Prepared by MERRILL CORPORATION




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Exhibit 10.1
  [EXECUTION COPY]    
  


     $3,000,000,000 CREDIT AGREEMENT  


 dated as of  


 August 27, 2001  


 among  


 MEDTRONIC, INC.,  


 as Borrower,  


 CERTAIN OF ITS SUBSIDIARIES,  


 as Guarantors,  


 THE LENDERS PARTY HERETO,  


 BANK OF AMERICA, N.A.  


 as Administrative Agent  


 and  


 BANC OF AMERICA SECURITIES LLC,  


 as Sole Lead Arranger and Sole Book Manager  






  



 
 

TABLE OF CONTENTS    
  



	ARTICLE I  Definitions	 	1
	 	Section 1.01	 	Defined Terms	 	1
	 	Section 1.02	 	Classification of Loans and Borrowings	 	11
	 	Section 1.03	 	Terms Generally	 	11
	 	Section 1.04	 	Accounting Terms; GAAP	 	12
	

ARTICLE II  The Credits	
 	

12
	 	Section 2.01	 	Commitments	 	12
	 	Section 2.02	 	Loans and Borrowings	 	12
	 	Section 2.03	 	Requests for Borrowings	 	13
	 	Section 2.04	 	Funding of Borrowings	 	13
	 	Section 2.05	 	Interest Elections	 	14
	 	Section 2.06	 	Termination and Reduction of Commitments	 	15
	 	Section 2.07	 	Repayment of Loans; Evidence of Debt	 	15
	 	Section 2.08	 	Prepayment of Loans	 	16
	 	Section 2.09	 	Fees	 	17
	 	Section 2.10	 	Interest	 	17
	 	Section 2.11	 	Alternate Rate of Interest	 	18
	 	Section 2.12	 	Increased Costs	 	18
	 	Section 2.13	 	Break Funding Payments	 	19
	 	Section 2.14	 	Taxes	 	20
	 	Section 2.15	 	Payments Generally; Pro Rata Treatment; Sharing of Set-offs	 	21
	 	Section 2.16	 	Mitigation Obligations; Replacement of Lenders	 	22
	

ARTICLE III  Representations and Warranties	
 	

23
	 	Section 3.01	 	Organization; Powers	 	23
	 	Section 3.02	 	Authorization; Enforceability	 	23
	 	Section 3.03	 	Governmental Approvals; No Conflicts	 	23
	 	Section 3.04	 	Financial Condition; No Material Adverse Change	 	23
	 	Section 3.05	 	Properties	 	23
	 	Section 3.06	 	Litigation and Environmental Matters	 	24
	 	Section 3.07	 	Compliance with Laws and Agreements	 	24
	 	Section 3.08	 	Investment and Holding Company Status	 	24
	 	Section 3.09	 	Taxes	 	24
	 	Section 3.10	 	ERISA	 	24
	 	Section 3.11	 	Disclosure	 	25
	 	Section 3.12	 	Federal Regulations	 	25
	 	Section 3.13	 	Purpose of Loans	 	25
	 	Section 3.14	 	Subsidiaries and Significant Subsidiaries	 	25
	

ARTICLE IV  Conditions	
 	

25
	 	Section 4.01	 	Closing Conditions	 	25
	 	Section 4.03	 	Each Credit Event	 	26



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ARTICLE V  Affirmative Covenants	
 	

27
	 	Section 5.01	 	Financial Statements and Other Information	 	27
	 	Section 5.02	 	Notices of Material Events	 	28
	 	Section 5.03	 	Existence; Conduct of Business	 	28
	 	Section 5.04	 	Payment of Obligations	 	28
	 	Section 5.05	 	Maintenance of Properties; Insurance	 	28
	 	Section 5.06	 	Books and Records; Inspection Rights	 	29
	 	Section 5.07	 	Compliance with Laws	 	29
	 	Section 5.08	 	Use of Proceeds	 	29
	 	Section 5.09	 	Maintenance of Accreditation, Etc.	 	29
	 	Section 5.10	 	Additional Subsidiary Guarantors	 	29
	

ARTICLE VI  Negative Covenants	
 	

29
	 	Section 6.01	 	Consolidated Tangible Net Worth	 	29
	 	Section 6.02	 	Indebtedness	 	29
	 	Section 6.03	 	Liens	 	30
	 	Section 6.04	 	Fundamental Changes	 	30
	 	Section 6.05	 	Transactions with Affiliates	 	31
	 	Section 6.06	 	Restrictive Agreements	 	31
	 	Section 6.07	 	Business Activity	 	31
	 	Section 6.08	 	Restricted Payments	 	31
	

ARTICLE VII  Events of Default	
 	

32
	

ARTICLE VIII  The Administrative Agent	
 	

33
	

ARTICLE IX  Miscellaneous	
 	

35
	 	Section 9.01	 	Notices	 	35
	 	Section 9.02	 	Waivers; Amendments	 	35
	 	Section 9.03	 	Expenses; Indemnity; Damage Waiver	 	36
	 	Section 9.04	 	Successors and Assigns	 	37
	 	Section 9.05	 	Survival	 	39
	 	Section 9.06	 	Counterparts; Integration; Effectiveness	 	40
	 	Section 9.07	 	Severability	 	40
	 	Section 9.08	 	Right of Setoff	 	40
	 	Section 9.09	 	Governing Law; Jurisdiction; Consent to Service of Process	 	40
	 	Section 9.10	 	Waiver of Jury Trial	 	41
	 	Section 9.11	 	Headings	 	41
	 	Section 9.12	 	Confidentiality	 	41



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ARTICLE X  GUARANTY	
 	

42
	 	Section 10.1	 	The Guaranty	 	42
	 	Section 10.2	 	Bankruptcy	 	42
	 	Section 10.3	 	Nature of Liability	 	42
	 	Section 10.4	 	Independent Obligation	 	43
	 	Section 10.5	 	Authorization	 	43
	 	Section 10.6	 	Reliance	 	43
	 	Section 10.7	 	Waiver	 	43
	 	Section 10.8	 	Limitation on Enforcement	 	44
	 	Section 10.9	 	Confirmation of Payment	 	44
	

SCHEDULES:	
 	

 
	Schedule 2.01—Commitments	 	 
	Schedule 3.06—Disclosed Matters	 	 
	Schedule 3.14—Subsidiaries and Significant Subsidiaries	 	 
	Schedule 6.02—Existing Indebtedness	 	 
	Schedule 6.03—Existing Liens	 	 
	

EXHIBITS:	
 	

 
	Exhibit A—Form of Assignment and Acceptance	 	 
	Exhibit B—Form of Joinder Agreement	 	 




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CREDIT AGREEMENT    
  


    CREDIT AGREEMENT dated as of August 27, 2001 among Medtronic, Inc., a Minnesota corporation (the "Borrower"), the Subsidiaries of the Borrower
listed on the signature pages hereto (individually a "Guarantor", collectively the "Guarantors"), the Lenders party hereto, and Bank of America, N.A., as Administrative Agent. 


 
 

W I T N E S S E T H:    
  


    WHEREAS, the Borrower and the Guarantors have requested that the Lenders provide a $3,000,000,000 credit
facility for the purposes hereinafter set forth; and 


    WHEREAS, the Lenders have agreed to make the requested credit facility available to the Borrower on the terms and conditions
hereinafter set forth; 


    NOW, THEREFORE, IN CONSIDERATION of the premises and other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows: 


 
 

ARTICLE I
  
    Definitions    
  



    Section 1.01  Defined Terms.


    As
used in this Credit Agreement, the following terms have the meanings specified below: 



     "ABR",  when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate. 


     "Acquisition",  shall mean collectively the acquisitions contemplated by the Acquisition Agreement. 



    "Acquisition Agreement"  shall mean collectively the Amended and Restated Agreement and Plan of Merger dated as of July 27, 2001 among
the Borrower, the Merger Sub named therein, and Medical Research, Inc. and the Amended and Restated Merger Agreement and Plan of Merger dated as of June 19, 2001 among the Borrower, the
Merger Sub named therein and MiniMed Inc., as the same may be amended, supplemented or otherwise modified in accordance with the terms hereof and thereof. 


     "Acquisition Documents"  shall mean the Acquisition Agreement and all other instruments, documents and agreements executed and delivered in
connection with the consummation of the Acquisition (excluding this Credit Agreement and the other Credit Documents), including, without limitation, any stockholders, registration or other agreements
related thereto, as the same may be amended, supplemented or otherwise modified in accordance with the terms hereof and thereof. 


     "Administrative Agent"  means Bank of America, in its capacity as administrative agent for the Lenders hereunder, and its successors in such
capacity. 


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



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


     "Alternate Base Rate"  means, for any day, a rate per annum equal to the greater of (a) the Prime Rate in effect on such day and
(b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to a change in the Prime Rate or the 






 


Federal Funds Effective Rate shall be effective from and including the effective date of such change in the Prime Rate or the Federal Funds Effective Rate, respectively. 


     "Applicable Percentage"  means, with respect to any Lender, the percentage of the total Commitments represented by such Lender's Commitment. If
the Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the Commitments most recently in effect, giving effect to any assignments 



    "Applicable Rate"  means, for purposes of calculating the applicable interest rate for any day with respect to the facility fees payable
hereunder, the applicable rate per annum set forth below (in basis points) under the caption "Facility Fee Rate" based upon the ratings by Moody's and S&P, respectively, applicable on such date to the
Index Debt. 



	Category
	 	S&P /Moody's Rating
	 	Facility Fee Rate

	I	 	Greater than or equal to AA-/Aa3	 	4.0
	II	 	Greater than or equal to A+/A1 but less than AA-/Aa3	 	5.0
	III	 	Greater than or equal to A/A2 but less than A+/A1	 	7.0
	IV	 	Greater than or equal to A-/A3 but less than A/A2	 	8.0
	V	 	Less than A-/A3	 	10.0






    For
purposes of the foregoing, (i) if either Moody's or S&P shall not have in effect a rating for the Index Debt (other than by reason of the circumstances referred to in the
last sentence of this definition), then such rating agency shall be deemed to have established a rating in Category V; (ii) if the
ratings established or deemed to have been established by Moody's and S&P for the Index Debt shall fall within different Categories, the Applicable Rate shall be based on the higher of the two ratings
unless one of the two ratings is two or more Categories lower than the other, in which case the Applicable Rate shall be determined by reference to the Category next above that of the lower of the two
ratings; and (iii) if the ratings established or deemed to have been established by Moody's and S&P for the Index Debt shall be changed (other than as a result of a change in the rating system
of Moody's or S&P), such change shall be effective as of the date on which it is first announced by the applicable rating agency. Each change in the Applicable Rate shall apply during the period
commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change. If the rating system of Moody's or S&P shall change, or if
either such rating agency shall cease to be in the business of rating corporate debt obligations, the Borrower and the Lenders shall negotiate in good faith to amend this definition to reflect such
changed rating system or the unavailability of ratings from such rating agency and, pending the effectiveness of any such amendment, the Applicable Rate shall be determined by reference to the rating
most recently in effect prior to such change or cessation. 


     "Approved Fund"  means with respect to any Lender that is a fund that invests in commercial loans, any other fund that invests in commercial
loans and is managed or advised by the same investment advisor as such Lender or by an Affiliate of such investment advisor. 


     "Assignment and Acceptance"  means an assignment and acceptance entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the
Administrative Agent. 


     "Availability Period"  means the period from and including the Effective Date to but excluding the earlier of the Maturity Date and the date of
termination of the Commitments. 


     "Bank of America"  means Bank of America, N.A. 



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     "Board"  means the Board of Governors of the Federal Reserve System of the United States of America. 


     "Borrower"  means Medtronic, Inc., a Minnesota corporation. 


     "Borrowing"  means Loans of the same Type, made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a
single Interest Period is in effect. 


    "Borrowing Request"  means a request by the Borrower for a Borrowing in accordance with Section 2.03. 


     "Business Day"  means any day that is not a Saturday, Sunday or other day on which commercial banks in Charlotte, North Carolina or New York,
New York are authorized or required by law to remain closed; provided that, when used in connection with a Eurodollar Loan, the term
"Business Day" shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market. 



    "Capital Lease Obligations"  of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of
such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP. 


     "Capital Stock"  means (i) in the case of a corporation, capital stock, (ii) in the case of an association or business entity, any
and all shares, interests, participations, rights or other equivalents (however designated) of capital stock, (iii) in the case of a partnership, partnership interests (whether general or
limited), (iv) in the case of a limited liability company, membership interests and (v) any other interest or participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person. 


     "Cash Equivalents"  shall mean (a) securities issued or directly and fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof) having maturities of not more than twelve months from the date
of acquisition ("Government Obligations"), (b) U.S. dollar denominated (or foreign currency fully hedged) time deposits, certificates of deposit,
Eurodollar time deposits and Eurodollar certificates of deposit of (y) any domestic commercial bank of recognized standing having capital and surplus in excess of $250,000,000 or (z) any
bank whose short-term commercial paper rating from S&P is at least A-1 or the equivalent thereof or from Moody's is at least P-1 or the equivalent thereof (any such
bank being an "Approved Bank"), in each case with maturities of not more than 364 days from the date of acquisition, (c) commercial paper
and variable or fixed rate
notes issued by any Approved Bank (or by the parent company thereof) or commercial paper or any variable rate notes issued by, or guaranteed by any domestic corporation rated A-2 (or the
equivalent thereof) or better by S&P or P-2 (or the equivalent thereof) or better by Moody's and maturing within six months of the date of acquisition, (d) repurchase agreements
with a bank or trust company (including a Lender) or a recognized securities dealer having capital and surplus in excess of $500,000,000 for direct obligations issued by or fully guaranteed by the
United States of America, (e) obligations of any state of the United States or any political subdivision thereof for the payment of the principal and redemption price of and interest on which
there shall have been irrevocably deposited Government Obligations maturing as to principal and interest at times and in amounts sufficient to provide such payment and (f) auction preferred
stock rated in the highest short-term credit rating category by S&P or Moody's. 



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     "Change in Control"  means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group
(within the meaning of the Securities Exchange Act of 1934 and the rules of the SEC thereunder as in effect on the date hereof), of shares representing more than 25% of the aggregate ordinary voting
power represented by the issued and outstanding capital stock of the Borrower; (b) occupation of a majority of the seats (other than vacant seats) on the board of directors of the Borrower by
Persons who were neither (i) nominated by the board of directors of the Borrower nor (ii) appointed by directors so nominated; or (c) the acquisition of direct or indirect Control
of the Borrower by any Person or group. 


     "Change in Law"  means (a) the adoption of any law, rule or regulation after the date of this Credit Agreement, (b) any change in
any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Credit Agreement or (c) compliance by any Lender (or, for
purposes of Section 2.12(b), by such Lender's holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Credit Agreement. 


    "Closing Date"  means the date hereof. 


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


     "Commitment"  means with respect to each Lender, the commitment of such Lender to make Loans hereunder, as such commitment may be reduced from
time to time pursuant to Section 2.06. The initial amount of each Lender's Commitment is set forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender
shall have assumed its Commitment, as applicable. 


    "Consolidated Assets"  means the consolidated assets of the Borrower and its Subsidiaries, determined in accordance with GAAP. 


     "Consolidated Net Income"  means, for any period, the consolidated net income (or loss) of the Borrower and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP; provided that there shall be excluded (a) the income (or deficit) of any Person accrued prior to the
date it becomes a Subsidiary of the Borrower or is merged into or consolidated with the Borrower or any of its Subsidiaries, (b) the income (or deficit) of any Person (other than a Subsidiary
of the Borrower) in which the Borrower or any of its Subsidiaries has an ownership interest, except to the extent that any such income is actually received by the Borrower or such Subsidiary in the
form of dividends or similar distributions and (c) the undistributed earnings of any Subsidiary of the Borrower to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary is not at the time permitted by the terms of any contractual obligation (other than under any Loan Document) or requirement of law applicable to such Subsidiary. 


     "Consolidated Net Tangible Assets"  means the Consolidated Assets less: (i) all current liabilities and minority interests and
(ii) goodwill and other intangibles (other than patents, trademarks, licenses, copyrights and other intellectual property and prepaid assets). 


     "Consolidated Tangible Net Worth"  means at any date, Consolidated Net Tangible Assets minus  Consolidated Total Liabilities,
determined in accordance with GAAP. 


     "Consolidated Total Liabilities"  means at any date, with respect to the Borrower and its Subsidiaries on a consolidated basis, total
liabilities, determined in accordance with GAAP. 


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



4







  



     "Credit Documents"  means a collective reference to this Credit Agreement, the Notes, if any, each Joinder Agreement and all other related
agreements and documents issued or delivered hereunder or thereunder or pursuant hereto or thereto (in each case as the same may be amended, modified, restated, supplemented, extended, renewed or
replaced from time to time), and "Credit Document" means any one of them. 



    "Debt Issuance"  means the issuance of any Indebtedness for borrowed money by the Borrower or any of its Subsidiaries. 


     "Default"  means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default. 


     "Disclosed Matters"  means the actions, suits and proceedings and the environmental matters disclosed in Schedule 3.06. 



    "dollars" or "$"  refers to lawful money of the United States of America. 


     "Effective Date"  shall mean the date upon which the conditions in Section 4.2 shall have been satisfied and the initial Loans shall have
been made by the Lenders. 


     "Environmental Laws"  means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or
threatened release of any Hazardous Material. 


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


     "Equity Issuance"  means any issuance by the Borrower or any of its Subsidiaries to any Person of (a) shares of its Capital Stock other
than (i) any shares of its Capital Stock pursuant to the exercise of options or warrants, (ii) any shares of its Capital Stock pursuant to the conversion of any debt securities to equity
and (iii) in the case of Subsidiaries, any shares of its Capital Stock issued to the Borrower or any of its Subsidiaries or (b) any options or warrants relating to its Capital Stock. The
term "Equity Issuance" shall not include (i) any Debt Issuance or (ii) the issuance of Capital Stock of the Borrower to its officers, directors or employees. 


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


     "ERISA Affiliate"  means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code. 


    "ERISA Event"  means (a) any "reportable event", as defined in Section 4043 of ERISA or the regulations issued thereunder with
respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the existence with respect to any Plan of an "accumulated funding deficiency" (as defined
in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an 



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application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA
with respect to the termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any
Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial
withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA
Affiliate of any notice, concerning the
imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA. 


     "Eurodollar",  when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the LIBO Rate. 


     "Event of Default"  has the meaning assigned to such term in Article VII. 



    "Excluded Taxes"  means, with respect to the Administrative Agent, any Lender or any other recipient of any payment to be made by or on account
of any obligation of the Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) its net income by the United States of America, or by the jurisdiction under the laws of
which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits taxes
imposed by the United States of America or any similar tax imposed by any other jurisdiction in which any Lender is located and (c) in the case of a Foreign Lender (other than an assignee
pursuant to a request by the Borrower under Section 2.16(b)), any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to
this Credit Agreement or is attributable to such Foreign Lender's failure or inability to comply with Section 2.14(e), except to the extent that such Foreign Lender's assignor (if any) was
entitled, at the time of assignment, to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 2.14(a). 


     "Federal Funds Effective Rate"  means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates
on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of
New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it. 


     "Financial Officer"  means the chief financial officer, principal accounting officer, senior vice president of finance, treasurer or controller
of the Borrower or any officer having substantially the same position for the Borrower. 


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


     "GAAP"  means generally accepted accounting principles in the United States of America. 


     "Governmental Authority"  means the government of the United States of America, any other nation or any political subdivision thereof, whether
state or local, and any agency, authority, 



6





 


instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to
government. 


     "Guarantee"  of or by any Person (the "guarantor") means any obligation, contingent or
otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity
capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account
party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided, that the term Guarantee
shall not include endorsements for collection or deposit in the ordinary course of business. 


     "Guarantor"  means each of the Persons identified as a "Guarantor" on the signature pages hereto and each Person which may hereafter execute a
Joinder Agreement pursuant to Section 5.10, together with their successors and permitted assigns, and "Guarantor" means any one of them. 



    "Guaranty"  shall mean the guaranty of the Guarantors set forth in Article X. 


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



    "Hedging Agreement"  means any interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement. 


     "Indebtedness"  of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to
similar cash advances (but excluding any premiums, fees and deposits received in the ordinary course of business), (b) all obligations of such Person evidenced by bonds, debentures, notes or
similar instruments, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (d) all obligations of
such Person in respect of the deferred purchase price of property or services (excluding current accounts payable or other like obligations incurred in the ordinary course of business), (e) all
Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person,
whether or not the Indebtedness secured thereby has been assumed, (f) all Guarantees by such Person of Indebtedness of others, (g) all Capital Lease Obligations of such Person,
(h) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty and (i) all obligations, contingent or otherwise,
of such Person in respect of bankers' acceptances. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such Person's ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness
provide that such Person is not liable therefor. Notwithstanding the 



7





 


foregoing, Indebtedness shall exclude Indebtedness of the Borrower to any Subsidiary and of any Subsidiary to the Borrower or any other Subsidiary. 


     "Indemnified Taxes"  means Taxes other than Excluded Taxes. 



    "Index Debt"  means senior, unsecured, long-term indebtedness for borrowed money of the Borrower that is not guaranteed by any other
Person or subject to any other credit enhancement. 


     "Interest Election Request"  means a request by the Borrower to convert or continue a Borrowing in accordance with Section 2.05. 


     "Interest Payment Date"  means (a) with respect to any ABR Loan, the last day of each March, June, September and December, and
(b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest
Period of more than three months' duration, each day prior to the last day of such Interest Period that occurs at intervals of three months' duration after the first day of such Interest Period. 


     "Interest Period"  means with respect to any Eurodollar Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or six months thereafter, as the Borrower may elect; provided, that
(i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day
would fall in the next calendar month, in which case such Interest Period shall end on the immediately preceding Business Day and (ii) any Interest Period that commences on the last Business
Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period. 


     "Lenders"  means the Persons listed on Schedule 2.01 and any other Person that shall have become a party hereto pursuant to an Assignment
and Acceptance, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Acceptance. 



    "LIBO Rate"  means, with respect to any Eurodollar Borrowing for any Interest Period, the rate appearing on Page 3750 of Telerate (or on any
successor or substitute page of such Service, or any successor to or substitute for such Service, providing rate quotations comparable to those currently provided on such page of such Service, as
determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period. In the event
that such rate is not available at such time for any reason, then the "LIBO Rate" with respect to such Eurodollar Borrowing for such Interest Period
shall be the rate at which dollar deposits of $5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately
available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period. 


     "Lien"  means, with respect to any asset (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having
substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with
respect to such securities. 



8





 

     "Loans"  means the loans made by the Lenders to the Borrower pursuant to this Credit Agreement. 


     "Material Adverse Effect"  means a material adverse effect on (a) the business, property, operations or financial condition of the
Borrower and the Subsidiaries taken as a whole, (b) the ability of the Borrower to perform any of its obligations under this Credit Agreement or (c) the legal rights of or benefits
available to the Lenders under this Credit Agreement. 


     "Material Indebtedness"  means Indebtedness (other than the Loans), or obligations in respect of one or more Hedging Agreements, of any one or
more of the Borrower and its Subsidiaries in an aggregate principal amount exceeding $50,000,000. For purposes of determining Material Indebtedness, the "principal amount" of the obligations of the
Borrower or any Subsidiary in respect of any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or such Subsidiary would be
required to pay if such Hedging Agreement were terminated at such time. 


     "Maturity Date"  means February 27, 2002. 


     "Moody's"  means Moody's Investors Service, Inc. 


     "Multiemployer Plan"  means a multiemployer plan as defined in Section 4001(a)(3) of ERISA. 



    "Net Cash Proceeds"  means the aggregate proceeds paid in cash or Cash Equivalents received by the Borrower or any of its Subsidiaries in
respect of any Equity Issuance or Debt Issuance, net of (a) direct costs (including, without limitation, legal, accounting and investment banking fees, and sales commissions) and
(b) taxes paid or payable as a result thereof; it being understood that "Net Cash Proceeds" shall include, without limitation, any cash or Cash Equivalents received upon the sale or other
disposition of any non-cash consideration received by the Borrower or any Subsidiary of the Borrower in any Equity Issuance or Debt Issuance. 


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


     "PBGC"  means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions. 


     "Permitted Encumbrances"  means: 


    (a) Liens
imposed by law for taxes that are not yet due or are being contested in compliance with Section 5.04; 



    (b) carriers',
warehousemen's, mechanics', materialmen's, repairmen's and other like Liens imposed by law, arising in the ordinary course of business and securing
obligations that are not overdue by more than 30 days or are being contested in compliance with Section 5.04; 


    (c) pledges
and deposits made in the ordinary course of business in compliance with workers' compensation, unemployment insurance and other social security laws or
regulations; 


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



9





 


    (e) Liens arising out of judgments or awards so long as an appeal or proceeding for review is being prosecuted in good faith and for the payment of which adequate
reserves, bonds or other security reasonably acceptable to the Administrative Agent have been provided or are fully covered by insurance; and 



    (f)  easements,
zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of
business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Borrower or any
Subsidiary; 


provided that the term "Permitted Encumbrances" shall not include any Lien securing Indebtedness. 


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


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


     "Prime Rate"  means the rate of interest per annum publicly announced from time to time by Bank of America as its prime rate in effect at its
principal office in Charlotte, North Carolina; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective. 


     "Property"  means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible. 


     "Register"  has the meaning set forth in Section 9.04(c). 


     "Related Parties"  means, with respect to any specified Person, such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates. 


    "Required Lenders"  means, at any time, Lenders having Loans and unused Commitments representing more than 50% of the sum of the total Loans and
unused Commitments at such time. 


     "Restricted Payment"  means (i) any dividend or other distribution, direct or indirect, on account of any shares of any class of capital
stock of the Borrower or any of its Subsidiaries, now or hereafter outstanding, (ii) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct
or indirect, of any shares of any class of capital stock of the Borrower or any of its Subsidiaries, now or hereafter outstanding, and (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire shares of any class of capital stock of the Borrower or any of its Subsidiaries, now or hereafter outstanding. 


     "SEC"  means the United States Securities and Exchange Commission. 


     "S&P"  means Standard & Poor's Ratings Services. 


     "Significant Subsidiary"  means, at any particular time, any Subsidiary of the Borrower (or such Subsidiary and its Subsidiaries taken together)
that would be a "significant subsidiary" of the Borrower within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC. 



10







  




     "Statutory Reserve Rate"  means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is
the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which the
Administrative Agent or any Lender is subject for eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of the Board). Such reserve percentages shall include
those imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve percentage. 


     "subsidiary"  means, with respect to any Person (the "parent") at any date, any corporation,
limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which
securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general
partnership interests are, as of such date, owned, Controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent. 


    "Subsidiary"  means any subsidiary of the Borrower. 


     "Taxes"  means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority. 


     "Transactions"  means the execution, delivery and performance by the Borrower of this Credit Agreement, the borrowing of Loans and the use of
the proceeds thereof. 


    "Type",  when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the LIBO Rate or the Alternate Base Rate. 


     "Used Commitment"  means on any day the aggregate outstanding principal amount of Loans. 


     "Withdrawal Liability"  means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA. 




    Section 1.02  Classification of Loans and Borrowings.


    For
purposes of this Credit Agreement, Loans may be classified and referred to by Type (e.g., a "Eurodollar Loan"). Borrowings also may
be classified and referred to by Type (e.g., a "Eurodollar Borrowing"). 


    Section 1.03  Terms Generally.



    The
definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation". The word "will" shall be
construed to have the same meaning and effect as the word "shall". Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein
shall be construed as referring to 


11





 


such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth
herein), (b) any reference herein to any Person shall be construed to include such Person's successors and assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Credit Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules
shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Credit Agreement and (e) the words "asset" and "property" shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights. 


    Section 1.04  Accounting Terms; GAAP.


    Except
as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time;  provided that, if the Borrower notifies
the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect
of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders
request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in
accordance herewith. 


 
 

ARTICLE II
  
    The Credits    
  


    Section 2.01  Commitments.



    Subject
to the terms and conditions set forth herein, each Lender agrees to make Loans to the Borrower from time to time during the Availability Period in an aggregate principal
amount that will not result in (a) the aggregate principal amount of such Lender's Loans exceeding such Lender's Commitment or (b) the aggregate principal amount of Loans exceeding the
total Commitments. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Loans. 


    Section 2.02  Loans and Borrowings.



    (a) Each
Loan shall be made as part of a Borrowing consisting of Loans made by the Lenders ratably in accordance with their respective Commitments. The failure of any
Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments of the
Lenders are several and no Lender shall be responsible for any other Lender's failure to make Loans as required. 


    (b) Subject
to Section 2.11, (i) each Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request in accordance
herewith. Each Lender at its option may make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option
shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Credit Agreement. 


    (c) At
the commencement of each Interest Period for any Eurodollar Borrowing or ABR Borrowing, such Borrowing shall be in a minimum aggregate amount of $5,000,000 and
integral multiples of $500,000 in excess thereof; provided that an ABR Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the total Commitments. Borrowings of more 



12





 


than one Type may be outstanding at the same time; provided that there shall not at any time be more than an aggregate total of ten Eurodollar
Borrowings outstanding. 


    (d) Notwithstanding
any other provision of this Credit Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, any Borrowing if
the Interest Period requested with respect thereto would end after the Maturity Date. 




    Section 2.03  Requests for Borrowings.


    To
request a Borrowing, the Borrower shall notify the Administrative Agent of such request by telephone (a) in the case of a Eurodollar Borrowing, not later than 12:00 noon
(Charlotte, North Carolina time), two Business Days before the date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 12:00 noon (Charlotte, North Carolina time),
on the date of the proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written
Borrowing Request in a form approved by the Administrative Agent and signed by the Borrower. Each such telephonic and written Borrowing Request shall specify the following information in compliance
with Section 2.02: 




     (i) the
aggregate amount of the requested Borrowing; 


    (ii) the
date of such Borrowing, which shall be a Business Day; 


    (iii) whether
such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; 


    (iv) in
the case of a Eurodollar Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term
"Interest Period"; and 


    (v) the
location and number of the Borrower's account to which funds are to be disbursed, which shall comply with the requirements of Section 2.04. 





    If
no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to any requested
Eurodollar Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month's duration. Promptly following receipt of a Borrowing Request in accordance with this Section,
the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender's Loan to be made as part of the requested Borrowing. 


    Section 2.04  Funding of Borrowings.



    (a) Each
Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 2:00 p.m.
(Charlotte, North Carolina time), to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders. The Administrative Agent will make such Loans
available to the Borrower by promptly crediting the amounts so received, in like funds, to an account of the Borrower maintained with the Administrative Agent in Charlotte, North Carolina and
designated by the Borrower in the applicable Borrowing Request. 


    (b) Unless
the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the
Administrative Agent such Lender's share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of
this Section and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing
available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding 



13





 


amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in
the case of such Lender, the Federal Funds Effective Rate or (ii) in the case of the Borrower, the interest rate applicable to ABR Loans. If such Lender pays such amount to the Administrative
Agent, then such amount shall constitute such Lender's Loan included in such Borrowing. 




    Section 2.05  Interest Elections.



    (a) Each
Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an initial
Interest Period as specified in such Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a Eurodollar
Borrowing, may elect Interest Periods therefore, all as provided in this Section. The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case
each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing. 


    (b) To
make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of such election by telephone by the time that a Borrowing Request
would be required under Section 2.03 if the Borrower were requesting a Borrowing of the Type resulting from such election to be made on the effective date of such election. Each such telephonic
Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Interest Election Request in a form approved by the
Administrative Agent and signed by the Borrower. 


    (c) Each
telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.02: 



    (i)  the
Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions
thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting
Borrowing); 


    (ii) the
effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day; 


    (iii) whether
the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and 


    (iv) if
the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period
contemplated by the definition of the term "Interest Period." 




If
any such Interest Election Request requests a Eurodollar Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one month's
duration. 


    (d) Promptly
following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender's portion of
each resulting Borrowing. 


    (e) If
the Borrower fails to deliver a timely Interest Election Request with respect to a Eurodollar Borrowing prior to the end of the Interest Period applicable
thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be continued as a Eurodollar Borrowing with an Interest Period of one month's
duration. 



14





 


Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower,
then, so long as an Event of Default is continuing (i) no outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar
Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto. 




    Section 2.06  Termination and Reduction of Commitments.



    (a) Unless
previously terminated, the Commitments shall terminate on the Maturity Date. 


    (b) The
Borrower may at any time terminate, or from time to time reduce, the Commitments in whole or in part; provided
that (i) each reduction of the Commitments shall be in an aggregate amount not less than $50,000,000 and integral multiples of $10,000,000 in excess thereof and (ii) the Borrower shall
not terminate or reduce the Commitments if, after giving effect to any concurrent prepayment of the Loans in accordance with Section 2.08, the aggregate principal amount of outstanding Loans
would exceed the total Commitments. 


    (c) The
Borrower shall notify the Administrative Agent of any election to terminate or reduce the Commitments under paragraph (b) of this Section at least three
Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this Section shall be irrevocable; provided that a
notice of termination of the Commitments delivered by the Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked
by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Any termination or reduction of the Commitments shall be
permanent. Each reduction of the Commitments shall be made ratably among the Lenders in accordance with their respective Commitments. 




    Section 2.07  Repayment of Loans; Evidence of Debt.



    (a) The
Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Loan and all
interest, fees and other amounts payable hereunder on the Maturity Date. 


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


    (c) The
Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Type thereof and the Interest
Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of
any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender's share thereof. 


    (d) The
entries made in the accounts maintained pursuant to paragraph (b) or (c) of this Section shall be prima facie  evidence of the existence and amounts of the obligations recorded therein;
provided that the failure of any Lender or the
Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of this Credit
Agreement. 



    (e) Any
Lender may request that Loans made by it be evidenced by a promissory note. In such event, the Borrower shall prepare, execute and deliver to such Lender a
promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its 



15





 


registered assigns) and in a form approved by the Administrative Agent and the Borrower. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including
after assignment pursuant to Section 9.04) be represented by one or more promissory notes in such form payable to the order of the payee named therein (or, if such promissory note is a
registered note, to such payee and its registered assigns). 




    Section 2.08  Prepayment of Loans.


    (a)  Voluntary Prepayments.  (i) The Borrower shall have the right at any time and from time to
time to prepay any Borrowing in whole or in part, without premium or penalty, subject to Section 2.13 and subject to prior notice in accordance with paragraph (a)(ii) of this
Section. The Borrower shall notify the Administrative Agent by telephone (confirmed by telecopy) of any prepayment hereunder (A) in the case of prepayment of a Eurodollar Borrowing, not later
than 11:00 a.m. (Charlotte, North Carolina time), two Business Days before the date of prepayment, or (B) in the case of prepayment of an ABR Borrowing, not later than 11:00 a.m.
(Charlotte, North Carolina time), one Business Day before the date of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing
or portion thereof to be prepaid; provided that, if a notice of prepayment is given in connection with a conditional notice of termination of the
Commitments as contemplated by Section 2.06, then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.06. Promptly following
receipt of any such notice relating to a Borrowing, the Administrative Agent shall advise the Lenders of the contents thereof. Each partial prepayment of any Borrowing shall be in an amount that would
be permitted in the case of an advance of a Borrowing of the same Type as provided in Section 2.02. Each prepayment of a Borrowing shall be applied ratably to the Loans included in the prepaid
Borrowing. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.10. 


    (b)  Mandatory Prepayments.  



    (i)  Commitment.  If at any time, the aggregate outstanding amount of the Loans shall exceed the
aggregate Commitment, the Borrower immediately shall prepay the Loans, in an amount sufficient to eliminate such excess. 


    (ii)  Debt Issuances.  Immediately upon receipt by the Borrower or any of its Subsidiaries of proceeds
from any Debt Issuance, the Borrower shall prepay the Loans in an aggregate amount equal to 100% of the Net Cash Proceeds of such Debt Issuance (such prepayment to be applied as set forth in
clause (iv) below). 


    (iii)  Equity Issuances.  Immediately upon receipt by the Borrower or any of its Subsidiaries of proceeds
from any Equity Issuance, the Borrower shall prepay the Loans in an aggregate amount equal to 100% of the Net Cash Proceeds of such Equity Issuance (such prepayment to be applied as set forth in
clause (iv) below). 


    (iv)  Application of Mandatory Prepayments.  All amounts required to be paid pursuant to this
Section 2.08(b) shall be applied as follows: (A) with respect to all amounts prepaid pursuant to Section 2.08(b)(i), to the Loans (with no corresponding reduction in the
Commitment) and (B) with respect to all amounts prepaid pursuant to Section 2.08(b)(ii) or (iii) to the Loans (with a corresponding reduction in the Commitment in an amount
equal to all amounts applied to the Loans pursuant to this clause (B)). Within the parameters of the applications set forth above, prepayments shall be applied first to ABR Loans and then to
Eurodollar Loans in direct order of Interest Period maturities. Each prepayment of a Borrowing pursuant to this Section 2.08(b) shall be applied ratably to the Loans included in the prepaid
Borrowing. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.10. 


16





 

    Section 2.09  Fees.



    (a) The
Borrower agrees to pay to the Administrative Agent for the account of each Lender a facility fee, which shall accrue at the Applicable Rate on the daily amount
of the Commitment of such Lender (whether used or unused) during the period from and including the Closing Date to but excluding the date on which such Commitment terminates;  provided that, if such
Lender continues to have any outstanding Loans after its Commitment terminates, then such facility fee shall continue to accrue
on the daily aggregate principal amount of such Lender's outstanding Loans from and including the date on which its Commitment terminates to but excluding the date on which such Lender ceases to have
any outstanding Loans. Accrued facility fees shall be payable in arrears on the last day of March, June, September and December of each year and on the date on which the Commitments terminate,
commencing on the first such date to occur after the date hereof; provided that any facility fees accruing after the date on which the Commitments
terminate shall be payable on demand. All facility fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day
but excluding the last day). 


    (b) In
the event that on December 31, 2001, Bank of America holds 100% of the Commitments hereunder, the Borrower shall pay to Bank of America, for its own
account, a utilization fee calculated at the rate equal to 5 basis points on the Used Commitment as of such date, payable on the next Business Day. 


    (c) The
Borrower agrees to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times separately agreed upon between the
Borrower and the Administrative Agent. 



    (d) All
fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent for distribution, in the case of facility
fees, to the Lenders. Fees paid shall not be refundable under any circumstances. 




    Section 2.10  Interest.



    (a) The
Loans comprising each ABR Borrowing shall bear interest at a rate per annum equal to the Alternate Base Rate. 



    (b) The
Loans comprising each Eurodollar Borrowing shall bear interest at a rate per annum equal to the LIBO Rate for the Interest Period in effect for such Borrowing
plus .25%. 


    (c) Notwithstanding
the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by the Borrower hereunder is not paid when due
(following the expiration of any grace period specified in Article VII), whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as
before judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the rate otherwise applicable to such Loan as provided above or (ii) in the case
of any other amount, 2% plus the rate applicable to ABR Loans as provided above. 


    (d) Accrued
interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan; provided that
(i) interest accrued pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of
an ABR Loan prior to the end of the Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment, (iii) in the
event of any conversion of any Eurodollar Loan prior to the end of the current Interest Period therefore, accrued interest on such Loan shall be payable on the effective date of such conversion and
(iv) all accrued interest shall be payable upon termination of the Commitments. 



17







  



    (e) All
interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base Rate at times
when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the
actual number of days elapsed (including the first day but excluding the last day). The applicable Alternate Base Rate or LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error. 


    (f)  If
any Lender shall be required under the regulations of the Board to maintain reserves with respect to liabilities or assets consisting of, or including,
Eurocurrency Liabilities (as defined in Regulation D of the Board), the Borrower shall pay to the Administrative Agent for the account of such Lender, additional interest on the unpaid
principal amount of each Eurodollar Loan made to the Borrower by such Lender, from the date of such Loan until such Loan is paid in full, at an interest rate per annum equal at all times during the
Interest Period for such Eurodollar Loan to the remainder obtained by subtracting (i) the LIBO Rate for such Interest Period from (ii) the rate obtained by multiplying LIBO Rate as
referred to in clause (i) above by the Statutory Reserve Rate applicable to such Lender for such Interest Period. Such additional interest shall be determined by such Lender and notified to the
Borrower (with a copy to the Administrative Agent) not later than five Business Days before the next Interest Payment Date for such Eurodollar Loan, and such additional interest so notified to the
Borrower by any Lender shall be payable to the Administrative Agent for the account of such Lender on each Interest Payment Date for such Eurodollar Loan. 




    Section 2.11  Alternate Rate of Interest.




If
prior to the commencement of any Interest Period for a Eurodollar Borrowing: 




    (a) the
Administrative Agent reasonably determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for
ascertaining the LIBO Rate for such Interest Period; or 


    (b) the
Administrative Agent is advised by the Required Lenders that the LIBO Rate for such Interest Period will not, in their reasonable judgment, adequately and
fairly reflect the cost to such Lenders of making or maintaining their Loans included in such Borrowing for such Interest Period; 


then
the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent notifies the
Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Borrowing to, or continuation
of any Borrowing as, a Eurodollar shall be ineffective, and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing;  provided that if the
circumstances giving rise to such notice affect only one Type of Borrowings, then the other Type of Borrowings shall be permitted.
 




    Section 2.12  Increased Costs.



    (a) If
any Change in Law shall: 



    (i)  impose,
modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended
by, any Lender (other than any reserves included in the Statutory Reserve Rate); or 


    (ii) impose
on any Lender or the London interbank market any other condition affecting this Credit Agreement or Eurodollar Loans made by such Lender; 




18





 




and
the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Loan) or to reduce
the amount of any sum received or receivable by such Lender hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such Lender such additional amount or amounts as will
compensate such Lender for such additional costs incurred or reduction suffered. 


    (b) If
any Lender reasonably determines that any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on such
Lender's capital or on the capital of such Lender's holding company, if any, as a consequence of this Credit Agreement or the Loans made by such Lender, to a level below that which such Lender or such
Lender's holding company could have achieved but for such Change in Law (taking into consideration such Lender's policies and the policies of such Lender's holding company with respect to capital
adequacy), then from time to time the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender's holding company for any such reduction
suffered. 


    (c) A
certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in
paragraph (a) or (b) of this Section and the method of calculating such amounts, in reasonable detail, shall be delivered to the Borrower and shall be conclusive absent manifest error.
The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof. 


    (d) Failure
or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender's right to demand such
compensation; provided that the Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs or reductions
incurred more than six months prior to the date that such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender's intention to claim
compensation therefore; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the
six-month period referred to above shall be extended to include the period of retroactive effect thereof. 




    Section 2.13  Break Funding Payments.



    In
the event of (a) the payment of any principal of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event
of Default), (b) the conversion of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any
Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice is permitted to be revocable under Section 2.08(a) if such notice is revoked in accordance
herewith two Business Days or less before the specified effective date), (d) the assignment of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a
result of a request by the Borrower pursuant to Section 2.16, then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense (but not loss of profit)
attributable to such event. In the case of a Eurodollar Loan, the loss to any Lender attributable to any such event shall be deemed to include an amount reasonably determined by such Lender to be
equal to the excess, if any, of (i) the amount of interest that such Lender would pay for a deposit equal to the principal amount of such Loan for the period from the date of such payment,
conversion, failure or assignment to the last day of the then current Interest Period for such Loan (or, in the case of a failure to borrow, convert or continue, the duration of the Interest Period
that would have resulted from such borrowing, conversion or continuation) if the interest rate payable on such deposit were equal to the LIBO Rate for such Interest Period, over (ii) the amount
of interest that such Lender would earn on such principal amount for such period if such Lender were to invest such principal amount for such period at the interest rate that would be bid by such
Lender (or an affiliate 


19





 


of such Lender) for dollar deposits from other banks in the eurodollar market at the commencement of such period. A certificate of any Lender setting forth any amount or amounts that such Lender is
entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive
absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof. 


    Section 2.14  Taxes.



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


    (b) In
addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law. 


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


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


    (e) Each
Foreign Lender, on or prior to the date of its execution and delivery of this Credit Agreement or on the date of the Assignment and Acceptance pursuant to
which it becomes a Lender, as applicable, shall provide the Borrower with any form or certificate that is required by any taxing authority (including, if applicable, two original Internal Revenue
Service Forms W-9, W-8BEN or W-8ECI, as appropriate, or any successor or other form prescribed by the Internal Revenue Service), certifying that such Lender is
exempt from or entitled to a reduced rate of withholding taxes on
payments pursuant to this Credit Agreement. Thereafter, each such Lender shall provide additional forms or certificates (i) to the extent a form or certificate previously provided has been
inaccurate, invalid or otherwise ceases to be effective or (ii) as requested in writing by the Borrower. If any Foreign Lender fails to comply with the provisions of this Section, the Borrower,
may, as required by law, deduct and withhold federal income tax payments from payments to such Lender under this Credit Agreement. 


    (f)  Any
Lender claiming any additional amounts payable pursuant to this Section 2.14 agrees to use reasonable efforts (consistent with its internal policy and
legal and regulatory restrictions) to select or change the jurisdiction of its applicable lending office if the making of such a selection or change would avoid the need for, or reduce the amount of,
any such additional amounts that may 



20





 


thereafter accrue and would not, in the reasonable judgment of such Lender, be otherwise economically disadvantageous to such Lender. 


    (g) If
any Lender or the Administrative Agent, as the case may be, obtains a refund or any Tax for which payment has been made pursuant to this Section 2.14,
which refund in the good faith judgment of such Lender or the Administrative Agent, as the case may be, (and without any obligation to disclose its tax records) is allocable to such payment made under
this Section 2.14, the amount of such refund (together with any interest received thereon and reduced by reasonable costs incurred in obtaining such refund) promptly shall be paid to the
Borrower to the extent payment has been made in full by the Borrower pursuant to this Section 2.14.] 




    Section 2.15  Payments Generally; Pro Rata Treatment; Sharing of Set-offs.



    (a) The
Borrower shall make each payment required to be made by it hereunder (whether of principal, interest or fees under Section 2.12, 2.13 or 2.14, or
otherwise) prior to 12:00 noon(Charlotte, North Carolina time), on the date when due, in immediately available funds, without set-off or counterclaim. Any amounts received after such time
on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 100 North Tryon, Charlotte, North Carolina except that payments pursuant to Sections 2.12, 2.13, 2.14 and 9.03 shall be made directly to the
Persons entitled thereto. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt
thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such extension. All payments hereunder shall be made in dollars. 


    (b) If
at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, interest and fees then due
hereunder, such funds shall be applied (i) first, to pay interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (ii) second, to pay principal then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal then due to such parties. 



    (c) If
any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any
of its Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and accrued interest thereon than the proportion received by any other Lender, then
the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans of other Lenders to the extent necessary so that the benefit of all such payments shall
be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans; provided that
(i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to
the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with
the express terms of this Credit Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant,
other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply). The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of 



21





 


set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation. 


    (d) Unless
the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the
account of the Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the Lenders the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such Lender with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the
date of payment to the Administrative Agent, at the Federal Funds Effective Rate. 


    (e) If
any Lender shall fail to make any payment required to be made by it pursuant to Section 2.04(b) or 2.15(d), then the Administrative Agent may, in its
discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such
Lender to satisfy such Lender's obligations under such Sections until all such unsatisfied obligations are fully paid. 




    Section 2.16  Mitigation Obligations; Replacement of Lenders.



    (a) If
any Lender requests compensation under Section 2.12, or if the Borrower is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.14, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 2.12 or 2.14, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and
would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment. 


    (b) If
any Lender requests compensation under Section 2.12, or if the Borrower is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.14, or if any Lender defaults in its obligation to fund Loans hereunder, then the Borrower may, at its sole expense and effort,
upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Credit Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts
such assignment); provided that (i) the Borrower shall have received the prior written consent of the Administrative Agent, which consent shall
not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and (iii) in
the case of any such assignment resulting from a claim for compensation under Section 2.12 or payments required to be made pursuant to Section 2.14, such assignment will result in a
reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation cease to apply. 



22






  



 
 

ARTICLE III
  
    Representations and Warranties    
  


    The Borrower represents and warrants to the Lenders that: 


    Section 3.01  Organization; Powers.


    Each
of the Borrower and its Subsidiaries is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect,
is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required. 


    Section 3.02  Authorization; Enforceability.


    The
Transactions are within the Borrower's corporate powers and have been duly authorized by all necessary corporate and, if required, shareholder action. This Credit Agreement has
been duly executed and delivered by the Borrower and constitutes a legal, valid and binding obligation of the Borrower, enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at
law. 


    Section 3.03  Governmental Approvals; No Conflicts.


    The
Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as have been
obtained or made and are in full force and effect, (b) will not violate any applicable law or regulation or the charter, by-laws or other organizational documents of the Borrower or
any of its Subsidiaries or any order of any Governmental Authority, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon the Borrower or
any of its Subsidiaries or its assets, or give rise to a right thereunder to require any payment to be made by the Borrower or any of its Subsidiaries, and (d) will not result in the creation
or imposition of any Lien on any asset of the Borrower or any of its Subsidiaries. 


    Section 3.04  Financial Condition; No Material Adverse Change.



    (a) The
Borrower has heretofore furnished to the Lenders (i) its consolidated balance sheet and statements of operations, shareholders' equity and cash flows as
of and for the fiscal year ended April 27, 2001, reported on by PricewaterhouseCoopers LLP, independent public accountants, and (ii) its
consolidated balance sheet and statements of operations and cash flows as of and for the fiscal quarter ended June 30, 2001, signed by its chief financial officer. Such financial statements
present fairly, in all material respects, the financial position and results of operations and cash flows of the Borrower and its consolidated Subsidiaries as of such dates and for such periods in
accordance with GAAP, subject to year-end audit adjustments and the absence of footnotes in the case of the statements referred to in clause (ii) above. 



    (b) Since
April 27, 2001, there has been no material adverse change in the business, assets, operations, or financial condition of the Borrower and its
Subsidiaries, taken as a whole, other than as disclosed in the Borrower's quarterly report on Form 10-Q for its fiscal quarter ending on June 30, 2001 as filed with the SEC
prior to the date hereof. 




    Section 3.05  Properties.



    (a) Each
of the Borrower and its Subsidiaries has good title to, or valid leasehold interests in, all its real and personal property material to its business, except
for minor defects in title that do 



23





 


not interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes. 


    (b) Each
of the Borrower and its Subsidiaries owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual property material to
its business, and the use thereof by the Borrower and its Subsidiaries does not infringe upon the rights of any other Person, except for any such infringements that, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect. 




    Section 3.06  Litigation and Environmental Matters.



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


    (b) Except
for the Disclosed Matters or except with respect to any other matters that, individually or in the aggregate, could not reasonably be expected to result in a
Material Adverse Effect, neither the Borrower nor any of its Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other
approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim with respect to any Environmental Liability
or (iv) knows of any basis for any Environmental Liability. 


    (c) Since
the date of this Credit Agreement, there has been no change in the status of the Disclosed Matters that, individually or in the aggregate, has resulted in, or
could reasonably be expected to result in a Material Adverse Effect. 




    Section 3.07  Compliance with Laws and Agreements.



    Each
of the Borrower and its Subsidiaries is in compliance with all laws, regulations and orders of any Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse
Effect. No Default has occurred and is continuing. 


    Section 3.08  Investment and Holding Company Status.


    Neither
the Borrower nor any of its Subsidiaries is (a) an "investment company" as defined in, or subject to regulation under, the Investment Company Act of 1940 or
(b) a "holding company" as defined in, or subject to regulation under, the Public Utility Holding Company Act of 1935. 


    Section 3.09  Taxes.


    Each
of the Borrower and its Subsidiaries has timely filed or caused to be filed all Tax returns and reports required to have been filed (taking into account any extensions granted by
the applicable taxing authority) and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings
and for which the Borrower or such Subsidiary, as applicable, has set aside on its books adequate reserves or (b) to the extent that the failure to do so could not reasonably be expected to
result in a Material Adverse Effect. 


    Section 3.10  ERISA.


    No
ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could
reasonably be 


24





 


expected to result in a Material Adverse Effect. The present value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of Statement of Financial
Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed by more than $25,000,000 the fair market value of the assets of such
Plan, and the present value of all accumulated benefit obligations of all underfunded Plans (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87)
did not, as of the date of the most recent financial statements reflecting such amounts, exceed by more than $25,000,000 the fair market value of the assets of all such underfunded Plans. 


    Section 3.11  Disclosure.


    The
Borrower has disclosed (which disclosure includes all filings by the Borrower pursuant to the Securities Exchange Act of 1934) to the Lenders all agreements, instruments and
corporate or other restrictions to which it or any of its Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in
a Material Adverse Effect. None of the reports, financial statements, certificates or other information furnished in writing by or on behalf of the Borrower to the Administrative Agent or any Lender
for use specifically in connection with the negotiation of this Credit Agreement or delivered hereunder (as modified or supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;  provided that, with
respect to projected financial information, the Borrower represents only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time. 


    Section 3.12  Federal Regulations.



    No
part of the proceeds of any Loans will be used in any transaction or for any purpose which violates the provisions of Regulation T, U or X of the Board of Governors of the
Federal Reserve System, as now and from time to time hereafter in effect. If requested by any Lender or the Administrative Agent, the Borrower will furnish to the Administrative Agent and each Lender
a statement to the foregoing effect in conformity with the requirements of Form FR U-1 referred to in said Regulation U. 


    Section 3.13  Purpose of Loans.



    The
proceeds of the Loans shall be used to finance (i) the Acquisition pursuant to the Acquisition Documents and (ii) any lawful general corporate purpose and working
capital. 


    Section 3.14  Subsidiaries and Significant Subsidiaries.


    Set
forth on Schedule 3.14 is a complete and accurate list of all Subsidiaries and all Significant Subsidiaries as of the
Closing Date. 


 
 

ARTICLE IV
  
    Conditions    
  


    Section 4.01  Closing Conditions.


    This
Credit Agreement shall become effective on the date on which each of the following conditions is satisfied (or waived in accordance with Section 9.02): 



    (a) The
Administrative Agent (or its counsel) shall have received from each party hereto either (i) a counterpart of this Credit Agreement signed on behalf of
such party or (ii) written evidence satisfactory to the Administrative Agent (which may include telecopy transmission of a signed signature page of this Credit Agreement) that such party has
signed a counterpart of this Credit Agreement. 



25





 


    (b) The Administrative Agent shall have received such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the
organization, existence and good standing of the Borrower and each of the Guarantors, the authorization of the Transactions and any other legal matters relating to the Borrower, the Guarantors, this
Agreement or the Transactions, all in form and substance satisfactory to the Administrative Agent and its counsel. 




    The
Administrative Agent shall notify the Borrower and the Lenders of the Closing Date, and such notice shall be conclusive and binding. 


    Section 4.02  Conditions to Initial Loan.



    The
obligation of each Lender to make the initial Loan are subject to satisfaction of each of the following conditions (in addition to satisfaction of each of the conditions set forth
in Section 4.01 as of the Closing Date): 



    (a) The
Administrative Agent shall have received a favorable written opinion or opinions (addressed to the Administrative Agent and the Lenders and dated the Effective
Date) of special counsel for the Borrower and the Guarantors and covering such other matters relating to the Borrower, the Guarantors, this Credit Agreement or the Transactions as the Required Lenders
shall reasonably request. The Borrower hereby requests such counsel to deliver such opinion. 


    (b) The
Acquisition Documents shall have been, or shall be simultaneously with the incurrence of the Loans, completed to the satisfaction of the Administrative Agent
and the Acquisition and related transactions shall have been consummated substantially in accordance with the terms of the Acquisition Documents. The Acquisition Documents shall not have been altered,
amended or otherwise modified or supplemented or any material condition thereof waived without the prior written consent of the Administrative Agent. The Administrative Agent shall have received a
copy, certified by an officer of the Borrower as true and complete, of each Acquisition Document as originally executed and delivered, together with all exhibits and schedules thereto. 



    (c) The
Administrative Agent shall have received a certificate, dated the Effective Date and signed by the President, a Vice President or a Financial Officer of the
Borrower, confirming compliance with the conditions set forth in paragraphs (a) and (b) of Section 4.03. 


    (d) The
Administrative Agent shall have received all fees and other amounts due and payable on or prior to the Effective Date, and, to the extent invoiced, the
reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. 




    Section 4.03  Each Credit Event.



    The
obligation of each Lender to make a Loan on the occasion of any Borrowing is subject to the satisfaction of the following conditions (in additional to satisfaction of each of the
conditions set forth in Section 4.01 as of the Closing Date and satisfaction of each of the conditions set forth in Section 4.02 as of the Effective Date): 



    (a) The
representations and warranties of the Borrower set forth in this Credit Agreement shall be true and correct on and as of the date of such Borrowing. 


    (b) At
the time of and immediately after giving effect to such Borrowing, no Default shall have occurred and be continuing. 




    Each
Borrowing shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in paragraphs (a) and (b) of
this Section. 


26





 
 
 

ARTICLE V
  
    Affirmative Covenants    
  



    Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in
full, the Borrower covenants and agrees with the Lenders that: 


    Section 5.01  Financial Statements and Other Information.


    The
Borrower will furnish to the Administrative Agent (with copies for each Lender): 



    (a) within
55 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower (including the fiscal quarter ending on
September 30, 2001), its consolidated balance sheet and related statements of operations and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal
year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all
certified by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes (the Lenders agree that the Borrower's
obligations under this paragraph (b) will be satisfied in respect of any fiscal quarter by delivering to the Administrative Agent, with copies for each Lender, within 55 days after the
end of such fiscal quarter of its quarterly report for such fiscal quarter on Form 10-Q as filed with the SEC); 


    (b) concurrently
with any delivery of financial statements under clause (a) or (b) above, a certificate of a Financial Officer of the Borrower
(i) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto,
(ii) setting forth reasonably detailed calculations demonstrating compliance with Section 6.01 and (iii) stating whether any change in GAAP or in the application thereof has
occurred since the date of the audited financial statements referred to in Section 3.04 and, if any such change has occurred, specifying the effect of such change on the financial statements
accompanying such certificate; 


    (c) concurrently
with any delivery of financial statements under clause (a) above, a certificate of the accounting firm that reported on such financial
statements stating whether they obtained knowledge during the course of their examination of such financial statements of any Default (which certificate may be limited to the extent required by
accounting rules or guidelines); 


    (d) promptly
after the same become publicly available or upon transmission or receipt thereof, copies of all periodic and other reports, proxy statements and other
materials filed by the Borrower or any Subsidiary with the SEC, or any Governmental Authority succeeding to any or all of the functions of said Commission, or with any national securities exchange, or
distributed by the Borrower to its shareholders generally, as the case may be, provided that, with respect to materials filed with any national
securities exchange, only material filings shall be required to be delivered pursuant to this clause (e); and 


    (e) promptly
following any request therefor, such other information regarding the operations, business affairs and financial condition of the Borrower or any
Subsidiary, or compliance with the terms of this Credit Agreement, as the Administrative Agent or any Lender (acting through the Administrative Agent) may reasonably request. 



27





 

    Section 5.02  Notices of Material Events.



    The
Borrower will furnish to the Administrative Agent and each Lender prompt written notice of, but in any event not later than five Business Days after, the following: 



    (a) the
occurrence of any Default; 


    (b) the
filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting the Borrower or any
Affiliate thereof that, if adversely determined, could reasonably be expected to result in a Material Adverse Effect; 


    (c) the
occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the
Borrower and its Subsidiaries in an aggregate amount exceeding $25,000,000; 


    (d) the
non-compliance or potential non-compliance with any contractual obligation or requirement of law that is not currently being contested
in good faith by appropriate proceedings if all such non-compliance in the aggregate could reasonably be expected to have a Material Adverse Effect; 


    (e) the
revocation of any license, permit, authorization, certificate, qualification or accreditation of the Borrower or any Subsidiary by any Governmental Authority if
all such revocations in the aggregate could reasonably be expected to have a Material Adverse Effect; and 


    (f)  any
other development that results in, or could reasonably be expected to result in, a Material Adverse Effect. 




    Each
notice delivered under this Section shall be accompanied by a statement of a Financial Officer or other executive officer of the Borrower setting forth the details of the event
or development requiring such notice and any action taken or proposed to be taken with respect thereto. 


    Section 5.03  Existence; Conduct of Business.



    The
Borrower will, and will cause each of its Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and
the rights, licenses, permits, privileges and franchises material to the conduct of its business; provided that the foregoing shall not prohibit any
merger, consolidation, liquidation, dissolution or stock or asset sale permitted under Section 6.04. 


    Section 5.04  Payment of Obligations.


    The
Borrower will, and will cause each of its Subsidiaries to, pay its obligations, including Tax liabilities, that, if not paid, could result in a Material Adverse Effect before the
same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) the Borrower or such
Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) the failure to make payment pending such contest could not reasonably be expected to
result in a Material Adverse Effect. 


    Section 5.05  Maintenance of Properties; Insurance.


    The
Borrower will, and will cause each of its Subsidiaries to, (a) keep and maintain all property material to the conduct of its business in good working order and condition,
ordinary wear and tear excepted, and (b) maintain, with financially sound and reputable insurance companies, insurance in such amounts and against such risks as are customarily maintained by
companies engaged in the same or similar businesses operating in the same or similar locations or maintain a system or systems of self-insurance or assumption of risk which accords with
the practices of similar businesses. 


28





 

    Section 5.06  Books and Records; Inspection Rights.



    The
Borrower will, and will cause each of its Subsidiaries to, keep proper books of record and account in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. The Borrower will, and will cause each of its Subsidiaries to, permit any representatives designated by the Administrative Agent or any Lender,
upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and
independent accountants, all at such reasonable times and as often as reasonably requested. 


    Section 5.07  Compliance with Laws.



    The
Borrower will, and will cause each of its Subsidiaries to, comply with all laws, rules, regulations and orders of any Governmental Authority applicable to it or its property,
except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. 


    Section 5.08  Use of Proceeds.


    The
proceeds of the Loans will be used for the purposes described in Section 3.13. No part of the proceeds of any Loan will be used, whether directly or indirectly, for any
purpose that entails a violation of any of the Regulations of the Board, including Regulations U and X. 


    Section 5.09  Maintenance of Accreditation, Etc.


    The
Borrower will preserve and maintain, and cause each of its Subsidiaries to preserve and maintain, all licenses, permits, authorizations, certifications and qualifications
(including, without limitation, those qualifications with respect to solvency and capitalization) required, except where the failure to do so would not result in a Material Adverse Effect. 


    Section 5.10  Additional Subsidiary Guarantors.



    The
Borrower will cause each of its Significant Subsidiaries, whether newly formed, after acquired or otherwise existing, to promptly become a Guarantor hereunder by way of execution
of a Joinder Agreement in the form of Exhibit B.  


  
 

    ARTICLE VI
  
    Negative Covenants    
  


    Until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees payable hereunder have been paid in full, the
Borrower covenants and agrees with the Lenders that: 


    Section 6.01  Consolidated Tangible Net Worth.


    The
Consolidated Tangible Net Worth shall at all times be greater than or equal to $730,900,000, increased by the sum of, on a cumulative basis as of the end of each fiscal quarter of
the Borrower, commencing with the fiscal quarter ending September 30, 2001, (i) an amount equal to 50% of Consolidated Net Income (to the extent positive) for the fiscal quarter then
ended plus (ii) an amount equal to 100% of the Net Cash Proceeds from any Equity Issuance occurring after the Effective Date. 


    Section 6.02  Indebtedness.


    The
Borrower will not, and will not permit any Subsidiary to, create, incur, create, assume or permit to exist any other Indebtedness or liability on account of borrowed money,
represented by any 


29





 


notes, bonds, debentures or similar obligations, or on account of the deferred purchase price of any property, or any other deposits, advance or progress payments under contracts,  except: 



    (a) Indebtedness
arising or existing under this Credit Agreement and the other Credit Documents; 


    (b) Indebtedness
existing on the date hereof and set forth in Schedule 6.02 and extensions, renewals and
replacements of any such Indebtedness that do not increase the outstanding principal amount thereof; 


    (c) Indebtedness
of the Borrower and its Subsidiaries incurred after the Closing Date consisting of Capital Lease Obligations or Indebtedness incurred to provide all or
a portion of the purchase price or cost of construction of an asset provided that (i) such Indebtedness when incurred shall not exceed the purchase price or cost of construction of such asset
and (ii) no such Indebtedness shall be refinanced for a principal amount in excess of the principal balance outstanding thereon at the time of such refinancing; 



    (d) Indebtedness
of any Subsidiary to the Borrower or any other Subsidiary; 


    (e) Indebtedness
secured by Liens to the extent permitted under Section 6.03(d); 


    (f)  other
unsecured Indebtedness of the Borrower and its Subsidiaries; provided that such Indebtedness is not senior in
right of payment to the payment of the Indebtedness arising or existing under this Credit Agreement and the other Credit Documents. 




    Section 6.03  Liens.



    The
Borrower will not, and will not permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or
assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except: 



    (a) Permitted
Encumbrances; 


    (b) any
Lien on any property or asset of the Borrower or any Subsidiary existing on the date hereof and set forth in Schedule 6.03;  provided that (i) such Lien shall not apply to any other property or
asset of the Borrower or any Subsidiary and (ii) such Lien shall
secure only those obligations which it secures on the date hereof and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof; 


    (c) any
Lien existing on any property or asset prior to the acquisition thereof by the Borrower or any Subsidiary or existing on any property or asset of any Person
that becomes a Subsidiary after the date hereof prior to the time such Person becomes a Subsidiary; provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition or such Person becoming a Subsidiary, as the case may be, (ii) such Lien shall not apply to any other property or assets of the Borrower
or any Subsidiary and (iii) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Subsidiary, as the case may be and
extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof; or 


    (d) Liens
not otherwise permitted under this Section securing obligations in an aggregate amount not exceeding at any time 10% of Consolidated Net Tangible Assets as at
the end of the immediately preceding fiscal quarter of the Borrower. 




    Section 6.04  Fundamental Changes.



    The
Borrower will not, and will not permit any Subsidiary to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or
sell, transfer, lease or otherwise dispose of (in one transaction or in a series of transactions) all or substantially all of its 


30





 


assets, or all or substantially all of the stock of any of its Subsidiaries (in each case, whether now owned or hereafter acquired), or liquidate or dissolve, except that, if at the time thereof and
immediately after giving effect thereto no Default shall have occurred and be continuing (i) any Person may merge into the Borrower in a transaction in which the Borrower is the surviving
corporation, (ii) any Person, including any Affiliate, may merge with any Subsidiary in a transaction in which the surviving entity is a Subsidiary, (iii) any Subsidiary may sell,
transfer, lease or otherwise dispose of its assets to the Borrower or to another Subsidiary, (iv) any Subsidiary may liquidate or dissolve or the Borrower or any Subsidiary may sell, transfer,
lease or otherwise dispose of the assets or stock of any Subsidiary if, in each case, the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the
Borrower and is not materially disadvantageous to the Lenders, (v) the Borrower and its Subsidiaries may sell immaterial businesses, including Subsidiaries, in the ordinary course of business
and (vi) any Subsidiary formed for the purpose of acquiring a minority interest in * Corporation may merge into * Corporation. 


    Section 6.05  Transactions with Affiliates.


    The
Borrower will not, and will not permit any of its Subsidiaries to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any
property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except (a) in the ordinary course of business at prices and on terms and conditions not less
favorable to the Borrower or such Subsidiary than could be obtained on an arm's-length basis from unrelated third parties, (b) transactions between or among the Borrower and its Subsidiaries
not involving any other Affiliates, (c) contributions to the Medtronic Foundation in amounts consistent with past practices or (d) as otherwise permitted by this Credit Agreement. 


    Section 6.06  Restrictive Agreements.


    The
Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits,
restricts or imposes any condition upon the ability of any Subsidiary to grant a lien on its properties or assets whether now owned or hereafter acquired or pay dividends or other distributions with
respect to any shares of its capital stock or to make or repay loans or advances to the Borrower or any other Subsidiary or to Guarantee Indebtedness of the Borrower or any other Subsidiary;  provided
that (i) the foregoing shall not apply to restrictions and conditions imposed by law, rule, regulation or regulatory administrative
agreement or determination or by this Credit Agreement, and (ii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a
Subsidiary pending such sale, provided such restrictions and conditions apply only to the Subsidiary that is to be sold and such sale is permitted hereunder. 


    Section 6.07  Business Activity.


    The
Borrower will not, nor will it permit any Significant Subsidiary to, alter the character of its business in any material respect from that conducted as of the Closing Date. 


    Section 6.08  Restricted Payments.


    The
Borrower will not, nor will it permit any Subsidiary to, directly or indirectly, declare, order, make or set apart any sum for or pay any Restricted Payment, except (a) to
make dividends payable solely in the same class of capital stock of such Person, (b) to make dividends or other distributions payable to the Borrower (directly or indirectly through
Subsidiaries) and ratably to minority shareholders and (c) other distributions in respect of the capital stock of such Person or the redemption, retirement, purchase or other acquisition of the
capital stock of such Person (or any warrant, option or other rights with respect to any shares of capital stock (now or hereafter outstanding) of such Person) if no Default has occurred and is
continuing or would result from such action. 


31






  



 
 

ARTICLE VII
  
    Events of Default    
  


    If any of the following events ("Events of Default") shall occur: 



    (a) the
Borrower shall fail to pay any principal of any Loan when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for
prepayment thereof or otherwise (or any Guarantor shall fail to pay on the Guaranty in respect of any of the foregoing or in respect of any other Guaranty Obligations thereunder); 


    (b) the
Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article)
payable under this Credit Agreement, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of five days; 


    (c) any
representation or warranty made or deemed made by or on behalf of the Borrower or any Subsidiary in or in connection with this Credit Agreement or any amendment
or modification hereof, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Credit Agreement or any amendment or modification hereof,
shall prove to have been incorrect in any material respect when made or deemed made; 


    (d) the
Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 5.02, 5.03 (with respect to the Borrower's existence)
or 5.08 or in Article VI; 


    (e) the
Borrower shall fail to observe or perform any covenant, condition or agreement contained in this Credit Agreement (other than those specified in
clause (a), (b) or (d) of this Article), and such failure shall continue unremedied for a period of 30 days after notice thereof from the Administrative Agent (given at the
request of any Lender) to the Borrower; 


    (f)  the
Borrower or any Subsidiary shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness,
when and as the same shall become due and payable; 


    (g) any
event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with the giving of
notice if required) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (g) shall not apply to secured
Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness; 


    (h) an
involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of
the Borrower or any Significant Subsidiary or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Significant Subsidiary or for a substantial
part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered; 


    (i)  the
Borrower or any Significant Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any 



32





 


Significant Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing; 



    (j)  the
Borrower or any Significant Subsidiary shall become unable, admit in writing or fail generally to pay its debts as they become due; 


    (k) one
or more judgments or decrees shall be rendered against the Borrower, any Significant Subsidiary or any combination thereof and the same shall not have been
paid, vacated, discharged, stayed or bonded pending appeal within 45 days from the entry thereof that involves in the aggregate a liability (not paid or fully covered by insurance) of  $25,000,000
or more; 



    (l)  an
ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with all other ERISA Events that have occurred, could
reasonably be expected to result in a Material Adverse Effect; 


    (m) a
Change in Control of the Borrower shall occur; or 


    (n) the
Guaranty or any provision thereof shall cease to be in full force and effect (other than in accordance with its terms) or any Guarantor or any Person acting by
or on behalf of any Guarantor shall deny or disaffirm any Guarantor's obligations under the Guaranty; 


then,
and in every such event (other than an event with respect to the Borrower described in clause (h) or (i) of this Article), and at any time thereafter during the continuance of such
event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times:
(i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which
case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with
accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall become due and payable immediately (and the Commitments shall terminate), without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; and in case of any event with respect to the Borrower described in clause (h) or (i) of this
Article, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrower
accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower. 



 
 

ARTICLE VIII
  
    The Administrative Agent


    Each
of the Lenders hereby irrevocably appoints the Administrative Agent as its agent and authorizes the Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof, together with such actions and powers as are reasonably incidental thereto. 


    The
bank serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it
were not the Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrower or any Subsidiary or other
Affiliate thereof as if it were not the Administrative Agent hereunder. 


    The
Administrative Agent shall not have any duties or obligations except those expressly set forth herein. Without limiting the generality of the foregoing, (a) the
Administrative Agent shall not be 


33





 


subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary
action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby that the Administrative Agent is required to exercise in writing by the Required
Lenders, and (c) except as expressly set forth herein, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information
relating to the Borrower or any of its Subsidiaries that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent
shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders or in the absence of its own gross negligence or willful misconduct. The
Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by the Borrower or a Lender, and the
Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Credit
Agreement, (ii) the contents of any certificate, report or other document delivered hereunder or in connection herewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth herein, (iv) the validity, enforceability, effectiveness or genuineness of this Credit Agreement or any other agreement, instrument or
document, or (v) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the
Administrative Agent. 


    The
Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document
or other writing believed by it to be genuine and to have been signed or sent by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower),
independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts. 



    The
Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative
Agent. The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties. The exculpatory
provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their
respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent. 


    The
Administrative Agent may resign as Administrative Agent upon 30 days' notice to the Lenders. If the Administrative Agent resigns under this Agreement, the Required Lenders
shall appoint from among the Lenders a successor administrative agent for the Lenders which successor administrative agent shall be consented to by the Borrower at all times other than during the
existence of an Event of Default (which consent of the Borrower shall not be unreasonably withheld or delayed). If no successor administrative agent is appointed prior to the effective date of the
resignation of the Administrative Agent, the Administrative Agent may appoint, after consulting with the Lenders and the Borrower, a successor administrative agent from among the Lenders. Upon the
acceptance of its appointment as successor administrative agent hereunder, such successor administrative agent shall succeed to all the rights, powers and duties of the retiring Administrative Agent
and the term "Administrative Agent" shall mean such successor administrative agent and the retiring Administrative Agent's appointment, powers and duties as Administrative Agent shall be terminated.
After any retiring Administrative Agent's resignation hereunder as Administrative Agent, the provisions of this Article and Section 9.03 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this Agreement. If no successor administrative agent has accepted appointment as Administrative Agent by the date which is
30 days following a retiring Administrative 


34





 



Agent's notice of resignation, the retiring Administrative Agent's resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above. 


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


 
 

ARTICLE IX
  
    Miscellaneous    
  


    Section 9.01  Notices.



    Except
in the case of notices and other communications expressly permitted to be given by telephone, all notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows: 



    (a) if
to the Borrower, to it at Medtronic, Inc., 710 Medtronic Parkway N.E., Minneapolis, MN 55432-5604, Attention: Treasury Department, Mail Stop
LC480 (Telecopy No. (763) 505-2700), with a copy to the attention of General Counsel, Mail Stop LC400 (Telecopy No. (763) 572-5459); 



    (b) if
to the Administrative Agent, to Bank of America, N.A., Independence Center, 15th Floor, NC1-001-15-04, 101
North Tryon Street, Charlotte, North Carolina 28255, Attn: Agency Services—Neil Hendrix, Telephone: 704-386-4220, Telecopy: 704-409-0017;
and 


    (c) if
to any other Lender, to it at its address (or telecopy number) set forth in its Administrative Questionnaire. 


Any
party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given to any party
hereto in accordance with the provisions of this Credit Agreement shall be deemed to have been given on the date of receipt. 




    Section 9.02  Waivers; Amendments.



    (a) No
failure or delay by the Administrative Agent or any Lender in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent and the Lenders hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver
of any provision of this Credit Agreement or consent to any departure by the Borrower therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan
shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent or any Lender may have had notice or knowledge of such Default at the time. 



35





 


    (b) Neither this Credit Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by
the Borrower and the Required Lenders or by the Borrower and the Administrative Agent with the consent of the Required Lenders; provided that no such
agreement shall (i) increase the Commitment of any Lender without the written consent of such Lender, (ii) reduce the principal amount of any Loan or reduce the rate of interest thereon,
or reduce any fees payable hereunder, without the written consent of each Lender directly affected thereby, (iii) postpone the scheduled date of payment of the principal amount of any Loan, or
any interest thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written
consent of each Lender directly affected thereby, (iv) change Section 2.15(b) or (c) in a manner that would alter the pro rata sharing of payments required thereby, without the
written consent of each Lender, (v) change any of the provisions of this Section or the definition of "Required Lenders" or any other provision hereof specifying the number or percentage of
Lenders required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender or release all or substantially all
of the Guarantors from their obligations under this Credit Agreement; provided further that no such agreement shall amend, modify or otherwise affect
the rights or duties of the Administrative Agent hereunder without the prior written consent of the Administrative Agent. 




    Section 9.03  Expenses; Indemnity; Damage Waiver.



    (a) The
Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates, including
the reasonable fees, charges and disbursements of counsel for the Administrative Agent, in connection with the syndication of the credit facilities provided for herein, the preparation and
administration of this Credit Agreement or any amendments, modifications or waivers of the provisions hereof (whether or not the transactions contemplated hereby or thereby shall be consummated), and
(ii) all reasonable out-of-pocket expenses incurred by the Administrative Agent or any Lender, including the fees and disbursements of any counsel for the Administrative
Agent or any Lender, in connection with the enforcement or protection of its rights in connection with this Credit Agreement, including its rights under this Section, or in connection with the Loans
made hereunder, including in connection with any workout, restructuring or negotiations in respect thereof. 


    (b) The
Borrower shall indemnify the Administrative Agent and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an
"Indemnitee") against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including the fees
and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of this
Credit Agreement or any agreement or instrument contemplated hereby, the performance by the parties hereto of their respective obligations hereunder or the consummation of the Transactions or any
other transactions contemplated hereby, (ii) any Loan or the actual or proposed use of the proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous Materials on
or from any property owned or operated by the Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of its Subsidiaries, or (iv) any
actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto;  provided that
such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related
expenses are determined by a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of such Indemnitee. 



36







  




    (c) To
the extent that the Borrower fails to pay any amount required to be paid by it to the Administrative Agent under paragraph (a) or (b) of this
Section, each Lender severally agrees to pay to the Administrative Agent, such Lender's Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment
is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against the Administrative Agent in its capacity as such. 


    (d) To
the extent permitted by applicable law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Credit Agreement or any agreement or
instrument contemplated hereby, the Transactions, any Loan or the use of the proceeds thereof. 


    (e) All
amounts due under this Section shall be payable promptly after written demand therefor. 




    Section 9.04  Successors and Assigns.



    (a) The
provisions of this Credit Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted
hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or
transfer by the Borrower without such consent shall be null and void). Nothing in this Credit Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Credit Agreement. 


    (b) Any
Lender may assign to one or more assignees all or a portion of its rights and obligations under this Credit Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it); provided that (i) except in the case of an assignment to a Lender, an Affiliate of a Lender or
an Approved Fund with respect thereto, each of the Borrower and the Administrative Agent (and, in the case of an assignment of all or a portion of a Commitment) must give their prior written consent
to such assignment (which consent shall not be unreasonably withheld), (ii) except in the case of an assignment to a Lender, an Affiliate of a Lender, an Approved Fund with respect thereto or
an assignment of the entire remaining amount of the assigning Lender's Commitment, the amount of the
Commitment of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to the Administrative Agent)
shall not be less than $5,000,000, except in the case of an assignment of the entire remaining amount of the assigning Lender's Commitment, unless each of the Borrower and the Administrative Agent
otherwise consent and, after giving effect to such assignment, the assigning Lender and its Affiliates and the Approved Funds with respect to such Lender shall have a Commitment of at least $5,000,000
unless each of the Borrower and the Administrative Agent otherwise consents, (iii) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender's
rights and obligations under this Credit Agreement, (iii) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Acceptance, together with a
processing and recordation fee of $3,500, and (iv) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire;  provided further that any
consent of the Borrower otherwise required under this paragraph shall not be required if an Event of Default under
clause (h) or (i) of Article VII has occurred and is continuing. Upon acceptance and recording pursuant to paragraph (d) of this Section, from and after the effective date
specified in 



37





 


each Assignment and Acceptance, the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a
Lender under this Credit Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this
Credit Agreement (and, in the case of an Assignment and Acceptance covering all of the assigning Lender's rights and obligations under this Credit Agreement, such Lender shall cease to be a party
hereto but shall continue to be entitled to the benefits of Sections 2.12, 2.14 and 9.03). Any assignment or transfer by a Lender of rights or obligations under this Credit Agreement that does not
comply with this paragraph shall be treated for purposes of this Credit Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (e) of
this Section. 


    (c) The
Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices in Charlotte, North Carolina a copy of each
Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in the Register shall be conclusive, and the Borrower, the Administrative
Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Credit Agreement, notwithstanding notice
to the contrary. 


    (d) Upon
its receipt of a duly completed Assignment and Acceptance executed by an assigning Lender and an assignee, the assignee's completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such
assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Acceptance and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Credit Agreement unless it has been recorded in the Register as provided in this paragraph. 


    (e) Any
Lender may, without the consent of the Borrower, the Administrative Agent, sell participations to one or more banks or other entities (a
"Participant") in all or a portion of such Lender's rights and obligations under this Credit Agreement (including all or a portion of its Commitment and
the Loans owing to it); provided that (i) such Lender's obligations under this Credit Agreement shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and obligations under this Credit Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to enforce this Credit Agreement and to approve any amendment, modification or waiver of any provision of this Credit
Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in the first proviso to Section 9.02(b) that affects such Participant. Subject to paragraph (f) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.12, 2.13 and 2.14 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section. 


    (f)  A
Participant shall not be entitled to receive any greater payment under Section 2.12 or 2.14 than the applicable Lender would have been entitled to receive
with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower's prior written consent. A Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.14 unless the Borrower is notified 



38





 


of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 2.14(e) as though it were a Lender. 


    (g) Any
Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Credit Agreement to secure obligations of such
Lender, including any such pledge or assignment to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided  that no such pledge or
assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such assignee for such Lender as a party
hereto. 


    (h) Notwithstanding
anything to the contrary contained herein, any Lender (a "Granting Lender") may grant to a special
purpose funding vehicle (an "SPC") of such Granting Lender, identified as such in writing from time to time by the Granting Lender to the Administrative
Agent and the Borrower, the option to provide to the Borrower all or any part of any Loan that such Granting Lender would otherwise be obligated to make to the Borrower pursuant to
Section 2.01, provided that (i) nothing herein shall constitute a commitment to make any Loan by any SPC and (ii) if an SPC elects
not to exercise such option or otherwise fails to provide all or any part of such Loan, the Granting Lender shall be obligated to make such Loan pursuant to the terms hereof. The making of a Loan by
an SPC hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if, such
Loan were made by the Granting Lender. Each party hereto hereby agrees that no SPC shall be liable for any payment under this Credit Agreement for which a Lender would otherwise be liable, for so long
as, and to the extent, the related Granting Lender makes such payment. In furtherance of the foregoing, each party hereto hereby agrees that, prior to the date that is one year and one day after the
payment in full of all outstanding senior indebtedness of any SPC, it will not institute against, or join any other person in instituting against, such SPC any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or similar proceedings under the laws of the United States or any State thereof. In addition, notwithstanding anything to the contrary contained in this
Section 9.04 or in Section 9.12, any SPC may (i) with notice to, but without the prior written consent of, the Borrower or the Administrative Agent and without paying any
processing fee therefor, assign all or a portion of its interests in any Loans to its Granting Lender or to any financial institutions providing liquidity and/or credit facilities to or for the
account of such SPC to fund the Loans made by such SPC or to support the securities (if any) issued by such SPC to fund such Loans and (ii) disclose on a confidential basis any
non-public information relating to its Loans to any rating agency, commercial paper dealer or provider of a surety, guarantee or credit or liquidity enhancement to such SPC. 




    Section 9.05  Survival.


    All
covenants, agreements, representations and warranties made by the Borrower herein and in the certificates or other instruments delivered in connection with or pursuant to this
Credit Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Credit Agreement and the making of any Loans, regardless
of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this Credit Agreement is outstanding and unpaid and so long as the Commitments have not expired or terminated. The provisions of Sections 2.12, 2.14 and 9.03 and
Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination
of the Commitments or the termination of this Credit Agreement or any provision hereof. 


39





 

    Section 9.06  Counterparts; Integration; Effectiveness.


    This
Credit Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Credit Agreement and any separate letter agreements with respect to fees payable to the Administrative Agent constitute the entire contract
among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in
Section 4.01, this Credit Agreement shall become effective when it shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Credit Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Credit Agreement. 


    Section 9.07  Severability.


    Any
provision of this Credit Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such
invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction. 


    Section 9.08  Right of Setoff.



    If
an Event of Default shall have occurred and be continuing, each Lender is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Lender to or for the credit or the account
of the Borrower against any of and all the obligations of the Borrower now or hereafter existing under this Credit Agreement held by such Lender, irrespective of whether or not such Lender shall have
made any demand under this Credit Agreement and although such obligations may be unmatured. The rights of each Lender under this Section are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have. 


    Section 9.09  Governing Law; Jurisdiction; Consent to Service of Process.



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


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



40





 


    (c) The Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or relating to this Credit Agreement in any court referred to in paragraph (b) of this Section. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. 



    (d) Each
party to this Credit Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01. Nothing in this Credit
Agreement will affect the right of any party to this Credit Agreement to serve process in any other manner permitted by law. 




    Section 9.10  WAIVER OF JURY TRIAL.


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


    Section 9.11  Headings.


    Article
and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Credit Agreement and shall not affect the construction
of, or be taken into consideration in interpreting, this Credit Agreement. 


    Section 9.12  Confidentiality.


    Each
of the Administrative Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to
its and its Affiliates' and its Approved Funds' directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent, and only to the extent, required by applicable laws or regulations or by any subpoena or similar legal process, provided that the Person required to disclose such
information shall take reasonable efforts (at Borrower's expense) to ensure that any Information so disclosed shall be afforded confidential treatment, (d) to any other party to this Credit
Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Credit Agreement or the enforcement of rights hereunder,
(f) subject to an agreement containing provisions substantially the same as those of this Section, to any assignee of or Participant in, or any prospective assignee of or Participant in, any of
its rights or obligations under this Credit Agreement, (g) with the consent of the Borrower or (h) to the extent such Information (i) becomes publicly available other than as a
result of a breach of this Section or (ii) becomes available to the Administrative Agent or any Lender on a nonconfidential basis from a source other than the Borrower who is not, to the
knowledge of the Administrative Agent or such Lender, under an obligation of confidentiality to Borrower with respect to such Information. For the purposes of this Section,
"Information" means all information received from the Borrower relating to the Borrower or its business, other than any such information that is
available to the Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by the Borrower; provided that, in 


41





 


the case of information received from the Borrower after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own confidential information. 


 
 

ARTICLE X
  
    GUARANTY    
  


    Section 10.1  The Guaranty.


    In
order to induce the Lenders to enter into this Credit Agreement and the other Credit Documents and to extend credit hereunder and in recognition of the direct benefits to be
received by the Guarantors from the Borrowings hereunder, each of the Guarantors hereby agrees with the Administrative Agent and the Lenders as follows: the Guarantor hereby unconditionally and
irrevocably jointly and severally guarantees as primary obligor and not merely as surety the full and prompt payment when due, whether upon maturity, by acceleration or otherwise, of any and all
obligations of the Borrower to the Administrative Agent and the Lenders. If any or all of the obligations of the Borrower to the Administrative Agent and the Lenders becomes due and payable hereunder,
each Guarantor unconditionally promises to pay such indebtedness to the Administrative Agent and the Lenders, on order, or demand, together with any and all reasonable expenses which may be incurred
by the Administrative Agent or the Lenders in collecting any of the obligations. 


    Notwithstanding
any provision to the contrary contained herein, to the extent the obligations of a Guarantor shall be adjudicated to be invalid or unenforceable for any reason
(including, without limitation, because of any applicable state or federal law relating to fraudulent conveyances or transfers) then the obligations of each such Guarantor hereunder shall be limited
to the maximum amount that is permissible under applicable law (whether federal or state). 


    Section 10.2  Bankruptcy.


    Additionally,
each of the Guarantors unconditionally and irrevocably guarantees jointly and severally the payment of any and all indebtedness of the Borrower to the Lenders whether or
not due or payable by the Borrower upon the occurrence of any of the Event of Default specified in Article VII, subsection (i), and unconditionally promises to pay such obligations to the
Administrative Agent for the account of the Lenders, or order, on demand, in lawful money of the United States. Each of the Guarantors further agrees that to the extent that the Borrower or a
Guarantor shall make a payment or a transfer of an interest in any property to the Administrative Agent or any Lender, which payment or transfer or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, or otherwise is avoided, and/or required to be repaid to the Borrower or a Guarantor, the estate of the Borrower or a Guarantor, a trustee, receiver or any
other party under any bankruptcy law, state or federal law, common law or equitable cause, then to the extent of such avoidance or repayment, the obligation or part thereof intended to be satisfied
shall be revived and continued in full force and effect as if said payment had not been made. 


    Section 10.3  Nature of Liability.


    The
liability of each Guarantor hereunder is exclusive and independent of any security for or other guaranty of the indebtedness of the Borrower whether executed by any such
Guarantor, any other guarantor or by any other party, and no Guarantor's liability hereunder shall be affected or impaired by (a) any direction as to application of payment by the Borrower or
by any other party, or (b) any other continuing or other guaranty, undertaking or maximum liability of a guarantor or of any other party as to the indebtedness of the Borrower, or
(c) any payment on or in reduction of any such other guaranty or undertaking, or (d) any dissolution, termination or increase, decrease or change in personnel by the 


42





 


Borrower, or (e) any payment made to the Administrative Agent or the Lenders on the indebtedness which the Administrative Agent or such Lenders repay the Borrower pursuant to court order in any
bankruptcy, reorganization, arrangement, moratorium or other debtor relief proceeding, and each of the Guarantors waives any right to the deferral or modification of its obligations hereunder by
reason of any such proceeding. 


    Section 10.4  Independent Obligation.


    The
obligations of each Guarantor hereunder are independent of the obligations of any other guarantor or the Borrower, and a separate action or actions may be brought and prosecuted
against each Guarantor whether or not action is brought against any other guarantor or the Borrower and whether or not any other Guarantor or the Borrower is joined in any such action or actions. 


    Section 10.5  Authorization.



    Each
of the Guarantors authorizes the Administrative Agent and each Lender without notice or demand (except as shall be required by applicable statute and cannot be waived), and
without affecting or impairing its liability hereunder, from time to time to (a) renew, compromise, extend, increase, accelerate or otherwise change the time for payment of, or otherwise change
the terms of the indebtedness or any part thereof in accordance with this Credit Agreement, including any increase or decrease of the rate of interest thereon, (b) take and hold security from
any guarantor or any other party for the payment of this Guaranty or the indebtedness and exchange, enforce waive and release any such security, (c) apply such security and direct the order or
manner of sale thereof as the Administrative Agent and the Lenders in their discretion may determine and (d) release or substitute any one or more endorsers, guarantors, the Borrower or other
obligors. 


    Section 10.6  Reliance.


    It
is not necessary for the Administrative Agent or the Lenders to inquire into the capacity or powers of the Borrower or the officers, directors, members, partners or agents acting
or purporting to act on its behalf, and any indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed hereunder. 



    Section 10.7  Waiver.



    (a) Each
of the Guarantors waives any right (except as shall be required by applicable statute and cannot be waived) to require the Administrative Agent or any Lender
to (i) proceed against the Borrower, any other guarantor or any other party, (ii) proceed against or exhaust any security held from the Borrower, any other guarantor or any other party,
or (iii) pursue any other remedy in the Administrative Agent's or any Lender's power whatsoever. Each of the Guarantors waives any defense based on or arising out of any defense of the
Borrower, any other guarantor or any other party other than payment in full of the indebtedness, including without limitation any defense based on or arising out of the disability of the Borrower, any
other guarantor or any other party, or the unenforceability of the indebtedness or any part thereof from any cause, or the cessation from any cause of the liability of the Borrower other than payment
in full of the indebtedness. The Administrative Agent or any of the Lenders may, at their election, foreclose on any security held by the Administrative Agent or a Lender by one or more judicial or
nonjudicial sales, whether or not every aspect of any such sale is commercially reasonable (to the extent such sale is permitted by applicable law), or exercise any other right or remedy the
Administrative Agent and any Lender may have against the Borrower or any other party, or any security, without affecting or impairing in any way the liability of any Guarantor hereunder except to the
extent the indebtedness has been paid. Each of the Guarantors waives any defense arising out of any such election by the Administrative Agent and each of the Lenders, even though such election
operates to impair or extinguish any right of reimbursement or subrogation or other right or remedy of the Guarantors against the Borrower or any other party or any security. 



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    (b) Each of the Guarantors waives all presentments, demands for performance, protests and notices, including without limitation notices of nonperformance, notice of
protest, notices of dishonor, notices of acceptance of this Guaranty, and notices of the existence, creation or incurring of new or additional indebtedness. Each Guarantor assumes all responsibility
for being and keeping itself informed of the Borrower's financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the indebtedness and the nature, scope and
extent of the risks which such Guarantor assumes and incurs hereunder, and agrees that neither the Administrative Agent nor any Lender shall have any duty to advise such Guarantor of information known
to it regarding such circumstances or risks. 


    (c) Each
of the Guarantors hereby agrees it will not exercise any rights of subrogation which it may at any time otherwise have as a result of this Guaranty (whether
contractual, under Section 509 of the U.S. Bankruptcy Code, or otherwise) to the claims of the Lenders against the Borrower or any other guarantor of the indebtedness of the Borrower owing to
the Lenders (collectively, the "Other Parties") and all contractual, statutory or common law rights of reimbursement, contribution or indemnity from any
Other Party which it may at any time otherwise have as a result of this Guaranty until such time as the Loans hereunder shall have been paid and the Commitments have been terminated. Each of the
Guarantors hereby further agrees not to exercise any right to enforce any other remedy which the Administrative Agent and the Lenders now have or may hereafter have against any Other Party, any
endorser or any other guarantor of all or any part of the indebtedness of the Borrower and any benefit of, and any right to participate in, any security or collateral given to or for the benefit of
the Lenders
to secure payment of the indebtedness of the Borrower until such time as the Loans hereunder shall have been paid and the Commitments have been terminated. 




    Section 10.8  Limitation on Enforcement.


    The
Lenders agree that this Guaranty may be enforced only by the action of the Administrative Agent acting upon the instructions of the Required Lenders and that no Lender shall have
any right individually to seek to enforce or to enforce this Guaranty, it being understood and agreed that such rights and remedies may be exercised by the Administrative Agent for the benefit of the
Lenders under the terms of this Credit Agreement. The Lenders further agree that this Guaranty may not be enforced against any director, officer, employee or stockholder or other equityholder of the
Guarantors. 


    Section 10.9  Confirmation of Payment.


    The
Administrative Agent and the Lenders will, upon request after payment of the indebtedness and obligations which are the subject of this Guaranty and termination of the Commitments
relating thereto, confirm to the Borrower, the Guarantors or any other Person that such indebtedness and obligations have been paid and the Commitments relating thereto terminated, subject to the
provisions of Section 10.2. 


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



	BORROWER:	 	MEDTRONIC, INC,

a Minnesota corporation
	

 	
 	

By:	

 
	 	 	 	

	 	 	Name:	 
	 	 	 	

	 	 	Title:	 
	 	 	 	

	
GUARANTORS:	
 	
MEDTRONIC ASSET MANAGEMENT, INC.,

a Minnesota corporation
	

 	
 	

By:	

 
	 	 	 	

	 	 	Name:	 
	 	 	 	

	 	 	Title:	 
	 	 	 	

	

 	
 	
MEDTRONIC AVE, INC.,

a Delaware corporation
	

 	
 	

By:	

 
	 	 	 	

	 	 	Name:	 
	 	 	 	

	 	 	Title:	 
	 	 	 	

	

 	
 	
MEDTRONIC INTERNATIONAL

TECHNOLOGY, INC.,

a Minnesota corporation
	

 	
 	

By:	

 
	 	 	 	

	 	 	Name:	 
	 	 	 	

	 	 	Title:	 
	 	 	 	

	

 	
 	
MEDTRONIC SOFAMOR DANEK, INC.,

an Indiana corporation
	

 	
 	

By:	

 
	 	 	 	

	 	 	Name:	 
	 	 	 	

	 	 	Title:	 
	 	 	 	




45





 

	

 	
 	
MEDTRONIC USA, INC.,

a Minnesota corporation
	

 	
 	

By:	

 
	 	 	 	

	 	 	Name:	 
	 	 	 	

	 	 	Title:	 
	 	 	 	

	

 	
 	
BANK OF AMERICA, N.A., individually

  and as Administrative Agent
	

 	
 	

By:	

 
	 	 	 	

	 	 	 	Name:
	 	 	 	Title:




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Exhibit 10.1 [EXECUTION COPY]



TABLE OF CONTENTS


CREDIT AGREEMENT

W I T N E S S E T H

ARTICLE I Definitions


ARTICLE II The Credits


ARTICLE III Representations and Warranties

ARTICLE IV Conditions

ARTICLE V Affirmative Covenants

ARTICLE VI Negative Covenants



ARTICLE VII Events of Default

ARTICLE VIII The Administrative Agent

ARTICLE IX Miscellaneous


ARTICLE X GUARANTY