Exhibit 10.2

 

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FIVE YEAR CREDIT AGREEMENT

 

DATED AS OF MAY 17, 2004

 

AMONG

 

NATIONWIDE MUTUAL INSURANCE COMPANY,

NATIONWIDE LIFE INSURANCE COMPANY,

NATIONWIDE FINANCIAL SERVICES, INC.,

 

THE LENDERS,

 

BANK ONE, NA,

AS AGENT,

 

CITICORP USA, INC.,

AS SYNDICATION AGENT,

 

AND

 

ABN AMRO BANK N.V.,

BANK OF AMERICA, N.A.,

KEYBANK NATIONAL ASSOCIATION,

THE BANK OF NEW YORK

AND

WACHOVIA BANK, NATIONAL ASSOCIATION,

AS DOCUMENTATION AGENTS

 

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BANC ONE CAPITAL MARKETS, INC.

AND

CITIGROUP GLOBAL MARKETS INC.,

AS JOINT LEAD ARRANGERS AND JOINT BOOK MANAGERS

 

1

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TABLE OF CONTENTS

 

Section

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       Page

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ARTICLE I DEFINITIONS

   1

ARTICLE II THE CREDITS

   16    

2.1

 

The Facility.

   16    

2.2

 

Ratable Advances.

   17    

2.3

 

Competitive Bid Advances

   18    

2.4

 

Method of Borrowing

   22    

2.5

 

Commitment Fee; Reduction and Increase of Aggregate Commitment.

   22    

2.6

 

Minimum Amount of Each Ratable Advance; Minimum Amount of Fixed Rate Advances

   23    

2.7

 

Optional Principal Payments

   23    

2.8

 

Changes in Interest Rate, etc

   23    

2.9

 

Rates Applicable After Default

   23    

2.10

 

Method of Payment

   24    

2.11

 

Noteless Agreement; Evidence of Indebtedness

   24    

2.12

 

Telephonic Notices

   25    

2.13

 

Interest Payment Dates; Interest and Fee Basis

   25    

2.14

 

Notification of Advances, Interest Rates, Prepayments and Commitment Reductions

   25    

2.15

 

Lending Installations

   25    

2.16

 

Non–Receipt of Funds by the Agent

   26

ARTICLE III YIELD PROTECTION; TAXES

   26    

3.1

 

Yield Protection

   26    

3.2

 

Changes in Capital Adequacy Regulations

   27    

3.3

 

Availability of Types of Advances

   27    

3.4

 

Funding Indemnification

   28    

3.5

 

Taxes

   28    

3.6

 

Lender Statements; Survival of Indemnity

   30

ARTICLE IV CONDITIONS PRECEDENT

   30    

4.1

 

Effectiveness of Agreement

   30    

4.2

 

Each Advance

   31

ARTICLE V REPRESENTATIONS AND WARRANTIES

   32    

5.1

 

Existence and Standing.

   32    

5.2

 

Authorization and Validity

   33    

5.3

 

No Conflict; Government Consent

   33    

5.4

 

Financial Statements.

   33    

5.5

 

Material Adverse Change

   34    

5.6

 

Taxes

   34    

5.7

 

Litigation and Contingent Obligations

   34    

5.8

 

Subsidiaries

   35    

5.9

 

ERISA

   35    

5.10

 

Accuracy of Information

   35    

5.11

 

Regulation U

   35    

5.12

 

Material Agreements

   35

 

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5.13

 

Compliance With Laws

   35    

5.14

 

Plan Assets; Prohibited Transactions

   36    

5.15

 

Environmental Matters

   36    

5.16

 

Investment Company Act

   36    

5.17

 

Public Utility Holding Company Act

   36    

5.18

 

Defaults

   36    

5.19

 

Insurance Licenses

   36

ARTICLE VI COVENANTS

   37    

6.1

 

Financial Reporting

   37    

6.2

 

Use of Proceeds

   39    

6.3

 

Notice of Default

   39    

6.4

 

Conduct of Business

   39    

6.5

 

Taxes

   40    

6.6

 

Insurance

   40    

6.7

 

Compliance with Laws

   40    

6.8

 

Maintenance of Properties

   40    

6.9

 

Inspection

   40    

6.10

 

Merger

   41    

6.11

 

Sale of Assets

   41    

6.12

 

Liens

   41    

6.13

 

Affiliates

   43    

6.14

 

ERISA Compliance

   43    

6.15

 

Financial Covenants.

   44

ARTICLE VII DEFAULTS

   45    

7.1

 

Representation or Warranty

   45    

7.2

 

Non-Payment of Obligations

   45    

7.3

 

Specific Defaults

   45    

7.4

 

Other Defaults

   45    

7.5

 

Cross-Default

   45    

7.6

 

Voluntary Proceedings

   45    

7.7

 

Involuntary Proceedings

   46    

7.8

 

Condemnation

   46    

7.9

 

Judgments

   46    

7.10

 

Change in Control

   46    

7.11

 

Rate Management Obligation

   46    

7.12

 

License

   46    

7.13

 

Violation of Insurance Laws

   47    

7.14

 

Directive or Mandate

   47    

7.15

 

Cross-Default With Respect to Other Borrowers

   47

ARTICLE VIII ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES

   47    

8.1

 

Acceleration

   47    

8.2

 

Amendments

   47    

8.3

 

Preservation of Rights

   48

 

 

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TABLE OF CONTENTS (continued)

 

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ARTICLE IX GENERAL PROVISIONS

   48    

9.1

 

Survival of Representations

   48    

9.2

 

Governmental Regulation

   48    

9.3

 

Headings

   49    

9.4

 

Entire Agreement

   49    

9.5

 

Several Obligations; Benefits of this Agreement

   49    

9.6

 

Expenses; Indemnification

   49    

9.7

 

Numbers of Documents

   50    

9.8

 

Accounting

   50    

9.9

 

Severability of Provisions

   50    

9.10

 

Nonliability of Lenders

   50    

9.11

 

Confidentiality

   50    

9.12

 

Nonreliance

   51    

9.13

 

Disclosure

   51    

9.14

 

USA PATRIOT ACT NOTIFICATION

   51

ARTICLE X THE AGENT

   51    

10.1

 

Appointment; Nature of Relationship

   51    

10.2

 

Powers

   52    

10.3

 

General Immunity

   52    

10.4

 

No Responsibility for Loans, Recitals, etc

   52    

10.5

 

Action on Instructions of Lenders

   52    

10.6

 

Employment of Agents and Counsel

   53    

10.7

 

Reliance on Documents; Counsel

   53    

10.8

 

Agent’s Reimbursement and Indemnification

   53    

10.9

 

Notice of Default

   54    

10.10

 

Rights as a Lender

   54    

10.11

 

Lender Credit Decision

   54    

10.12

 

Successor Agent

   54    

10.13

 

Agent and Arranger Fees

   55    

10.14

 

Delegation to Affiliates

   55    

10.15

 

Co-Agents, Documentation Agent, Syndication Agent, Managing Agent, etc

   55

ARTICLE XI SETOFF; RATABLE PAYMENTS

   55    

11.1

 

Setoff

   55    

11.2

 

Ratable Payments

   55

ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

   56    

12.1

 

Successors and Assigns

   56    

12.2

 

Participations.

   56    

12.3

 

Assignments.

   57    

12.4

 

Dissemination of Information

   58    

12.5

 

Tax Treatment

   58    

12.6

 

Designation

   58

ARTICLE XIII NOTICES

   59    

13.1

 

Notices

   59

 

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TABLE OF CONTENTS (continued)

 

Section

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13.2

 

Change of Address

   60

ARTICLE XIV COUNTERPARTS

   60

ARTICLE XV CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

   60    

15.1

 

CHOICE OF LAW

   60    

15.2

 

CONSENT TO JURISDICTION

   60    

15.3

 

WAIVER OF JURY TRIAL

   60

 

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TABLE OF CONTENTS

 

SCHEDULES

    

Pricing Schedule

    

Schedule 1

  

Commitments

Schedule 5.08

  

Subsidiaries

Schedule 6.12

  

Liens

 

EXHIBITS

 

Exhibit A-1

  

Ratable Note

Exhibit A-2

  

Competitive Bid Note

Exhibit B

  

Compliance Certificate

Exhibit C

  

Assignment and Acceptance

Exhibit D

  

Wire Money Transfer Instructions

Exhibit E

  

Competitive Bid Quote

Exhibit F

  

Competitive Bid Quote Request

Exhibit G

  

Invitation for Competitive Bid Quotes

 

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FIVE YEAR CREDIT AGREEMENT

 

This Five Year Credit Agreement, dated as of May 17, 2004, is among Nationwide
Mutual Insurance Company, Nationwide Life Insurance Company, Nationwide
Financial Services, Inc., the Lenders and Bank One, NA, a national banking
association having its principal office in Chicago, Illinois, as Agent. The
parties hereto agree as follows:

 

RECITALS:

 

WHEREAS, the Borrowers have requested the Lenders to make long-term financial
accommodations available to them in the aggregate principal amount of
$700,000,000, the proceeds of which the Borrowers may use for general corporate
purposes (including commercial paper back-up); and

 

WHEREAS, the Lenders are willing to extend such financial accommodations on the
terms and conditions set forth herein;

 

NOW, THEREFORE, in consideration of the mutual covenants and undertakings herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrowers, the Lenders and the
Agent hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

As used in this Agreement:

 

“ABR Advance” means an Advance which, except as otherwise provided in Section
2.9, bears interest at the Alternate Base Rate.

 

“ABR Loan” means a Loan which, except as otherwise provided in Section 2.9,
bears interest at the Alternate Base Rate.

 

“Absolute Rate” means, with respect to an Absolute Rate Loan made by a given
Lender for the relevant Absolute Rate Interest Period, the rate of interest per
annum (rounded to the nearest 1/100 of 1%) offered by such Lender and accepted
by the Requesting Borrower pursuant to Section 2.3.

 

“Absolute Rate Advance” means a borrowing hereunder consisting of the aggregate
amount of the several Absolute Rate Loans made by some or all of the Lenders to
the Requesting Borrower at the same time and for the same Absolute Rate Interest
Period.

 

“Absolute Rate Auction” means a solicitation of Competitive Bid Quotes setting
forth Absolute Rates pursuant to Section 2.3.

 

“Absolute Rate Interest Period” means, with respect to an Absolute Rate Advance,
a period of not less than 1 and not more than 270 days commencing on a Business
Day selected by

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the Requesting Borrower pursuant to this Agreement. If such Absolute Rate
Interest Period would end on a day which is not a Business Day, such Absolute
Rate Interest Period shall end on the next succeeding Business Day.

 

“Absolute Rate Loan” means a Loan which bears interest at an Absolute Rate.

 

“Advance” means a Ratable Advance or a Competitive Bid Advance.

 

“Affiliate” of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.

 

“Agent” means Bank One in its capacity as contractual representative of the
Lenders pursuant to Article X, and not in its individual capacity as a Lender,
and any successor Agent appointed pursuant to Article X.

 

“Aggregate Commitment” means the aggregate of the Commitments of all the
Lenders, as reduced from time to time pursuant to the terms hereof.

 

“Agreement” means this credit agreement, as it may be amended or modified and in
effect from time to time.

 

“Agreement Accounting Principles” means generally accepted accounting principles
as in effect from time to time, applied in a manner consistent with that used in
preparing the financial statements referred to in Section 5.4; provided,
however, that for the purposes of all computations required to be made with
respect to compliance by any Borrower with Section 6.15, such term shall mean
generally accepted accounting principles (excluding where SAP is applicable) as
in effect on the date hereof, applied in a manner consistent with those used in
preparing the financial statements referred to in Section 5.4.

 

“Alternate Base Rate” means, for any day, a rate of interest per annum equal to
the higher of (a) the Prime Rate for such day or (b) the sum of the Federal
Funds Effective Rate for such day plus 1/2% per annum.

 

“AMH” means Asset Management Holdings plc, which indirectly owns 100% of the
capital stock of Gartmore Investment Management plc.

 

“AMH Acquisition” means the acquisition by Nationwide Mutual or one of its
Subsidiaries of all or substantially all of the assets of AMH.

 

“Annual Statement” means the annual statutory financial statement of any
Insurance Company required to be filed with the insurance commissioner (or
similar authority) of its jurisdiction of incorporation, which statement shall
be in the form required by such Insurance

 

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Company’s jurisdiction of incorporation or, if no specific form is so required,
in the form of financial statements permitted by such insurance commissioner (or
such similar authority) to be used for filing annual statutory financial
statements and shall contain the type of information permitted by such insurance
commissioner (or similar authority) to be disclosed therein, together with all
exhibits or schedules filed therewith.

 

“Applicable Facility Fee Rate” means, at any time, the percentage rate per annum
at which Facility Fees are accruing on the Aggregate Commitment (without regard
to usage) at such time as set forth in the Pricing Schedule.

 

“Applicable Margin” means, with respect to Ratable Advances at any time, the
percentage rate per annum which is applicable at such time with respect to
Advances as set forth in the Pricing Schedule.

 

“Applicable Utilization Fee Rate” means, at any time, the percentage rate per
annum at which Utilization Fees are accruing as set forth in the Pricing
Schedule.

 

“Arrangers” means, collectively, BOCM, CGMI and their respective successors, in
their capacity as Joint Lead Arrangers and Joint Book Managers.

 

“Article” means an article of this Agreement unless another document is
specifically referenced.

 

“Authorized Officer” means any of the Treasurer or any Assistant Treasurer of a
Borrower, acting singly.

 

“Bank One” means Bank One, NA, a national banking association having its
principal office in Chicago, Illinois, in its individual capacity, and its
successors.

 

“BOCM” means Banc One Capital Markets, Inc.

 

“Borrowers” means, collectively, Nationwide Mutual, Nationwide Life and NFS, and
their respective successors and assigns.

 

“Borrowing Date” means a date on which an Advance is made hereunder.

 

“Borrowing Notice” means a Competitive Bid Borrowing Notice or a Ratable
Borrowing Notice, as the context may require.

 

“Business Day” means (a) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago and New York city for the conduct of
substantially all of their commercial lending activities, interbank wire
transfers can be made on the Fedwire system and dealings in United States
dollars are carried on in the London interbank market and (b) for all other
purposes, a day (other than a Saturday or Sunday) on which banks generally are
open in Chicago

 

- 3 -

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and New York city for the conduct of substantially all of their commercial
lending activities and interbank wire transfers can be made on the Fedwire
system.

 

“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 Agreement Accounting Principles.

 

“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 Agreement Accounting
Principles.

 

“Cash Equivalent Investments” means (a) short-term obligations of, or fully
guaranteed by, the United States of America, (b) commercial paper rated A-1 or
better by S&P or P-1 or better by Moody’s, (c) demand deposit accounts
maintained in the ordinary course of business, and (d) certificates of deposit
issued by and time deposits with commercial banks (whether domestic or foreign)
having capital and surplus in excess of $100,000,000; provided in each case that
the same provides for payment of both principal and interest (and not principal
alone or interest alone) and is not subject to any contingency regarding the
payment of principal or interest.

 

“CGMI” means Citigroup Global Markets Inc.

 

“Change in Control” means (a) in the case of Nationwide Mutual, it shall cease
to be a mutual insurance company, (b) in the case of Nationwide Life, it shall
cease to be a Wholly-Owned Subsidiary of NFS, and (c) in the case of NFS, it
shall cease to be a Subsidiary of Nationwide Mutual.

 

“Closing Date” means May 17, 2004.

 

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

 

“Combined Annual Statement” means the Annual Statement required to be filed by
Nationwide Mutual and its affiliated property and casualty insurers.

 

“Commitment” means, (a) with respect to each Lender, the amount specified for
such Lender on Schedule 1 and (b) with respect to each Person which becomes a
Lender after the Closing Date, the amount specified for such Person on the
signature page of the Assignment and Acceptance or in the Assumption Agreement,
as the case may be, to which it is a party, in each case, as such amount may be
permanently terminated or reduced from time to time pursuant to Section 2.5(c)
or Section 8.1.

 

“Competitive Bid Advance” means a borrowing hereunder made by some or all of the
Lenders on the same Borrowing Date and consisting of the aggregate amount of the
several Competitive Bid Loans of the same Type and for the same Interest Period.

 

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“Competitive Bid Borrowing Notice” is defined in Section 2.3.6.

 

“Competitive Bid Loan” means a Eurodollar Bid Rate Loan or an Absolute Rate
Loan, or both, as the case may be.

 

“Competitive Bid Margin” means the margin above or below the applicable
Eurodollar Base Rate (adjusted for reserve costs, if applicable) offered for a
Eurodollar Bid Rate Loan, expressed as a percentage (rounded to the nearest
1/100 of 1%) to be added or subtracted from such Eurodollar Base Rate.

 

“Competitive Bid Note” means any promissory note in the form of Exhibit A-2
hereto issued at the request of a Lender pursuant to Section 2.11 to evidence
its Competitive Bid Loans.

 

“Competitive Bid Quote” means a Competitive Bid Quote substantially in the form
of Exhibit E hereto completed and delivered by a Lender to the Agent in
accordance with Section 2.3.4.

 

“Competitive Bid Quote Request” means a Competitive Bid Quote Request
substantially in the form of Exhibit F hereto completed and delivered by the
Borrower to the Agent in accordance with Section 2.3.2.

 

“Consolidated Person” means, for any taxable year of reference, each Person
which is a member of the affiliated group of such Borrower if consolidated
returns are or shall be filed for such affiliated group for federal income tax
purposes or any combined or unitary group of which such Borrower is a member for
state income tax purposes.

 

“Consolidated Tangible Net Worth” means at any date the consolidated
shareholders’ equity of NFS and its consolidated Subsidiaries plus any
unrealized losses or less (a) any unrealized gains (in each case to the extent
reflected in the determination of such consolidated shareholders’ equity)
related, directly or indirectly, to securities available-for-sale, as determined
in accordance with Statement of Financial Accounting Standards No. 115 (or any
successor statements or amendments thereto) (in each case as affected by any
subsequent relevant pronouncements of the Financial Accounting Standards Board
or, if and to the extent applicable, the Securities and Exchange Commission) and
(b) Intangible Assets, all determined as of such date in accordance with
Agreement Accounting Principles based upon its most recent financial statements
prepared in accordance with Agreement Accounting Principles; provided, that in
calculating Consolidated Tangible Net Worth on any date the impact thereon of
FIN 46 shall be excluded.

 

“Contingent Obligation” of a Person means any agreement, undertaking or
arrangement by which 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 obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or the obligations of any such Person as general
partner of a partnership with respect to

 

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the liabilities of the partnership, but excluding (a) Contingent Obligations in
respect of insurance policies issued in the ordinary course of business
(including, without limitation, Contingent Obligations in respect of reinsurance
agreements entered into in connection with the sale of Wausau General Insurance
Company and its affiliates), (b) Contingent Obligations incurred by any Borrower
in connection with the issuance of a License to a Subsidiary and (c) Contingent
Obligations in respect of undrawn letters of credit which are issued in the
ordinary course of business to support reinsurance obligations.

 

“Conversion/Continuation Notice” is defined in Section 2.2.4.

 

“Controlled Group” means all members of a controlled group of corporations or
other business entities and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any of
its Subsidiaries, are treated as a single employer under Section 414 of the
Code.

 

“Default” means an event described in Article VII.

 

“Environmental Laws” means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, plans, injunctions, permits, concessions, grants, franchises,
licenses, agreements and other governmental restrictions relating to (a) the
protection of the environment, (b) the effect of the environment on human
health, (c) emissions, discharges or releases of pollutants, contaminants,
hazardous substances or wastes into surface water, ground water or land, or (d)
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, hazardous substances or
wastes or the clean-up or other remediation thereof.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any rule or regulation issued thereunder.

 

“Eurodollar Advance” means a Eurodollar Ratable Advance, a Eurodollar Bid Rate
Advance, or both, as the context may require.

 

“Eurodollar Auction” means a solicitation of Competitive Bid Quotes setting
forth Competitive Bid Margins pursuant to Section 2.3.

 

“Eurodollar Base Rate” means, with respect to a Eurodollar Advance to a Borrower
for the relevant Eurodollar Interest Period, the applicable British Bankers’
Association Interest Settlement Rate for deposits in U.S. dollars appearing on
Reuters Screen FRBD as of 11:00 a.m. (London time) two Business Days prior to
the first day of such Eurodollar Interest Period, and having a maturity equal to
such Eurodollar Interest Period, provided that, (a) if Reuters Screen FRBD is
not available to the Agent for any reason, the applicable Eurodollar Base Rate
for the relevant Eurodollar Interest Period shall instead be the applicable
British Bankers’ Association Interest Settlement Rate for deposits in U.S.
dollars as reported by any other generally recognized financial information
service as of 11:00 a.m. (London time) two Business Days prior to the first day
of such Eurodollar Interest Period, and having a maturity equal to such
Eurodollar Interest Period, and (b) if no such British Bankers’ Association
Interest Settlement Rate is

 

- 6 -

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available to the Agent, the applicable Eurodollar Base Rate for the relevant
Eurodollar Interest Period shall instead be the rate determined by the Agent to
be the rate at which Bank One or one of its Affiliate banks offers to place
deposits in U.S. dollars with first-class banks in the London interbank market
at approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such Eurodollar Interest Period, in the approximate amount of Bank One’s
relevant Eurodollar Ratable Loan, or, in the case of a Eurodollar Bid Rate
Advance, the amount of the Eurodollar Bid Rate Advance requested by such
Borrower, and having a maturity equal to such Eurodollar Interest Period.

 

“Eurodollar Bid Rate” means, with respect to a Eurodollar Bid Rate Loan made by
a given Lender for the relevant Eurodollar Interest Period, the sum of (a) the
quotient of (i) the Eurodollar Base Rate applicable to such Interest Period,
divided by (ii) one minus the Reserve Requirement (expressed as a decimal)
applicable to such Interest Period, plus (b) the Competitive Bid Margin offered
by such Lender and accepted by the Requesting Borrower.

 

“Eurodollar Bid Rate Advance” means a Competitive Bid Advance which bears
interest at a Eurodollar Bid Rate.

 

“Eurodollar Bid Rate Loan” means a Loan which bears interest at a Eurodollar Bid
Rate.

 

“Eurodollar Interest Period” means, with respect to a Eurodollar Advance to a
Borrower, a period of one, two, three or six months commencing on a Business Day
selected by such Borrower pursuant to this Agreement. Such Eurodollar Interest
Period shall end on the day which corresponds numerically to such date one, two,
three or six months thereafter; provided, however, that if there is no such
numerically corresponding day in such next, second, third or sixth succeeding
month, such Eurodollar Interest Period shall end on the last Business Day of
such next, second, third or sixth succeeding month. If a Eurodollar Interest
Period would otherwise end on a day which is not a Business Day, such Eurodollar
Interest Period shall end on the next succeeding Business Day; provided,
however, that if said next succeeding Business Day falls in a new calendar
month, such Eurodollar Interest Period shall end on the immediately preceding
Business Day.

 

“Eurodollar Loan” means a Eurodollar Ratable Loan or a Eurodollar Bid Rate Loan,
or both, as the context may require.

 

“Eurodollar Ratable Advance” means a Ratable Advance to a Borrower which bears
interest at a Eurodollar Rate requested by such Borrower pursuant to Section
2.2.

 

“Eurodollar Ratable Loan” means a Ratable Loan to a Borrower which bears
interest at a Eurodollar Rate requested by such Borrower pursuant to Section
2.2.

 

“Eurodollar Rate” means, with respect to a Eurodollar Ratable Advance for the
relevant Eurodollar Interest Period, the sum of (a) the quotient of (i) the
Eurodollar Base Rate applicable to such Eurodollar Interest Period, divided by
(ii) one minus the Reserve Requirement (expressed as a decimal) applicable to
such Eurodollar Interest Period, plus (b) the Applicable Margin.

 

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“Excluded Taxes” means, in the case of each Lender or applicable Lending
Installation and the Agent, taxes imposed on its overall net income, and
franchise taxes imposed on it, by (a) the jurisdiction under the laws of which
such Lender or the Agent is incorporated or organized or (b) any jurisdiction in
which the Agent or such Lender maintains a lending office.

 

“Exhibit” refers to an exhibit to this Agreement, unless another document is
specifically referenced.

 

“Facility Fee” is defined in Section 2.5(a).

 

“Facility Termination Date” means May 17, 2009, or any earlier date on which the
Aggregate Commitment is reduced to zero or otherwise terminated pursuant to the
terms hereof.

 

“FAS 35” means Financial Accounting Statement No. 35, “Accounting and Reporting
by Defined Benefit Pension Plans” issued by the Financial Accounting Standards
Board in March, 1980.

 

“Federal Funds Effective Rate” means, for any day, an interest 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 for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.

 

“FIN 46” means Interpretation No. 46, “Consolidation of Variable Interest
Entities,” issued by the Financing Accounting Standards Board in January 2003.

 

“Fixed Rate” means the Eurodollar Rate, the Eurodollar Bid Rate or the Absolute
Rate.

 

“Fixed Rate Advance” means an Advance which bears interest at a Fixed Rate.

 

“Fixed Rate Loan” means a Loan which bears interest at a Fixed Rate.

 

“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 without limitation any board of
insurance, insurance department or insurance commissioner and any taxing
authority or political subdivision) or any instrumentality or officer thereof
(including without limitation 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 by any of the foregoing.

 

“Indebtedness” 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

 

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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, acceptances, or other instruments, including notes issued to an
Affiliate in connection with the issuance by such Affiliate of trust preferred
securities, (e) obligations of such Person to purchase securities or other
Property arising out of or in connection with the sale of the same or
substantially similar securities or Property, (f) Capitalized Lease Obligations,
(g) Contingent Obligations, (h) obligations in respect of Surplus Debentures,
(i) Net Mark-to-Market Exposure under Rate Management Transactions, (j)
non-contingent obligations of such Person to reimburse any Lender or other
Person in respect of amounts paid under a letter of credit and (k) any other
obligation for borrowed money or other financial accommodation which in
accordance with Agreement Accounting Principles or SAP, as applicable, would be
shown as a liability on the consolidated balance sheet of such Person; provided,
however, that for the purpose of determining compliance with Sections 6.15.4
and, with respect to clauses (ii) and (iv) below, Section 6.15.5 on any date,
“Indebtedness” shall exclude (i) Surplus Debentures which mature more than ten
(10) years after such date of determination, (ii) obligations of such Person
arising in respect of securities lending activities and securities repurchase or
reverse-repurchase activities undertaken in the ordinary course of business in
compliance with all applicable laws, (iii) obligations of Nationwide Mutual
under one or more prepaid equity forward contracts, and (iv) indebtedness of
such Person incurred in connection with the sale or issuance of Structured
Finance Securities, provided that no Borrower or Subsidiary has any recourse
obligations with respect thereto;

 

“Insurance Company” means Nationwide Mutual, Nationwide Life or any Insurance
Subsidiary.

 

“Insurance Subsidiary” means any Subsidiary which is engaged in the business of
underwriting policies of insurance.

 

“Intangible Assets” means the amount (to the extent reflected in determining
such consolidated shareholders’ equity) of all unamortized debt discount and
expense, unamortized deferred charges, goodwill, patents, trademarks, service
marks, trade names, anticipated future benefit of tax loss carry-forwards,
copyrights, organization or developmental expenses and other intangible assets;
provided, that the deferred policy acquisition costs shall not be considered
Intangible Assets for the purposes of this definition.

 

“Interest Period” means a Eurodollar Interest Period or an Absolute Rate
Interest Period.

 

“Invitation for Competitive Bid Quotes” means an Invitation for Competitive Bid
Quotes substantially in the form of Exhibit G hereto, completed and delivered by
the Agent to the Lenders in accordance with Section 2.3.3.

 

“Lenders” means the lending institutions listed on the signature pages of this
Agreement and their respective successors and assigns.

 

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“Lending Installation” means, with respect to a Lender or the Agent, the office,
branch, subsidiary or Affiliate of such Lender or the Agent listed on the
signature pages hereof or on a Schedule or otherwise selected by such Lender or
the Agent pursuant to Section 2.15.

 

“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 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).

 

“Loan” means, with respect to a Lender, such Lender’s loan made pursuant to
Article II (or, in the case of a loan made pursuant to Section 2.2, any
conversion or continuation thereof).

 

“Loan Documents” means this Agreement and any Notes issued pursuant to Section
2.11 and the other documents and agreements contemplated hereby and executed by
any Borrower in favor of the Agent or any Lender.

 

“Material Adverse Effect” means, with respect to any Borrower, a material
adverse effect on (a) the business, Property, condition (financial or
otherwise), results of operations, or prospects of such Borrower and its
Subsidiaries taken as a whole, (b) the ability of such Borrower to perform its
obligations under the Loan Documents, or (c) the validity or enforceability of
any of the Loan Documents or the rights or remedies of the Agent or the Lenders
thereunder.

 

“Material Affiliate” means:

 

(a) in respect of Nationwide Mutual, (i) any other Person which is a party to
the Nationwide Insurance Intercompany Pooling Agreement, effective as of January
1, 1999, as amended or supplemented from time to time, and (ii) any of its
Material Subsidiaries; and

 

(b) in respect of each of Nationwide Life and NFS, any of its Material
Subsidiaries.

 

“Material Indebtedness” is defined in Section 7.5.

 

“Material Insurance Subsidiary” means an Insurance Subsidiary which is a
Material Subsidiary.

 

“Material Subsidiary” means:

 

(a) in respect of Nationwide Mutual, any Subsidiary having, as of the date of
the Combined Annual Statement most recently delivered to the Lenders pursuant to
Section 5.4(a) or Section 6.1(d), consolidated assets with a value of at least
two percent (2%) of the total

 

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combined assets set out in such statement; provided, that, for the purposes of
this Agreement, neither Nationwide Life nor NFS nor any of their consolidated
Subsidiaries shall be considered to be a Material Subsidiary of Nationwide
Mutual; and

 

(b) in respect of each of Nationwide Life and NFS, any Subsidiary having, as of
the date of the balance sheet most recently delivered to the Lenders pursuant to
Section 5.4 or Section 6.1, consolidated assets with a value of at least two
percent (2%) of the total consolidated assets set out in such statement.

 

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

 

“Multiemployer Plan” means a Plan maintained pursuant to a collective bargaining
agreement or any other arrangement to which the Borrower 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.

 

“Nationwide Life” means Nationwide Life Insurance Company, an Ohio insurance
company.

 

“Nationwide Mutual” means Nationwide Mutual Insurance Company, an Ohio mutual
insurance company.

 

“Net Mark-to-Market Exposure” of a Person means, as of any date of
determination, the excess (if any) of all unrealized losses over all unrealized
profits of such Person arising from Rate Management Transactions. “Unrealized
losses” means the fair market value of the cost to such Person of replacing such
Rate Management Transaction as of the date of determination (assuming the Rate
Management Transaction were to be terminated as of that date), and “unrealized
profits” means the fair market value of the gain to such Person of replacing
such Rate Management Transaction as of the date of determination (assuming such
Rate Management Transaction were to be terminated as of that date).

 

“NFS” means Nationwide Financial Services, Inc., a Delaware corporation.

 

“Non-U.S. Lender” is defined in Section 3.5(d).

 

“Notes” means, collectively, all of the Competitive Bid Notes and all of the
Ratable Notes which may be issued hereunder, and “Note” means any one of the
Notes.

 

“Obligations” means all unpaid principal of and accrued and unpaid interest on
the Loans, all accrued and unpaid fees and all expenses, reimbursements,
indemnities and other

 

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obligations of the Borrowers or any Borrower to the Lenders or to any Lender,
the Agent or any indemnified party arising under the Loan Documents.

 

“Other Taxes” is defined in Section 3.5(b).

 

“Participants” is defined in Section 12.2.1.

 

“Payment Date” means the last day of each March, June, September and December.

 

“PBGC” means the Pension Benefit Guaranty Corporation, or any successor thereto.

 

“Person” means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.

 

“Plan” means an employee pension benefit plan which is covered by Title IV of
ERISA or subject to the minimum funding standards under Section 412 of the Code
as to which a Borrower or any member of the Controlled Group may have any
liability.

 

“Pricing Schedule” means the Schedule attached hereto identified as such.

 

“Prime Rate” means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.

 

“Property” of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.

 

“Purchasers” is defined in Section 12.3.1.

 

“Quarterly Statement” means the quarterly statutory financial statement of any
Insurance Company required to be filed with the insurance commissioner (or
similar authority) of its jurisdiction of incorporation or, if no specific form
is so required, in the form of financial statements permitted by such insurance
commissioner (or such similar authority) to be used for filing quarterly
statutory financial statements and shall contain the type of financial
information permitted by such insurance commissioner (or such similar authority)
to be disclosed therein, together with all exhibits or schedules filed
therewith.

 

“Ratable Advance” means a borrowing hereunder (a) made by the Lenders to a
Borrower on the same Borrowing Date, or (b) converted or continued by the
Lenders on the same date of conversion or continuation, consisting, in either
case, of the aggregate amount of the several Ratable Loans of the same Type and,
in the case of Eurodollar Ratable Loans, for the same Interest Period.

 

“Ratable Borrowing Notice” is defined in Section 2.2.3.

 

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“Ratable Loan” means a Loan made by a Lender pursuant to Section 2.2 hereof.

 

“Ratable Note” means any promissory note in the form of Exhibit A-1 hereto
issued at the request of a Lender pursuant to Section 2.11 to evidence its
Ratable Loans.

 

“Rate Management Obligations” of a Person means any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (a) any and all Rate
Management Transactions, and (b) any and all cancellations, buy backs,
reversals, terminations or assignments of any Rate Management Transactions.

 

“Rate Management Transaction” means any transaction (including an agreement with
respect thereto) now existing or hereafter entered into by any Borrower which is
a credit default swap, rate swap, basis swap, forward rate transaction,
commodity swap, commodity option, equity or equity index swap, equity or equity
index option, bond option, interest rate option, foreign exchange transaction,
cap transaction, floor transaction, collar transaction, forward transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
these transactions) or any combination thereof, whether linked to one or more
interest rates, foreign currencies, commodity prices, equity prices or other
financial measures.

 

“Regulation D” means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.

 

“Regulation U” means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.

 

“Reportable Event” means a reportable event as defined in Section 4043 of ERISA
and the regulations issued under such section, with respect to a 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, however, 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.

 

“Reports” is defined in Section 9.6.

 

“Requesting Borrower” is defined in Section 2.3.2.

 

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“Required Lenders” means Lenders in the aggregate having at least 51% of the
Aggregate Commitment or, if the Aggregate Commitment has been terminated,
Lenders in the aggregate holding at least 51% of the aggregate unpaid principal
amount of the outstanding Advances.

 

“Reserve Requirement” means, with respect to an Interest Period, the maximum
aggregate reserve requirement (including all basic, supplemental, marginal and
other reserves) which is imposed under Regulation D on Eurocurrency liabilities.

 

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

 

“SAP” means, with respect to any Insurance Company, the statutory accounting
practices prescribed or permitted by the insurance commissioner (or other
similar authority) in the jurisdiction of such Person for the preparation of
annual statements and other financial reports by insurance companies of the same
type as such Person in effect from time to time, applied in a manner consistent
with those used in preparing the financial statements referred to in Section
5.4(a) and (b); provided, that, except as otherwise provided in the definition
of Agreement Accounting Principles, with respect to the financial covenants
contained in Section 6.15 hereof, and the related definitions, “SAP” means such
statutory accounting practices in effect on the date hereof, applied in a manner
consistent with those used in preparing the financial statements referred to in
Section 5.4(a) and (b).

 

“Schedule” refers to a specific schedule to this Agreement, unless another
document is specifically referenced.

 

“Section” means a numbered section of this Agreement, unless another document is
specifically referenced.

 

“Single Employer Plan” means a Plan maintained by a Borrower or any member of
the Controlled Group for employees of such Borrower or any member of the
Controlled Group.

 

“Statutory Surplus” means, with respect to (a) Nationwide Mutual at any time,
the surplus as regards policyholders of Nationwide Mutual at such time, as
determined in accordance with SAP (“Liabilities, Surplus and Other Funds”
statement, page 3, line 35 of the Annual Statement) based upon its most recently
filed Quarterly Statement and (b) Nationwide Life at any time, the statutory
capital and surplus of Nationwide Life at such time, as determined in accordance
with SAP (“Liabilities, Surplus and Other Funds” statement, page 3, line 38 of
the Annual Statement) based upon its most recently filed Quarterly Statement.

 

“Structured Finance Securities” means (a) notes or other instruments secured by
collateral consisting primarily of debt securities and/or other types of debt
obligations, including loans and credit default swaps or (b) securities whose
benefits are derived from a discreet pool of assets, either fixed or revolving,
that are acquired with the intention to convert into cash within a finite period
of time under a recognized securitization program sponsored by any Borrower.

 

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“Subsidiary” of a Person means (a) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(b) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.

 

“Substantial Portion” means, with respect to the Property of a Borrower and its
Subsidiaries, Property which (a) represents more than 10% of the consolidated
assets of such Borrower and its Subsidiaries as would be shown in the
consolidated financial statements of such Borrower and its Subsidiaries as at
the beginning of the twelve-month period ending with the month in which such
determination is made, or (b) is responsible for more than 10% of the
consolidated net sales or of the consolidated net income of such Borrower and
its Subsidiaries as reflected in the financial statements referred to in clause
(a) above.

 

“Surplus Debentures” means, as to Nationwide Mutual, debt securities of
Nationwide Mutual the proceeds of which are permitted to be included, in whole
or in part, as Statutory Surplus as approved and permitted by the insurance
department of Nationwide Mutual’s state of domicile.

 

“Taxes” means any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings, and any and all liabilities with respect to
the foregoing, but excluding Excluded Taxes and Other Taxes.

 

“Total Capitalization” means at any time:

 

(a) with respect to Nationwide Mutual, the sum of (i) Nationwide Mutual’s
outstanding Indebtedness and (ii) Nationwide Mutual’s Statutory Surplus based
upon its most recently filed Quarterly Statement excluding, however, the impact
thereon of FIN 46; and

 

(b) with respect to NFS, the sum of (i) the consolidated Indebtedness of NFS and
its Subsidiaries as of such time and (ii) the consolidated shareholders’ equity
of NFS and its Subsidiaries as of such time based upon its most recent financial
statements prepared in accordance with Agreement Accounting Principles,
excluding, however, the effect of any unrealized gain or loss reported under
Statement of Financial Accounting Standards No. 115 and the impact thereon of
FIN 46.

 

“Transferee” is defined in Section 12.4.

 

“Type” means, with respect to any Advance, its nature as an ABR Advance, an
Absolute Rate Advance, a Eurodollar Bid Rate Advance or a Eurodollar Ratable
Advance.

 

“Unfunded Liabilities” means the amount (if any) by which the sum of (i) the
present value of all vested accrued benefits under all Single Employer Plans,
calculated using PBGC actuarial assumptions for single employer plans, and (ii)
the present value of all non-vested accrued benefits for such Plans, calculated
using FAS 35 actuarial assumptions, exceeds the fair

 

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market value of all such Plan assets allocable to such benefits, all determined
as of the then most recent valuation date for such Plans.

 

“Unmatured Default” means an event which but for the lapse of time or the giving
of notice, or both, would constitute a Default.

 

“Utilization Fee” is defined in Section 2.5(b).

 

“Wholly-Owned Subsidiary” of a Person means (a) any Subsidiary all of the
outstanding voting securities of which shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of
such Person, or (b) any partnership, limited liability company, association,
joint venture or similar business organization 100% of the ownership interests
having ordinary voting power of which shall at the time be so owned or
controlled.

 

The foregoing definitions shall be equally applicable to both the singular and
plural forms of the defined terms. References herein to particular columns,
lines or sections of any Person’s Annual Statement shall be deemed, where
appropriate, to be references to the corresponding column, line or section of
such Person’s Quarterly Statement, or if no such corresponding column, line or
section exists or if any report form changes, then to the corresponding item
referenced thereby. In the event that any changes in Agreement Accounting
Principles or SAP occur after the date of this Agreement and such changes result
in a material variation in the method of calculation of financial covenants or
other terms of this Agreement, then the Borrowers, the Agent and the Lenders
agree to amend such provisions of this Agreement so as to equitably reflect such
changes in order that the criteria for evaluating each Borrower’s financial
condition will be the same after such changes as if such changes had not
occurred.

 

ARTICLE II

 

THE CREDITS

 

2.1 The Facility.

 

2.1.1 Description of Facility. The Lenders grant to the Borrowers a revolving
credit facility pursuant to which, and upon the terms and subject to the
conditions herein set forth:

 

(a) each Lender severally agrees to make Ratable Loans to each of the Borrowers
in accordance with Section 2.2; and

 

(b) each Lender may, in its sole discretion, make bids to make Competitive Bid
Loans to each of the Borrowers in accordance with Section 2.3.

 

2.1.2 Amount of Facility. In no event may the aggregate principal amount of all
outstanding Advances (including both the Ratable Advances and the Competitive
Bid Advances) to all Borrowers exceed the Aggregate Commitment. The Commitments
may be terminated or reduced from time to time pursuant to Section 2.5(c) or
Section 8.1.

 

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2.1.3 Availability of Facility. Subject to the terms of this Agreement, the
facility is available from the date hereof to the Facility Termination Date, and
the Borrowers may borrow, repay and reborrow at any time prior to the Facility
Termination Date. The Commitments to lend hereunder shall expire on the Facility
Termination Date.

 

2.1.4 Repayment of Facility. Any outstanding Advances and all other unpaid
Obligations shall be paid in full by the Borrowers on the Facility Termination
Date.

 

2.1.5 Several Obligations. Each Borrower will be severally obligated for all
Advances made to such Borrower and all interest accrued with respect thereto,
and no Borrower will be obligated for any Advances made to any other Borrower.
Except as provided in this Section 2.1.5 and as otherwise expressly provided
herein, the Borrowers shall be jointly and severally liable for all other
Obligations hereunder.

 

2.2 Ratable Advances.

 

2.2.1 Ratable Advances. Each Ratable Advance hereunder shall consist of Loans
made to a Borrower from the several Lenders ratably in proportion to the ratio
that their respective Commitments bear to the Aggregate Commitment. The
aggregate outstanding amount of Competitive Bid Advances shall reduce each
Lender’s Commitment ratably in the proportion such Lender’s Commitment bears to
the Aggregate Commitment regardless of which Lender or Lenders make such
Competitive Bid Advances.

 

2.2.2 Types of Ratable Advances. The Ratable Advances may be ABR Advances or
Eurodollar Ratable Advances, or a combination thereof, selected by the Borrower
requesting such Advance in accordance with Section 2.2.3.

 

2.2.3 Method of Selecting Types and Interest Periods for Ratable Advances. Each
applicable Borrower shall select the Type of Ratable Advance and, in the case of
each Eurodollar Ratable Advance, the Interest Period applicable thereto from
time to time. Such Borrower shall give the Agent irrevocable notice (a “Ratable
Borrowing Notice”) not later than 10:00 a.m. (Chicago time) at least one
Business Day before the Borrowing Date of each ABR Advance and three Business
Days before the Borrowing Date for each Eurodollar Ratable Advance.
Notwithstanding the foregoing, a Ratable Borrowing Notice for an ABR Advance may
be given by a Borrower not later than 15 minutes after the time which such
Borrower is required to reject one or more bids offered in connection with an
Absolute Rate Auction pursuant to Section 2.3.6 and a Ratable Borrowing Notice
for a Eurodollar Ratable Advance may be given not later than 15 minutes after
the time such Borrower is required to reject one or more bids offered in
connection with a Eurodollar Auction pursuant to Section 2.3.6. A Ratable
Borrowing Notice shall specify:

 

(a) the Borrowing Date, which shall be a Business Day, of such Ratable Advance,

 

(b) the aggregate amount of such Ratable Advance,

 

(c) the Type of Ratable Advance selected, and

 

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(d) in the case of each Eurodollar Ratable Advance, the Interest Period
applicable thereto (which may not end after the Facility Termination Date).

 

2.2.4 Conversion and Continuation of Outstanding Ratable Advances. ABR Advances
shall continue as ABR Advances unless and until such ABR Advances are converted
into Eurodollar Advances pursuant to this Section 2.2.4 or are repaid in
accordance with Section 2.7. Each Eurodollar Ratable Advance shall continue as a
Eurodollar Ratable Advance until the end of the then applicable Eurodollar
Interest Period therefor, at which time such Eurodollar Ratable Advance shall be
automatically converted into an ABR Advance unless (i) such Eurodollar Ratable
Advance is or was repaid in accordance with Section 2.7 or (ii) the Borrower to
which such Eurodollar Ratable Advance was made shall have given the Agent a
Conversion/Continuation Notice (as defined below) requesting that, at the end of
such Eurodollar Interest Period, such Eurodollar Ratable Advance continue as a
Eurodollar Ratable Advance for the same or another Eurodollar Interest Period.
Subject to the terms of Section 2.6, each Borrower may elect from time to time
to convert all or any part of an ABR Advance made to such Borrower into a
Eurodollar Ratable Advance. Such Borrower shall give the Agent irrevocable
notice (a “Conversion/Continuation Notice”) of each conversion of an ABR Advance
into a Eurodollar Ratable Advance or continuation of a Eurodollar Ratable
Advance not later than 10:00 a.m. (Chicago time) at least three Business Days
prior to the date of the requested conversion or continuation, specifying:

 

(a) the requested date of such conversion or continuation, which shall be a
Business Day,

 

(b) the aggregate amount and Type of the Ratable Advance which is to be
converted or continued, and

 

(c) the amount of such Ratable Advance which is to be converted into or
continued as a Eurodollar Ratable Advance and the duration of the Eurodollar
Interest Period applicable thereto.

 

2.3 Competitive Bid Advances.

 

2.3.1. Competitive Bid Option. In addition to Ratable Advances pursuant to
Section 2.2, but subject to the terms and conditions of this Agreement
(including, without limitation, the limitation set forth in Section 2.1.2 as to
the maximum aggregate principal amount of all outstanding Advances hereunder),
each Borrower may, as set forth in this Section 2.3, request the Lenders, prior
to the Facility Termination Date, to make offers to make Competitive Bid
Advances to such Borrower. Each Lender may, but shall have no obligation to,
make such offers and such Borrower may, but shall have no obligation to, accept
any such offers in the manner set forth in this Section 2.3. Each Competitive
Bid Advance to a Borrower shall be repaid by such Borrower on the last day of
the Interest Period applicable thereto.

 

2.3.2. Competitive Bid Quote Request. When a Borrower (in such capacity, a
“Requesting Borrower”) wishes to request offers to make Competitive Bid Loans
under this Section 2.3, it shall transmit to the Agent by telecopy a Competitive
Bid Quote Request so as to be received no later than (i) 10:00 a.m. (Chicago
time) at least five Business Days prior to the

 

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Borrowing Date proposed therein, in the case of a Eurodollar Auction, or (ii)
9:00 a.m. (Chicago time) at least one Business Day prior to the Borrowing Date
proposed therein, in the case of an Absolute Rate Auction, specifying:

 

(a) the proposed Borrowing Date, which shall be a Business Day, for such
Competitive Bid Advance,

 

(b) the aggregate principal amount of such Competitive Bid Advance,

 

(c) whether the Competitive Bid Quotes requested are to set forth a Competitive
Bid Margin or an Absolute Rate, or both,

 

(d) whether the proposed Competitive Bid Advance will be subject to prepayment,
and

 

(e) the Interest Period applicable thereto (which may not end after the Facility
Termination Date).

 

The Requesting Borrower may request offers to make Competitive Bid Loans for
more than one Interest Period and for a Eurodollar Auction and an Absolute Rate
Auction in a single Competitive Bid Quote Request. No Competitive Bid Quote
Request shall be given within 5 Business Days (or such other number of days as
the requesting Borrower and the Agent may agree) of any other Competitive Bid
Quote Request. A Competitive Bid Quote Request that does not conform
substantially to the format of Exhibit F hereto shall be rejected, and the Agent
shall promptly notify the Requesting Borrower of such rejection.

 

2.3.3. Invitation for Competitive Bid Quotes. Promptly and in any event before
the close of business on the same Business Day of receipt of a Competitive Bid
Quote Request that is not rejected pursuant to Section 2.3.2, the Agent shall
send to each of the Lenders by telecopy an Invitation for Competitive Bid Quotes
substantially in the form of Exhibit G hereto, which shall constitute an
invitation by the Requesting Borrower to each Lender to submit Competitive Bid
Quotes offering to make the Competitive Bid Loans to which such Competitive Bid
Quote Request relates in accordance with this Section 2.3.

 

2.3.4. Submission and Contents of Competitive Bid Quotes. (a) Each Lender may,
in its sole discretion, submit a Competitive Bid Quote containing an offer or
offers to make Competitive Bid Loans in response to any Invitation for
Competitive Bid Quotes. Each Competitive Bid Quote must comply with the
requirements of this Section 2.3.4 and must be submitted to the Agent by
telecopy at its offices specified in or pursuant to Article XIII not later than
(i) 9:00 a.m. (Chicago time) at least three Business Days prior to the proposed
Borrowing Date, in the case of a Eurodollar Auction or (ii) 9:00 a.m. (Chicago
time) on the proposed Borrowing Date, in the case of an Absolute Rate Auction
(or, in either case upon reasonable prior notice to the Lenders, such other time
and date as the Requesting Borrower and the Agent may agree); provided that
Competitive Bid Quotes submitted by Bank One may only be submitted if the Agent
or Bank One notifies the Requesting Borrower of the terms of the offer or offers
contained therein not later than 15 minutes prior to the latest time at which
the relevant

 

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Competitive Bid Quotes must be submitted by the other Lenders. Subject to
Articles IV and VIII, any Competitive Bid Quote so made shall be irrevocable
except with the written consent of the Agent given on the instructions of the
Requesting Borrower.

 

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

 

(i) the proposed Borrowing Date, which shall be the same as that set forth in
the applicable Invitation for Competitive Bid Quotes,

 

(ii) the principal amount of the Competitive Bid Loan for which each such offer
is being made, which principal amount (A) may be greater than, less than or
equal to the Commitment of the quoting Lender, (B) must be at least $25,000,000
and an integral multiple of $1,000,000, and (C) may not exceed the principal
amount of Competitive Bid Loans for which offers were requested,

 

(iii) in the case of a Eurodollar Auction, the Competitive Bid Margin offered
for each such Competitive Bid Loan,

 

(iv) the minimum amount, if any, of the Competitive Bid Loan which may be
accepted by the Requesting Borrower,

 

(v) in the case of an Absolute Rate Auction, the Absolute Rate offered for each
such Competitive Bid Loan,

 

(vi) the maximum aggregate amount, if any, of Competitive Bid Loans offered by
the quoting Lender which may be accepted by the Requesting Borrower, and

 

(vii) the identity of the quoting Lender.

 

(c) The Agent shall reject any Competitive Bid Quote that:

 

(i) is not substantially in the form of Exhibit E hereto or does not specify all
of the information required by this Section 2.3.4(c),

 

(ii) contains qualifying, conditional or similar language, other than any such
language contained in Exhibit E hereto,

 

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

 

(iv) arrives after the time set forth in Section 2.3.4(a).

 

If any Competitive Bid Quote shall be rejected pursuant to this Section
2.3.4(c), then the Agent shall notify the relevant Lender of such rejection as
soon as practical.

 

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2.3.5. Notice to Requesting Borrower. The Agent shall promptly notify the
Requesting Borrower of the terms (a) of any Competitive Bid Quote submitted by a
Lender that is in accordance with Section 2.3.4 and (b) of any Competitive Bid
Quote that amends, modifies or is otherwise inconsistent with a previous
Competitive Bid Quote submitted by such Lender with respect to the same
Competitive Bid Quote Request. Any such subsequent Competitive Bid Quote shall
be disregarded by the Agent unless such subsequent Competitive Bid Quote
specifically states that it is submitted solely to correct a manifest error in
such former Competitive Bid Quote. The Agent’s notice to the Requesting Borrower
shall specify the aggregate principal amount of Competitive Bid Loans for which
offers have been received for each Interest Period specified in the related
Competitive Bid Quote Request and the respective principal amounts and
Eurodollar Bid Rates or Absolute Rates, as the case may be, so offered.

 

2.3.6. Acceptance and Notice by Borrower. Not later than (a) 10:00 a.m. (Chicago
time) at least three Business Days prior to the proposed Borrowing Date, in the
case of a Eurodollar Auction or (b) 10:00 a.m. (Chicago time) on the proposed
Borrowing Date, in the case of an Absolute Rate Auction (or, in either case upon
reasonable prior notice to the Lenders, such other time and date as the
Requesting Borrower and the Agent may agree), the Requesting Borrower shall
notify the Agent of its acceptance or rejection of the offers so notified to it
pursuant to Section 2.3.5; provided, however, that the failure by the Requesting
Borrower to give such notice to the Agent shall be deemed to be a rejection of
all such offers. In the case of acceptance, such notice (a “Competitive Bid
Borrowing Notice”) shall specify the aggregate principal amount of offers for
each Interest Period that are accepted. The Requesting Borrower may accept any
Competitive Bid Quote in whole or in part (subject to the terms of Section
2.3.4(b)(iv)); provided that:

 

(a) the aggregate principal amount of each Competitive Bid Advance may not
exceed the applicable amount set forth in the related Competitive Bid Quote
Request,

 

(b) acceptance of offers may only be made on the basis of ascending Eurodollar
Bid Rates or Absolute Rates, as the case may be, and

 

(c) the Requesting Borrower may not accept any offer that is described in
Section 2.3.4(c) or that otherwise fails to comply with the requirements of this
Agreement.

 

2.3.7. Allocation by Agent. If offers are made by two or more Lenders with the
same Eurodollar Bid Rates or Absolute Rates, as the case may be, for a greater
aggregate principal amount than the amount in respect of which offers are
accepted for the related Interest Period, the principal amount of Competitive
Bid Loans in respect of which such offers are accepted shall be allocated by the
Agent among such Lenders as nearly as possible (in such multiples, not greater
than $1,000,000, as the Agent may deem appropriate) in proportion to the
aggregate principal amount of such offers; provided, however, that no Lender
shall be allocated a portion of any Competitive Bid Advance which is less than
the minimum amount which such Lender has indicated that it is willing to accept.
Allocations by the Agent of the amounts of Competitive Bid

 

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Loans shall be conclusive in the absence of manifest error. The Agent shall
promptly, but in any event on the same Business Day, notify each Lender of its
receipt of a Competitive Bid Borrowing Notice and the aggregate principal amount
of such Competitive Bid Advance allocated to each participating Lender.

 

2.3.8. Administration Fee. Each Requesting Borrower hereby agrees to pay to the
Agent an administration fee of $3,000 for each Competitive Bid Quote Request
transmitted by such Requesting Borrower to the Agent pursuant to Section 2.3.2.
Such administration fee shall be payable in arrears on each Payment Date
hereafter and on the Facility Termination Date (or such earlier date on which
the Aggregate Commitment shall terminate or be cancelled) for any period then
ending for which such fee, if any, shall not have been theretofore paid.

 

2.4 Method of Borrowing. Not later than noon (Chicago time) on each Borrowing
Date, each Lender shall make available its Loan or Loans in funds immediately
available in Chicago to the Agent at its address specified pursuant to Article
XIII. Promptly upon its receipt thereof, the Agent will make the funds so
received from the Lenders available to the applicable Borrower at the Agent’s
aforesaid address.

 

2.5 Commitment Fee; Reduction and Increase of Aggregate Commitment.

 

(a) Facility Fee. The Borrowers jointly and severally agree to pay to the Agent
for the account of each Lender a facility fee (the “Facility Fee”) at a per
annum rate equal to the Applicable Facility Fee Rate on each Lender’s Commitment
regardless of usage. Each Borrower shall be obligated to pay to the Agent for
the account of each Lender an undivided one-third portion of the Facility Fee,
with such Borrower’s portion based on its Status (as defined in the Pricing
Schedule). The Facility Fee is payable quarterly in arrears on each Payment Date
hereafter and on the Facility Termination Date.

 

(b) Utilization Fee. For each day on which the aggregate principal amount of all
outstanding Advances (including both Ratable Advances and Competitive Bid
Advances) exceeds 50% of the Aggregate Commitment, the Borrowers jointly and
severally agree to pay to the Agent for the account of each Lender based on each
Lender’s outstanding Advances a utilization fee (the “Utilization Fee”) at a per
annum rate equal to the Applicable Utilization Fee Rate on the average daily
amount of all outstanding Advances. The Utilization Fee is payable quarterly in
arrears on each Payment Date hereafter and on the Facility Termination Date.

 

(c) Reductions in Aggregate Commitment. The Borrowers may permanently reduce the
Aggregate Commitment in whole, or in part ratably among the Lenders in integral
multiples of $10,000,000, upon at least three Business Days’ written notice to
the Agent, which notice shall specify the amount of any such reduction,
provided, however, that the amount of the Aggregate Commitment may not be
reduced below the aggregate principal amount of the outstanding Advances. All
accrued commitment fees shall be payable on the effective date of any
termination of the obligations of the Lenders to make Loans hereunder.

 

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2.6 Minimum Amount of Each Ratable Advance; Minimum Amount of Fixed Rate
Advances. Each Eurodollar Ratable Advance shall be in the minimum amount of
$25,000,000 (and in multiples of $1,000,000 if in excess thereof), and each ABR
Advance shall be in the minimum amount of $25,000,000 (and in multiples of
$1,000,000 if in excess thereof); provided, however, that any ABR Advance may be
in the amount of the unused Aggregate Commitment. No Borrower shall request a
Fixed Rate Advance if, after giving effect to the requested Fixed Rate Advance,
more than six (6) separate Fixed Rate Advances would be outstanding in respect
of all Borrowers.

 

2.7 Optional Principal Payments. Each Borrower may from time to time pay,
without penalty or premium, all outstanding ABR Advances, or, in a minimum
aggregate amount of $10,000,000, any portion of the outstanding ABR Advances,
upon one Business Day’s prior notice to the Agent. Each Borrower may from time
to time pay, subject to the payment of any funding indemnification amounts
required by Section 3.4 but without penalty or premium, all outstanding
Eurodollar Ratable Advances, or, in a minimum aggregate amount of $10,000,000 or
any integral multiple of $1,000,000 in excess thereof, any portion of the
outstanding Eurodollar Ratable Advances upon three Business Days’ prior notice
to the Agent. Except as specifically agreed to by the applicable Borrower and
Lender, a Competitive Bid Loan may not be paid prior to the last day of the
applicable Interest Period. Any optional principal payment of a Competitive Bid
Loan which is permitted by such Borrower and such Lender shall be made subject
to the payment of any funding indemnification amounts required by Section 3.4
and to any minimum amounts agreed upon by such Borrower and such Lender.

 

2.8 Changes in Interest Rate, etc. Each ABR Advance shall bear interest on the
outstanding principal amount thereof, for each day from and including the date
such Advance is made or is automatically converted from a Eurodollar Ratable
Advance into an ABR Advance pursuant to Section 2.2.4, to but excluding the date
it is paid or is converted into a Eurodollar Ratable Advance pursuant to Section
2.2.4 hereof, at a rate per annum equal to the Alternate Base Rate for such day.
Changes in the rate of interest on that portion of any Advance maintained as an
ABR Advance will take effect simultaneously with each change in the Alternate
Base Rate. Each Fixed Rate Advance shall bear interest on the outstanding
principal amount thereof from and including the first day of the Interest Period
applicable thereto to (but not including) the last day of such Interest Period
at the interest rate determined by the Agent as applicable to such Fixed Rate
Advance. No Interest Period may end after the Facility Termination Date.

 

2.9 Rates Applicable After Default. Notwithstanding anything to the contrary
contained in Section 2.2.3 or 2.2.4, during the continuance of a Default or
Unmatured Default with respect to any Borrower, the Required Lenders may, at
their option, by notice to such Borrower (which notice may be revoked at the
option of the Required Lenders notwithstanding any provision of Section 8.2
requiring unanimous consent of the Lenders to changes in interest rates),
declare that no Ratable Advance to such Borrower may be made as, converted into
or continued as a Eurodollar Ratable Advance. During the continuance of a
Default with respect to such Borrower, the Required Lenders may, at their
option, by notice to such Borrower (which notice may be revoked at the option of
the Required Lenders notwithstanding any provision of Section 8.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that (a)
each Fixed Rate Advance made to such Borrower shall bear interest for the
remainder of the

 

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applicable Interest Period at the rate otherwise applicable to such Interest
Period plus 2% per annum and (b) each ABR Advance made to such Borrower shall
bear interest at a rate per annum equal to the Alternate Base Rate in effect
from time to time plus 2% per annum, provided that, during the continuance of a
Default with respect to any Borrower under Section 7.6 or 7.7, the interest
rates set forth in clauses (a) and (b) above shall be applicable to all Advances
of all Borrowers without any election or action on the part of the Agent or any
Lender.

 

2.10 Method of Payment. All payments of the Obligations hereunder shall be made,
without setoff, deduction, or counterclaim, in immediately available funds to
the Agent at the Agent’s address specified pursuant to Article XIII, or at any
other Lending Installation of the Agent specified in writing by the Agent to the
Borrowers, by noon (Chicago time) on the date when due and shall be applied
ratably by the Agent among the Lenders. Each payment delivered to the Agent for
the account of any Lender shall be delivered promptly by the Agent to such
Lender in the same type of funds that the Agent received at its address
specified pursuant to Article XIII or at any Lending Installation specified in a
notice received by the Agent from such Lender. The Agent is hereby authorized to
charge the account of each Borrower maintained with Bank One for each payment of
principal, interest and fees as it becomes due hereunder with respect to such
Borrower.

 

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

 

(b) The Agent shall also maintain accounts in which it will record (i) the
amount of each Loan made to each Borrower hereunder, the Type thereof and the
Interest Period with respect thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from each Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Agent hereunder
from each Borrower and each Lender’s share thereof.

 

(c) The entries maintained in the accounts maintained pursuant to paragraphs (a)
and (b) above shall be prima facie evidence of the existence and amounts of the
Obligations therein recorded; provided, however, that the failure of the Agent
or any Lender to maintain such accounts or any error therein shall not in any
manner affect the obligation of the Borrowers to repay the Obligations in
accordance with their terms.

 

(d) Any Lender may request that its Ratable Loans or its Competitive Bid Loans
be evidenced by Ratable Notes or Competitive Bid Notes, respectively. In such
event, each Borrower shall prepare, execute and deliver to such Lender a Ratable
Note or a Competitive Bid Note, as the case may be, payable to the order of such
Lender. Thereafter, the Loans evidenced by such Note and interest thereon shall
at all times (including after any assignment pursuant to Section 12.3) be
represented by one or more Notes payable to the order of the payee named therein
or any assignee pursuant to Section 12.3, except to the extent that any such
Lender or assignee subsequently returns

 

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any such Note for cancellation and requests that such Loans once again be
evidenced as described in paragraphs (a) and (b) above.

 

2.12 Telephonic Notices. Each Borrower hereby authorizes the Lenders and the
Agent to extend, convert or continue Advances, effect selections of Types of
Advances, submit Competitive Bid Quotes and transfer funds based on telephonic
notices made by any person or persons the Agent or any Lender in good faith
believes to be acting on behalf of such Borrower, it being understood that the
foregoing authorization is specifically intended to allow Borrowing Notices,
Conversion/Continuation Notices and Competitive Bid Quote Requests to be given
telephonically. Each Borrower agrees to deliver promptly to the Agent a written
confirmation, if such confirmation is requested by the Agent or any Lender, of
each telephonic notice signed by an Authorized Officer. If the written
confirmation differs in any material respect from the action taken by the Agent
and the Lenders, the records of the Agent and the Lenders shall govern absent
manifest error.

 

2.13 Interest Payment Dates; Interest and Fee Basis. Interest accrued on each
ABR Advance shall be payable on each Payment Date, commencing with the first
such date to occur after the date hereof, on any date on which the ABR Advance
is prepaid, whether due to acceleration or otherwise, and at maturity. Interest
accrued on that portion of the outstanding principal amount of any ABR Advance
converted into a Eurodollar Ratable Advance on a day other than a Payment Date
shall be payable on the date of conversion. Interest accrued on each Fixed Rate
Advance shall be payable on the last day of its applicable Interest Period, on
any date on which the Fixed Rate Advance is prepaid, whether by acceleration or
otherwise, and at maturity. Interest accrued on each Fixed Rate Advance having
an Interest Period longer than three months shall also be payable on the last
day of each three-month interval during such Interest Period. Interest on Fixed
Rate Advances and fees shall be calculated for actual days elapsed on the basis
of a 360-day year, and interest on ABR Advances shall be calculated for actual
days elapsed on the basis of a 365 or 366 day year, as applicable. Interest
shall be payable for the day an Advance is made but not for the day of any
payment on the amount paid if payment is received prior to noon (local time) at
the place of payment. If any payment of principal of or interest on an Advance
shall become due on a day which is not a Business Day, such payment shall be
made on the next succeeding Business Day and, in the case of a principal
payment, such extension of time shall be included in computing interest in
connection with such payment.

 

2.14 Notification of Advances, Interest Rates, Prepayments and Commitment
Reductions. Promptly after receipt thereof, the Agent will notify each Lender of
the contents of each Aggregate Commitment reduction notice, Ratable Borrowing
Notice, Conversion/Continuation Notice, Competitive Bid Borrowing Notice, and
repayment notice received by it hereunder. The Agent will notify each Lender of
the interest rate applicable to each Fixed Rate Advance promptly upon
determination of such interest rate and will give each Lender prompt notice of
each change in the Alternate Base Rate.

 

2.15 Lending Installations. Each Lender may book its Loans at any Lending
Installation selected by such Lender and may change its Lending Installation
from time to time. All terms of this Agreement shall apply to any such Lending
Installation and the Loans and any Notes issued hereunder shall be deemed held
by each Lender for the benefit of any such Lending

 

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Installation. Each Lender may, by written notice to the Agent and the Borrowers
in accordance with Article XIII, designate replacement or additional Lending
Installations through which Loans will be made by it and for whose account Loan
payments are to be made.

 

2.16 Non-Receipt of Funds by the Agent. Unless a Borrower or a Lender, as the
case may be, notifies the Agent prior to the date on which it is scheduled to
make payment to the Agent of (a) in the case of a Lender, the proceeds of a Loan
or (b) in the case of a Borrower, a payment of principal, interest or fees to
the Agent for the account of the Lenders, that it does not intend to make such
payment, the Agent may assume that such payment has been made. The Agent may,
but shall not be obligated to, make the amount of such payment available to the
intended recipient in reliance upon such assumption. If such Lender or such
Borrower, as the case may be, has not in fact made such payment to the Agent,
the recipient of such payment shall, on demand by the Agent, repay to the Agent
the amount so made available together with interest thereon in respect of each
day during the period commencing on the date such amount was so made available
by the Agent until the date the Agent recovers such amount at a rate per annum
equal to (i) in the case of payment by a Lender, the Federal Funds Effective
Rate for such day for the first three days and, thereafter, the interest rate
applicable to the relevant Loan or (ii) in the case of payment by a Borrower,
the interest rate applicable to the relevant Loan.

 

ARTICLE III

 

YIELD PROTECTION; TAXES

 

3.1 Yield Protection. If, on or after the date of this Agreement, the adoption
of any law or any governmental or quasi-governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law), or any change
in the interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender or
applicable Lending Installation with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency:

 

(a) subjects any Lender or any applicable Lending Installation to any Taxes, or
changes the basis of taxation of payments (other than with respect to Excluded
Taxes) to any Lender in respect of its Fixed Rate Loans, or

 

(b) imposes or increases or deems applicable any reserve, assessment, insurance
charge, special deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended by, any Lender or any applicable
Lending Installation (other than reserves and assessments taken into account in
determining the interest rate applicable to Fixed Rate Advances), or

 

(c) imposes any other condition the result of which is to increase the cost to
any Lender or any applicable Lending Installation of making, funding or
maintaining its Fixed Rate Loans or reduces any amount receivable by any Lender
or any applicable Lending Installation in connection with its Fixed Rate Loans,
or requires any Lender or any applicable Lending Installation to make any
payment calculated by reference to the

 

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amount of Fixed Rate Loans held or interest received by it, by an amount deemed
material by such Lender,

 

and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation of making or maintaining its Fixed Rate Loans or
Commitment or to reduce the return received by such Lender or applicable Lending
Installation in connection with such Fixed Rate Loans or Commitment, then,
within 15 days of demand by such Lender, the Borrowers shall pay such Lender
such additional amount or amounts as will compensate such Lender for such
increased cost or reduction in amount received.

 

3.2 Changes in Capital Adequacy Regulations. If a Lender determines the amount
of capital required or expected to be maintained by such Lender, any Lending
Installation of such Lender or any corporation controlling such Lender is
increased as a result of a Change, then, within 15 days of demand by such
Lender, the Borrowers shall pay such Lender the amount necessary to compensate
for any shortfall in the rate of return on the portion of such increased capital
which such Lender determines is attributable to this Agreement, its Loans or its
Commitment to make Loans hereunder (after taking into account such Lender’s
policies as to capital adequacy). “Change” means (a) any change after the date
of this Agreement in the Risk-Based Capital Guidelines or (b) any adoption of or
change in any other law, governmental or quasi-governmental rule, regulation,
policy, guideline, interpretation, or directive (whether or not having the force
of law) after the date of this Agreement which affects the amount of capital
required or expected to be maintained by any Lender or any Lending Installation
or any corporation controlling any Lender. “Risk-Based Capital Guidelines” means
(i) the risk-based capital guidelines in effect in the United States on the date
of this Agreement, including transition rules, and (ii) the corresponding
capital regulations promulgated by regulatory authorities outside the United
States implementing the July 1988 report of the Basle Committee on Banking
Regulation and Supervisory Practices Entitled “International Convergence of
Capital Measurements and Capital Standards,” including transition rules, and any
amendments to such regulations adopted prior to the date of this Agreement.

 

3.3 Availability of Types of Advances. If (a) any Lender determines that
maintenance of its Eurodollar Ratable Loans or Eurodollar Bid Rate Loans at a
suitable Lending Installation would violate any applicable law, rule,
regulation, or directive, whether or not having the force of law, or (b) if the
Required Lenders determine that (i) deposits of a type and maturity appropriate
to match fund Eurodollar Ratable Advances are not available or (ii) the interest
rate applicable to Eurodollar Ratable Advances does not accurately reflect the
cost of making or maintaining Eurodollar Ratable Advances, then the Agent shall,
in the case of clause (a) above, suspend the availability of Eurodollar Ratable
Advances and Eurodollar Bid Rate Advances and, pursuant to a notice given to the
applicable Borrowers from the Agent, require any affected Eurodollar Rate
Advances and Eurodollar Bid Rate Advances to be repaid or converted to ABR
Advances, subject to the payment of any funding indemnification amounts required
by Section 3.4, and, in the case of clause (b) above, suspend the availability
of Eurodollar Ratable Advances and, pursuant to a notice given to the applicable
Borrowers from the Agent, require any affected Eurodollar Ratable Advances to be
repaid or converted to ABR Rate Advances, subject to the payment of any funding
indemnification amounts required by Section 3.4.

 

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3.4 Funding Indemnification. If any payment of a Fixed Rate Advance occurs on a
date which is not the last day of the applicable Interest Period, whether
because of acceleration, prepayment or otherwise, or a Fixed Rate Advance is not
made on the date specified by the requesting Borrower for any reason other than
default by the Lenders, such Borrower will indemnify each Lender for any loss or
cost incurred by it resulting therefrom, including, without limitation, any loss
or cost in liquidating or employing deposits acquired to fund or maintain such
Fixed Rate Advance.

 

3.5 Taxes. (a) All payments by the Borrowers to or for the account of any Lender
or the Agent hereunder or under any Note shall be made free and clear of and
without deduction for any and all Taxes. If any Borrower shall be required by
law to deduct any Taxes from or in respect of any sum payable hereunder to any
Lender or the Agent, (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 3.5) such Lender or the Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) such Borrower shall make such deductions, (iii)
such Borrower shall pay the full amount deducted to the relevant authority in
accordance with applicable law and (iv) such Borrower shall furnish to the Agent
the original copy of a receipt evidencing payment thereof within 30 days after
such payment is made.

 

(b) In addition, the Borrowers hereby agree to pay any present or future stamp
or documentary taxes and any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or under any Note or from the
execution or delivery of, or otherwise with respect to, this Agreement or any
Note (“Other Taxes”).

 

(c) The Borrowers hereby agree to indemnify the Agent and each Lender for the
full amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed on amounts payable under this Section 3.5) paid by the Agent
or such Lender and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto. Payments due under this
indemnification shall be made within 30 days of the date the Agent or such
Lender makes demand therefor pursuant to Section 3.6.

 

(d) Each Lender that is not incorporated under the laws of the United States of
America or a state thereof (each a “Non-U.S. Lender”) agrees that it will, not
more than ten Business Days after the date of this Agreement, (i) deliver to
each of the Borrowers and the Agent two duly completed copies of United States
Internal Revenue Service Form W-8BEN or W-8ECI, certifying in either case that
such Lender is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes, and (ii)
deliver to each of the Borrowers and the Agent a United States Internal Revenue
Form W-8 or W-9, as the case may be, and certify that it is entitled to an
exemption from United States backup withholding tax. Each Non-U.S. Lender
further undertakes to deliver to each of the Borrowers and the Agent (x)
renewals or additional copies of such form (or any successor form) on or before
the date that such form expires or becomes obsolete, and (y) after the
occurrence of any event requiring a change in the most recent forms so delivered
by it, such additional forms or amendments thereto as may be reasonably
requested by any Borrower or the Agent. All forms or

 

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amendments described in the preceding sentence shall certify that such Lender is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, unless an event
(including without limitation any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form or amendment with
respect to it and such Lender advises the Borrowers and the Agent that it is not
capable of receiving payments without any deduction or withholding of United
States federal income tax.

 

(e) For any period during which a Non-U.S. Lender has failed to provide any
Borrower with an appropriate form pursuant to clause (d), above (unless such
failure is due to a change in treaty, law or regulation, or any change in the
interpretation or administration thereof by any Governmental Authority,
occurring subsequent to the date on which a form originally was required to be
provided), such Non-U.S. Lender shall not be entitled to indemnification under
this Section 3.5 with respect to Taxes imposed by the United States; provided
that, should a Non-U.S. Lender which is otherwise exempt from or subject to a
reduced rate of withholding tax become subject to Taxes because of its failure
to deliver a form required under clause (d), above, such Borrower shall take
such steps as such Non-U.S. Lender shall reasonably request to assist such
Non-U.S. Lender to recover such Taxes.

 

(f) Any Lender that is entitled to an exemption from or reduction of withholding
tax with respect to payments under this Agreement or any Note pursuant to the
law of any relevant jurisdiction or any treaty shall deliver to the Borrowers
(with a copy to the Agent), at the time or times prescribed by applicable law,
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.

 

(g) If the U.S. Internal Revenue Service or any other Governmental Authority of
the United States or any other country or any political subdivision thereof
asserts a claim that the Agent did not properly withhold tax from amounts paid
to or for the account of any Lender (because the appropriate form was not
delivered or properly completed, because such Lender failed to notify the Agent
of a change in circumstances which rendered its exemption from withholding
ineffective, or for any other reason), such Lender shall indemnify the Agent
fully for all amounts paid, directly or indirectly, by the Agent as tax,
withholding therefor, or otherwise, including penalties and interest, and
including taxes imposed by any jurisdiction on amounts payable to the Agent
under this subsection, together with all costs and expenses related thereto
(including attorneys fees and time charges of attorneys for the Agent, which
attorneys may be employees of the Agent). The obligations of the Lenders under
this Section 3.5(g) shall survive the payment of the Obligations and termination
of this Agreement.

 

(h) If any Lender receives a refund which it determines in its sole discretion
to be in respect of any Taxes as to which it has been indemnified by any
Borrower or with respect to which such Borrower (or any Person acting on behalf
of such Borrower) has paid additional amounts pursuant to this Section 3.5, then
such Lender shall promptly

 

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repay such refund to such Borrower (but only to the extent of indemnity payments
made, or additional amounts paid, by such Borrower (or such Person acting on
behalf of such Borrower) under this Section 3.5 with respect to Taxes giving
rise to such refund), net of all amounts paid pursuant to Section 3.5(c) and all
out-of-pocket expenses of such Lender or the Agent, as the case may be;
provided, that such Borrower, upon the request of such Lender or the Agent,
agrees to return such refund (together with any penalties, interest or other
charges due in connection therewith to the appropriate taxing authority or other
Governmental Authority) to such Lender or the Agent in the event such Lender or
the Agent is required to pay or to return such refund to the relevant taxing
authority or other Governmental Authority.

 

3.6 Lender Statements; Survival of Indemnity. To the extent reasonably possible,
each Lender shall designate an alternate Lending Installation with respect to
its Eurodollar Loans to reduce any liability of the Borrowers to such Lender
under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of Eurodollar
Ratable Advances under Section 3.3, so long as such designation is not, in the
judgment of such Lender, disadvantageous to such Lender. Each Lender shall
deliver a written statement of such Lender to the Borrowers (with a copy to the
Agent) as to the amount due, if any, under Section 3.1, 3.2, 3.4 or 3.5. Such
written statement shall set forth in reasonable detail the calculations upon
which such Lender determined such amount and shall be final, conclusive and
binding on the Borrowers in the absence of manifest error. Determination of
amounts payable under such Sections in connection with a Eurodollar Loan shall
be calculated as though each Lender funded its Eurodollar Loan through the
purchase of a deposit of the type and maturity corresponding to the deposit used
as a reference in determining the Eurodollar Rate or Eurodollar Bid Rate, as the
case may be, applicable to such Loan, whether in fact that is the case or not.
Unless otherwise provided herein, the amount specified in the written statement
of any Lender (which statement shall be conclusive absent manifest error) shall
be payable within ten (10) days after receipt by the Borrowers of such written
statement. The obligations of the Borrowers under Sections 3.1, 3.2, 3.4 and 3.5
shall survive payment of the Obligations and termination of this Agreement.

 

ARTICLE IV

 

CONDITIONS PRECEDENT

 

4.1 Effectiveness of Agreement. This Agreement shall not become effective, and
the Lenders shall not be required to make the initial Advance hereunder, unless
the Borrowers have furnished to the Agent with sufficient copies for the
Lenders:

 

(a) Charters and Good Standing Certificates. Copies of the articles or
certificate of incorporation of each Borrower, together with all amendments, and
a certificate of good standing, each certified by the appropriate governmental
officer in its jurisdiction of incorporation, as well as any other information
required by Section 326 of the USA PATRIOT ACT or necessary for the Agent or any
Lender to verify the identity of any Borrower as required by Section 326 of the
USA PATRIOT Act, and, in the case of Nationwide Mutual and Nationwide Life, a
certificate of authority (or its equivalent) issued by the insurance department
of such Borrower’s state of domicile.

 

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(b) By-Laws and Resolutions. Copies, certified by the Secretary or Assistant
Secretary of each Borrower, of its by-laws or code of regulations and of its
Board of Directors’ resolutions and of resolutions or actions of any other body
authorizing the execution of the Loan Documents to which such Borrower is a
party.

 

(c) Incumbency Certificates. An incumbency certificate, executed by the
Secretary or Assistant Secretary of each Borrower, which shall identify by name
and title and bear the signatures of the Authorized Officers and any other
officers of each Borrower authorized to sign the Loan Documents to which such
Borrower is a party and to make borrowings hereunder, upon which certificate the
Agent and the Lenders shall be entitled to rely until informed of any change in
writing by such Borrower.

 

(d) Closing Certificates. A certificate, signed by the chief financial officer
of each Borrower, stating that on the date hereof no Default or Unmatured
Default has occurred and is continuing.

 

(e) Opinion. A written opinion of the Borrowers’ counsel, addressed to the
Lenders in for and substance acceptable to the Agent and its counsel.

 

(f) Notes. Any Notes requested by a Lender pursuant to Section 2.11 payable to
the order of each such requesting Lender.

 

(g) Termination of Existing Five Year Credit Agreement. All principal, interest
and other amounts due under that certain Five Year Credit Agreement dated as of
May 25, 2004 among the Borrowers, the Lenders named therein and Bank One, NA, as
Agent, and all other documents related thereto shall have been paid in full and
such agreement and all related documents shall have been terminated.

 

(h) Other. Such other documents as any Lender or its counsel may have reasonably
requested.

 

4.2 Each Advance. The Lenders shall not be required to make any Advance unless
on the applicable Borrowing Date:

 

(a) There exists no Default or Unmatured Default with respect to the applicable
Borrower.

 

(b) The representations and warranties of the applicable Borrower contained in
Article V are true and correct as of such Borrowing Date except to the extent
any such representation or warranty is stated to relate solely to an earlier
date, in which case such representation or warranty shall have been true and
correct on and as of such earlier date; provided, however, that Advances made to
Nationwide Life under this Agreement for commercial paper back-up will not be
subject to the truthfulness of the representations and warranties set forth in
Section 5.5.

 

(c) All legal matters incident to the making of such Advance shall be
satisfactory to the Lenders and their counsel.

 

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(d) Immediately after such Borrowing, the aggregate outstanding principal amount
of the Loans will not exceed the Aggregate Commitments.

 

Each Ratable Borrowing Notice with respect to each such Ratable Advance and each
Competitive Bid Borrowing Notice with respect to each such Competitive Bid
Advance shall constitute a representation and warranty by such Borrower that the
conditions contained in Sections 4.2(a) and (b) have been satisfied. Any Lender
may require a duly completed compliance certificate in substantially the form of
Exhibit B as a condition to making an Advance.

 

ARTICLE V

 

REPRESENTATIONS AND WARRANTIES

 

Each Borrower represents and warrants to the Lenders that:

 

5.1 Existence and Standing.

 

(a) In the case of Nationwide Mutual, such Borrower is a mutual insurance
company duly and properly incorporated, validly existing and in good standing
under the laws of its jurisdiction of incorporation or organization and has all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted, except where the failure to be authorized to conduct
business could not reasonably be expected to have a Material Adverse Effect.

 

(b) In the case of Nationwide Life, such Borrower is an insurance company duly
and properly incorporated, validly existing and in good standing under the laws
of its jurisdiction of incorporation or organization and has all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted, except where the failure to be authorized to conduct business could
not reasonably be expected to have a Material Adverse Effect.

 

(c) In the case of NFS, such Borrower is a corporation duly and properly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization and has all requisite authority to
conduct its business in each jurisdiction in which its business is conducted,
except where the failure to be authorized to conduct business could not
reasonably be expected to have a Material Adverse Effect.

 

(d) Each of such Borrower’s Material Subsidiaries is a corporation, partnership,
limited liability company or business trust duly and properly incorporated or
organized, as the case may be, validly existing and in good standing under the
laws of its jurisdiction of incorporation or organization and has all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted, except where the failure to be so qualified, licensed or authorized
could not reasonably be expected to have a Material Adverse Effect.

 

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5.2 Authorization and Validity. Such Borrower has the power and authority and
legal right to execute and deliver the Loan Documents to which it is a party and
to perform its obligations thereunder. The execution and delivery by such
Borrower of the Loan Documents to which it is a party and the performance of its
obligations thereunder have been duly authorized by proper corporate
proceedings, and the Loan Documents to which such Borrower is a party constitute
legal, valid and binding obligations of such Borrower enforceable against such
Borrower in accordance with their terms, except as enforceability may be limited
by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors’ rights generally and by general principles of equity.

 

5.3 No Conflict; Government Consent. Neither the execution and delivery by such
Borrower of the Loan Documents to which it is a party, nor the consummation of
the transactions therein contemplated, nor compliance with the provisions
thereof will violate (a) any law, rule, regulation (including Regulations T, U
and X), order, writ, judgment, injunction, decree or award binding on such
Borrower or any of its Subsidiaries or (b) such Borrower’s or any Subsidiary’s
articles or certificate of incorporation, partnership agreement, certificate of
partnership, articles or certificate of organization, by-laws, or operating or
other management agreement, as the case may be, or (c) the provisions of any
indenture, instrument or agreement to which such Borrower or any of its
Subsidiaries 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, or
require, the creation or imposition of any Lien in, of or on the Property of
such Borrower or a Subsidiary of such Borrower pursuant to the terms of any such
indenture, instrument or agreement. No order, consent, adjudication, approval,
license, authorization, or validation of, or filing, recording or registration
with, or exemption by, or other action in respect of any Governmental Authority,
or any subdivision thereof, or any other Person (including without limitation
the shareholders or policyholders, as applicable, of any Person) which has not
been obtained by such Borrower or any of its Subsidiaries, is required to be
obtained by such Borrower or any of its Subsidiaries in connection with the
execution and delivery of the Loan Documents, the borrowings under this
Agreement, the payment and performance by such Borrower of the Obligations or
the legality, validity, binding effect or enforceability of any of the Loan
Documents.

 

5.4 Financial Statements.

 

(a) In the case of Nationwide Mutual, the December 31, 2003 Annual Statement of
Nationwide Mutual heretofore delivered to the Lenders was prepared in accordance
with SAP, and such Annual Statement was prepared and fairly presents the
financial condition and operations of Nationwide Mutual as at such date and the
results of its operations for the period then ended.

 

(b) In the case of Nationwide Life, the December 31, 2003 Annual Statement of
Nationwide Life heretofore delivered to the Lenders was prepared in accordance
with SAP, and such Annual Statement was prepared and fairly presents the
financial condition and operations of Nationwide Life as at such date and the
results of its operations for the period then ended.

 

(c) In the case of NFS, the December 31, 2003 consolidated financial statements
of NFS and its Subsidiaries heretofore delivered to the Lenders were prepared

 

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in accordance with Agreement Accounting Principles, and such statements were
prepared and fairly present the consolidated financial condition and operations
of NFS and its Subsidiaries at such date and the consolidated results of their
operations for the period then ended.

 

5.5 Material Adverse Change. Since December 31, 2003, there has been no change
in the business, Property, prospects, condition (financial or otherwise) or
results of operations of such Borrower and its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect.

 

5.6 Taxes. Such Borrower and its Subsidiaries have filed all United States
federal tax returns and all other material tax returns which are required to be
filed and have paid all taxes due pursuant to said returns or pursuant to any
assessment received by such Borrower or any of its Subsidiaries, except such
taxes, if any, as are being contested in good faith and as to which adequate
reserves have been provided in accordance with Agreement Accounting Principles
or SAP, as applicable, and as to which no Lien exists; provided, that for the
purposes of determining compliance with this sentence, all representations and
warranties made with respect to AMH and its Subsidiaries shall be made only with
respect to returns filed and taxes paid from and after the consummation of the
AMH Acquisition. The United States income tax returns of such Borrower and its
Subsidiaries (other than AMH) have been audited by the Internal Revenue Service
through the fiscal year ended December 31, 1997. No tax Liens have been filed
and no material claims are being asserted with respect to any such taxes. The
charges, accruals and reserves on the books of such Borrower and its Material
Subsidiaries in respect of any taxes or other governmental charges are adequate;
provided, that for the purposes of determining compliance with this sentence,
all representations and warranties made with respect to AMH and its Subsidiaries
shall be made only with respect to Liens filed and claims asserted from and
after the consummation of the AMH Acquisition. For the purpose of this Section
5.6, each reference to a Borrower shall be deemed to include a reference to all
predecessor entities thereto. In the case of Nationwide Mutual, (a) for all
periods ending on or prior to the consummation of the AMH Acquisition, AMH and
each of its Subsidiaries paid all taxes due pursuant to said returns or pursuant
to any assessment received by it, except such taxes, if any, the nonpayment of
which could not reasonably be expected to have a Material Adverse Effect and
such taxes, if any, as are being contested in good faith and as to which
adequate reserves have been provided in accordance with generally accepted
accounting principles as in effect in the United Kingdom (“U.K. GAAP”), and as
to which no Lien exists, (b) to the best of Nationwide Mutual’s knowledge, for
all periods ending on or prior to the consummation of the AMH Acquisition, AMH
and its Subsidiaries filed all federal tax returns and all other material tax
returns required to be filed by it, and (c) to the best of Nationwide Mutual’s
knowledge, for all periods ending on or prior to the consummation of the AMH
Acquisition, the charges, accruals and reserves on the books of AMH and its
Material Subsidiaries in respect of any taxes or other governmental charges were
adequate under U.K. GAAP.

 

5.7 Litigation and Contingent Obligations. There is no litigation, arbitration,
governmental investigation, proceeding or inquiry pending or, to the knowledge
of any of their officers, threatened against or affecting such Borrower or any
of its Subsidiaries which could reasonably be expected to have a Material
Adverse Effect on such Borrower or which seeks to prevent, enjoin or delay the
making of any Loans. Other than any liability incident to any

 

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litigation, arbitration or proceeding which could not reasonably be expected to
have a Material Adverse Effect, neither such Borrower nor any of its
Subsidiaries has any material contingent obligations not provided for or
disclosed in the financial statements referred to in Section 5.4.

 

5.8 Subsidiaries. Schedule 5.8 contains an accurate list of all Subsidiaries of
such Borrower as of December 31, 2003, setting forth the percentage of their
respective capital stock or other ownership interests owned by such Borrower or
other Subsidiaries of such Borrower. All of the issued and outstanding shares of
capital stock or other ownership interests of such Subsidiaries have been (to
the extent such concepts are relevant with respect to such ownership interests)
duly authorized and issued and are fully paid and non-assessable.

 

5.9 ERISA. No Single Employer Plan has an Unfunded Liability. Neither such
Borrower nor any other member of the Controlled Group has incurred, or is
reasonably expected to incur, any withdrawal liability to Multiemployer Plans.
Each Plan complies in all material respects with all applicable requirements of
law and regulations, no Reportable Event has occurred with respect to any Plan.
Neither such Borrower nor any other member of the Controlled Group has (i)
withdrawn from any Plan or initiated steps to do so, or (ii) taken any steps to
reorganize or terminate any Plan; provided, that if any such action has been
taken, it could not reasonably be expected to result in liability to the
Borrower or any Subsidiary which would have a Material Adverse Effect.

 

5.10 Accuracy of Information. No information, exhibit or report furnished by
such Borrower or any of its Subsidiaries to the Agent or to any Lender in
connection with the negotiation of, or compliance with, the Loan Documents
contained any material misstatement of fact or omitted to state a material fact
or any fact necessary to make the statements contained therein not misleading.

 

5.11 Regulation U. Margin stock (as defined in Regulation U) constitutes less
than 25% of the value of those assets of such Borrower and its Subsidiaries
which are subject to any limitation on sale, pledge, or other restriction
hereunder.

 

5.12 Material Agreements. Neither such Borrower nor any Material Subsidiary of
such Borrower is a party to any agreement or instrument or subject to any
charter or other corporate restriction which could reasonably be expected to
have a Material Adverse Effect. Neither such Borrower nor any Material
Subsidiary of such Borrower is in default (beyond any applicable grace or notice
period with respect thereto, if any) in the performance, observance or
fulfillment of (a) any of the obligations, covenants or conditions contained in
any agreement to which it is a party, which default could reasonably be expected
to have a Material Adverse Effect or (b) any monetary obligation under any
agreement or instrument evidencing or governing Indebtedness.

 

5.13 Compliance With Laws. Such Borrower and its Subsidiaries have complied with
all applicable statutes, rules, regulations, orders and restrictions of any
domestic or foreign government or any instrumentality or agency thereof having
jurisdiction over the conduct of their respective businesses or the ownership of
their respective Property except for any failure to comply with any of the
foregoing which could not reasonably be expected to have a Material Adverse
Effect.

 

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5.14 Plan Assets; Prohibited Transactions. With respect to Nationwide Mutual and
NFS, such Borrower is not an entity deemed to hold “plan assets” within the
meaning of 29 C.F.R. §2510.3-101 of an employee benefit plan (as defined in
Section 3(3) of ERISA) which is subject to Title I of ERISA or any plan within
the meaning of Section 4975 of the Code. With respect to Nationwide Life, such
Borrower is not, as a result of the significant participation test found in 29
C.F.R. §2510.3-101(a)(2)(ii) and (f), an entity deemed to hold “plan assets” of
any employee benefit plan (as defined in Section 3(3) of ERISA) which is subject
to Title I of ERISA or any plan within the meaning of Section 4975 of the Code,
because less than 25% of the value of any class or type of its equity interests
is, or could be deemed to be, held by benefit plan investors, as defined in 29
C.F.R. §2510.3-101(f)(2). To the knowledge of the Borrower, neither the
execution of this Agreement nor the making of Loans hereunder gives rise to a
prohibited transaction, within the meaning of Section 406(a) of ERISA or Section
4975 of the Code, that is not the subject of a prohibited transaction class
exemption, all of the conditions of which are satisfied by the Borrower.

 

5.15 Environmental Matters. In the ordinary course of its business, the officers
of such Borrower consider the effect of Environmental Laws on the business of
such Borrower and its Subsidiaries, in the course of which they identify and
evaluate potential risks and liabilities accruing to such Borrower due to
Environmental Laws. On the basis of this consideration, such Borrower has
concluded that Environmental Laws cannot reasonably be expected to have a
Material Adverse Effect. Neither such Borrower nor any Subsidiary of such
Borrower has received any notice to the effect that its operations are not in
material compliance with any of the requirements of applicable Environmental
Laws or are the subject of any federal or state investigation evaluating whether
any remedial action is needed to respond to a release of any toxic or hazardous
waste or substance into the environment, which non-compliance or remedial action
could reasonably be expected to have a Material Adverse Effect on such Borrower.

 

5.16 Investment Company Act. Such Borrower is not an “investment company” or a
company “controlled” by an “investment company”, within the meaning of the
Investment Company Act of 1940, as amended.

 

5.17 Public Utility Holding Company Act. Neither such Borrower nor any
Subsidiary of such Borrower is a “holding company” or a “subsidiary company” of
a “holding company”, or an “affiliate” of a “holding company” or of a
“subsidiary company” of a “holding company”, within the meaning of the Public
Utility Holding Company Act of 1935, as amended.

 

5.18 Defaults. No Default or Unmatured Default has occurred and is continuing.

 

5.19 Insurance Licenses. No License of such Borrower (in the case of Nationwide
Mutual and Nationwide Life) or any Material Insurance Subsidiary of such
Borrower, the loss of which could reasonably be expected to have a Material
Adverse Effect, is the subject of a proceeding for suspension or revocation. To
such Borrower’s knowledge, there is no sustainable basis for such suspension or
revocation, and no such suspension or revocation has been threatened by any
Governmental Authority.

 

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ARTICLE VI

 

COVENANTS

 

During the term of this Agreement, unless the Required Lenders shall otherwise
consent in writing, each Borrower covenants and agrees that:

 

6.1 Financial Reporting. Such Borrower will maintain, for itself and each
Subsidiary of such Borrower, a system of accounting established and administered
in accordance with Agreement Accounting Principles or SAP, as applicable, and
furnish to the Lenders:

 

(a) In the case of NFS, within 100 days after the close of each of its fiscal
years, an unqualified audit report on Form 10K as filed with the Securities and
Exchange Commission, certified by independent certified public accountants
acceptable to the Lenders and prepared in accordance with Agreement Accounting
Principles on a consolidated basis for itself and its Subsidiaries, including
balance sheets as of the end of such period and related statements of income,
shareholders’ equity and cash flows, accompanied by any internal control letter
prepared by said accountants.

 

(b) In the case of NFS, within 60 days after the close of the first three
quarterly periods of each of its fiscal years, for itself and its Subsidiaries,
consolidated unaudited balance sheets as at the close of each such period and
consolidated statements of income, shareholders’ equity and cash flows for the
period from the beginning of such fiscal year to the end of such quarter, all
certified by its chief financial officer.

 

(c) (i) In the case of each of Nationwide Mutual and Nationwide Life, upon the
earlier of (A) thirty (30) days after the regulatory filing date or (B) one
hundred (100) days after the close of each fiscal year of such Borrower, copies
of the unaudited Annual Statement of such Borrower, certified by the chief
financial officer or the treasurer of such Borrower, all such statements to be
prepared in accordance with SAP consistently applied throughout the periods
reflected therein and (ii) in the case of Nationwide Life, no later than each
June 15, copies of such Annual Statement audited and certified by independent
certified public accountants of recognized national statement.

 

(d) In the case of Nationwide Mutual, (i) within thirty (30) days after the
regulatory filing date, copies of the unaudited Combined Annual Statement of
Nationwide Mutual, certified by the chief financial officer or the treasurer of
Nationwide Mutual, all such statements to be prepared in accordance with SAP
consistently applied throughout the periods reflected therein and (ii) no later
than each June 15, copies of such Combined Annual Statement audited and
certified by independent certified public accountants of recognized national
statement.

 

(e) In the case of Nationwide Mutual and Nationwide Life, upon the earlier of
(i) thirty (30) days after the regulatory filing date or (ii) sixty (60) days
after the close of each of the first three (3) fiscal quarters of each fiscal
year of Nationwide Mutual and Nationwide Life, copies of the unaudited Quarterly
Statement of such Borrower, certified by the chief financial officer or
treasurer of such Borrower, all such statements to be

 

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prepared in accordance with SAP consistently applied through the period
reflected therein.

 

(f) Together with the financial statements required under Sections 6.1(a), (b),
(c) and (e), a compliance certificate in substantially the form of Exhibit B
signed by its chief financial officer or treasurer showing the calculations
necessary to determine compliance with this Agreement and stating that no
Default or Unmatured Default exists, or if any Default or Unmatured Default
exists, stating the nature and status thereof.

 

(g) Promptly and in any event within ten (10) days after learning thereof,
notification of any changes after the Closing Date in the rating given by
Moody’s, S&P or A.M. Best & Co. in respect of any Borrower.

 

(h) Within five (5) Business Days after the receipt thereof by such Borrower,
any written communication from the Insurance Department of the State of Ohio
(provided that such communication is directed to such Borrower specifically with
respect to a particular inquiry and not to insurance companies generally) which
asserts in any material respect that such Borrower has an unsound financial
condition;

 

(i) Within ten (10) days after the required annual filing with the PBGC, a
statement of the Unfunded Liabilities of each Single Employer Plan, if any,
certified as correct by an actuary enrolled under ERISA.

 

(j) As soon as possible and in any event within 10 days after such Borrower
knows that any Reportable Event has occurred with respect to any Plan, a
statement, signed by the chief financial officer of such Borrower, describing
said Reportable Event and the action which such Borrower proposes to take with
respect thereto.

 

(k) Promptly upon the furnishing thereof to the shareholders (in the case of
NFS) or the policyholders (in the case of Nationwide Mutual), copies of all
financial statements, reports and proxy statements so furnished.

 

(l) Promptly and in any event within ten (10) days after learning thereof,
notification of (i) any tax assessment, demand, notice of proposed deficiency or
notice of deficiency received by such Borrower or any other Consolidated Person
or (ii) the filing of any tax Lien or commencement of any judicial proceeding by
or against such Consolidated Person, if any such assessment, demand, notice,
Lien or judicial proceeding (or all such assessments, demands, notices, Liens
and judicial proceedings, in the aggregate) relates to tax liabilities in excess
of ten percent (10%) of (A) in the case of Nationwide Mutual and Nationwide
Life, the Statutory Surplus (determined without reduction for any reserve for
liabilities) of such Borrower or (B) in the case of NFS, the Consolidated
Tangible Net Worth (determined without reduction for any reserve for
liabilities) of NFS.

 

(m) Such other information (including non-financial information) as the Agent or
any Lender may from time to time reasonably request.

 

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6.2 Use of Proceeds. Such Borrower will, and will cause each Subsidiary of such
Borrower to, use the proceeds of the Advances for general corporate purposes
(including commercial paper back-up). Such Borrower will not, nor will it permit
any Subsidiary of such Borrower to, use any of the proceeds of the Advances to
purchase or carry any “margin stock” (as defined in Regulation U).

 

6.3 Notice of Default. Such Borrower will, and will cause each of its Material
Subsidiaries to, give prompt notice in writing to the Lenders of the occurrence
of (a) any Default or Unmatured Default, (b) any other development, financial or
otherwise, relating specifically to such Borrower or any of its Material
Subsidiaries (and not of a general economic or political nature) which could
reasonably be expected to have a Material Adverse Effect on such Borrower, (c)
their receipt of any notice from any Governmental Authority of the expiration
without renewal, revocation or suspension of, or the institution of any
proceedings which could reasonably be expected to result in the revocation or
suspension of, any material License now or hereafter held by any Material
Insurance Subsidiary of such Borrower 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, (d) their receipt of any notice from any
Governmental Authority which could reasonably be expected to result in
disciplinary proceedings against or in respect of any Material 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
which, if adversely determined, could reasonably be expected to have a Material
Adverse Effect, (e) any material judicial or administrative order of which they
are aware limiting or controlling the insurance business of such Borrower (in
the case of Nationwide Mutual and Nationwide Life) or any Material Insurance
Subsidiary of such Borrower (and not the insurance industry generally) which has
been issued or adopted and which could reasonably be expected to create a
Material Adverse Effect or (f) the commencement of any litigation of which they
are aware which could reasonably be expected to create a Material Adverse
Effect.

 

6.4 Conduct of Business. Such Borrower will, and will cause each of its Material
Subsidiaries to, (a) carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted, (b) do all things reasonably necessary to remain duly incorporated or
organized, validly existing and (to the extent such concept applies to such
entity) in good standing as a domestic corporation, partnership or limited
liability company in its jurisdiction of incorporation or organization, as the
case may be, and maintain all requisite authority to conduct its business in
each jurisdiction in which its business is conducted except where the failure to
maintain such authority could not reasonably be expected to have a Material
Adverse Effect, and (c) 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
such Borrower (in the case of Nationwide Mutual or Nationwide Life) or any
Material Insurance Subsidiary of such Borrower to operate its insurance business
in compliance with all applicable laws and regulations except for any License
the loss of which could not reasonably be expected to have a Material Adverse
Effect; provided such Borrower (in the case of Nationwide Mutual or Nationwide
Life) or any Material Insurance Subsidiary of such Borrower may withdraw from
one or more states (other than its state of domicile) as an admitted insurer if
such withdrawal is determined by such Borrower’s senior management to be in the
best interest of such Borrower and could not reasonably be expected to have a
Material Adverse

 

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Effect; provided, further, that nothing provided in this Section 6.4 shall
prohibit any consolidation, merger, sale, lease or other transfer permitted
under Section 6.10. Such Borrower shall not change its state of domicile or
incorporation without the prior written consent of the Required Lenders, which
consent shall not be unreasonably withheld or delayed.

 

6.5 Taxes. Such Borrower will, and will cause each of its Subsidiaries to,
timely file complete and correct United States federal and applicable foreign,
state and local tax returns required by law and pay when due all taxes,
assessments and governmental charges and levies upon it or its income, profits
or Property, 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 Agreement Accounting Principles or SAP, as applicable.

 

6.6 Insurance. Such Borrower will, and will cause each of its Subsidiaries to,
maintain with financially sound and reputable insurance companies insurance on
all their Property in such amounts and covering such risks as is consistent with
sound business practice, and such Borrower will furnish to any Lender upon
request full information as to the insurance carried; provided, that such
Borrower and its Subsidiaries may self-insure such risks to the extent it deems
it prudent to do so.

 

6.7 Compliance with Laws. Such Borrower will, and will cause each of its
Subsidiaries to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject including,
without limitation, all Environmental Laws, the noncompliance with which could
reasonably be expected to have a Material Adverse Effect.

 

6.8 Maintenance of Properties. Such Borrower will, and will cause each of its
Subsidiaries to, do all things necessary to maintain, preserve, protect and keep
its Property in good repair, working order and condition, 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; provided, however,
that nothing herein contained shall prevent such Borrower and its Subsidiaries
from discontinuing the operation and maintenance of any of its Property if such
discontinuance is desirable in the conduct of its business and such Borrower or
such Subsidiary has concluded that such discontinuance could not individually or
in the aggregate reasonably be expected to have a Material Adverse Effect.

 

6.9 Inspection. Such Borrower will, and will cause each of its Subsidiaries to,
permit the Agent and each of the Lenders, by their respective representatives
and agents, to inspect any of the Property, books and financial records of such
Borrower and each of its Subsidiaries, to examine and make copies of the books
of accounts and other financial records of such Borrower and each of its
Subsidiaries, and to discuss the affairs, finances and accounts of such Borrower
and each of its Subsidiaries with, and to be advised as to the same by, their
respective officers at such reasonable times and intervals as the Agent or any
Lender may designate. Such Borrower will keep or cause to be kept, and cause
each of its Subsidiaries to keep or cause to be kept, appropriate records and
books of account in which complete entries are to be made reflecting its and
their business and financial transactions, such entries to be made in accordance
with Agreement Accounting Principles or SAP, as applicable, consistently
applied.

 

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6.10 Merger. Such Borrower will not merge or consolidate with or into any other
Person, except that such Borrower may merge with another Person if (a) such
Borrower is the corporation surviving the merger and (b) after giving effect to
such merger, no Unmatured Default or Default shall have occurred and be
continuing.

 

6.11 Sale of Assets. Such Borrower will not, directly or indirectly through one
of its Subsidiaries, lease, sell or otherwise dispose of all or any substantial
part of the Property of such Borrower and its Subsidiaries, taken as a whole, to
any other Person.

 

6.12 Liens. Such Borrower will not, nor will it permit any Subsidiary to,
create, incur, or suffer to exist any Lien in, of or on the Property of such
Borrower or any of its Subsidiaries, except:

 

(a) Liens existing on the date hereof and described on Schedule 6.12;

 

(b) any Lien on any Property securing Indebtedness incurred or assumed for the
purpose of financing all or any part of the cost of acquiring such Property;
provided, that such Lien (i) applies only to such acquired Property and (ii)
attaches to such Property concurrently with or within 90 days after the
acquisition thereof;

 

(c) any Lien on any Property of any Person existing at the time such Person is
merged or consolidated with or into such Borrower or its Subsidiary; provided
that such Lien (i) applies only to such acquired Property and (ii) is not
created in contemplation of such merger or consolidation;

 

(d) any Lien existing on any Property prior to the acquisition thereof by such
Borrower or its Subsidiary; provided, that such Lien (i) applies only to such
acquired Property and (ii) is not created in contemplation of such acquisition;

 

(e) any Lien arising out of the refinancing, extension, renewal or refunding of
any Indebtedness secured by any Lien permitted by any of the foregoing clauses
of this Section 6.12; provided, that such Indebtedness is not increased and is
not secured by additional Property;

 

(f) Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ liens
and other similar Liens arising in the ordinary course of business which secure
payment of obligations not more than 60 days past due;

 

(g) Liens arising in the ordinary course of business which (i) do not secure
Indebtedness, (ii) do not secure any obligation in an amount exceeding
$25,000,000 and (iii) do not in the aggregate materially detract from the value
of its assets or materially impair the use thereof in the operation of its
business;

 

(h) Liens on cash and cash equivalents securing Rate Management Obligations
which are incurred for bona fide hedging purposes or replication purposes and
not for speculation;

 

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(i) Liens (i) arising from judicial attachments and judgments, (ii) securing
appeal bonds or supersedeas bonds, and (iii) arising in connection with court
proceedings (including, without limitation, surety bonds and letters of credit
or any other instrument serving a similar purpose); provided, that (A) the
execution or other enforcement of such Liens is effectively stayed, (B) the
claims secured thereby are being actively contested in good faith and by
appropriate proceedings, and (C) adequate book reserves shall have been
established and maintained and shall exist with respect thereto;

 

(j) Liens in the nature of reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases and other similar
title exceptions or encumbrances affecting real Property; provided, that such
exceptions and encumbrances do not in the aggregate materially detract from the
value of such Property or materially interfere with the use of such Property in
the ordinary conduct of the business of such Borrower and its Subsidiaries,
taken as a whole;

 

(k) Liens on Property of a Subsidiary of such Borrower (other than a Subsidiary
which is a Borrower); provided, that such Liens secure only obligations owing to
such Borrower;

 

(l) in the case of Nationwide Mutual, Liens on securities owned by Nationwide
Mutual securing its obligations under one or more prepaid equity forward
contracts;

 

(m) in the case of Nationwide Mutual and Nationwide Life, Liens on securities,
cash and cash equivalents granted in connection with securities lending
activities or securities repurchase or reverse-repurchase activities of such
Borrower and its Subsidiaries in the ordinary course of business in compliance
with all applicable laws; provided, that the aggregate amount of securities,
cash and cash equivalents subject to such Liens may at no time exceed 5% of such
Borrower’s Statutory Surplus;

 

(n) Liens consisting of deposits made by such Borrower (in the case of
Nationwide Mutual and Nationwide Life) on behalf of itself or any Insurance
Subsidiary or by any Insurance Subsidiary of such Borrower with the insurance
regulatory authority in its jurisdiction of formation or other statutory Liens
or Liens or claims imposed or required by applicable insurance law or regulation
against the assets of such Borrower or any Insurance Subsidiary of such
Borrower, in each case in favor of policyholders of such Borrower or such
Insurance Subsidiary and granted in the ordinary course of such Borrower’s or
such Insurance Subsidiary’s business;

 

(o) Liens granted by Nationwide Realty Investors, Ltd. and its Subsidiaries on
real property owned thereby and the improvements thereon in connection with the
development or operation of such real property and improvements;

 

(p) Liens granted on assets of Subsidiaries of such Borrower (other than a
Subsidiary which is a Borrower) securing indebtedness of such Person incurred in
connection with the sale or issuance of Structured Finance Securities, provided
that no Borrower or Subsidiary has any recourse obligations with respect
thereto;

 

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(q) in the case of Nationwide Life, Liens securing Rate Management Obligations
of Nationwide Life incurred in connection with funding agreements issued by
Nationwide Life to support its Medium Term Note Program;

 

(r) Liens on mortgage loans and foreclosure receivables securing indebtedness of
a Borrower or its Subsidiaries under a warehousing credit facility in an
aggregate principal or face amount at any date not to exceed $150,000,000;

 

(s) Liens created in connection with Capitalized Lease Obligations; provided,
that the principal amount of the Indebtedness secured by any and all such Liens
shall not at any time exceed $200,000,000;

 

(t) Liens granted by Subsidiaries of such Borrower, which Subsidiaries are hedge
funds or mutual funds, provided that no Borrower or Subsidiary has any recourse
obligations with respect thereto; and

 

(u) Liens not otherwise permitted by the foregoing clauses of this Section 6.12
securing Indebtedness in an aggregate principal or face amount at any date not
to exceed (i) in the case of Nationwide Mutual and Nationwide Life, 5% of such
Borrower’s Statutory Surplus and (ii) in the case of NFS, 5% of the Consolidated
Tangible Net Worth of NFS.

 

Notwithstanding anything to the contrary in this Section 6.12, in no event shall
Nationwide Mutual or its Subsidiaries create, incur or suffer to exist any Lien
on the stock of NFS, and in no event shall NFS create, incur or suffer to exist
any Lien on the stock of Nationwide Life.

 

6.13 Affiliates. The Borrower will not, and will not permit any Subsidiary to,
enter into any transaction (including, without limitation, the purchase or sale
of any Property or service) with, or make any payment or transfer to, any
Affiliate except in the ordinary course of business and pursuant to the
reasonable requirements of the Borrower’s or such Subsidiary’s business and upon
fair and reasonable terms no less favorable to the Borrower or such Subsidiary
than the Borrower or such Subsidiary would obtain in a comparable arms-length
transaction; provided, that the foregoing provisions of this Section 6.13 shall
not prohibit any such Person from declaring or paying any lawful dividend or
other payment ratably in respect of all of its capital stock of the relevant
class so long as, after giving effect thereto, no Default in respect of such
Borrower shall have occurred and be continuing.

 

6.14 ERISA Compliance. With respect to any Plan, neither such Borrower nor any
of its Subsidiaries shall or shall permit any other member of the Controlled
Group to:

 

(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 in excess
of $5,000,000 for all Plans in the aggregate (less amounts determined pursuant
to clauses (b), (c) and (d)) could reasonably be expected to be imposed;

 

(b) permit an “accumulated funding deficiency” (as such term is defined in
Section 302 of ERISA) in excess of $5,000,000 for all Plans in the aggregate
(less

 

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amounts determined pursuant to clauses (a), (c) and (d)) to be incurred whether
or not waived, or permit any Unfunded Liability which could reasonably be
expected to have a Material Adverse Effect;

 

(c) permit the occurrence of any Reportable Event which could reasonably be
expected to result in liability (i) to the Borrower or any Subsidiary in excess
of $5,000,000 for all Plans in the aggregate (less amounts determined pursuant
to clauses (a), (b) and (d)) or (ii) to any other member of the Controlled Group
in an amount which could reasonably be expected to have a Material Adverse
Effect;

 

(d) fail to make any contribution or payment to any Multiemployer Plan which any
member of the Controlled Group may be required to make under any agreement
relating to such Multiemployer Plan or any law pertaining thereto which results
in or could result in a liability (i) of the Borrower or any Subsidiary in
excess of $5,000,000 for all Plans in the aggregate (less amounts determined
pursuant to clauses (a), (b) and (c)) or (ii) of any other member of the
Controlled Group which could reasonably be expected to have a Material Adverse
Effect; or

 

(e) permit the establishment or amendment of any Plan or cause or permit any
Plan to fail to comply with the applicable provisions of ERISA and the Code,
which establishment, amendment or failure could reasonably be expected to result
in liability to any member of the Controlled Group which individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.

 

6.15 Financial Covenants.

 

6.15.1 Statutory Surplus of Nationwide Mutual. Nationwide Mutual will not permit
its Statutory Surplus, determined as at the end of each fiscal quarter of
Nationwide Mutual, to be less than $5,010,000,000.

 

6.15.2 Statutory Surplus of Nationwide Life. Nationwide Life will not permit its
Statutory Surplus, determined as at the end of each fiscal quarter of Nationwide
Life, to be less than $1,560,000,000 at any time.

 

6.15.3 Consolidated Tangible Net Worth of NFS. NFS will not permit its
Consolidated Tangible Net Worth, determined as at the end of each fiscal quarter
of NFS, to be less than $2,285,000,000 at any time.

 

6.15.4 Leverage Ratio of Nationwide Mutual. Nationwide Mutual will not permit
the ratio, determined as of the end of each fiscal quarter of Nationwide Mutual,
of (a) Indebtedness of Nationwide Mutual to (b) Total Capitalization of
Nationwide Mutual, to be greater than 0.35 to 1.0.

 

6.15.5 Leverage Ratio of NFS. NFS will not permit the ratio, determined as of
the end of each fiscal quarter of NFS, of (a) Indebtedness of NFS and its
Subsidiaries calculated on a consolidated basis as of such time to (b) Total
Capitalization of NFS, to be greater than 0.40 to 1.0.

 

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ARTICLE VII

 

DEFAULTS

 

The occurrence of any one or more of the following events with respect to any
Borrower shall constitute a Default with respect to such Borrower:

 

7.1 Representation or Warranty. Any representation or warranty made or deemed
made by or on behalf of such Borrower or any of its Subsidiaries to the Lenders
or the Agent under or in connection with this Agreement, any Loan, or any
certificate or information delivered by or on behalf of such Borrower or any of
its Subsidiaries in connection with this Agreement or any other Loan Document
shall be materially false on the date as of which made.

 

7.2 Non-Payment of Obligations. Nonpayment of principal of any Loan made to such
Borrower when due, or nonpayment of interest upon any Loan made to such Borrower
or of any Facility Fee or Utilization Fee or other obligations of such Borrower
under any of the Loan Documents within five days after the same becomes due.

 

7.3 Specific Defaults. The breach by such Borrower of any of the terms or
provisions of Section 6.2, 6.10, 6.11, 6.12, 6.14 or 6.15.

 

7.4 Other Defaults. The breach by such Borrower (other than a breach which
constitutes a Default under another Section of this Article VII) of any of the
terms or provisions of this Agreement which is not remedied within twenty (20)
days after written notice from the Agent or any Lender.

 

7.5 Cross-Default. Failure of such Borrower or any of its Material Affiliates to
pay when due any Indebtedness aggregating in excess of $25,000,000 (“Material
Indebtedness”); or the default by such Borrower or any of its Material
Affiliates in the performance (beyond the applicable grace period with respect
thereto, if any) of any term, provision or condition contained in any agreement
under which any such Material Indebtedness was created or is governed, or any
other event shall occur or condition exist, the effect of which default or event
is to cause, or to permit the holder or holders of such Material Indebtedness to
cause, such Material Indebtedness to become due prior to its stated maturity; or
any Material Indebtedness of such Borrower or any of its Material Affiliates
shall be declared to be due and payable or required to be prepaid or repurchased
(other than by a regularly scheduled payment) prior to the stated maturity
thereof; or such Borrower or any of its Material Affiliates shall not pay, or
admit in writing its inability to pay, its debts generally as they become due.

 

7.6 Voluntary Proceedings. Such Borrower or any of its Material Affiliates shall
(a) have an order for relief entered with respect to it under the Federal
bankruptcy or state insurance insolvency laws as now or hereafter in effect, (b)
make an assignment for the benefit of creditors, (c) apply for, seek, consent
to, or acquiesce in, the appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it or any Substantial Portion of
its Property, (d) institute any proceeding seeking an order for relief under the
Federal bankruptcy or state insurance insolvency laws as now or hereafter in
effect or seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, winding up, liquidation, reorganization,

 

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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, (e) take any corporate or partnership action to
authorize or effect any of the foregoing actions set forth in this Section 7.6
or (f) fail to contest in good faith any appointment or proceeding described in
Section 7.7.

 

7.7 Involuntary Proceedings. Without the application, approval or consent of
such Borrower or any of its Material Affiliates, a receiver, trustee, examiner,
liquidator or similar official shall be appointed for such Borrower or any of
its Material Affiliates or any Substantial Portion of its Property, or a
proceeding described in Section 7.6(d) shall be instituted against such Borrower
or any of its Material Affiliates and such appointment continues undischarged or
such proceeding continues undismissed or unstayed for a period of 60 consecutive
days.

 

7.8 Condemnation. Any court, government or governmental agency shall condemn,
seize or otherwise appropriate, or take custody or control of, all or any
portion of the Property of such Borrower and its Material Affiliates which, when
taken together with all other Property of such Borrower and its Material
Affiliates so condemned, seized, appropriated, or taken custody or control of,
during the twelve-month period ending with the month in which any such action
occurs, constitutes a Substantial Portion.

 

7.9 Judgments. Such Borrower or any of its Material Affiliates shall fail within
30 days to pay, bond or otherwise discharge one or more (a) judgments or orders
for the payment of money in excess of $25,000,000 (or the equivalent thereof in
currencies other than U.S. Dollars) in the aggregate, or (b) nonmonetary
judgments or orders which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect, which judgment(s), in any such case,
is/are not stayed on appeal or otherwise being appropriately contested in good
faith.

 

7.10 Change in Control. Any Change in Control shall occur.

 

7.11 Rate Management Obligation. Nonpayment by such Borrower or any of its
Subsidiaries of any Rate Management Obligation in respect of any Rate Management
Transaction entered into between such Borrower or any of its Subsidiaries and
any Lender or Affiliate thereof with respect to the Obligations under this
Agreement when due or the breach by such Borrower or any of its Subsidiaries of
any material term, provision or condition contained in any Rate Management
Transaction entered into with respect to the Obligations under this Agreement.

 

7.12 License. Any License of such Borrower (in the case of Nationwide Mutual and
Nationwide Life) or any Material Insurance Subsidiary of such Borrower in a
material jurisdiction of such Person (a) shall be revoked by the Governmental
Authority which issued such License, or any action (administrative or judicial)
which could reasonably be expected to result in the revocation of such License
shall have been commenced against such Borrower or any such Material Insurance
Subsidiary and shall not have been dismissed within thirty (30) days after the
commencement thereof, (b) shall be suspended by such Governmental Authority for
a period in excess of thirty (30) days or (c) shall not be reissued or renewed
by such Governmental Authority upon the expiration thereof following application
for such reissuance or renewal of such Borrower or such Material Insurance
Subsidiary. For the purposes of this Section 7.12,

 

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“material jurisdiction” shall mean a jurisdiction in which such Borrower or
Material Insurance Subsidiary generates 10% or more of its total premiums.

 

7.13 Violation of Insurance Laws. Such Borrower (in the case of Nationwide
Mutual and Nationwide Life) or any Material Insurance Subsidiary of such
Borrower shall be the subject of a final non-appealable order imposing a fine in
an amount in excess of $2,000,000 in any single instance or other such orders
imposing fines in excess of $5,000,000 in the aggregate after the Closing Date
by or at the request of any state insurance regulatory agency as a result of the
violation by such Borrower or such Material Insurance Subsidiary of such state’s
applicable insurance laws or the regulations promulgated in connection
therewith.

 

7.14 Directive or Mandate. Such Borrower (in the case of Nationwide Mutual and
Nationwide Life) or any Material Insurance Subsidiary shall become subject to
any conservation, rehabilitation or liquidation order (which, in the case of any
Material Insurance Subsidiary, is not stayed within ten (10) days), directive or
mandate issued by any Governmental Authority or such Borrower (in the case of
Nationwide Mutual and Nationwide Life) or any Material Insurance Subsidiary
shall become subject to any other directive or mandate issued by any
Governmental Authority which could reasonably be expected to have a Material
Adverse Effect.

 

7.15 Cross-Default With Respect to Other Borrowers. The occurrence of a Default
under Section 7.2, 7.6 or 7.7 with respect to any other Borrower.

 

ARTICLE VIII

 

ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES

 

8.1 Acceleration. If any Default described in Section 7.6 or 7.7 occurs with
respect to any Borrower, the obligations of the Lenders to make Loans hereunder
shall automatically terminate and the Obligations shall immediately become due
and payable without any election or action on the part of the Agent or any
Lender. If any other Default occurs, the Required Lenders (or the Agent with the
consent of the Required Lenders) may terminate or suspend the obligations of the
Lenders to make Loans to such Borrower hereunder, or declare the Obligations of
such Borrower to be due and payable, or both, whereupon the Obligations of such
Borrower shall become immediately due and payable, without presentment, demand,
protest or notice of any kind, all of which each Borrower hereby expressly
waives.

 

If, within 30 days after acceleration of the maturity of any or all of the
Obligations or termination of the obligations of the Lenders to make Loans to
one or more of the Borrowers hereunder as a result of any Default (other than
any Default as described in Section 7.6 or 7.7 with respect to any Borrower) and
before any judgment or decree for the payment of the Obligations due shall have
been obtained or entered, the Required Lenders (in their sole discretion) shall
so direct, the Agent shall, by notice to the affected Borrower or Borrowers,
rescind and annul such acceleration and/or termination.

 

8.2 Amendments. Subject to the provisions of this Article VIII, the Required
Lenders (or the Agent with the consent in writing of the Required Lenders) and
the Borrowers may enter into agreements supplemental hereto for the purpose of
adding or modifying any provisions to

 

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the Loan Documents or changing in any manner the rights of the Lenders or the
Borrowers hereunder or waiving any Default hereunder; provided, however, that no
such supplemental agreement shall, without the consent of all of the Lenders:

 

(a) Extend the final maturity of any Loan or forgive all or any portion of the
principal amount thereof, or reduce the rate or extend the time of payment of
interest or fees thereon.

 

(b) Reduce the percentage specified in the definition of Required Lenders.

 

(c) Extend the Facility Termination Date, or reduce the amount or extend the
payment date for, the mandatory payments required under Section 2.1.4, or
increase the amount of the Commitment of any Lender hereunder, or permit the
Borrowers to assign their rights under this Agreement.

 

(d) Amend this Section 8.2.

 

No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent. The Agent may waive payment
of the fee required under Section 12.3.2 without obtaining the consent of any
other party to this Agreement.

 

8.3 Preservation of Rights. No delay or omission of the Lenders or the Agent to
exercise any right under the Loan Documents shall impair such right or be
construed to be a waiver of any Default or an acquiescence therein, and the
making of a Loan to any Borrower notwithstanding the existence of a Default with
respect to such Borrower or the inability of such Borrower to satisfy the
conditions precedent to such Loan shall not constitute any waiver or
acquiescence. Any single or partial exercise of any such right shall not
preclude other or further exercise thereof or the exercise of any other right,
and no waiver, amendment or other variation of the terms, conditions or
provisions of the Loan Documents whatsoever shall be valid unless in writing
signed by the Lenders required pursuant to Section 8.2, and then only to the
extent in such writing specifically set forth. All remedies contained in the
Loan Documents or by law afforded shall be cumulative and all shall be available
to the Agent and the Lenders until the Obligations have been paid in full.

 

ARTICLE IX

 

GENERAL PROVISIONS

 

9.1 Survival of Representations. All representations and warranties of the
Borrowers contained in this Agreement shall survive the making of the Loans
herein contemplated.

 

9.2 Governmental Regulation. Anything contained in this Agreement to the
contrary notwithstanding, no Lender shall be obligated to extend credit to any
Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.

 

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9.3 Headings. Section headings in the Loan Documents are for convenience of
reference only, and shall not govern the interpretation of any of the provisions
of the Loan Documents.

 

9.4 Entire Agreement. The Loan Documents embody the entire agreement and
understanding among the Borrowers, the Agent and the Lenders and supersede all
prior agreements and understandings among the Borrowers, the Agent and the
Lenders relating to the subject matter thereof other than the fee letter
described in Section 10.13.

 

9.5 Several Obligations; Benefits of this Agreement. The respective obligations
of the Lenders hereunder are several and not joint and no Lender shall be the
partner or agent of any other (except to the extent to which the Agent is
authorized to act as such). The failure of any Lender to perform any of its
obligations hereunder shall not relieve any other Lender from any of its
obligations hereunder. This Agreement shall not be construed so as to confer any
right or benefit upon any Person other than the parties to this Agreement and
their respective successors and assigns, provided, however, that the parties
hereto expressly agree that each Arranger shall enjoy the benefits of the
provisions of Sections 9.6, 9.10 and 10.11 to the extent specifically set forth
therein and shall have the right to enforce such provisions on its own behalf
and in its own name to the same extent as if it were a party to this Agreement.

 

9.6 Expenses; Indemnification. (a) Each Borrower jointly and severally agrees to
reimburse the Agent and the Arrangers for any reasonable costs, internal charges
and out-of-pocket expenses (including reasonable attorneys’ fees and time
charges of attorneys for the Agent, which attorneys may be employees of the
Agent) paid or incurred by the Agent or the Arrangers in connection with the
preparation, negotiation, execution, delivery, syndication, review, amendment,
modification, and administration of the Loan Documents. Each Borrower also
jointly and severally agrees to reimburse the Agent, the Arrangers and the
Lenders for any costs, internal charges and out-of-pocket expenses (including
attorneys’ fees and time charges of attorneys for the Agent, the Arrangers and
the Lenders, which attorneys may be employees of the Agent, the Arrangers or the
Lenders) paid or incurred by the Agent, the Arrangers or any Lender in
connection with the collection and enforcement of the Loan Documents. Expenses
being reimbursed by the Borrowers under this Section include, without
limitation, costs and expenses incurred in connection with the Reports described
in the following sentence. Each Borrower acknowledges that from time to time
Bank One may prepare and may distribute to the Lenders (but shall have no
obligation or duty to prepare or to distribute to the Lenders) certain audit
reports (the “Reports”) pertaining to such Borrower’s assets for internal use by
Bank One from information furnished to it by or on behalf of such Borrower,
after Bank One has exercised its rights of inspection pursuant to this
Agreement.

 

(b) Each Borrower hereby further jointly and severally agrees to indemnify the
Agent, each Arranger, each Lender, their respective affiliates, and each of
their directors, officers and employees against all losses, claims, damages,
penalties, judgments, liabilities and expenses (including, without limitation,
all expenses of litigation or preparation therefor whether or not the Agent, any
Arranger, any Lender or any affiliate is a party thereto) which any of them may
pay or incur arising out of or relating to this Agreement, the other Loan
Documents, the transactions contemplated hereby or the direct or indirect
application or proposed application of the proceeds of any

 

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Loan hereunder except to the extent that they are determined in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of the party seeking
indemnification and except as provided in Section 3.5. The obligations of the
Borrowers under this Section 9.6 shall survive the termination of this
Agreement.

 

9.7 Numbers of Documents. All statements, notices, closing documents, and
requests hereunder shall be furnished to the Agent with sufficient counterparts
so that the Agent may furnish one to each of the Lenders.

 

9.8 Accounting. Except as provided to the contrary herein, all accounting terms
used herein shall be interpreted and all accounting determinations hereunder
shall be made in accordance with Agreement Accounting Principles.

 

9.9 Severability of Provisions. Any provision in any Loan Document that is held
to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to
that jurisdiction, be inoperative, unenforceable, or invalid without affecting
the remaining provisions in that jurisdiction or the operation, enforceability,
or validity of that provision in any other jurisdiction, and to this end the
provisions of all Loan Documents are declared to be severable.

 

9.10 Nonliability of Lenders. The relationship between the Borrowers on the one
hand and the Lenders and the Agent on the other hand shall be solely that of
borrower and lender. Neither the Agent, any Arranger nor any Lender shall have
any fiduciary responsibilities to any Borrower. Neither the Agent, any Arranger
nor any Lender undertakes any responsibility to any Borrower to review or inform
such Borrower of any matter in connection with any phase of such Borrower’s
business or operations. Each Borrower agrees that neither the Agent, any
Arranger nor any Lender shall have liability to such Borrower (whether sounding
in tort, contract or otherwise) for losses suffered by the Borrower in
connection with, arising out of, or in any way related to, the transactions
contemplated and the relationship established by the Loan Documents, or any act,
omission or event occurring in connection therewith, unless it is determined in
a final non-appealable judgment by a court of competent jurisdiction that such
losses resulted from the gross negligence or willful misconduct of the party
from which recovery is sought. Neither the Agent, any Arranger nor any Lender
shall have any liability with respect to, and each Borrower hereby waives,
releases and agrees not to sue for, any special, indirect or consequential
damages suffered by such Borrower in connection with, arising out of, or in any
way related to the Loan Documents or the transactions contemplated thereby.

 

9.11 Confidentiality. Each Lender agrees to hold any confidential information
which it may receive from the Borrowers pursuant to this Agreement in
confidence, except for disclosure (a) to its Affiliates and to other Lenders and
their respective Affiliates, provided that such Persons agree to keep such
information confidential to the same extent required by the Lenders hereunder,
(b) to legal counsel, accountants, and other professional advisors to such
Lender or to a Transferee, (c) to regulatory officials, (d) to any Person as
requested pursuant to or as required by law, regulation, or legal process, (e)
to any Person in connection with any legal proceeding to which such Lender is a
party and is legally required to disclose such information, (f) of public
information such Lender receives from any Borrower to its direct or indirect
contractual counterparties in swap agreements or to legal counsel, accountants
and other professional

 

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advisors to such counterparties, and (g) permitted by Section 12.4.
Notwithstanding anything herein to the contrary, confidential information shall
not include, and each Lender (and each employee, representative or other agent
of any Lender) may disclose to any and all Persons, without limitation of any
kind, the “tax treatment” and “tax structure” (in each case, within the meaning
of Treasury Regulation Section 1.6011-4) of the transactions contemplated hereby
and all materials of any kind (including opinions or other tax analyses) that
are or have been provided to such Lender relating to such tax treatment or tax
structure; provided that with respect to any document or similar item that in
either case contains information concerning such tax treatment or tax structure
of the transactions contemplated hereby as well as other information, this
sentence shall only apply to such portions of the document or similar item that
relate to such tax treatment or tax structure.

 

9.12 Nonreliance. Each Lender hereby represents that it is not relying on or
looking to any margin stock (as defined in Regulation U of the Board of
Governors of the Federal Reserve System) for the repayment of the Loans provided
for herein.

 

9.13 Disclosure. Each Borrower and each Lender hereby acknowledge and agree that
Bank One and/or its Affiliates from time to time may hold investments in, make
other loans to or have other relationships with any Borrower and its Affiliates.

 

9.14 USA PATRIOT ACT NOTIFICATION. The following notification is provided to the
Borrowers pursuant to Section 326 of the USA Patriot Act of 2001, 31 U.S.C.
Section 5318:

 

IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the
government fight the funding of terrorism and money laundering activities,
Federal law requires all financial institutions to obtain, verify, and record
information that identifies each person or entity that opens an account,
including any deposit account, treasury management account, loan, other
extension of credit, or other financial services product. What this means for
the Borrowers: When a Borrower opens an account, if such Borrower is an
individual, the Agent and the Lenders will ask for such Borrower’s name,
residential address, tax identification number, date of birth, and other
information that will allow the Agent and the Lenders to identify such Borrower,
and, if such Borrower is not an individual, the Agent and the Lenders will ask
for such Borrower’s name, tax identification number, business address, and other
information that will allow the Agent and the Lenders to identify such Borrower.
The Agent and the Lenders may also ask, if such Borrower is an individual, to
see such Borrower’s driver’s license or other identifying documents, and, if
such Borrower is not an individual, to see such Borrower’s legal organizational
documents or other identifying documents.

 

ARTICLE X

 

THE AGENT

 

10.1 Appointment; Nature of Relationship. Bank One, NA is hereby appointed by
each of the Lenders as its contractual representative (herein referred to as the
“Agent”) hereunder and under each other Loan Document, and each of the Lenders
irrevocably authorizes the Agent to act as the contractual representative of
such Lender with the rights and duties expressly set forth herein and in the
other Loan Documents. The Agent agrees to act as such contractual

 

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representative upon the express conditions contained in this Article X.
Notwithstanding the use of the defined term “Agent,” it is expressly understood
and agreed that the Agent shall not have any fiduciary responsibilities to any
Lender by reason of this Agreement or any other Loan Document and that the Agent
is merely acting as the contractual representative of the Lenders with only
those duties as are expressly set forth in this Agreement and the other Loan
Documents. In its capacity as the Lenders’ contractual representative, the Agent
(a) does not hereby assume any fiduciary duties to any of the Lenders, (b) is a
“representative” of the Lenders within the meaning of Section 9-105 of the
Uniform Commercial Code and (c) is acting as an independent contractor, the
rights and duties of which are limited to those expressly set forth in this
Agreement and the other Loan Documents. Each of the Lenders hereby agrees to
assert no claim against the Agent on any agency theory or any other theory of
liability for breach of fiduciary duty, all of which claims each Lender hereby
waives.

 

10.2 Powers. The Agent shall have and may exercise such powers under the Loan
Documents as are specifically delegated to the Agent by the terms of each
thereof, together with such powers as are reasonably incidental thereto. The
Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Agent.

 

10.3 General Immunity. Neither the Agent nor any of its directors, officers,
agents or employees shall be liable to the Borrowers, any Borrower, the Lenders
or any Lender for any action taken or omitted to be taken by it or them
hereunder or under any other Loan Document or in connection herewith or
therewith except to the extent such action or inaction is determined in a final
non-appealable judgment by a court of competent jurisdiction to have arisen from
the gross negligence or willful misconduct of such Person.

 

10.4 No Responsibility for Loans, Recitals, etc. Neither the Agent nor any of
its directors, officers, agents or employees shall be responsible for or have
any duty to ascertain, inquire into, or verify (a) any statement, warranty or
representation made in connection with any Loan Document or any borrowing
hereunder; (b) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Lender; (c) the satisfaction of any condition specified in Article IV, except
receipt of items required to be delivered solely to the Agent; (d) the existence
or possible existence of any Default or Unmatured Default; (e) the validity,
enforceability, effectiveness, sufficiency or genuineness of any Loan Document
or any other instrument or writing furnished in connection therewith; (f) the
value, sufficiency, creation, perfection or priority of any Lien in any
collateral security; or (g) the financial condition of any Borrower or any
guarantor of any of the Obligations or of any Borrower’s or any such guarantor’s
respective Subsidiaries. The Agent shall have no duty to disclose to the Lenders
information that is not required to be furnished by any Borrower to the Agent at
such time, but is voluntarily furnished by any Borrower to the Agent (either in
its capacity as Agent or in its individual capacity).

 

10.5 Action on Instructions of Lenders. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, hereunder and under any other
Loan Document in accordance with written instructions signed by the Required
Lenders, and such instructions and any action taken or failure to act pursuant
thereto shall be binding on all of the Lenders. The

 

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Lenders hereby acknowledge that the Agent shall be under no duty to take any
discretionary action permitted to be taken by it pursuant to the provisions of
this Agreement or any other Loan Document unless it shall be requested in
writing to do so by the Required Lenders. The Agent shall be fully justified in
failing or refusing to take any action hereunder and under any other Loan
Document unless it shall first be indemnified to its satisfaction by the Lenders
pro rata against any and all liability, cost and expense that it may incur by
reason of taking or continuing to take any such action.

 

10.6 Employment of Agents and Counsel. The Agent may execute any of its duties
as Agent hereunder and under any other Loan Document by or through employees,
agents, and attorneys-in-fact and shall not be answerable to the Lenders, except
as to money or securities received by it or its authorized agents, for the
default or misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care. The Agent shall be entitled to advice of counsel
concerning the contractual arrangement between the Agent and the Lenders and all
matters pertaining to the Agent’s duties hereunder and under any other Loan
Document.

 

10.7 Reliance on Documents; Counsel. The Agent shall be entitled to rely upon
any Note, notice, consent, certificate, affidavit, letter, telegram, statement,
paper or document believed by it to be genuine and correct and to have been
signed or sent by the proper person or persons, and, in respect to legal
matters, upon the opinion of counsel selected by the Agent, which counsel may be
employees of the Agent.

 

10.8 Agent’s Reimbursement and Indemnification. The Lenders agree to reimburse
and indemnify the Agent ratably in proportion to their respective Commitments
(or, if the Commitments have been terminated, in proportion to their Commitments
immediately prior to such termination) (a) for any amounts not reimbursed by the
Borrowers for which the Agent is entitled to reimbursement by the Borrowers
under the Loan Documents, (b) for any other expenses incurred by the Agent on
behalf of the Lenders, in connection with the preparation, execution, delivery,
administration and enforcement of the Loan Documents (including, without
limitation, for any expenses incurred by the Agent in connection with any
dispute between the Agent and any Lender or between two or more of the Lenders)
and (c) for any liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the Agent in
any way relating to or arising out of the Loan Documents or any other document
delivered in connection therewith or the transactions contemplated thereby
(including, without limitation, for any such amounts incurred by or asserted
against the Agent in connection with any dispute between the Agent and any
Lender or between two or more of the Lenders), or the enforcement of any of the
terms of the Loan Documents or of any such other documents, provided that (i) no
Lender shall be liable for any of the foregoing to the extent any of the
foregoing is found in a final non-appealable judgment by a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the Agent and (ii) any indemnification required pursuant to Section 3.5(g)
shall, notwithstanding the provisions of this Section 10.8, be paid by the
relevant Lender in accordance with the provisions thereof. The obligations of
the Lenders under this Section 10.8 shall survive payment of the Obligations and
termination of this Agreement.

 

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10.9 Notice of Default. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Unmatured Default hereunder unless
the Agent has received written notice from a Lender or a Borrower referring to
this Agreement describing such Default or Unmatured Default and stating that
such notice is a “notice of default”. In the event that the Agent receives such
a notice, the Agent shall give prompt notice thereof to the Lenders.

 

10.10 Rights as a Lender. In the event the Agent is a Lender, the Agent shall
have the same rights and powers hereunder and under any other Loan Document with
respect to its Commitment and its Loans as any Lender and may exercise the same
as though it were not the Agent, and the term “Lender” or “Lenders” shall, at
any time when the Agent is a Lender, unless the context otherwise indicates,
include the Agent in its individual capacity. The Agent and its Affiliates may
accept deposits from, lend money to, and generally engage in any kind of trust,
debt, equity or other transaction, in addition to those contemplated by this
Agreement or any other Loan Document, with any Borrower or any of its
Subsidiaries in which such Borrower or such Subsidiary is not restricted hereby
from engaging with any other Person. The Agent, in its individual capacity, is
not obligated to remain a Lender.

 

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

 

10.12 Successor Agent. The Agent may resign at any time by giving written notice
thereof to the Lenders and the Borrowers, such resignation to be effective upon
the appointment of a successor Agent or, if no successor Agent has been
appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. The Agent may be removed at any time with or without cause
by written notice received by the Agent from the Required Lenders, such removal
to be effective on the date specified by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint, on
behalf of the Borrowers and the Lenders, a successor Agent. If no successor
Agent shall have been so appointed by the Required Lenders within thirty days
after the resigning Agent’s giving notice of its intention to resign, then the
resigning Agent may appoint, on behalf of the Borrowers and the Lenders, a
successor Agent. Notwithstanding the previous sentence, the Agent may at any
time without the consent of any Borrower or any Lender, appoint any of its
Affiliates which is a commercial bank as a successor Agent hereunder. If the
Agent has resigned or been removed and no successor Agent has been appointed,
the Lenders may perform all the duties of the Agent hereunder and the Borrowers
shall make all payments in respect of the Obligations to the applicable Lender
and for all other purposes shall deal directly with the Lenders. No successor
Agent shall be deemed to be appointed hereunder until such successor Agent has
accepted the appointment. Any such successor Agent shall be a commercial bank
having capital and retained earnings of at least $100,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the resigning or removed Agent. Upon
the

 

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effectiveness of the resignation or removal of the Agent, the resigning or
removed Agent shall be discharged from its duties and obligations hereunder and
under the Loan Documents. After the effectiveness of the resignation or removal
of an Agent, the provisions of this Article X shall continue in effect for the
benefit of such Agent in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent hereunder and under the other Loan
Documents. In the event that there is a successor to the Agent by merger, or the
Agent assigns its duties and obligations to an Affiliate pursuant to this
Section 10.12, then the term “Prime Rate” as used in this Agreement shall mean
the prime rate, base rate or other analogous rate of the new Agent.

 

10.13 Agent and Arranger Fees. The Borrowers agree to pay to the Agent and the
Arrangers, for their respective accounts, the fees agreed to by the Borrowers,
the Agent and BOCM pursuant to that certain letter agreement dated April 7,
2004.

 

10.14 Delegation to Affiliates. The Borrowers and the Lenders agree that the
Agent may delegate any of its duties under this Agreement to any of its
Affiliates. Any such Affiliate (and such Affiliate’s directors, officers, agents
and employees) which performs duties in connection with this Agreement shall be
entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Agent is entitled under Articles IX and X.

 

10.15 Co-Agents, Documentation Agent, Syndication Agent, Managing Agent, etc.
Neither any of the Lenders identified in this Agreement as a “co-agent” nor any
Documentation Agent, Syndication Agent or Managing Agent shall have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than those applicable to all Lenders as such. Without limiting the foregoing,
none of such Lenders shall have or be deemed to have a fiduciary relationship
with any Lender. Each Lender hereby makes the same acknowledgments with respect
to such Lenders as it makes with respect to the Agent in Section 10.11.

 

ARTICLE XI

 

SETOFF; RATABLE PAYMENTS

 

11.1 Setoff. In addition to, and without limitation of, any rights of the
Lenders under applicable law, if any Borrower becomes insolvent, however
evidenced, or any Default occurs, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender or
any Affiliate of any Lender to or for the credit or account of such Borrower may
be offset and applied toward the payment of the Obligations owing to such
Lender, whether or not the Obligations, or any part thereof, shall then be due.

 

11.2 Ratable Payments. If any Lender, whether by setoff or otherwise, has
payment made to it upon its Loans (other than payments received pursuant to
Section 3.1, 3.2, 3.4 or 3.5 or payments of principal or interest on Competitive
Bid Loans by any Borrower at a time when no Default is continuing with respect
to such Borrower) in a greater proportion than that received by any other
Lender, such Lender agrees, promptly upon demand, to purchase a portion of the
Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligations or such

 

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amounts which may be subject to setoff, such Lender agrees, promptly upon
demand, to take such action necessary such that all Lenders share in the
benefits of such collateral ratably in proportion to their Loans. In case any
such payment is disturbed by legal process, or otherwise, appropriate further
adjustments shall be made.

 

ARTICLE XII

 

BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

 

12.1 Successors and Assigns. The terms and provisions of the Loan Documents
shall be binding upon and inure to the benefit of the Borrowers and the Lenders
and their respective successors and assigns, except that (a) no Borrower shall
have the right to assign its rights or obligations under the Loan Documents and
(b) any assignment by any Lender must be made in compliance with Section 12.3.
The parties to this Agreement acknowledge that clause (b) of this Section 12.1
relates only to absolute assignments and does not prohibit assignments creating
security interests, including, without limitation, any pledge or assignment by
any Lender of all or any portion of its rights under this Agreement and any Note
to a Federal Reserve Bank; provided, however, that no such pledge or assignment
creating a security interest shall release the transferor Lender from its
obligations hereunder unless and until the parties thereto have complied with
the provisions of Section 12.3. The Agent may treat the Person which made any
Loan or which holds any Note as the owner thereof for all purposes hereof unless
and until such Person complies with Section 12.3; provided, however, that the
Agent may in its discretion (but shall not be required to) follow instructions
from the Person which made any Loan or which holds any Note to direct payments
relating to such Loan or Note to another Person. Any assignee of the rights to
any Loan or any Note agrees by acceptance of such assignment to be bound by all
the terms and provisions of the Loan Documents. Any request, authority or
consent of any Person, who at the time of making such request or giving such
authority or consent is the owner of the rights to any Loan (whether or not a
Note has been issued in evidence thereof), shall be conclusive and binding on
any subsequent holder or assignee of the rights to such Loan.

 

12.2 Participations.

 

12.2.1. Permitted Participants; Effect. Any Lender may, in the ordinary course
of its business and in accordance with applicable law, at any time sell to one
or more banks or other entities (“Participants”) participating interests in any
Loan owing to such Lender, any Note held by such Lender, any Commitment of such
Lender or any other interest of such Lender under the Loan Documents. In the
event of any such sale by a Lender of participating interests to a Participant,
such Lender’s obligations under the Loan Documents shall remain unchanged, such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, such Lender shall remain the owner of its Loans
and the holder of any Note issued to it in evidence thereof for all purposes
under the Loan Documents, all amounts payable by the Borrowers under this
Agreement shall be determined as if such Lender had not sold such participating
interests, and the Borrowers and the Agent shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under the Loan Documents.

 

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12.2.2. Voting Rights. Each Lender shall retain the sole right to approve,
without the consent of any Participant, any amendment, modification or waiver of
any provision of the Loan Documents other than any amendment, modification or
waiver with respect to any Loan or Commitment in which such Participant has an
interest which would require consent of all of the Lenders pursuant to the terms
of Section 8.2 or of any other Loan Document.

 

12.2.3. Benefit of Setoff. Each Borrower agrees that each Participant shall be
deemed to have the right of setoff provided in Section 11.1 in respect of its
participating interest in amounts owing under the Loan Documents to the same
extent as if the amount of its participating interest were owing directly to it
as a Lender under the Loan Documents, provided that each Lender shall retain the
right of setoff provided in Section 11.1 with respect to the amount of
participating interests sold to each Participant. The Lenders agree to share
with each Participant, and each Participant, by exercising the right of setoff
provided in Section 11.1, agrees to share with each Lender, any amount received
pursuant to the exercise of its right of setoff, such amounts to be shared in
accordance with Section 11.2 as if each Participant were a Lender.

 

12.3 Assignments.

 

12.3.1. Permitted Assignments. Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time assign to one or
more banks or other entities (“Purchasers”) all or any part of its rights and
obligations under the Loan Documents. Such assignment shall be substantially in
the form of Exhibit C or in such other form as may be agreed to by the parties
thereto. The consent of the Borrowers and the Agent shall be required prior to
an assignment becoming effective with respect to a Purchaser which is not a
Lender or an Affiliate thereof; provided, however, that if a Default has
occurred and is continuing, the consent of the Borrowers shall not be required.
Such consent of the Agent and, if applicable, the Borrowers shall not be
unreasonably withheld or delayed. Each such assignment with respect to a
Purchaser which is not a Lender or an Affiliate thereof shall (unless each of
the Borrowers and the Agent otherwise consents) be in an amount not less than
the lesser of (a) $10,000,000 or (b) the remaining amount of the assigning
Lender’s Commitment (calculated as at the date of such assignment) or
outstanding Loans (if the applicable Commitment has been terminated).

 

12.3.2. Effect; Effective Date. Upon (a) delivery to the Agent of an assignment,
together with any consents required by Section 12.3.1, and (b) payment to the
Agent by the Purchaser or the Lender of a $3,500 fee in respect of any
assignment under this Section 12.3 for processing such assignment (unless such
fee is waived by the Agent), such assignment shall become effective on the
effective date specified in such assignment. The assignment shall contain a
representation by the Purchaser to the effect that none of the consideration
used to make the purchase of the Commitment and Loans under the applicable
assignment agreement constitutes “plan assets” as defined under ERISA and that
the rights and interests of the Purchaser in and under the Loan Documents will
not be “plan assets” under ERISA. On and after the effective date of such
assignment, such Purchaser shall for all purposes be a Lender party to this

 

- 57 -

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

Agreement and any other Loan Document executed by or on behalf of the Lenders
and shall have all the rights and obligations of a Lender under the Loan
Documents, to the same extent as if it were an original party hereto, and no
further consent or action by the Borrowers, the Lenders or the Agent shall be
required to release the transferor Lender with respect to the percentage of the
Aggregate Commitment and Loans assigned to such Purchaser. Upon the consummation
of any assignment to a Purchaser pursuant to this Section 12.3.2, the transferor
Lender, the Agent and the Borrowers shall, if the transferor Lender or the
Purchaser desires that its Loans be evidenced by Notes, make appropriate
arrangements so that new Notes or, as appropriate, replacement Notes are issued
to such transferor Lender and new Notes or, as appropriate, replacement Notes,
are issued to such Purchaser, in each case in principal amounts reflecting their
respective Commitments, as adjusted pursuant to such assignment.

 

12.4 Dissemination of Information. Each Borrower authorizes each Lender to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a “Transferee”) and any
prospective Transferee any and all information in such Lender’s possession
concerning the creditworthiness of such Borrower and its Subsidiaries, including
without limitation any information contained in any Reports; provided that each
Transferee and prospective Transferee agrees to be bound by Section 9.11 of this
Agreement.

 

12.5 Tax Treatment. If any interest in any Loan Document is transferred to any
Transferee which is organized under the laws of any jurisdiction other than the
United States or any State thereof, the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, to comply with
the provisions of Section 3.5(d).

 

12.6 Designation. (a) Notwithstanding anything to the contrary contained herein,
any Lender (a “Designating Lender”) may grant to one or more special purpose
funding vehicles (each, an “SPV”), identified as such in writing from time to
time by the Designating Lender to the Administrative Agent and the Borrowers,
the option to provide to the Borrowers all or any part of any Loan that such
Designating Lender would otherwise be obligated to make to the Borrowers
pursuant to this Agreement; provided that (i) nothing herein shall constitute a
commitment by any SPV to make any Loan, (ii) if an SPV elects not to exercise
such option or otherwise fails to provide all or any part of such Loan, the
Designating Lender shall be obligated to make such Loan pursuant to the terms
hereof and (iii) the Designating Lender shall remain liable for any indemnity or
other payment obligation with respect to its Commitment hereunder. The making of
a Loan by an SPV hereunder shall utilize the Commitment of the Designating
Lender to the same extent, and as if, such Loan were made by such Designating
Lender.

 

(b) As to any Loans or portion thereof made by it, each SPV shall have all the
rights that a Lender making such Loans or portion thereof would have had under
this Agreement; provided, however, that each SPV shall have granted to its
Designating Lender an irrevocable power of attorney, to deliver and receive all
communications and notices under this Agreement (and any Loan Documents) and to
exercise on such SPV’s behalf, all of such SPV’s voting rights under this
Agreement. In the event that any Notes have been issued to the Designated Lender
hereunder, no additional Notes shall be required to evidence the Loans or
portion thereof made by an SPV; and the related

 

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

Designating Lender shall be deemed to hold its Notes as agent for such SPV to
the extent of the Loans or portion thereof funded by such SPV. In addition, any
payments for the account of any SPV shall be paid to its Designating Lender as
agent for such SPV.

 

(c) Each party hereto hereby agrees that no SPV shall be liable for any
indemnity or payment under this Agreement for which a Lender would otherwise be
liable. In furtherance of the foregoing, each party hereto hereby agrees (which
agreements shall survive the termination of this Agreement) that, prior to the
date that is one year and one day after the payment in full of all outstanding
commercial paper or other senior indebtedness of any SPV, it will not institute
against, or join any other person in instituting against, such SPV any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under the laws of the United States or any State thereof.

 

(d) In addition, notwithstanding anything to the contrary contained in this
Section 12.6 or otherwise in this Agreement, any SPV may (i) at any time and
without paying any processing fee therefor, assign or participate all or a
portion of its interest in any Loans to the Designating Lender or, with the
prior consent of the Borrowers and the Agent (provided, that if a Default has
occurred and is continuing, the consent of the Borrowers shall not be required)
to any financial institutions providing liquidity and/or credit support to or
for the account of such SPV to support the funding or maintenance of Loans and
(ii) disclose on a confidential basis any non-public information relating to its
Loan to any rating agency, commercial paper dealer or provider of any surety,
guarantee or credit or liquidity enhancements to such SPV, provided that such
Persons agree to keep such information confidential to the same extent required
by the Lenders hereunder. This Section 12.6 may not be amended without the
written consent of any Designating Lender affected thereby.

 

ARTICLE XIII

 

NOTICES

 

13.1 Notices. Except as otherwise permitted by Section 2.12 with respect to
borrowing notices, all notices, requests and other communications to any party
hereunder shall be in writing (including electronic transmission, facsimile
transmission or similar writing) and shall be given to such party: (a) in the
case of any Borrower or the Agent, at its address or facsimile number set forth
on the signature pages hereof, (b) in the case of any Lender, at its address or
facsimile number set forth below its signature hereto or (c) in the case of any
party, at such other address or facsimile number as such party may hereafter
specify for the purpose by notice to the Agent and the Borrowers in accordance
with the provisions of this Section 13.1. Each such notice, request or other
communication shall be effective (i) if given by facsimile transmission, when
transmitted to the facsimile number specified in this Section and confirmation
of receipt is received, (ii) if given by mail, 72 hours after such communication
is deposited in the mails with first class postage prepaid, addressed as
aforesaid, or (iii) if given by any other means, when delivered (or, in the case
of electronic transmission, received) at the address specified in this Section;
provided that notices to the Agent under Article II shall not be effective until
received.

 

- 59 -

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

13.2 Change of Address. Any Borrower, the Agent and any Lender may each change
the address for service of notice upon it by a notice in writing to the other
parties hereto.

 

ARTICLE XIV

 

COUNTERPARTS

 

This Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be
effective when it has been executed by the Borrowers, the Agent and the Lenders
and each party has notified the Agent by facsimile transmission or telephone
that it has taken such action.

 

ARTICLE XV

 

CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

 

15.1 CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A CONTRARY
EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, 735 ILCS SECTION 105/5-1 ET SEQ,
BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE STATE OF
ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

 

15.2 CONSENT TO JURISDICTION. EACH BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT
SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS AND EACH BORROWER HEREBY IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER
HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT
THE RIGHT OF THE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST ANY BORROWER
IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY BORROWER
AGAINST THE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE AGENT OR ANY LENDER
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED
TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN
CHICAGO, ILLINOIS.

 

15.3 WAIVER OF JURY TRIAL. EACH BORROWER, THE AGENT AND EACH LENDER HEREBY WAIVE
TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER

 

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

(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED
THEREUNDER.

 

[signature pages follow]

 

- 61 -

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

IN WITNESS WHEREOF, the Borrowers, the Lenders and the Agent have executed this
Agreement as of the date first above written.

 

NATIONWIDE MUTUAL INSURANCE COMPANY

By:

 

 

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

   

Carol L. Dove

Title:

 

Vice President – Assistant Treasurer

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

   

One Nationwide Plaza 1-32-06

Columbus, Ohio 43215-2220

Attention: Carol L. Dove

Telephone: (614) 249-6963

FAX: (614) 249-2739

 

NATIONWIDE LIFE INSURANCE COMPANY

By:

 

 

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

   

Carol L. Dove

Title:

 

Vice President – Assistant Treasurer

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

   

One Nationwide Plaza 1-32-06

Columbus, Ohio 43215-2220

Attention: Carol L. Dove

Telephone: (614) 249-6963

FAX: (614) 249-2739

 

NATIONWIDE FINANCIAL SERVICES, INC.

By:

 

 

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

   

Carol L. Dove

Title:

 

Vice President – Assistant Treasurer

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

   

One Nationwide Plaza 1-32-06

Columbus, Ohio 43215-2220

Attention: Carol L. Dove

Telephone: (614) 249-6963

FAX: (614) 249-2739

 

S-1

[TO FIVE YEAR CREDIT AGREEMENT]

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

BANK ONE, NA, as Agent and as a Lender

By:

 

 

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

Title:

 

 

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

   

1 Bank One Plaza, Suite IL1-0085

Chicago, Illinois 60670

Attention: Cynthia W. Priest

Telephone: (312) 732-9565

FAX: (312) 732-4033

 

 

 

S-2

[TO FIVE YEAR CREDIT AGREEMENT]

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

 

CITICORP USA, INC., as Syndication Agent and as a Lender

By:

 

 

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

Title:

 

 

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

 

S-3

[TO FIVE YEAR CREDIT AGREEMENT]

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

 

ABN AMRO BANK N.V., as Documentation
Agent and as a Lender

By:

 

 

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

Title:

 

 

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

By:

 

 

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

Title:

 

 

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

 

S-4

[TO FIVE YEAR CREDIT AGREEMENT]

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

 

 

BANK OF AMERICA, N.A., as Documentation Agent and as a Lender

By:

 

 

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

Title:

 

 

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

 

S-5

[TO FIVE YEAR CREDIT AGREEMENT]

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

 

KEYBANK NATIONAL ASSOCIATION, as
Documentation Agent and as a Lender

By:

 

 

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

   

Mary K. Young

Vice President and Portfolio Manager

 

S-6

[TO FIVE YEAR CREDIT AGREEMENT]

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

 

THE BANK OF NEW YORK, as Documentation Agent and as a Lender

By:

 

 

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

Title:

 

 

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

 

S-7

[TO FIVE YEAR CREDIT AGREEMENT]

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

 

WACHOVIA BANK, NATIONAL ASSOCIATION, as Documentation Agent and as a Lender

By:

 

 

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

Title:

 

 

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

 

S-8

[TO FIVE YEAR CREDIT AGREEMENT]

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

 

HSBC BANK USA, as Senior Managing Agent and as a Lender

By:

 

 

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

Title:

 

 

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

 

S-9

[TO FIVE YEAR CREDIT AGREEMENT]

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

 

MELLON BANK, N.A., as Senior Managing Agent and as a Lender

By:

 

 

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

Title:

 

 

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

 

S-10

[TO FIVE YEAR CREDIT AGREEMENT]

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

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Senior Managing Agent and as a Lender

By:

 

 

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

Title:

 

 

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

By:

 

 

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

Title:

 

 

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

 

S-11

[TO FIVE YEAR CREDIT AGREEMENT]

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

 

PNC BANK, NATIONAL ASSOCIATION, as Managing Agent and as a Lender

By:

 

 

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

Title:

 

 

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

 

S-12

[TO FIVE YEAR CREDIT AGREEMENT]

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

 

THE HUNTINGTON NATIONAL BANK, as Managing Agent and as a Lender

By:

 

 

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

Title:

 

 

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

 

S-13

[TO FIVE YEAR CREDIT AGREEMENT]

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

 

US BANK, NATIONAL ASSOCIATION, as Managing Agent and as a Lender

By:

 

 

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

Title:

 

 

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

 

S-14

[TO FIVE YEAR CREDIT AGREEMENT]

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

 

FIFTH THIRD BANK (CENTRAL OHIO), as a Lender

By:

 

 

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

Title:

 

 

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

 

S-15

[TO FIVE YEAR CREDIT AGREEMENT]

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

 

HARRIS NESBITT FINANCIAL, INC., as a Lender

By:

 

 

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

Title:

 

 

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

 

S-16

[TO FIVE YEAR CREDIT AGREEMENT]

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

 

JPMORGAN CHASE BANK, as a Lender

By:

 

 

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

   

Lawrence Palumbo, Jr.

Vice President

 

S-17

[TO FIVE YEAR CREDIT AGREEMENT]

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

 

NATIONAL CITY BANK, as a Lender

By:

 

 

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

Title:

 

 

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

 

S-18

[TO FIVE YEAR CREDIT AGREEMENT]

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

 

STATE STREET BANK AND TRUST COMPANY, as a Lender

By:

 

 

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

Title:

 

 

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

 

S-19

[TO FIE YEAR CREDIT AGREEMENT]

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

PRICING SCHEDULE

 

     LEVEL I
STATUS     LEVEL II
STATUS     LEVEL III
STATUS     LEVEL IV
STATUS     LEVEL V
STATUS     LEVEL VI
STATUS  

Eurodollar Rate

   0.180 %   0.220 %   0.285 %   0.375 %   0.450 %   0.500 %

Facility Fee Rate

   0.070 %   0.080 %   0.090 %   0.125 %   0.150 %   0.250 %

Utilization Fee Rate

   0.050 %   0.050 %   0.050 %   0.100 %   0.125 %   0.250 %

 

For the purposes of this Schedule, the following terms have the following
meanings, subject to the final paragraph of this Schedule:

 

“Level I Status” exists (a) with respect to Nationwide Mutual or Nationwide
Life, at any date if, on such date, such Person’s Moody’s Rating is Aa2 or
better or such Person’s S&P Rating is AA or better and (b) with respect to NFS,
at any date if, on such date, NFS’s Moody’s Rating is A1 or better or NFS’s S&P
Rating is A+ or better.

 

“Level II Status” exists with respect to any Borrower at any date if, on such
date, (a) such Borrower has not qualified for Level I Status and (b) (i) with
respect to Nationwide Mutual or Nationwide Life, such Person’s Moody’s Rating is
Aa3 or better or such Person’s S&P Rating is AA- or better and (ii) with respect
to NFS, NFS’s Moody’s Rating is A2 or better or NFS’s S&P Rating is A or better.

 

“Level III Status” exists with respect to any Borrower at any date if, on such
date, (a) such Borrower has not qualified for Level I Status or Level II Status
and (b) (i) with respect to Nationwide Mutual or Nationwide Life, such Person’s
Moody’s Rating is A1 or better or such Person’s S&P Rating is A+ or better and
(ii) with respect to NFS, NFS’s Moody’s Rating is A3 or better or NFS’s S&P
Rating is A- or better.

 

“Level IV Status” exists with respect to any Borrower at any date if, on such
date, (a) such Borrower has not qualified for Level I Status, Level II Status or
Level III Status and (b) (i) with respect to Nationwide Mutual or Nationwide
Life, such Person’s Moody’s Rating is A2 or better or such Person’s S&P Rating
is A or better and (ii) with respect to NFS, NFS’s Moody’s Rating is Baa1 or
better or NFS’s S&P Rating is BBB+ or better.

 

“Level V Status” exists with respect to any Borrower at any date if, on such
date, (a) such Borrower has not qualified for Level I Status, Level II Status,
Level III Status or Level IV Status and (b) (i) with respect to Nationwide
Mutual or Nationwide Life, such Person’s Moody’s Rating is A3 or better or such
Person’s S&P Rating is A- or better and (ii) with respect to NFS, NFS’s Moody’s
Rating is Baa2 or better or NFS’s S&P Rating is BBB or better.

 

“Level VI Status” exists with respect to any Borrower at any date if, on such
date, such Borrower has not qualified for Level I Status, Level II Status, Level
III Status, Level IV Status, or Level V Status.

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

“Moody’s Rating” means, at any time, (a) with respect to Nationwide Mutual and
Nationwide Life, the financial strength rating issued by Moody’s and then in
effect with respect to such Person, and (b) with respect to NFS, the rating
issued by Moody’s and then in effect with respect to NFS’s senior unsecured
long-term debt securities without third-party credit enhancement.

 

“S&P Rating” means, at any time, (a) with respect to Nationwide Mutual and
Nationwide Life, the financial strength rating issued by S&P and then in effect
with respect to such Person, and (b) with respect to NFS, the rating issued by
S&P and then in effect with respect to NFS’s senior unsecured long-term debt
securities without third-party credit enhancement.

 

“Status” means either Level I Status, Level II Status, Level III Status, Level
IV Status, Level V Status or Level VI Status.

 

The Applicable Margin and the Applicable Facility Fee Rate with respect to each
Borrower shall be determined in accordance with the foregoing table based on
such Borrower’s Status as determined from its then-current Moody’s and S&P
Ratings. The Applicable Utilization Fee Rate shall be determined in accordance
with the foregoing table based on the Status of the Borrower which has the
lowest Status (with Level I Status being the highest Status and Level VI Status
being the lowest Status) of all Borrowers to which Advances are then
outstanding.

 

The credit rating in effect on any date for the purposes of this Schedule is
that in effect at the close of business on such date. If at any time a Borrower
has no Moody’s Rating or no S&P Rating, Level VI Status shall exist.
Notwithstanding the foregoing, if the Moody’s Rating and the S&P Rating are more
than one level apart, then Status shall be based on the level which is one level
above the lower of the two levels.

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

SCHEDULE I

 

COMMITMENTS

 

Lender

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

 

Commitment

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

Bank One, NA

  66,500,000

Citicorp USA, Inc.

  66,500,000

ABN AMRO Bank N.V.

  53,900,000

Bank of America, N.A.

  53,900,000

KeyBank National Association

  53,900,000

The Bank of New York

  53,900,000

Wachovia Bank, National Association

  53,900,000

HSBC Bank USA

  42,000,000

Mellon Bank, N.A.

  42,000,000

Wells Fargo Bank, National Association

  42,000,000

PNC Bank, National Association

  28,000,000

The Huntington National Bank

  28,000,000

US Bank, National Association

  28,000,000

Fifth Third Bank (Central Ohio)

  17,500,000

Harris Nesbitt Financial, Inc.

  17,500,000

JPMorgan Chase Bank

  17,500,000

National City Bank

  17,500,000

State Street Bank and Trust Company

  17,500,000

Aggregate Commitment:

  $700,000,000    

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

 

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

SCHEDULE 5.8

 

SUBSIDIARIES

(as of December 31, 2003)

 

[Borrowers to update]

 

1717 Advisory Services, Inc.

1717 Brokerage Services, Inc.

1717 Capital Management Company

1717 Insurance Agency of Massachusetts, Inc.

1717 Insurance Agency of Texas, Inc.

The 401(k) Companies, Inc.

The 401(k) Company

401(k) Investment Advisors, Inc.

401(k) Investment Services, Inc.

Affiliate Agency of Ohio, Inc.

Affiliate Agency, Inc.

AGMC Reinsurance Ltd.

AID Finance Services, Inc.

ALLIED Document Solutions, Inc. (fka Midwest Printing Services, Inc.)

ALLIED General Agency Company

ALLIED Group Insurance Marketing Company

ALLIED Group, Inc.

ALLIED Property and Casualty Insurance Company

Allied Texas Agency, Inc.

Allnations, Inc.

AMCO Insurance Company

American Marine Underwriters, Inc.

Asset Management Holdings, plc

Audenstar Limited

Cal-Ag Insurance Services, Inc.

CalFarm Insurance Agency

CalFarm Insurance Company

Cap Pro Advisory Services, Inc.

Cap Pro Brokerage Services, Inc.

Cap Pro Holding, Inc.

Cap Pro Insurance Agency Services, Inc.

Capital Professional Advisors, Inc.

Clarinet Life Insurance

CODA Capital Management LLC

Colonial County Mutual Insurance Company

Cooperative Service Company

Corviant Corporation

Damian Securities Limited

Danica Life S.A.

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

Delfi Realty Corporation

Depositors Insurance Company

Discover Insurance Agency of Texas, LLC

Discover Insurance Agency, LLC

DVM Insurance Agency, Inc.

F&B, Inc.

Farmland Mutual Insurance Company

Fenplace Limited

Financial Horizons Distributors Agency of Alabama, Inc.

Financial Horizons Distributors Agency of Ohio, Inc.

Financial Horizons Distributors Agency of Oklahoma, Inc.

Financial Horizons Distributors Agency of Texas, Inc.

Financial Horizons Securities Corporation

Four P Finance Company

G.I.L. Nominees Limited

Gartmore 1990 Limited

Gartmore 1990 Trustee Limited

Gartmore Capital Management Limited

Gartmore Distribution Services, Inc.

Gartmore Emerging Managers, LLC

Gartmore Fund Managers International Limited

Gartmore Fund Managers Limited

Gartmore Global Asset Management Trust

Gartmore Global Asset Management, Inc.

Gartmore Global Investments, Inc.

Gartmore Global Partners

Gartmore Global Ventures, Inc.

Gartmore Indosuez UK Recovery Fund (G.P.) Limited

Gartmore Investment Limited

Gartmore Investment Management plc

Gartmore Investment Services GmbH

Gartmore Investment Services Limited

Gartmore Investor Services, Inc.

Gartmore Japan Limited

Gartmore Morley & Associates, Inc.

Gartmore Morley Capital Management, Inc.

Gartmore Morley Financial Services, Inc.

Gartmore Mutual Fund Capital Trust

Gartmore Nominees Limited

Gartmore Pension Trustees Limited

Gartmore Riverview, LLC

Gartmore S.A. Capital Trust

Gartmore Secretaries (Jersey) Ltd.

Gartmore Trust Company

Gartmore Securities Limited

Gartmore U.S. Limited

Gates, McDonald & Company

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

Gates, McDonald & Company of New York, Inc.

Gates, McDonald & Company of Nevada

GatesMcDonald Health Plus Inc.

GGI Management LLC

Institutional Concepts, Inc.

Insurance Intermediaries, Inc.

Landmark Financial Services of New York, Inc.

Lone Star General Agency, Inc.

Market Street Fund

Market Street Investment Management Company

MedProSolutions, Inc.

National Casualty Company

National Deferred Compensation, Inc.

Nationwide Advantage Mortgage Company

Nationwide Affinity Insurance Company of America

Nationwide Affordable Housing, LLC

Nationwide Agency, Inc.

Nationwide Agribusiness Insurance Company

Nationwide Arena, LLC

Nationwide Asset Management Holdings, Ltd.

Nationwide Assurance Company

Nationwide Capital Mortgage, LLC

Nationwide Cash Management Company

Nationwide Community Development Corporation, LLC

Nationwide Corporation

Nationwide Financial Assignment Company

Nationwide Financial Institution Distributors Agency, Inc.

Nationwide Financial Institution Distributors Agency, Inc. of New Mexico

Nationwide Financial Institution Distributors Insurance Agency, Inc. of
Massachusetts

Nationwide Financial Services (Bermuda) Ltd.

Nationwide Financial Services Capital Trust

Nationwide Financial Services Capital Trust II

Nationwide Financial Services, Inc.

Nationwide Financial Sp. z o.o

Nationwide Foundation

Nationwide General Insurance Company

Nationwide Global Finance, LLC

Nationwide Global Funds

Nationwide Global Holdings, Inc.

Nationwide Global Holdings, Inc.- Luxembourg Branch

Nationwide Global Holdings-NGH Brazil Participacoes, LTDA

Nationwide Global Japan, Inc.

Nationwide Global Limited

Nationwide Health Plans, Inc.

Nationwide Home Mortgage Distributors, Inc.

Nationwide Indemnity Company

Nationwide Insurance Company of America

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

Nationwide Insurance Company of Florida

Nationwide Insurance Sales Company, LLC

Nationwide International Underwriters

Nationwide Investment Services Corporation

Nationwide Life and Annuity Company of America

Nationwide Life and Annuity Insurance Company

Nationwide Life Assurance Company, Ltd.

Nationwide Life Insurance Company

Nationwide Life Insurance Company of America, Inc.

Nationwide Life Insurance Company of Delaware

Nationwide Lloyds

Nationwide Management Systems, Inc.

Nationwide Martíma Vida Previdência S.A.

Nationwide Mortgage Holdings, Inc.

Nationwide Mutual Fire Insurance Company

Nationwide Mutual Insurance Company

Nationwide Properties, Ltd.

Nationwide Property and Casualty Insurance Company

Nationwide Provident Distributors, Inc.

Nationwide Provident Holding Company

Nationwide Realty Investors, Ltd.1

Nationwide Retirement Plan Services, Inc.

Nationwide Retirement Solutions, Inc.

Nationwide Retirement Solutions, Inc. of Alabama

Nationwide Retirement Solutions, Inc. of Arizona

Nationwide Retirement Solutions, Inc. of Arkansas

Nationwide Retirement Solutions, Inc. of Montana

Nationwide Retirement Solutions, Inc. of Nevada

Nationwide Retirement Solutions, Inc. of New Mexico

Nationwide Retirements Solutions, Inc. of Ohio

Nationwide Retirement Solutions, Inc. of Oklahoma

Nationwide Retirement Solutions, Inc. of South Dakota

Nationwide Retirement Solutions, Inc. of Texas

Nationwide Retirement Solutions, Inc. of Wyoming

Nationwide Retirement Solutions Insurance Agency, Inc.

Nationwide Securities, Inc.

Nationwide Services Company, LLC

Nationwide Services Sp. z o.o.

Nationwide Strategic Investment Fund, LLC

Nationwide Towarzystwo Ubezpieczen na Zycie S.A.

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1

Nationwide Realty Investors, Ltd. (“NRI”) has, directly or indirectly, a
majority interest in a number of entities that are not listed herein (“NRI
Subsidiaries”) despite the fact that each of said NRI Subsidiaries would be
considered a “Subsidiary” pursuant to the terms of the Agreement. The NRI
Subsidiaries are formed in the ordinary course of NRI’s business primarily for
ownership of, investment in, or development of real estate. A complete list of
the NRI Subsidiaries is available upon request.

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Nationwide Trust Company, FSB

Nationwide UK Asset Management Holdings, Ltd.

Nationwide UK Holding Company, Ltd.

NCC of America, Ltd. (Inactive)

Newhouse Capital Partners, LLC

Newhouse Special Situations Fund I, LLC

NFS Distributors, Inc.

NFSB Investments Ltd.

NGH Luxembourg, S.A.

NGH Netherlands, B.V.

NGH UK, Ltd.

NorthPointe Capital, LLC

PanEuroLife

Pension Associates, Inc.

PNAM, Inc.

Premier Agency, Inc.

Provestco, Inc.

RCMD Financial Services, Inc.

Retention Alternatives, Ltd.

RF Advisers, Inc.

Riverview Agency, Inc.

Riverview International Group, Inc.

SBSC Ltd (Thailand)

Scottsdale Indemnity Company

Scottsdale Insurance Company

Scottsdale Surplus Lines Insurance Company

Siam Ar-Na-Khet Company Limited

Software Development Corp.

TBG Insurance Services Corporation

Vertboise, SA

Veterinary Pet Insurance Company

Veterinary Pet Services, Inc.

Villanova Securities, LLC

VPI Services, Inc.

Washington Square Administrative Services, Inc.

Western Heritage Insurance Company

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SCHEDULE 6.12

 

LIENS

 

NATIONWIDE ADVANTAGE MORTGAGE COMPANY

SCHEDULE OF OUTSTANDING DEBT—SCHEDULE 6.12

AS OF MAY, 2004

 

[to be provided by Borrowers]