Total Outstandings at any time exceed the Aggregate
Commitments then in effect, the Borrower shall immediately prepay Loans and/or
Cash Collateralize the L/C Obligations in an aggregate

 

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amount equal to such excess; provided, however, that the Borrower shall not be
required to Cash Collateralize the L/C Obligations pursuant to this Section
2.06(d) unless after the prepayment in full of the Committed Loans and Swing
Line Loans the Total Outstandings exceed the Aggregate Commitments then in
effect.

 

2.07 Termination or Reduction of Commitments. The Borrower may, upon notice to
the Administrative Agent, terminate the Aggregate Commitments or from time to
time permanently reduce the Aggregate Commitments; provided that (i) any such
notice shall be received by the Administrative Agent not later than 11:00 a.m.
three Business Days prior to the date of termination or reduction, (ii) any such
partial reduction shall be in an aggregate amount of $5,000,000 or any whole
multiple of $1,000,000 in excess thereof, (iii) the Borrower shall not terminate
or reduce the Aggregate Commitments if, after giving effect thereto and to any
concurrent prepayments hereunder, the Total Outstandings would exceed the
Aggregate Commitments, and (iv) if, after giving effect to any reduction of the
Aggregate Commitments, the Letter of Credit Sublimit or the Swing Line Sublimit
exceeds the amount of the Aggregate Commitments, such Sublimit shall be
automatically reduced by the amount of such excess. The Administrative Agent
will promptly notify the Lenders of any such notice of termination or reduction
of the Aggregate Commitments. Any reduction of the Aggregate Commitments shall
be applied to the Commitment of each Lender according to its Applicable
Percentage. All fees accrued until the effective date of any termination of the
Aggregate Commitments shall be paid on the effective date of such termination.

 

2.08 Repayment of Loans.

 

(a) The Borrower shall repay to the Lenders on the Maturity Date the aggregate
principal amount of Committed Loans outstanding on such date.

 

(b) The Borrower shall repay each Bid Loan on the last day of the Interest
Period in respect thereof.

 

(c) The Borrower shall repay each Swing Line Loan on the earlier to occur of (i)
the date ten Business Days after such Loan is made and (ii) the Maturity Date.

 

2.09 Interest.

 

(a) Subject to Section 2.09(b), (i) each Eurodollar Rate Committed Loan shall
bear interest on the outstanding principal amount thereof for each Interest
Period at a rate per annum equal to the Eurodollar Rate for such Interest Period
plus the respective Applicable Rate; (ii) each Base Rate Committed Loan shall
bear interest on the outstanding principal amount thereof from the applicable
borrowing date at a rate per annum equal to the Base Rate plus the respective
Applicable Rate; (iii) each Bid Loan shall bear interest on the outstanding
principal amount thereof for the Interest Period therefor at a rate per annum
equal to the Eurodollar Rate for such Interest Period plus (or minus) the
Eurodollar Bid Margin, or at the Absolute Rate for such Interest Period, as the
case may be; and (iv) each Swing Line Loan shall bear interest on the
outstanding principal amount thereof from the applicable borrowing date at a
rate per annum equal to the Base Rate plus the respective Applicable Rate.

 

(b) (i) If any principal of or interest on any Loan or any fee or other amount
payable by the Loan Parties hereunder is not paid when due, whether at stated
maturity, upon acceleration or otherwise, such overdue amount shall bear
interest, after as well as before judgment, at a rate per annum equal to the
Default Rate to the fullest extent permitted by applicable Laws.

 

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

 

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

 

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2.10 Fees. In addition to certain fees described in Sections 2.04(i) and (j):

 

(a) Facility Fee. The Borrower shall pay to the Administrative Agent for the
account of each Lender in accordance with its Applicable Percentage, a facility
fee equal to the respective Applicable Rate times the actual daily amount of the
Aggregate Commitments (or, if the Aggregate Commitments have terminated, on the
Outstanding Amount of all Committed Loans, Swing Line Loans and L/C
Obligations), regardless of usage. The facility fee shall accrue at all times
during the Availability Period (and thereafter so long as any Committed Loans,
Swing Line Loans or L/C Obligations remain outstanding), including at any time
during which one or more of the conditions in Article IV is not met, and shall
be due and payable quarterly in arrears on the last Business Day of each March,
June, September and December, commencing with the first such date to occur after
the Closing Date, and on the Maturity Date (and, if applicable, thereafter on
demand). The facility fee shall be calculated quarterly in arrears, and if there
is any change in the respective Applicable Rate during any quarter, the actual
daily amount shall be computed and multiplied by such Applicable Rate separately
for each period during such quarter that such Applicable Rate was in effect.

 

(b) Other Fees. The Borrower shall pay to the Arrangers and the Administrative
Agent for their own respective accounts fees in the amounts and at the times
specified in the respective Fee Letter and as agreed from time to time by the
Borrower and the Administrative Agent in respect of the Administrative Agent’s
administration of Bid Loans, with such fee to be paid on or before any request
for Bid Loans as provided herein. Such fees shall be fully earned when paid and
shall not be refundable for any reason whatsoever.

 

2.11 Computation of Interest and Fees. All computations of interest for Base
Rate Loans when the Base Rate is determined by Bank of America’s “prime rate”
shall be made on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed. All other computations of fees and interest shall be made
on the basis of a 360-day year and actual days elapsed (which results in more
fees or interest, as applicable, being paid than if computed on the basis of a
365-day year). Interest shall accrue on each Loan for the day on which the Loan
is made, and shall not accrue on a Loan, or any portion thereof, for the day on
which the Loan or such portion is paid, provided that any Loan that is repaid on
the same day on which it is made shall, subject to Section 2.13(a), bear
interest for one day. Each determination by the Administrative Agent of an
interest rate or fee hereunder shall be conclusive and binding for all purposes,
absent manifest error.

 

2.12 Evidence of Debt.

 

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

 

(b) In addition to the accounts and records referred to in Section 2.12(a), each
Lender and the Administrative Agent shall maintain in accordance with its usual
practice accounts or records evidencing the purchases and sales by such Lender
of participations in Letters of Credit and Swing Line Loans. In the event of any
conflict between the accounts and records maintained by the Administrative Agent
and the accounts and records of any Lender in respect of such matters, the
accounts and records of the Administrative Agent shall control in the absence of
manifest error.

 

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2.13 Payments Generally; Administrative Agent’s Clawback.

 

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

 

(b) (i) Funding by Lenders; Presumption by Administrative Agent. Unless the
Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Committed Borrowing that such Lender will not make
available to the Administrative Agent such Lender’s share of such Committed
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with Section 2.02 and may, in
reliance upon such assumption, make available to the Borrower a corresponding
amount. In such event, if a Lender has not in fact made its share of the
applicable Committed Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount in immediately available
funds with interest thereon, for each day from and including the date such
amount is made available to the Borrower to but excluding the date of payment to
the Administrative Agent, at (A) in the case of a payment to be made by such
Lender, the greater of the Federal Funds Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation and (B) in the case of a payment to be made by the Borrower, the
interest rate applicable to Base Rate Loans. If the Borrower and such Lender
shall pay such interest to the Administrative Agent for the same or an
overlapping period, the Administrative Agent shall promptly remit to the
Borrower the amount of such interest paid by the Borrower for such period. If
such Lender pays its share of the applicable Committed Borrowing to the
Administrative Agent, then the amount so paid shall constitute such Lender’s
Committed Loan included in such Committed Borrowing. Any payment by the Borrower
shall be without prejudice to any claim the Borrower may have against a Lender
that shall have failed to make such payment to the Administrative Agent.

 

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

 

A notice of the Administrative Agent to any Lender or the Borrower with respect
to any amount owing under this Section 2.13(b) shall be conclusive, absent
manifest error.

 

(c) Failure to Satisfy Conditions Precedent. If any Lender makes available to
the Administrative Agent funds for any Loan to be made by such Lender as
provided in the foregoing provisions of this Article II, and such

 

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funds are not made available to the Borrower by the Administrative Agent because
the conditions to the applicable Credit Extension set forth in Article IV are
not satisfied or waived in accordance with the terms hereof, the Administrative
Agent shall return such funds (in like funds as received from such Lender) to
such Lender, without interest.

 

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

 

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

 

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

 

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

 

(ii) the provisions of this Section 2.14 shall not be construed to apply to (x)
any payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement or (y) any payment obtained by a Lender as consideration
for the assignment of or sale of a participation in any of its Committed Loans
or subparticipations in L/C Obligations or Swing Line Loans to any assignee or
participant, other than to the Borrower or any Subsidiary thereof (as to which
the provisions of this Section 2.14 shall apply).

 

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

 

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ARTICLE III.

TAXES, YIELD PROTECTION AND ILLEGALITY

 

3.01 Taxes.

 

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

 

(b) Payment of Other Taxes by the Borrower. Without limiting Section 3.01(a),
the Borrower shall timely pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable law.

 

(c) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent, each Lender and the L/C Issuer, within 10 days after
demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section 3.01) paid by the
Administrative Agent, such Lender or the L/C Issuer, as the case may be, and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to the
Borrower by a Lender or the L/C Issuer (with a copy to the Administrative
Agent), or by the Administrative Agent on its own behalf or on behalf of a
Lender or the L/C Issuer, shall be conclusive absent manifest error.

 

(d) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority,
the Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.

 

(e) Status of Lenders. Any Foreign Lender that is entitled to an exemption from
or reduction of withholding tax under the law of the jurisdiction in which the
Borrower is resident for tax purposes, or any treaty to which such jurisdiction
is a party, with respect to payments hereunder or under any other Loan Document
shall deliver to the Borrower (with a copy to the Administrative Agent), on or
prior to the Closing Date, or in the case of a Lender that is an assignee or
transferee of an interest under this Agreement pursuant to Section 10.06(b)
(unless the respective Lender was already a Lender hereunder immediately prior
to such assignment or transfer), on the date of such assignment or transfer to
such Lender, such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without withholding or at
a reduced rate of withholding. In addition, any Lender, if requested by the
Borrower or the Administrative Agent, shall deliver such other documentation
prescribed by applicable law or reasonably requested by the Borrower or the
Administrative Agent as will enable the Borrower or the Administrative Agent to
determine whether or not such Lender is subject to backup withholding or
information reporting requirements.

 

Without limiting the generality of the foregoing, in the event that the Borrower
is resident for tax purposes in the United States, any Foreign Lender shall
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the Closing Date, or in
the case of a Foreign Lender that is an assignee or transferee of an interest
under this Agreement pursuant to Section 10.06(b) (unless the respective Foreign
Lender was already a Foreign Lender hereunder immediately prior to such

 

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assignment or transfer), on the date of such assignment or transfer to such
Foreign Lender (and from time to time thereafter upon the request of the
Borrower or the Administrative Agent), whichever of the following is applicable:

 

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

 

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

 

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

 

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

 

In addition, each Lender agrees that from time to time after the Closing Date
provided there has not been a Change in Law that makes it unable to do so, when
a lapse in time or change in circumstances renders the previous certification
obsolete or inaccurate in any material respect, it will deliver to the Borrower
new duly completed original signed copies of Internal Revenue Service Form
W-8ECI, Form W-8BEN (with respect to the benefits of any income tax treaty), or
Form W-8BEN (with respect to the portfolio interest exemption) and a Non-Bank
Certificate, as the case may be, and such other forms as may be required in
order to confirm or establish the entitlement of such Lender to a continued
exemption from or reduction in United States withholding tax with respect to
payments under this Agreement and any Note. Notwithstanding anything to the
contrary contained in Section 3.01(a), (x) the Borrower shall be entitled, to
the extent it is required to do so by law, to deduct or withhold income or
similar taxes imposed by the United States (or any political subdivision or
taxing authority thereof or therein) from interest, fees or other amounts
payable hereunder for the account of any Foreign Lender to the extent that such
Lender has not provided to the Borrower United States Internal Revenue Service
Forms that establish a complete exemption from such deduction or withholding
(or, in the case of a Foreign Lender that has established a reduced rate of
withholding, up to such reduced rate) and (y) the Borrower shall not be
obligated pursuant to Section 3.01(a) to gross up payments to be made to a
Lender in respect of income or similar taxes imposed by the United States if
such Lender has not provided the Borrower the Internal Revenue Service Forms
required to be provided the Borrower pursuant to this Section 3.01(e).

 

(f) Treatment of Certain Refunds. If the Administrative Agent, any Lender or the
L/C Issuer determines, in its sole discretion, that it has received a refund of
any Taxes or Other Taxes as to which it has been indemnified by the Borrower or
with respect to which the Borrower has paid additional amounts pursuant to this
Section 3.01, it shall pay to the Borrower an amount equal to such refund (but
only to the extent of indemnity payments made, or additional amounts paid, by
the Borrower under this Section 3.01 with respect to the Taxes or Other Taxes
giving rise to such refund), net of all out-of-pocket expenses of the
Administrative Agent, such Lender or the L/C Issuer, as the case may be, and
without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund), provided that the Borrower, upon the
request of the Administrative Agent, such Lender or the L/C Issuer, agrees to
repay the amount paid over to the Borrower (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to the
Administrative Agent, such Lender or the L/C Issuer in the event the
Administrative Agent, such Lender or the L/C Issuer is required to repay such
refund to such Governmental Authority. This Section 3.01(f) shall not be
construed to require the Administrative Agent, any Lender or the L/C Issuer to
make available its tax returns (or any other information relating to its taxes
that it deems confidential) to the Borrower or any other Person.

 

(g) Each Lender that is a United States person (as such term is defined in
Section 7701(a)(30) of the Code) for United States federal income tax purposes
agrees to provide the Borrower with two accurate and complete

 

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signed original copies of Internal Revenue Service Form W-9 (Request for
Taxpayer Identification Number and Certification), or any successor form, on or
prior to the date hereof (or on the date such Lender becomes a Lender hereunder
as provided in Section 10.06(b)), when a lapse in time or change in
circumstances renders the previous certification obsolete or inaccurate.

 

(h) If the Borrower is required to pay Lender any additional amounts pursuant to
this Section 3.01, such Lender shall, upon the reasonable request of the
Borrower, use reasonable efforts to select an alternative Lending Office which
would not result in the imposition of such Taxes or Other Taxes; provided,
however, that no Lender shall be obligated to select an alternative Lending
Office if such Lender Party determines that (i) as a result of such selection
such Lender would be in violation of an applicable law, regulation, or treaty,
or would incur unreasonable additional costs or expenses or (ii) such selection
would be inadvisable for regulatory reasons or inconsistent with the interests
of such Lender.

 

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

 

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

 

3.04 Increased Costs; Reserves on Eurodollar Rate Loans.

 

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

 

(i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or credit extended or participated in by, any Lender
(except any reserve requirement contemplated by Section 3.04(e)) or the L/C
Issuer;

 

(ii) change the basis of taxation of payments to such Lender or the L/C Issuer
in respect thereof (except for Indemnified Taxes or Other Taxes covered by
Section 3.01 and the imposition of, or any change in the rate of, any Excluded
Tax payable by such Lender or the L/C Issuer); or

 

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

 

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

 

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

 

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

 

(d) Delay in Requests. Failure or delay on the part of any Lender or the L/C
Issuer to demand compensation pursuant to the foregoing provisions of this
Section 3.04 shall not constitute a waiver of such Lender’s or the L/C Issuer’s
right to demand such compensation, provided that the Borrower shall not be
required to compensate a Lender or the L/C Issuer pursuant to the foregoing
provisions of this Section 3.04 for any increased costs incurred or reductions
suffered more than nine months prior to the date that such Lender or the L/C
Issuer, as the case may be, notifies the Borrower of the Change in Law giving
rise to such increased costs or reductions and of such Lender’s or the L/C
Issuer’s intention to claim compensation therefor (except that, if the Change in
Law giving rise to such increased costs or reductions is retroactive, then the
nine-month period referred to above shall be extended to include the period of
retroactive effect thereof).

 

(e) Reserves on Eurodollar Rate Loans. The Borrower shall pay to each Lender, as
long as such Lender shall be required to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency funds or deposits
(currently known as “Eurocurrency liabilities”), additional interest on the
unpaid principal amount of each Eurodollar Rate Loan equal to the actual costs
of such reserves allocated to such Loan by such Lender (as determined by such
Lender in good faith, which determination shall be conclusive), which shall be
due and payable on each date on which interest is payable on such Loan, provided
the Borrower shall have received at least 10 days’ prior notice (with a copy to
the Administrative Agent) of such additional interest from such Lender. If a
Lender fails to give notice 10 days prior to the relevant Interest Payment Date,
such additional interest shall be due and payable 10 days from receipt of such
notice.

 

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

 

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

 

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

 

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

 

including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
The Borrower shall also pay any customary administrative fees charged by such
Lender in connection with the foregoing.

 

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

 

3.06 Mitigation Obligations; Replacement of Lenders.

 

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

 

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

 

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

 

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ARTICLE IV.

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

 

4.01 Conditions of Initial Credit Extension. The obligation of the L/C Issuer
and each Lender to make its initial Credit Extension hereunder is subject to
satisfaction of the following conditions precedent on or before January 31,
2005:

 

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

 

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

 

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

 

(iii) such certificates of resolutions or other action, incumbency certificates
and/or other certificates of Authorized Officers of each Loan Party as the
Administrative Agent may reasonably require evidencing the identity, authority
and capacity of each Authorized Officer thereof authorized to act as an
Authorized Officer in connection with this Agreement and the other Loan
Documents to which such Loan Party is a party;

 

(iv) the Organization Documents of each Loan Party and such other documents and
certifications as the Administrative Agent may reasonably require to evidence
that each Loan Party is duly organized or formed, validly existing, in good
standing and qualified to engage in business in each jurisdiction where its
ownership, lease or operation of properties or the conduct of its business
requires such qualification, except to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect;

 

(v) favorable opinions of David R. Frick, general counsel of the Loan Parties,
and White & Case LLP, special counsel to the Loan Parties, addressed to the
Administrative Agent and each Lender, as to the matters set forth in Exhibit G
and such other matters concerning the Loan Parties and the Loan Documents as the
Required Lenders may reasonably request;

 

(vi) a certificate signed by an Authorized Officer of the Borrower, dated the
date of this Agreement, certifying (A) that on such date (after giving effect to
the applicability of Article VI and Article VII) no Default or Event of Default
has occurred and is continuing, (B) each of the representations and warranties
set forth in Article V is true and correct in all material respects as of such
date, (C) the current Debt Ratings, which shall be not less than BBB- by S&P and
Baa3 by Moody’s, and (D) that (a) all information (other than financial
projections as referred to below) that has been made available to the
Administrative Agent, the Arrangers or the Lenders by or on behalf of the
Borrower or any of its representatives in connection with the negotiation of
this Agreement and the commitments therefor is complete and correct in all
material respects on such date, except to the extent that such information
specifically refers to an earlier date, in which case it shall be complete and
correct in all material respects as of such earlier date, and does not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements contained therein not misleading and (b) all
financial projections concerning the Borrower and its Subsidiaries or WellPoint
and its Subsidiaries that have been made available to the Administrative Agent,
the Arrangers or the Lenders by or on behalf of the Borrower or any of its
representatives in connection with the negotiation of this Agreement and the
commitments therefor have been prepared in good faith based upon reasonable
assumptions (all such information and financial projections made available to
the Administrative Agent or to the Arrangers prior to May 27, 2004, the
“Pre-Commitment Information”);

 

(vii) evidence that, after giving pro forma effect to the Merger (including the
termination of the Existing Credit Agreements and the WellPoint Credit
Agreements) (a) the Total Debt to Capital Ratio is not more than 40% and (b)
Liquidity is not less than $500,000,000; and

 

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(viii) such other documents as the Administrative Agent, any Lender or their
counsel may have reasonably requested.

 

(b) The payment by the Borrower of all accrued and unpaid fees, costs and
expenses to the extent due and payable on or prior to the execution of this
Agreement, including, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses required to be reimbursed or paid by the Borrower
hereunder.

 

(c) The anticipated final terms and conditions of each aspect of the Merger,
including, without limitation, all tax aspects thereof, shall be (i) materially
consistent with the description thereof received in writing as part of the
Pre-Commitment Information or (ii) otherwise reasonably satisfactory to the
Required Lenders.

 

(d) The Lenders shall be reasonably satisfied with (i) the amount, tenor,
ranking and other terms and conditions of all debt financings that will comprise
part of the Merger transaction and (ii) the amount, terms, conditions and
holders of all Debt and other material liabilities owing to third parties to be
outstanding on and after the Closing Date.

 

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

 

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

 

(a) The representations and warranties of the Borrower and each other Loan Party
contained in Article V (except the representations and warranties made in
Sections 5.06 and 5.08), shall be true and correct in all material respects on
and as of the date of such Credit Extension, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they shall be true and correct in all material respects as of such earlier
date.

 

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

 

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

 

Each Request for Credit Extension (other than a Committed Loan Notice requesting
only a conversion of Committed Loans to the other Type or a continuation of
Eurodollar Rate Committed Loans) submitted by the Borrower shall be deemed to be
a representation and warranty that the conditions specified in Sections 4.02(a)
and (b) have been satisfied on and as of the date of the applicable Credit
Extension.

 

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ARTICLE V.

REPRESENTATIONS AND WARRANTIES

 

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

 

5.01 Corporate Existence and Standing. Each Loan Party and each Material
Subsidiary (i) is a corporation, limited liability company or other entity duly
organized and validly existing under the laws of the jurisdiction of its
incorporation; (ii) has all requisite corporate power, and has all material
governmental licenses, authorizations, consents and approvals, necessary to own
its assets and carry on its business as now being or as proposed to be
conducted; and (iii) is duly qualified to do business in all jurisdictions in
which the nature of the business conducted by it makes such qualification
necessary except where the failure so to qualify could not reasonably be
expected to have a Material Adverse Effect.

 

5.02 Authorization and Validity. Each Loan Party has all requisite corporate
power and authority and legal right to execute and deliver each Loan Document to
which it is party and to perform its obligations thereunder. The execution and
delivery by each Loan Party of each Loan Document to which it is party and the
performance of its obligations hereunder have been duly authorized by proper
corporate proceedings and each Loan Document to which it is party constitutes
the legal, valid and binding obligations of the respective Loan Party in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors’
rights generally which may be in effect and to general principles of equity.

 

5.03 Compliance with Laws and Contracts. Each Loan Party is not, and no
Subsidiary is, in default under or in violation of any Laws (including the HMO
Regulations and Insurance Regulations) or any order, writ, judgment, injunction,
decree or award binding upon or applicable to such Loan Party or such
Subsidiary, in each case the consequence of which default or violation could
reasonably be expected to have a Material Adverse Effect. None of the execution
and delivery by either Loan Party of each Loan Document to which it is party,
the application of the proceeds of the Loans, or compliance with the provisions
of each Loan Document to which it is party will, or at the relevant time did,
(i) violate any Law (including HMO Regulations and Insurance Regulations and
Regulations U and X of the FRB), order (including HMO Regulations and Insurance
Regulations), writ, judgment, injunction, decree or award binding on either Loan
Party or any Subsidiary or either Loan Party’s or any Subsidiary’s Organization
Documents or (ii) violate the provisions of or require the approval or consent
of any party to any indenture, instrument or agreement to which either Loan
Party or any Subsidiary is a party or is subject, or by which it, or its
property, is bound, or conflict with or constitute a default thereunder, or
result in the creation or imposition of any Lien (other than Permitted Liens)
in, of or on the property of a Loan Party or any Subsidiary pursuant to the
terms of any such indenture, instrument or agreement other than such violations
and failures to obtain that could not reasonably be expected to result in a
Material Adverse Effect.

 

5.04 Governmental Consents. No order, consent, approval, qualification, license
or authorization of, or filing, recording or registration with, or exemption by,
or other action in respect of, any Governmental Authority, including, without
limitation, HMO Regulators and Insurance Regulators, or self-regulatory
organization is or at the relevant time was necessary or required to authorize,
or is or at the relevant time was required in connection with, the execution,
delivery, consummation or performance or the legality, validity, binding effect
or enforceability of any of the Loan Documents (other than those which the
failure to obtain could not reasonably be expected to result in a Material
Adverse Effect).

 

5.05 Financial Statements. The Borrower has furnished to the Lenders (a) the
Audited Financial Statements and (b) the unaudited consolidated financial
statements of the Borrower and its Subsidiaries for the Fiscal Quarter ended
September 30, 2004 (collectively the “Financial Statements”). Each of the
Financial Statements (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein and (ii) fairly present the financial condition of the Borrower
and its respective Subsidiaries as of the date thereof and their results of
operations for the period covered thereby

 

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in accordance with GAAP consistently applied throughout the period covered
thereby, except as otherwise expressly noted therein and, in the case of such
unaudited statements, except for absence of footnotes and normal year-end audit
adjustments. The pro forma financial statements contained in the Registration
Statement have been properly applied to the historical amounts, comply in form
with the applicable accounting requirements of the Securities Act, and fairly
present the effects of the Merger.

 

5.06 Material Adverse Change. No material adverse change in the business,
property, financial condition or operations of the Borrower and its Subsidiaries
taken as a whole, has occurred since the date of the Audited Financial
Statements.

 

5.07 Properties. (a) Each Loan Party and each Subsidiary has good title to, or
valid leasehold interests in, all its real and personal property material to its
business, except for such defects in title that could not reasonably be expected
to have a Material Adverse Effect.

 

(b) Each Loan Party and each Subsidiary owns, or is licensed to use, all
trademarks, service marks, tradenames and other intellectual property in
connection with the names “Anthem”, “WellPoint”, “Blue Cross”, “Blue Shield” and
“BCBS”, and the use thereof by the Loan Party or Subsidiary, as applicable, does
not infringe upon the rights of any other Person, except for any such
infringements that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.

 

5.08 Litigation and Environmental Matters. (a) There are no actions, suits or
proceedings by or before any arbitrator or Governmental Authority pending
against or, to the knowledge of the Borrower, threatened against or affecting
either Loan Party or any Subsidiary (i) as to which there is a reasonable
possibility of an adverse determination and that, if adversely determined, could
reasonably be expected, individually or in the aggregate (excluding from such
aggregate any Disclosed Matters), to result in a Material Adverse Effect (other
than the Disclosed Matters) or (ii) that involve this Agreement.

 

(b) Except for the Disclosed Matters and except with respect to any other
matters that, individually or in the aggregate (excluding from such aggregate
any Disclosed Matters), could not reasonably be expected to result in a Material
Adverse Effect, neither Loan Party and no Subsidiary (A) has failed to comply
with any Environmental Law or to obtain, maintain or comply with any permit,
license or other approval required under any Environmental Law, (B) has become
subject to any Environmental Liability or (C) has received notice of any claim
with respect to any Environmental Liability.

 

5.09 Taxes. Each Loan Party and each Subsidiary has filed or caused to be filed
on a timely basis (taking into account any extensions granted by the applicable
taxing authority) all United States federal and applicable material foreign,
state and local Tax returns and all other material Tax returns which are
required to be filed and have paid or caused to be paid all Taxes due pursuant
to said Tax returns or pursuant to any assessment received by such Loan Party or
Subsidiary, except (a) such Taxes, if any, as are being contested in good faith
by appropriate proceedings and as to which adequate reserves have been provided
in accordance with GAAP and (b) to the extent the failure to do so could not
reasonably be expected to have a Material Adverse Effect.

 

5.10 ERISA Compliance. Except as disclosed on Schedule 5.10 or, in the case of
clauses (i), (ii), (iv), (v) and (vi) of this Section 5.10, as would not result
in a Material Adverse Effect, (i) neither Loan Party nor any other member of the
Controlled Group is obligated to contribute to any Multiemployer Plan or has
incurred, or is reasonably expected to incur, any withdrawal liability to any
Multiemployer Plan, (ii) each Plan complies in all material respects with all
applicable requirements of Laws, (iii) neither Loan Party nor any member of the
Controlled Group has, with respect to any Plan, failed to make any contribution
or pay any amount required under Section 412 of the Code or Section 302 of ERISA
or the terms of such Plan that could result in a material liability to the
respective Loan Party, (iv) no Single Employer Plan has any material Unfunded
Liability, (v) there are no pending or, to the knowledge of either Loan Party,
threatened claims, actions, investigations or lawsuits against any Plan, any
fiduciary thereof, or either Loan Party or any member of the Controlled Group
with respect to a Plan, (vi) neither Loan Party nor any member of the Controlled
Group has engaged in any prohibited

 

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transaction (as defined in Section 4975 of the Code or Section 406 of ERISA) in
connection with any Plan which would subject such Person to any liability, (vii)
within the last five years neither Loan Party nor any member of the Controlled
Group has engaged in a transaction which resulted in a Single Employer Plan with
an Unfunded Liability being transferred out of the Controlled Group and (viii)
no Termination Event has occurred or is reasonably expected to occur with
respect to any Plan which is subject to Title IV of ERISA that could result in a
material liability to the Loan Parties.

 

5.11 Federal Reserve Regulations. Neither Loan Party nor any Subsidiary is
engaged, directly or indirectly, principally, or as one of its important
activities, in the business of extending, or arranging for the extension of,
credit for the purpose of purchasing or carrying Margin Stock. No part of the
proceeds of any Loan will be used in a manner which would violate, or result in
a violation of, Regulation U or Regulation X of the FRB. Neither the making of
any Loan hereunder nor the use of the proceeds thereof will violate or be
inconsistent with the provisions of Regulation U or Regulation X. Following the
application of the proceeds of the Loans, less than 25% of the value (as
determined by any reasonable method) of the assets of the Borrower and its
Subsidiaries which are subject to any limitation on sale, pledge, or other
restriction hereunder, taken as a whole, will be represented by Margin Stock.

 

5.12 Investment Company. Neither Loan Party nor any Subsidiary is, or after
giving effect to any Borrowing will be, an “investment company” or a company
“controlled” by an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.

 

5.13 Material Agreements. Other than as disclosed on Schedule 5.13, except to
the extent imposed by applicable state Governmental Authorities or except to the
extent could not reasonably be expected to have a Material Adverse Effect,
neither Loan Party nor any Subsidiary is a party to any agreement or instrument
or subject to any charter or other internal corporate restriction which
restricts or imposes conditions upon the ability of any Subsidiary to (A) pay
dividends or make other distributions on its capital stock, (B) make loans or
advances to the Loan Parties, (C) repay loans or advances from the Loan Parties
or (D) grant Liens to the Administrative Agent to secure the Obligations.

 

5.14 Disclosure. None of the information, exhibits or reports furnished or to be
furnished by the Loan Parties or any Subsidiary to the Administrative Agent or
to any Lender in connection with the negotiation of this Agreement and the
commitments therefor (taken as a whole) contains any untrue statement of a
material fact or omitted, omits or will omit to state a material fact necessary
in order to make the statements contained herein or therein (taken as a whole)
not misleading in light of the circumstances in which the same were made (it
being recognized by the Administrative Agent and the Lenders that any
projections as to future events are not to be viewed as facts or factual
information and that actual results during the period or periods covered thereby
may differ from the projected results and such differences may be material).

 

5.15 Purpose of Loans and Letters of Credit. The proceeds of the Loans and
Letters of Credit shall be used to finance any lawful general corporate purpose,
including acquisitions and working capital.

 

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ARTICLE VI.

AFFIRMATIVE COVENANTS

 

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

 

6.01 Financial Reporting. Maintain, for itself and each Subsidiary, a system of
accounting established and administered in accordance with GAAP, consistently
applied, and furnish to the Administrative Agent (for distribution to each
Lender):

 

(a) As soon as practicable and in any event within 90 days after the close of
each Fiscal Year, the consolidated statements of income, retained earnings and
cash flow of the Borrower and its Subsidiaries for such Fiscal Year, and the
related consolidated balance sheet of the Borrower and its Subsidiaries as at
the end of such Fiscal Year, setting forth in each case in comparative form the
corresponding figures for the preceding Fiscal Year, accompanied by an opinion
of Ernst & Young, PricewaterhouseCoopers LLP or such other certified public
accountants of recognized standing which are reasonably satisfactory to the
Administrative Agent, which opinion shall not be limited as to scope or contain
a “going concern” or like qualification or exception and shall state that such
financial statements fairly present the consolidated financial condition and
results of operations, as the case may be, of the Borrower and its Subsidiaries
in accordance with GAAP as at the end of, and for, such Fiscal Year.

 

(b) As soon as practicable and in any event within 60 days after the close of
each of the first three Fiscal Quarters of each Fiscal Year, the consolidated
unaudited balance sheets of the Borrower and its Subsidiaries as at the close of
each such period and related consolidated statements of income, retained
earnings and cash flow for the period from the beginning of such Fiscal Year to
the end of such Fiscal Quarter, in each case setting forth in comparative form
results of the corresponding period in the preceding Fiscal Year, all certified
by a Financial Officer of the Borrower as fairly presenting the consolidated
financial condition and results of operations of the Borrower and its
Subsidiaries for such period in accordance with GAAP (subject to normal year-end
adjustments and the absence of footnotes).

 

(c) Together with the financial statements required by Sections 6.01(a) and (b),
a compliance certificate signed by a Financial Officer of the Borrower showing
the calculations necessary to determine compliance with Section 7.10 of this
Agreement and stating that no Default has occurred, or if a Default has
occurred, stating the nature and status thereof and the details of any action
taken or proposed to be taken with respect thereto.

 

(d) As soon as possible and in any event within 10 days after an executive
officer of the Borrower knows that any Termination Event that, when taken
together with all other Termination Events that have occurred, could result in a
material liability to the Loan Parties has occurred, a statement, signed by a
Financial Officer of the Borrower, describing such Termination Event and the
action which the Borrower proposes to take with respect thereto.

 

(e) Promptly upon the filing thereof, copies of all filings and annual,
quarterly, monthly or other regular reports which the Borrower or any Subsidiary
files with (i) the Securities and Exchange Commission or (ii) to the extent that
it contains information indicating that an event or circumstance constituting or
resulting in a Material Adverse Effect has occurred, the NAIC or any insurance
commission or department or analogous Governmental Authority (including, without
limitation, any filing made by the Borrower or any Subsidiary pursuant to any
insurance holding company act or related rules or regulations).

 

(f) Such other information regarding the operations, business affairs and
financial condition of a Loan Party or Subsidiary or compliance with this
Agreement as the Administrative Agent or any Lender may from time to time
reasonably request.

 

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Information required to be delivered pursuant to Sections 6.01(a) and (b) and
Section 6.01(e)(i) and shall be deemed to have been delivered on the date on
which the Borrower provides written notice to the Lenders that such information
has been posted on the Borrower’s website on the Internet at
http://www.anthem.com (or any successor page including, without limitation,
http://www.wellpoint.com) or at http://www.sec.gov; provided that such notice
may be included in the certificates delivered pursuant to Section 6.01(d);
provided further that the Borrower shall deliver paper copies of the information
referred to in Section 6.01(d) and that, if any Lender requests delivery
thereof, the Borrower shall deliver to such Lender paper copies of the
information referred to in Sections 6.01(a) and (b) and Section 6.01(e)(i)
within five Business Days after delivery is otherwise required hereunder.

 

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

 

6.02 Notices. Notify the Administrative Agent and each Lender promptly, but in
any event not later than five Business Days after an executive officer of the
Borrower obtains knowledge thereof, of the following:

 

(a) The occurrence of any Default if such Default is continuing.

 

(b) The occurrence of any other development, financial or otherwise, relating
specifically to the Borrower or any Subsidiaries (and not of a general economic
or political nature) which could reasonably be expected to have a Material
Adverse Effect.

 

(c) The receipt of any notice from any Governmental Authority (including,
without limitation, HMO Regulators and Insurance Regulators) (i) of the
expiration without renewal, revocation or suspension of, or the institution of
any proceedings to revoke or suspend, any License now or hereafter held by the
Borrower or any Insurance Subsidiary which is required to conduct insurance
business in compliance with all applicable laws and regulations and the
expiration, revocation or suspension of which could reasonably be expected to
have a Material Adverse Effect or (ii) of the institution of any disciplinary
proceedings against or in respect of the Borrower or any Insurance Subsidiary,
or the issuance of any order, the taking of any action or any request for an
extraordinary audit for cause by any Governmental Authority (including, without
limitation, HMO Regulators and Insurance Regulators) which, if adversely
determined, could reasonably be expected to have a Material Adverse Effect.

 

(d) Any judicial or administrative order limiting or controlling the business of
the Borrower or any of its Subsidiaries (and not the industry in which the
Borrower or such Subsidiary is engaged generally) which has been issued or
adopted which could reasonably be expected to have a Material Adverse Effect.

 

(e) The commencement of any litigation which could reasonably be expected to
result in a Material Adverse Effect.

 

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6.03 Use of Proceeds. Use the proceeds of the Loans and the Letters of Credit
for the purposes described in Section 5.15. No part of the proceeds of any Loan
will be used, whether directly or indirectly, for any purpose that entails a
violation of Regulation U or Regulation X of the Regulations of the FRB.

 

6.04 Conduct of Business. (a) Do all things necessary to remain duly
incorporated, validly existing and in good standing in its jurisdiction of
incorporation and its jurisdiction of domicile and maintain all requisite
authority to conduct its business in each other jurisdiction in which such
qualification is required, except where the failure to maintain such
qualification could not reasonably be expected to have a Material Adverse
Effect, and (b) do all things necessary to renew, extend and continue in effect
all Licenses which may at any time and from time to time be necessary for the
Borrower or any Insurance Subsidiary to conduct business in compliance with all
applicable Laws and/or required under the HMO Regulations or the Insurance
Regulations in connection with the ownership or operation of HMOs or insurance
companies, except where failure to do so could not reasonably be expected to
have a Material Adverse Effect.

 

6.05 Taxes. Timely file United States federal and applicable material foreign,
state and local Tax returns required by applicable law and pay when due (taking
into account any applicable extensions) all Taxes, except those which are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves have been set aside in accordance with GAAP.

 

6.06 Insurance. Maintain with financially sound and reputable insurance
companies insurance in such amounts and covering such risks as are customarily
maintained by companies engaged in the same or similar businesses operating in
the same or similar locations or maintain a system or systems of self-insurance
or assumption of risk which accords with the practices of similar businesses.

 

6.07 Compliance with Laws. Comply in all material respects with the requirements
of all Laws (including, without limitation, the HMO Regulations and Insurance
Regulations pertaining to fiscal soundness, solvency or financial condition) and
all orders, writs, injunctions and decrees applicable to which it may be
subject, the failure to comply with which could reasonably be expected to have a
Material Adverse Effect.

 

6.08 Maintenance of Properties. Do all things necessary to maintain, preserve,
protect and keep its property in good repair, working order and condition
(ordinary wear and tear and sales and other dispositions permitted under this
Agreement excepted), and make all necessary and proper repairs, renewals and
replacements so that its business carried on in connection therewith may be
properly conducted at all times other than those things which the failure to do
could not reasonably be expected to have a Material Adverse Effect.

 

6.09 Inspection. Permit the Administrative Agent and each Lender, by its
respective representatives and agents and subject to such confidentiality
restrictions as the Borrower may reasonably impose, to inspect any of the
property, corporate books and financial records of the Loan Parties or any
Material Subsidiary, to examine and make extracts of the books of accounts and
other financial records of the Loan Parties or any Material Subsidiary, and to
discuss the affairs, finances and accounts of the Loan Parties and each
Subsidiary with, and to be advised as to the same by, their respective officers
at such reasonable times and intervals as the Administrative Agent or such
Lender may designate upon reasonable notice. The Borrower will keep or cause to
be kept appropriate records and books of account reflecting its and their
business and financial transactions, such entries to be made in accordance with
GAAP or SAP, as applicable, consistently applied.

 

6.10 Payment of Material Obligations. Pay its obligations (other than under
agreements and other instruments evidencing Debt, except where failure to pay
such Debt would constitute an Event of Default under Section 8.01(e)), including
Tax liabilities, that if not paid, could reasonably be expected to result in a
Material Adverse Effect before the same shall become delinquent or in default,
except where the validity or amount thereof is being contested in good faith by
appropriate proceedings and the Borrower or such Subsidiary has set aside on its
books adequate reserves with respect thereto in accordance with GAAP.

 

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6.11 Actions Prior to and Following the Merger.

 

(a) Prior to the Merger Effective Date:

 

(i) Issue commercial paper only that matures on the Business Day after issuance;
and

 

(ii) Deposit or cause to be deposited in an account maintained with the
Administrative Agent or with Fleet Bank, N.A. in trust for the stockholders of
WellPoint pursuant to the Merger Agreement all the proceeds of outstanding
commercial paper issued by the Borrower and of Borrowings hereunder and shall
use such proceeds only to fund in part the Merger, to repay purchasers of such
commercial paper or to repay such Borrowings.

 

(b) Upon the Merger Effective Date, take all necessary actions so that both the
Existing Credit Agreements and all credit facilities of WellPoint (including the
WellPoint Credit Agreements but excluding the WellPoint Notes) have been, or
concurrently with the Merger Effective Date shall be, terminated and pay all
obligations then due thereunder, and provide evidence of such termination and
payment to the Administrative Agent.

 

ARTICLE VII.

NEGATIVE COVENANTS

 

From and after the Closing Date, so long as any Lender shall have any Commitment
hereunder, any Loan or other Obligation hereunder shall remain unpaid or
unsatisfied, or any Letter of Credit shall remain outstanding:

 

7.01 Liens. The Borrower shall not, nor shall it permit any Subsidiary to,
directly or indirectly, create, assume, incur, or permit to exist or to be
created, assumed, incurred or permitted to exist, directly or indirectly, any
Lien on any of its property, whether now owned or hereafter acquired, except for
Permitted Liens.

 

7.02 Fundamental Changes. The Borrower shall not, nor shall it permit any
Subsidiary to, directly or indirectly, liquidate or dissolve itself (or suffer
any liquidation or dissolution) or otherwise wind up, merge or consolidate with
any other corporation, or sell, lease or otherwise dispose of all or
substantially all of its assets, except that, so long as no Default then exists
or would result therefrom:

 

(a) Subsidiaries which are not Material Subsidiaries may be liquidated or
dissolved and their affairs wound up;

 

(b) a Loan Party or Subsidiary may merge, consolidate or amalgamate with any
other Person; provided, that the Borrower or Subsidiary, as the case may be, is
the surviving, continuing or resulting Person in such merger, consolidation or
amalgamation and, in the case of a Subsidiary, continues to be a Subsidiary;

 

(c) any Subsidiary may merge into the Borrower or another Subsidiary;

 

(d) any Subsidiary may sell, lease or otherwise dispose of any of its assets
(whether now owned or hereafter acquired and including shares of capital stock,
receivables and leasehold interests) to the Borrower or to another Subsidiary;

 

(e) any Subsidiary (other than the Guarantor) may liquidate or dissolve or the
Borrower or any Subsidiary may sell, transfer, lease or otherwise dispose of the
assets or stock of any Subsidiary (other than the Guarantor) if, in each case,
the Borrower determines in good faith that such liquidation, dissolution or
disposition is in the best interests of the Borrower, and

 

(f) the Borrower and its Subsidiaries may sell immaterial businesses, including
Subsidiaries (other than the Guarantor).

 

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7.03 Investments and Purchases. The Borrower shall not, and shall not permit any
Insurance Subsidiary to, make or suffer to exist any Investments (including,
without limitation, loans and advances to, and other Investments in,
Subsidiaries), or commitments therefor, or to create any Subsidiary or to become
or remain a partner in any partnership or joint venture, or to make any
Purchases, except for (i) in the case of any Insurance Subsidiary, Investments
and Purchases approved by applicable insurance departments or commissioners, or
as otherwise permitted by, or not prohibited by, applicable insurance laws; and
(ii) Permitted Investments.

 

7.04 Transactions With Affiliates. The Borrower shall not, nor shall it permit
any Subsidiary to, directly or indirectly, sell or transfer any assets to, or
purchase or acquire any assets of, or otherwise engage in any transaction with,
any of its respective Affiliates, except in the ordinary course of business and
upon fair and reasonable terms no less favorable than the Borrower or Subsidiary
could obtain or could be entitled to in an arm’s-length transaction with a
Person which is not an Affiliate.

 

7.05 Subsidiary Debt. The Borrower shall not permit the aggregate principal
amount of Debt of the Subsidiaries (excluding (i) Debt outstanding on the
Closing Date and listed on Schedule 7.05 (and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof), (ii) the Debt of the Guarantor in respect of the WellPoint Notes,
which the Guarantor became obligated for pursuant to the Merger, (iii) any Debt
of a Subsidiary owed to a Loan Party or another Subsidiary, (iv) Contingent
Obligations of any Subsidiary where the “other Person” referred to in the
definition of “Contingent Obligations” is a Subsidiary, but including, without
duplication, any guarantee (or obligations having the economic effect of a
guarantee) by a Subsidiary of Debt of the Borrower; (v) Hedging Agreements of
any Subsidiary in the ordinary course of business; or (vi) repurchase
agreements, reverse repurchase agreements or similar arrangements entered into
by any Subsidiary in the ordinary course of business) at any time to exceed
$200,000,000.

 

7.06 Change in Corporate Structure; Fiscal Year; Nature of Business. The
Borrower shall not, nor shall it permit any Material Subsidiary to, directly or
indirectly:

 

(a) Substantively alter the general character of its business from that
conducted by such Person as of the Closing Date;

 

(b) Permit any amendment or modification to be made to its Organization
Documents which is materially adverse to the interests of the Lenders; or

 

(c) Change its Fiscal Year to end on any date other than December 31 of each
year.

 

7.07 Inconsistent Agreements. The Borrower shall not, nor shall it permit any
Subsidiary to, directly or indirectly, enter into any material indenture,
agreement, instrument or other arrangement which, (a) directly or indirectly
prohibits or restrains, or has the effect of prohibiting or restraining, or
imposes materially adverse conditions upon, the Transactions or the Obligations,
the amending of this Agreement or the ability of any Material Subsidiary to (i)
pay dividends or make other distributions on its capital stock, (ii) make loans
or advances to a Loan Party or (iii) repay loans or advances from a Loan Party
(other than as required by applicable state Governmental Authorities), or (b)
contains any provision which would be violated or breached by the making of
Loans or the issuing of Letters of Credit or by the performance by either Loan
Party of any of the Obligations or the Transactions; provided that the foregoing
shall not apply to (i) restrictions and conditions imposed by law, rule,
regulation or regulatory administrative agreement or determination or by this
Agreement, (ii) customary restrictions and conditions contained in agreements
relating to the sale of a Subsidiary pending such sale, provided such
restrictions and conditions apply only to the Subsidiary that is to be sold and
such sale is permitted under this Agreement or (iii) any agreement or other
instrument of a Person acquired by the Borrower or any Subsidiary at the time of
such acquisition, which restriction is not applicable to any Person, or the
assets of any Person, other than the Person so acquired or the assets of the
Person so acquired and was not entered into in contemplation of such
acquisition.

 

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7.08 ERISA Compliance. With respect to each Plan, neither Loan Party nor any
member of the Controlled Group shall do the following except as would not,
individually or in the aggregate, have a Material Adverse Effect:

 

(a) engage in any “prohibited transaction” (as such term is defined in Section
406 of ERISA or Section 4975 of the Code) for which a civil penalty pursuant to
Section 502(i) of ERISA or a tax pursuant to Section 4975 of the Code for such
Plan and all other Plans in the aggregate could be imposed;

 

(b) incur any “accumulated funding deficiency” (as such term is defined in
Section 302 of ERISA) for such Plan and all other Plans in the aggregate,
whether or not waived, or (ii) permit any Unfunded Liability for such Plan and
all other Plans in the aggregate;

 

(c) permit the occurrence of any Termination Event which could result in a
liability for such Plan and all other Plans in the aggregate;

 

(d) be an “employer” (as such term is defined in Section 3(5) of ERISA) required
to contribute to such Plan if it is a Multiemployer Plan or a “substantial
employer” (as such term is defined in Section 4001(a)(2) of ERISA) required to
contribute to such Plan if it is a Single Employer Plan; or

 

(e) permit the establishment or amendment of such Plan or fail to comply with
the applicable provisions of ERISA and the Code with respect to such Plan which
could result in liability to either Loan Party or any member of the Controlled
Group.

 

7.09 Merger Agreement; Existing Credit Agreements. The Borrower shall not:

 

(a) Alter, amend or otherwise change or supplement, or waive any condition of,
the Merger Agreement or any other agreement, instrument or document relating to
the Merger in any respect that is material to the repayment of the Loans; or

 

(b) Make any additional borrowings under either of the Existing Credit
Agreements.

 

7.10 Financial Covenants. The Borrower shall:

 

(a) Minimum Net Worth. Maintain a minimum Net Worth as of the last day of each
Fiscal Quarter after the date hereof of an amount at least equal to the sum of
(i) 75% of the Net Worth of the Borrower as shown in the Closing Date statement
contemplated in Section 4.01(a)(vii), plus (ii) 50% of positive Net Income, if
any, of the Borrower for each Fiscal Quarter ending on and after the December
31, 2004 Fiscal Quarter to and including such Fiscal Quarter.

 

(b) Total Debt to Capital Ratio. Maintain a Total Debt to Capital Ratio as of
the last day of each Fiscal Quarter after the date hereof of not more than 40%.

 

ARTICLE VIII.

EVENTS OF DEFAULT AND REMEDIES

 

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

 

(a) Non-Payment. (i) The Borrower shall fail to pay any principal of any Loan or
any L/C Obligation when and as the same shall become due and payable, whether at
the due date thereof or at a date fixed for prepayment thereof or otherwise; or
(ii) the Borrower shall fail to pay any interest on any Loan or any L/C
Obligation or any fee or any other amount (other than an amount referred to in
clause (i)) payable under this Agreement, when and as the same shall become due
and payable, and such failure shall continue unremedied for a period of five
days; or

 

(b) Representations and Warranties. Any representation or warranty made or
deemed made by or on behalf of the Borrower to the Lenders or the Administrative
Agent under or in connection with this Agreement or the

 

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Transactions, or any certificate or information delivered in connection with
this Agreement or the Transactions, shall be false in any material respect on
the date as of which made, deemed made, or delivered; or

 

(c) Specific Covenants. The breach by the Borrower or any Subsidiary of any of
the terms or provisions of Section 6.02(a), 6.03 or 6.11 or Section 7.01 (to the
extent that a Lien was created, assumed, incurred or permitted to exist in
violation thereof with the knowledge or approval of a Financial Officer) or
Section 7.02 through 7.10, or by any member of the Controlled Group of Section
7.08; or

 

(d) Other Defaults. The breach by the Borrower (other than breaches specified in
Section 8.01(a), (b) or (c)) of any of the terms or provisions of this Agreement
which is not remedied within 30 days after the earlier of (i) the date by which
notice of such breach would be required to be given by the Borrower under this
Agreement and (ii) written notice from the Administrative Agent or any Lender to
the Borrower; or

 

(e) Cross-Default. The failure by the Borrower or any Subsidiary to make any
payment of principal or interest under any agreement or agreements under which
any Debt aggregating in excess of the Threshold Amount was created or is
governed when due and payable (beyond any applicable grace period), or the
occurrence of any other event or existence of any other condition, the effect of
any of which is to cause, or to permit the holder or holders of such Debt to
cause, such Debt to become due prior to its stated maturity; or any such Debt of
the Borrower or any Subsidiary shall be declared to be due and payable or
required to be prepaid (other than by regularly scheduled payment) prior to the
stated maturity thereof; provided, that this Section 8.01(e) shall not apply to
secured Debt that becomes due as a result of the voluntary sale or transfer of
the property or assets securing such Debt where such Debt is paid when due; or

 

(f) Insolvency Proceedings, Etc. The Borrower or any of its Material
Subsidiaries shall (i) have an order for relief entered with respect to it under
the Federal bankruptcy laws as now or hereafter in effect, (ii) make an
assignment for the benefit of creditors, (iii) apply for, seek, consent to, or
acquiesce in, the appointment of a receiver, custodian, trustee, examiner,
liquidator or similar official for it or its property, (iv) institute any
proceeding seeking an order for relief under the Federal bankruptcy laws as now
or hereafter in effect or seeking to adjudicate it as bankrupt or insolvent, or
seeking dissolution, winding up, liquidation, reorganization, rehabilitation,
arrangement, adjustment or composition of it or its debts under any law relating
to bankruptcy, insolvency or reorganization or relief of debtors or fail to file
an answer or other pleading denying the material allegations of any such
proceeding filed against it, (v) take any corporate action to authorize or
effect any of the foregoing actions set forth in this Section 8.01(f) or (vi)
become unable to pay, not pay, or admit in writing its inability to pay, its
debts generally as they become due; or

 

(g) Proceedings. (i) Without the application, approval or consent of the
Borrower or any of its Material Subsidiaries, a receiver, trustee, examiner,
liquidator, conservator or similar official shall be appointed for the Borrower
or any of its Material Subsidiaries or its property, or a proceeding described
in Section 8.01(f)(iv) shall be instituted against the Borrower or any of its
Material Subsidiaries and such appointment continues undischarged or such
proceeding continues undismissed or unstayed for a period of 60 consecutive
days; or

 

(h) Judgments. There is entered against the Borrower or any of its Material
Subsidiaries (i) a final judgment or order for the payment of money in excess of
the Threshold Amount (or multiple judgments or orders for the payment of an
aggregate amount in excess of the Threshold Amount) which has not been paid,
bonded or otherwise discharged within 60 days after such judgment becomes final,
or (ii) any non-monetary final judgment that has, or could reasonably be
expected to have, a Material Adverse Effect which has not been bonded or
discharged within 60 days after such judgment becomes final and, in either case,
such judgment or order has not been stayed on appeal or is not otherwise being
appropriately contested in good faith; provided, however, that any such judgment
or order shall not give rise to an Event of Default under this Section 8.01(h)
if and for so long as (x) the Borrower or such Material Subsidiary has set aside
on its books adequate reserves with respect thereto in accordance with GAAP or
(y) (A) the amount of such judgment or order which remains unsatisfied is
covered by a valid and binding policy of insurance between the defendant and the
insurer covering full payment thereof and (B) such insurer has been notified,
and has not disputed the claim made for payment, of the amount of such judgment
or order; or

 

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(i) Change of Control. There occurs any Change of Control.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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Subject to Section 2.04(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fifth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.

 

ARTICLE IX.

ADMINISTRATIVE AGENT

 

9.01 Appointment and Authority.

 

Each of the Lenders and the L/C Issuer hereby irrevocably appoints Bank of
America to act on its behalf as the Administrative Agent hereunder and under the
other Loan Documents and authorizes the Administrative Agent to take such
actions on its behalf and to exercise such powers as are delegated to the
Administrative Agent by the terms hereof or thereof, together with such actions
and powers as are reasonably incidental thereto. The provisions of this Article
IX are solely for the benefit of the Administrative Agent, the Lenders and the
L/C Issuer, and neither the Borrower nor any other Loan Party shall have rights
as a third party beneficiary of any of such provisions.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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Agent shall be the same as those payable to its predecessor unless otherwise
agreed between the Borrower and such successor. After the retiring
Administrative Agent’s resignation hereunder and under the other Loan Documents,
the provisions of this Article IX and Section 10.04 shall continue in effect for
the benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while the retiring Administrative Agent was acting as
Administrative Agent.

 

Any resignation by Bank of America as Administrative Agent pursuant to this
Section 9.06 shall also constitute its resignation as L/C Issuer and Swing Line
Lender. Upon the acceptance of a successor’s appointment as Administrative Agent
hereunder, (a) such successor shall succeed to and become vested with all of the
rights, powers, privileges and duties of the retiring L/C Issuer and Swing Line
Lender, (b) the retiring L/C Issuer and Swing Line Lender shall be discharged
from all of their respective duties and obligations hereunder or under the other
Loan Documents, and (c) the successor L/C Issuer shall issue letters of credit
in substitution for the Letters of Credit, if any, outstanding at the time of
such succession or make other arrangement satisfactory to the retiring L/C
Issuer to effectively assume the obligations of the retiring L/C Issuer with
respect to such Letters of Credit.

 

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

 

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

 

ARTICLE X.

MISCELLANEOUS

 

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

 

(a) waive any condition set forth in Section 4.01 without the written consent of
each Lender;

 

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

 

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

 

(d) reduce the principal of, or the rate of interest specified herein on, any
Loan, or (subject to clause (v) of the second proviso to this Section 10.01) any
fees or other amounts payable hereunder or under any other Loan

 

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Document, or change the specific Debt Ratings in any Pricing Level in the
definition of Applicable Rate that would result in a reduction of any interest
rate on any Loan or any fee payable hereunder without the written consent of
each Lender directly affected thereby; provided, however, that only the consent
of the Required Lenders shall be necessary to amend the definition of “Default
Rate” or to waive any obligation of the Borrower to pay interest at the Default
Rate;

 

(e) change Section 2.14 or Section 8.03 in a manner that would alter the pro
rata sharing of payments required thereby without the written consent of each
Lender;

 

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

 

(g) release the Guarantor from the Guaranty without the written consent of each
Lender;

 

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

 

10.02 Notices; Effectiveness; Electronic Communication.

 

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

 

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

 

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

 

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient). Notices delivered through electronic communications to the extent
provided in Section 10.02(b), shall be effective as provided in Section
10.02(b).

 

(b) Electronic Communications. Notices and other communications to the Lenders
and the L/C Issuer hereunder may be delivered or furnished by electronic
communication (including e-mail and Internet or intranet websites) pursuant to
procedures approved by the Administrative Agent, provided that the foregoing
shall not

 

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apply to notices to any Lender or the L/C Issuer pursuant to Article II if such
Lender or the L/C Issuer, as applicable, has notified the Administrative Agent
that it is incapable of receiving notices under such Article by electronic
communication. The Administrative Agent or the Borrower may, in its discretion,
agree to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it, provided that approval of
such procedures may be limited to particular notices or communications.

 

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

 

(c) Change of Address, Etc. Each of the Borrower, the Administrative Agent, the
L/C Issuer and the Swing Line Lender may change its address, telecopier or
telephone number for notices and other communications hereunder by notice to the
other parties hereto. Each other Lender may change its address, telecopier or
telephone number for notices and other communications hereunder by notice to the
Borrower, the Administrative Agent, the L/C Issuer and the Swing Line Lender.

 

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

 

10.03 No Waiver; Cumulative Remedies. No failure by any Lender, the L/C Issuer
or the Administrative Agent to exercise, and no delay by any such Person in
exercising, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.

 

10.04 Expenses; Indemnity; Damage Waiver.

 

(a) Costs and Expenses. The Borrower shall pay (i) all reasonable out-of-pocket
expenses incurred by the Administrative Agent and its Affiliates (including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent), in connection with the syndication of the credit facilities provided for
herein, the preparation, negotiation, execution, delivery and administration of
this Agreement and the other Loan Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) all reasonable
out-of-pocket expenses incurred by the L/C Issuer in connection with the
issuance, amendment, renewal or extension of any Letter of Credit or any demand
for payment thereunder and (iii) all reasonable out-of-pocket expenses incurred
by the Administrative Agent, any Lender or the L/C Issuer (including the fees,
charges and disbursements of any counsel for the Administrative Agent, any
Lender or the L/C Issuer), in connection with the enforcement or protection of
its

 

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rights (A) in connection with this Agreement and the other Loan Documents,
including its rights under this Section 10.04, or (B) in connection with the
Loans made or Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.

 

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

 

(c) Reimbursement by Lenders. To the extent that the Borrower for any reason
fails to indefeasibly pay any amount required under Section 10.04(a) or (b) to
be paid by it to the Administrative Agent (or any sub-agent thereof), the L/C
Issuer or any Related Party of any of the foregoing, each Lender severally
agrees to pay to the Administrative Agent (or any such sub-agent), the L/C
Issuer or such Related Party, as the case may be, such Lender’s Applicable
Percentage (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount, provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the
Administrative Agent (or any such sub-agent) or the L/C Issuer in its capacity
as such, or against any Related Party of any of the foregoing acting for the
Administrative Agent (or any such sub-agent) or L/C Issuer in connection with
such capacity. The obligations of the Lenders under this Section 10.04(c) are
subject to the provisions of Section 2.12(d).

 

(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable law, the Borrower shall not assert, and hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement, any other
Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or Letter of Credit or the
use of the proceeds thereof. No Indemnitee referred to in Section 10.04(b) shall
be liable for any damages arising from the use by unintended recipients of any
information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or the other Loan Documents or the transactions contemplated hereby or
thereby.

 

(e) Payments. All amounts due under this Section 10.04 shall be payable not
later than ten Business Days after demand therefor.

 

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(f) Survival. The agreements in this Section 10.04 shall survive the resignation
of the Administrative Agent and the L/C Issuer, the replacement of any Lender,
the termination of the Aggregate Commitments and the repayment, satisfaction or
discharge of all the other Obligations.

 

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

 

10.06 Successors and Assigns.

 

(a) Successors and Assigns Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that neither the Borrower nor
any other Loan Party may assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of the Administrative
Agent and each Lender and no Lender may assign or otherwise transfer any of its
rights or obligations hereunder except (i) to an Eligible Assignee in accordance
with Section 10.06(b), (ii) by way of participation in accordance with Section
10.06(d), (iii) by way of pledge or assignment of a security interest subject to
the restrictions of Section 10.06(f), or (iv) to an SPC in accordance with
Section 10.06(h) (and any other attempted assignment or transfer by any party
hereto shall be null and void). Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby, Participants to the
extent provided in Section 10.06(d) and, to the extent expressly contemplated
hereby, the Related Parties of each of the Administrative Agent, the L/C Issuer
and the Lenders) any legal or equitable right, remedy or claim under or by
reason of this Agreement.

 

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

 

(i) except in the case of an assignment of the entire remaining amount of the
assigning Lender’s Commitment and the Loans at the time owing to it or in the
case of an assignment to a Lender or an Affiliate of a Lender or an Approved
Fund with respect to a Lender, the aggregate amount of the Commitment (which for
this purpose includes Loans outstanding thereunder) or, if the Commitment is not
then in effect, the principal outstanding balance of the Loans of the assigning
Lender subject to each such assignment, determined as of the date the Assignment
and Assumption with respect to such assignment is delivered to the
Administrative Agent or, if “Trade Date” is specified in the Assignment and
Assumption, as of the Trade Date, shall not be less than $5,000,000 unless each
of the Administrative Agent and, so long as no Event of Default has occurred and
is continuing, the Borrower otherwise consents (each such consent not to be
unreasonably withheld or delayed);

 

(ii) each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement
with respect to the Loans or the Commitment assigned, except that this clause
(ii) shall not apply to rights in respect of Bid Loans or Swing Line Loans;

 

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

 

(iv) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500, and the Eligible Assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire.

 

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

 

(c) Register. The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at the Administrative Agent’s Office a
copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Loans and L/C Obligations owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The entries in
the Register shall be conclusive, and the Borrower, the Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by each of the Borrower and the L/C Issuer at any
reasonable time and from time to time upon reasonable prior notice. In addition,
at any time that a request for a consent for a material or substantive change to
the Loan Documents is pending, any Lender wishing to consult with other Lenders
in connection therewith may request and receive from the Administrative Agent a
copy of the Register. An assignee that is a Foreign Lender shall satisfy the
requirements of Section 3.01(e).

 

(d) Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrower, the Administrative Agent, the L/C Issuer or any Lender,
sell participations to any Person (other than a natural person or the Borrower
or any of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in
all or a portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans (including such
Lender’s participations in L/C Obligations and/or Swing Line Loans) owing to
it); provided that (i) such Lender’s obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the Borrower,
the Administrative Agent, the Lenders and the L/C Issuer shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement.

 

Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
Section 10.01 that affects such Participant. Subject to Section 10.06(e), the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 3.01, 3.04 and 3.05 to the same

 

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extent as if it were a Lender and had acquired its interest by assignment
pursuant to Section 10.06(b). To the extent permitted by law, each Participant
also shall be entitled to the benefits of Section 10.08 as though it were a
Lender, provided such Participant agrees to be subject to Section 2.13 as though
it were a Lender.

 

(e) Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Section 3.01, 3.04 or 3.05 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with 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 3.01 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 3.01(e) as though it were a Lender.

 

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

 

(g) Electronic Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.

 

(h) Special Purpose Funding Vehicles. Notwithstanding anything to the contrary
contained herein, any Lender (a “Granting Lender”) may grant to a special
purpose funding vehicle identified as such in writing from time to time by the
Granting Lender to the Administrative Agent and the Borrower (an “SPC”) the
option to provide all or any part of any Committed Loan that such Granting
Lender would otherwise be obligated to make pursuant to this Agreement; provided
that (i) nothing herein shall constitute a commitment by any SPC to fund any
Committed Loan, and (ii) if an SPC elects not to exercise such option or
otherwise fails to make all or any part of such Committed Loan, the Granting
Lender shall be obligated to make such Committed Loan pursuant to the terms
hereof or, if it fails to do so, to make such payment to the Administrative
Agent as is required under Section 2.12(b)(ii). Each party hereto hereby agrees
that (i) neither the grant to any SPC nor the exercise by any SPC of such option
shall increase the costs or expenses or otherwise increase or change the
obligations of the Borrower under this Agreement (including its obligations
under Section 3.04), (ii) no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement for which a Lender would be liable, and
(iii) the Granting Lender shall for all purposes, including the approval of any
amendment, waiver or other modification of any provision of any Loan Document,
remain the lender of record hereunder. The making of a Committed Loan by an SPC
hereunder shall utilize the Commitment of the Granting Lender to the same
extent, and as if, such Committed Loan were made by such Granting Lender. In
furtherance of the foregoing, each party hereto hereby agrees (which agreement
shall survive the termination of this Agreement) that, prior to the date that is
one year and one day after the payment in full of all outstanding commercial
paper or other senior debt of any SPC, it will not institute against, or join
any other Person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency, or liquidation proceeding under the
laws of the United States or any State thereof. Notwithstanding anything to the
contrary contained herein, any SPC may (i) with notice to, but without prior
consent of the Borrower and the Administrative Agent, assign all or any portion
of its right to receive payment with respect to any Committed Loan to the
Granting Lender and (ii) disclose on a confidential basis any non-public
information relating to its funding of Committed Loans to any rating agency,
commercial paper dealer or provider of any surety or guarantee or credit or
liquidity enhancement to such SPC.

 

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(i) Resignation as L/C Issuer or Swing Line Lender after Assignment.
Notwithstanding anything to the contrary contained herein, if at any time Bank
of America assigns all of its Commitment and Loans pursuant to Section 10.07(b),
Bank of America may, (i) upon 30 days’ notice to the Borrower and the Lenders,
resign as L/C Issuer and/or (ii) upon 30 days’ notice to the Borrower, resign as
Swing Line Lender. In the event of any such resignation as L/C Issuer or Swing
Line Lender, the Borrower shall be entitled to appoint from among the Lenders,
upon the agreement of the appointed Lender, a successor L/C Issuer or Swing Line
Lender hereunder; provided, however, that no failure by the Borrower to appoint
any such successor shall affect the resignation of Bank of America as L/C Issuer
or Swing Line Lender, as the case may be. If Bank of America resigns as L/C
Issuer, it shall retain all the rights and obligations of the L/C Issuer
hereunder with respect to all Letters of Credit outstanding as of the effective
date of its resignation as L/C Issuer and all L/C Obligations with respect
thereto (including the right to require the Lenders to make Base Rate Committed
Loans or fund risk participations in Unreimbursed Amounts pursuant to Section
2.03(c)). If Bank of America resigns as Swing Line Lender, it shall retain all
the rights of the Swing Line Lender provided for hereunder with respect to Swing
Line Loans made by it and outstanding as of the effective date of such
resignation, including the right to require the Lenders to make Base Rate
Committed Loans or fund risk participations in outstanding Swing Line Loans
pursuant to Section 2.04(c).

 

(j) Dissenting Lender. In the event that the Borrower shall request that the
Lenders enter into any amendment, modification, consent or waiver with respect
to this Agreement or any other Loan Document, and any Lender elects not to enter
into such amendment, modification, consent or waiver (each such Lender being a
“Dissenting Lender”), then the Borrower shall have the right upon 10 days’
written notice to the Administrative Agent and such Dissenting Lender, to
require each such Dissenting Lender to assign 100% of the rights and obligations
of the Dissenting Lender at par to any Lender or any other financial institution
which satisfies the requirements of Section 10.06 and has been consented to by
the Administrative Agent (which consent shall not be unreasonably withheld or
delayed). Each such assignment shall be made pursuant to an Assignment and
Assumption and shall comply with the other terms of this Section 10.06. The
Borrower shall pay to such Dissenting Lender, concurrently with the
effectiveness of such assignment, any amounts payable under Section 3.05 of this
Agreement that would have been payable, in respect of any assignment of
Eurodollar Loans, if the Borrower had voluntarily prepaid the respective Loans.
The Dissenting Lender shall not be required to pay any fee relating to such
assignment.

 

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

 

For purposes of this Section 10.07, “Information” means all information or
materials received from, or provided by, or on behalf of, the Borrower or any
Subsidiary relating to the Borrower or any Subsidiary or any of their respective
businesses, other than any such information or materials that are available to
the Administrative

 

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Agent, any Lender or the L/C Issuer on a nonconfidential basis prior to
disclosure by the Borrower or any Subsidiary. Any Person required to maintain
the confidentiality of Information as provided in this Section 10.07 shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as a reasonable Person would accord to its own confidential
information.

 

10.08 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender, the L/C Issuer and each of their respective Affiliates
is hereby authorized at any time and from time to time, after obtaining the
prior written consent of the Administrative Agent, to the fullest extent
permitted by applicable law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final, in whatever currency) at any
time held and other obligations (in whatever currency) at any time owing by such
Lender, the L/C Issuer or any such Affiliate to or for the credit or the account
of the Borrower or any other Loan Party against any and all of the obligations
of the Borrower or such Loan Party now or hereafter existing under this
Agreement or any other Loan Document to such Lender or the L/C Issuer,
irrespective of whether or not such Lender or the L/C Issuer shall have made any
demand under this Agreement or any other Loan Document and although such
obligations of the Borrower or such Loan Party may be contingent or unmatured or
are owed to a branch or office of such Lender or the L/C Issuer different from
the branch or office holding such deposit or obligated on such indebtedness. The
rights of each Lender, the L/C Issuer and their respective Affiliates under this
Section 10.08 are in addition to other rights and remedies (including other
rights of setoff) that such Lender, the L/C Issuer or their respective
Affiliates may have. Each Lender and the L/C Issuer agrees to notify the
Borrower and the Administrative Agent promptly after any such setoff and
application, provided that the failure to give such notice shall not affect the
validity of such setoff and application.

 

10.09 Interest Rate Limitation. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or
any Lender shall receive interest in an amount that exceeds the Maximum Rate,
the excess interest shall be applied to the principal of the Loans or, if it
exceeds such unpaid principal, refunded to the Borrower. In determining whether
the interest contracted for, charged, or received by the Administrative Agent or
a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or unequal parts the total amount of interest throughout the contemplated
term of the Obligations hereunder.

 

10.10 Counterparts; Integration; Effectiveness. This Agreement may be executed
in counterparts (and by different parties hereto in different counterparts),
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement and the other Loan Documents
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. This Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof that, when
taken together, bear the signatures of each of the other parties hereto.
Delivery of an executed counterpart of a signature page of this Agreement by
telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement.

 

10.11 Survival of Representations and Warranties. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Credit Extension, and shall continue in full
force and effect as long as any Loan or any other Obligation hereunder shall
remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

 

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10.12 Severability. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

10.13 Replacement of Lenders. If any Lender requests compensation under Section
3.04, or if the Borrower is required to pay any additional amount to any Lender
or any Governmental Authority for the account of any Lender pursuant to Section
3.01, or if any Lender is a Defaulting Lender, then the Borrower may, at its
sole expense and effort, upon notice to such Lender and the Administrative
Agent, require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in, and consents
required by, Section 10.06), all of its interests, rights and obligations under
this Agreement and the related Loan Documents to an assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts such
assignment), provided that:

 

(a) the Borrower shall have paid to the Administrative Agent the assignment fee
specified in Section 10.06(b);

 

(b) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and L/C Advances, accrued interest thereon,
accrued fees and all other amounts payable to it hereunder and under the other
Loan Documents (including any amounts under Section 3.05) from the assignee (to
the extent of such outstanding principal and accrued interest and fees) or the
Borrower (in the case of all other amounts);

 

(c) in the case of any such assignment resulting from a claim for compensation
under Section 3.04 or payments required to be made pursuant to Section 3.01,
such assignment will result in a reduction in such compensation or payments
thereafter; and

 

(d) such assignment does not conflict with applicable Laws.

 

A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.

 

10.14 Governing Law; Jurisdiction; Etc.

 

(a) Governing Law. This Agreement shall be governed by, and construed in
accordance with, the law of the State of New York.

 

(b) Submission to Jurisdiction. The Borrower and each other Loan Party
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of the Courts of the State of New York sitting in the
County of New York and of the United States District Court of the Southern
District of New York, and any appellate Court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or any other Loan
Document, or for recognition or enforcement of any judgment, and each of the
parties hereto irrevocably and unconditionally agrees that all claims in respect
of any such action or proceeding may be heard and determined in such New York
State Court or, to the fullest extent permitted by applicable law, in such
Federal Court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement or in any other Loan Document shall affect any right
that the Administrative Agent, any Lender or the L/C Issuer may otherwise have
to bring any action or proceeding relating to this Agreement or any other Loan
Document against the Borrower or any other Loan Party or its properties in the
Courts of any jurisdiction.

 

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(c) Waiver of Venue. The Borrower and each other Loan Party irrevocably and
unconditionally waives, to the fullest extent permitted by applicable law, any
objection that it may now or hereafter have to the laying of venue of any action
or proceeding arising out of or relating to this Agreement or any other Loan
Document in any Court referred to in paragraph (b) of this Section 10.14. Each
of the parties hereto hereby irrevocably waives, to the fullest extent permitted
by applicable law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.

 

(d) Service of Process. Each party hereto irrevocably consents to service of
process in the manner provided for notices in Section 10.02. Nothing in this
Agreement will affect the right of any party hereto to serve process in any
other manner permitted by applicable law.

 

10.15 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

10.16 USA PATRIOT Act Notice. Each Lender that is subject to the Act (as
hereinafter defined) and the Administrative Agent (for itself and not on behalf
of any Lender) hereby notifies the Borrower that pursuant to the requirements of
the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”), it is required to obtain, verify and record information that
identifies 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 Act.

 

10.17 Time of the Essence. Time is of the essence of the Loan Documents.

 

10.18 Entire Agreement. This Agreement and the other Loan Documents represent
the final agreement among the parties and may not be contradicted by evidence of
prior, contemporaneous, or subsequent oral agreements of the parties. There are
no unwritten oral agreements among the parties.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

THE BORROWER    

ANTHEM, INC.

   

By

  /S/    MICHAEL L. SMITH            

Title:

  Chief Financial and Accounting Officer THE ADMINISTRATIVE AGENT    

BANK OF AMERICA, N.A.

   

By

  /S/    KEVIN L. AHART            

Title:

  Assistant Vice President THE INITIAL LENDERS    

BANK OF AMERICA, N.A., as Lender

   

By

  /S/    JOSEPH L. CORAH            

Title:

  Principal    

JPMORGAN CHASE BANK, as Lender

   

By

  /S/    GARY L. SPEVACK            

Title:

  Vice President    

UBS LOAN FINANCE LLC, as Lender

   

By

  /S/    WILFORD V. SAINT            

Title:

  Director, Banking Products Services, US    

By

  /S/    JUAN ZUNIGA            

Title:

  Associate Director, Banking Products Services, US

   

WILLIAM STREET COMMITMENT CORPORATION, as Lender

   

(Recourse only to assets of William Street Commitment Corporation)

   

By

  /S/    JENNIFER M. HILL            

Title:

  Chief Financial Officer    

SUNTRUST BANK, as Lender

   

By

  /S/    W. BROOKS HUBBARD            

Title:

  Director

 

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WACHOVIA BANK, NATIONAL ASSOCIATION, as Lender

   

By

  /S/    KIMBERLY SHAFFER            

Title:

  Director    

CITICORP USA, INC., as Lender

   

By

  /S/    DAVID A. DODGE            

Title:

  Managing Director    

THE BANK OF TOKYO-MITSHBISHI, LTD. NEW YORK BRANCH, as Lender

   

By

  /S/    J. TERRENCE DENNEHY            

Title:

  Authorized Signatory    

THE BANK OF NEW YORK, as Lender

   

By

  /S/    PATRICK VATEL            

Title:

  Vice President    

CREDIT SUISSE FIRST BOSTON, acting through its Cayman Island Branch, as Lender

   

By

  /S/    PAUL COLON            

Title:

  Director    

By

  /S/    VANESSA GOMEZ            

Title:

  Associate    

BNP PARIBAS, as Lender

   

By

  /S/    PETER LABRIE            

Title:

  Central Region Manager    

By

  /S/    CHRISTINE L. HOWATT            

Title:

  Director    

DEUTSCHE BANK AG NEW YORK BRANCH, as Lender

   

By

  /S/    RUTH LEUNG            

Title:

  Director    

By

  /S/    CLINTON JOHNSON            

Title:

  Managing Director

 

67

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FIFTH THIRD BANK (CENTRAL INDIANA), as Lender

   

By

  /S/    ANDREW M. CARDIMEN            

Title:

  Vice President    

SUMITOMO MITSUI BANKING CORPORATION, NEW YORK, as Lender

   

By

  /S/    YASUHIKO IMAI            

Title:

  Senior Vice President    

LEHMAN BROTHERS BANK, FSB, as Lender

   

By

  /S/    GARY T. TAYLOR            

Title:

  Vice President    

MERRILL LYNCH BANK USA, as Lender

   

By

  /S/    PRESTON L. JACKSON            

Title:

  President & CEO    

MORGAN STANLEY BANK, as Lender

   

By

  /S/    DANIEL TWENGE            

Title:

  Vice President    

BRANCH BANKING AND TRUST COMPANY OF VIRGINIA, as Lender

   

By

  /S/    J. CHARLES LINK            

Title:

  Senior Vice President    

MELLON BANK, N.A., as Lender

   

By

  /S/    MARSHA WICKER            

Title:

  Vice President    

WELLS FARGO BANK, NATIONAL, ASSOCIATION, as Lender

   

By

  /S/    BETH C. MCGINNIS            

Title:

  Senior Vice President    

By

  /S/    JAMES J. DOHERTY            

Title:

  Vice President    

MIZUHO CORPORATE BANK, LTD., as Lender

   

By

  /S/    GREG BOTSHON            

Title:

  Senior Vice President

 

68

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NATIONAL CITY BANK OF INDIANA, as Lender

   

By

  /S/    THOMAS E. BALE            

Title:

  Vice President    

UFJ BANK LIMITED, as Lender

   

By

  /S/    RUSSELL BOHNER            

Title:

  Vice President    

SOCIÉTÉ GÉNÉRALE, as Lender

   

By

  /S/    DAVID GRANT            

Title:

  Managing Director    

U.S. BANK NATIONAL ASSOCIATION, as Lender

   

By

  /S/    MICHAEL E. DORN            

Title:

  Vice President

 

69