Prepared by MERRILL CORPORATION




QuickLinks
 -- Click here to rapidly navigate through this document

 
 

EXHIBIT 10.01    
  


     CREDIT AGREEMENT

($750,000,000 Five Year Revolving Credit and Competitive Advance Facility)  


 dated as of  


 March 30, 2001  


 among  


 WELLPOINT HEALTH NETWORKS INC.

as Borrower,  


 THE LENDERS

FROM TIME TO TIME PARTY HERETO,  


 BANK OF AMERICA, N. A.,

as Administrative Agent,  


 and  


 BANC OF AMERICA SECURITIES LLC

and

JPMORGAN,

as Joint Arrangers and Joint Book Managers  





 
  
 

    TABLE OF CONTENTS    
  



	ARTICLE I Definitions	 	1
	 	 	 	Section 1.01	 	Defined Terms	 	1
	 	 	 	Section 1.02	 	Classification of Loans and Borrowings	 	14
	 	 	 	Section 1.03	 	Terms Generally	 	15
	 	 	 	Section 1.04	 	Accounting Terms; GAAP	 	15
	

ARTICLE II The Credits	
 	

15
	 	 	 	Section 2.01	 	Commitments	 	15
	 	 	 	Section 2.02	 	Loans and Borrowings	 	15
	 	 	 	Section 2.03	 	Requests for Revolving Borrowings	 	16
	 	 	 	Section 2.04	 	Requests for Swingline Borrowings	 	17
	 	 	 	Section 2.05	 	Competitive Bid Procedure	 	18
	 	 	 	Section 2.06	 	Letters of Credit	 	20
	 	 	 	Section 2.07	 	Extension of Maturity Date	 	24
	 	 	 	Section 2.08	 	Funding of Borrowings	 	25
	 	 	 	Section 2.09	 	Interest Elections	 	25
	 	 	 	Section 2.10	 	Termination and Reduction of Commitments	 	26
	 	 	 	Section 2.11	 	Repayment of Loans; Evidence of Debt	 	27
	 	 	 	Section 2.12	 	Prepayment of Loans	 	27
	 	 	 	Section 2.13	 	Fees	 	28
	 	 	 	Section 2.14	 	Interest	 	29
	 	 	 	Section 2.15	 	Alternate Rate of Interest	 	30
	 	 	 	Section 2.16	 	Increased Costs	 	31
	 	 	 	Section 2.17	 	Break Funding Payments	 	32
	 	 	 	Section 2.18	 	Taxes	 	32
	 	 	 	Section 2.19	 	Payments Generally; Pro Rata Treatment; Sharing of Set-offs	 	33
	 	 	 	Section 2.20	 	Mitigation Obligations; Replacement of Lenders	 	35
	

ARTICLE III Representations and Warranties	
 	

35
	 	 	 	Section 3.01	 	Organization; Powers	 	35
	 	 	 	Section 3.02	 	Authorization; Enforceability	 	35
	 	 	 	Section 3.03	 	Governmental Approvals; No Conflicts	 	36
	 	 	 	Section 3.04	 	Financial Condition; No Material Adverse Change	 	36
	 	 	 	Section 3.05	 	Properties	 	36
	 	 	 	Section 3.06	 	Litigation and Environmental Matters	 	36
	 	 	 	Section 3.07	 	Compliance with Laws and Agreements	 	37
	 	 	 	Section 3.08	 	Investment and Holding Company Status	 	37
	 	 	 	Section 3.09	 	Taxes	 	37
	 	 	 	Section 3.10	 	ERISA	 	37
	 	 	 	Section 3.11	 	Disclosure	 	37
	 	 	 	Section 3.12	 	Federal Regulations	 	38
	 	 	 	Section 3.13	 	Nature of Business	 	38
	 	 	 	Section 3.14	 	Purpose of Loans and Letters of Credit	 	38
	

ARTICLE IV Conditions	
 	

38
	 	 	 	Section 4.01	 	Closing Date	 	38
	 	 	 	Section 4.02	 	Each Credit Event	 	39
	

ARTICLE V Affirmative Covenants	
 	

39
	 	 	 	Section 5.01	 	Financial Statements and Other Information	 	39
	 	 	 	Section 5.02	 	Notices of Material Events	 	40



i





 

	 	 	 	Section 5.03	 	Existence; Conduct of Business	 	41
	 	 	 	Section 5.04	 	Payment of Obligations	 	41
	 	 	 	Section 5.05	 	Maintenance of Properties; Insurance	 	41
	 	 	 	Section 5.06	 	Books and Records; Inspection Rights	 	41
	 	 	 	Section 5.07	 	Compliance with Laws and Agreements	 	41
	 	 	 	Section 5.08	 	Use of Proceeds and Letters of Credit	 	42
	

ARTICLE VI Negative Covenants-	
 	

42
	 	 	 	Section 6.01	 	Financial Covenants	 	42
	 	 	 	Section 6.02	 	Subsidiary Indebtedness	 	42
	 	 	 	Section 6.03	 	Liens	 	42
	 	 	 	Section 6.04	 	Fundamental Changes	 	43
	 	 	 	Section 6.05	 	Transactions with Affiliates	 	44
	 	 	 	Section 6.06	 	Restrictive Agreements	 	44
	 	 	 	Section 6.07	 	Nature of Business	 	44
	 	 	 	Section 6.08	 	Advances, Investments and Loans	 	44
	 	 	 	Section 6.09	 	Restricted Payments	 	44
	

ARTICLE VII Events of Default	
 	

45
	

ARTICLE VIII The Administrative Agent; the Syndication Agent	
 	

47
	

ARTICLE IX Miscellaneous	
 	

48
	 	 	 	Section 9.01	 	Notices	 	48
	 	 	 	Section 9.02	 	Waivers; Amendments	 	49
	 	 	 	Section 9.03	 	Expenses; Indemnity; Damage Waiver	 	49
	 	 	 	Section 9.04	 	Successors and Assigns	 	50
	 	 	 	Section 9.05	 	Survival	 	53
	 	 	 	Section 9.06	 	Counterparts; Integration; Effectiveness	 	53
	 	 	 	Section 9.07	 	Severability	 	53
	 	 	 	Section 9.08	 	Right of Setoff	 	54
	 	 	 	Section 9.09	 	Governing Law; Jurisdiction; Consent to Service of Process	 	54
	 	 	 	Section 9.10	 	WAIVER OF JURY TRIAL	 	54
	 	 	 	Section 9.11	 	Headings	 	55
	 	 	 	Section 9.12	 	Confidentiality	 	55





SCHEDULES:


Schedule 2.01—Commitments

Schedule 3.06—Disclosed Matters

Schedule 6.02—Existing Subsidiary Indebtedness

Schedule 6.03—Existing Liens

Schedule 6.08—Existing Investments 


EXHIBITS:


Exhibit A—Form
of Assignment and Acceptance

Exhibit B—Form of Opinion of Borrower's Counsel 


ii







 
 

CREDIT AGREEMENT    
  


    THIS FIVE-YEAR CREDIT AGREEMENT dated as of March 30, 2001 among WELLPOINT HEALTH
NETWORKS INC., as Borrower, the LENDERS party hereto, BANK OF AMERICA, N.A., as Administrative Agent and Issuing Bank, and JPMORGAN, a division of Chase Securities Inc., as Syndication
Agent. 


 
 

W I T N E S S E T H:    
  


    WHEREAS, the Borrower is party to the Credit Agreement dated as of May 15, 1996 (the
"Existing Credit Agreement") among the Borrower, the lenders parties thereto, and Bank of America, N.A., as administrative agent and issuing bank; and 



    WHEREAS, the Borrower, the Lenders and the Administrative Agent desire to replace the Existing Credit Agreement with this Agreement
upon and subject to 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 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", by any Person, means the acquisition by such Person of at least a majority of the capital stock or all or substantially
all of the Property of another Person, division of another Person or other business unit of another Person, whether or not involving a merger or consolidation with such Person. 


    "Acquired EBITDA" means, with respect to any acquisition permitted under this Agreement, for any period, for the Borrower and its
Subsidiaries (determined in accordance with GAAP), the sum of (a) consolidated pre-tax net income (exclusive of extraordinary gains or losses) plus (b) to the extent deducted
in determining consolidated pre-tax net income, (i) interest expense, amortization or writeoff of debt discount and debt issuance costs and commissions, discounts and other fees and
charges associated with Indebtedness, (ii) depreciation and (iii) amortization, all for such period, as each of the items specified above are reasonably allocable to the assets, capital
stock, division or business group acquired in such acquisition. 


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


    "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 any day, with respect to any Eurodollar Revolving Loan, or with respect to the facility fees or
utilization fees payable hereunder, as the case may be, the applicable rate per annum set forth below (in basis points) under the caption "Eurodollar Spread", "Facility Fee Rate", or "Utilization Fee
Rate", as the case may be, 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
	 	Eurodollar Spread
	 	Facility Fee Rate
	 	Utilization Fee Rate

(Commitment Utilization

Percentage greater than

or equal to 50%

but less than 75%)
	 	Utilization Fee Rate

(Commitment Utilization

Percentage greater than

or equal to 75%)

	I	 	Greater than or equal to A/A2	 	29.0	 	 8.5	 	10.0	 	20.0
	

II	
 	

Greater than or equal to A-/A3 but less than A/A2	
 	

40.0	
 	

10.0	
 	

10.0	
 	

20.0
	

III	
 	

Greater than or equal to BBB+/Baa1 but less than A-/A3	
 	

62.5	
 	

12.5	
 	

12.5	
 	

25.0
	

IV	
 	

Greater than or equal to BBB/Baa2 but less than BBB+/Baa1	
 	

72.0	
 	

15.5	
 	

12.5	
 	

25.0
	

V	
 	

Greater than or equal to BBB-/Baa3 but less than BBB/Baa2	
 	

80.0	
 	

20.0	
 	

12.5	
 	

25.0
	

VI	
 	

Less than BBB-/Baa3	
 	

100.0	
 	

25.0	
 	

25.0	
 	

50.0





    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 VI; (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 



2





 


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 and the Borrower. 


    "Availability Period" means the period from and including the Closing 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. 


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


    "Borrower" means WellPoint Health Networks Inc., a Delaware corporation. 


    "Borrowing" means (a) Revolving 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, or (b) a Competitive Loan or group of Competitive Loans of the same Type made on the same date and as to which a single
Interest Period is in effect. 


    "Borrowing Request" means a request by the Borrower for a Revolving 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. 


    "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 



3





 


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. 


    "Change in Control" means (a) 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) shall have acquired ownership, directly or indirectly, beneficially or of record, of shares representing more than 35% of the aggregate ordinary
voting power represented by the issued and outstanding capital stock of the Borrower; or (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. 


    "Change in Law" means (a) the adoption of any law, rule or regulation after the date of this 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 Agreement or (c) compliance by any Lender or the Issuing Bank
(or, for purposes of Section 2.16(b), by any lending office of such Lender or by such Lender's or the Issuing Bank'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 Agreement. 


    "Class", when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are
Revolving Loans or Competitive Loans. 


    "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 Revolving Loans and to acquire participations in
Swingline Loans and Letters of Credit hereunder, expressed as an amount representing the maximum aggregate amount of such Lender's Revolving Credit Exposure hereunder, as such commitment may be
(a) reduced from time to time pursuant to Section 2.10 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04.
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. 



    "Commitment Utilization Percentage" means on any day the percentage equivalent of a fraction (a) the numerator of which is the
sum of the aggregate outstanding principal amount of Loans (but not including any Swingline Loans) plus the aggregate amount of LC Exposure (the "Used
Commitment") and (b) the denominator of which is the aggregate amount of the Commitments (or, on any day after
termination of the Commitments, the aggregate amount of the Commitments in effect immediately preceding such termination). 



    "Competitive Bid" means an offer by a Lender to make a Competitive Loan in accordance with Section 2.05. 



4





 


    "Competitive Bid Rate" means, with respect to any Competitive Bid, the Margin or the Fixed Rate, as applicable, offered by the Lender
making such Competitive Bid. 


    "Competitive Bid Request" means a request by the Borrower for Competitive Bids in accordance with Section 2.05. 


    "Competitive Loan" means a Loan made pursuant to Section 2.05. 


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


    "Consolidated EBITDA" means, for any period, Consolidated Net Income for such period  plus, without duplication and to the extent reflected as a charge in the statement
of such Consolidated Net Income for such period, the sum of
(a) income tax expense, (b) interest expense, amortization or writeoff of debt discount and debt issuance costs and commissions, discounts and other fees and charges associated with
Indebtedness (including the Loans), (c) depreciation and amortization expense, (d) amortization of intangibles (including, but not limited to, goodwill) and organization costs,
(e) any extraordinary, unusual or non-recurring non-cash expenses or non-cash losses (including, whether or not otherwise includable as a separate item in
the statement of such Consolidated Net Income for such period, non-cash losses on sales of assets outside of the ordinary course of business), and (f) any other non-cash
charges, and minus, to the extent included in the statement of such Consolidated Net Income for such period, the sum of (a) any extraordinary,
unusual or non-recurring income or gains (including, whether or not otherwise includable as a separate item in the statement of such Consolidated Net Income for such period, gains on the
sales of assets outside of the ordinary course of business) and (b) any other non-cash income, all as determined on a consolidated basis. 


    "Consolidated Funded Indebtedness" means, at any date, all liabilities of the Borrower and its Subsidiaries that are or should be
reflected at such date on the Borrower's consolidated balance sheet as debt in accordance with GAAP. 


    "Consolidated Interest Coverage Ratio" means, for any period, the ratio of (a) Consolidated EBITDA for such period to
(b) Consolidated Interest Expense for such period. 


    "Consolidated Interest Expense" means, for any period, total cash interest expense (including that attributable to Capital Lease
Obligations) of the Borrower and its Subsidiaries for such period with respect to all outstanding Indebtedness of the Borrower and its Subsidiaries (including all commissions, discounts and other fees
and charges owed with respect to letters of credit and bankers' acceptance financing and net costs under Hedging Agreements in respect of interest rates to the extent such net costs are allocable to
such period in accordance with GAAP). 


    "Consolidated Leverage Ratio" means, for any period, the ratio of (a) Consolidated Funded Indebtedness as of the last day of
such period to (b) the sum of (i) Consolidated EBITDA for such period, plus (ii) with respect to any acquisition permitted under this Agreement made during such period, the
aggregate amount of Acquired EBITDA from the first day of such period to the date on which each such acquisition was made. 


    "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, and (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. 



5





 


    "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). 



    "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. 


    "Current Anniversary Date" has the meaning set forth in Section 2.07(a). 


    "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. 


    "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. 


    "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 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. 



6





 


    "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. 


    "Excess Utilization Day" means each day on which the Commitment Utilization Percentage equals or exceeds 50%. 



    "Excluded Taxes" means, with respect to the Administrative Agent, any Lender, the Issuing Bank 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 2.20(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 Agreement or is attributable to such Foreign Lender's failure or inability to comply with Section 2.18(e). 


    "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. 



    "Fee Letter" shall mean the letter agreement dated February 9, 2001 addressed to the Borrower from the Administrative Agent, as
amended, modified, restated or otherwise supplemented from time to time. 


    "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. 


    "Fixed Rate" means, with respect to any Competitive Loan (other than a Eurodollar Competitive Loan), the fixed rate of interest per
annum specified by the Lender making such Competitive Loan in its related Competitive Bid. 


    "Fixed Rate Loan" means a Competitive Loan bearing interest at a Fixed Rate. 


    "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, 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. 



7







  



    "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. The amount of any Guarantee shall be deemed equal to the stated or determinable amount of the primary
obligation in respect of which such contingent obligation is made or, if not stated or if indeterminable, the maximum reasonably anticipated liability in respect of such primary obligation, and in the
case of other Guarantees other than in respect of Hedging Agreements, shall be equal to the maximum reasonably anticipated liability in respect of such Guarantees and, in the case of Guarantees in
respect of Hedging Agreements, shall be equal to the Hedging Agreement Termination Value. 


    "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. 


    "Hedging Agreement Termination Value" means, in respect of any one or more Hedging Agreements, after taking into account the effect of
any legally enforceable netting agreement relating to such Hedging Agreements, (a) for any date on or after the date such Hedging Agreements have been closed out and the termination value or
values determined in accordance therewith, such termination values, and (b) for any date prior to the date referenced in clause (a) the amounts determined as the
mark-to-market value or values for such Hedging Agreements. 


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


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


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


    "HMO Subsidiary" means any Subsidiary of the Borrower that is now or hereafter an HMO. 


    "Indebtedness" of any Person means, without duplication, (a) all obligations of such Person for borrowed money, (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 



8





 


or other like obligations incurred in the ordinary course of business), (e) all Guarantees by such Person of Indebtedness of others, (f) all Capital Lease Obligations of such Person,
(g) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit, (h) all obligations, contingent or otherwise, of such Person in respect
of bankers' acceptances and (i) all indebtedness referred to in clauses (a) through (h) above 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. 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
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. 


    "Insurance Regulation" means any law, regulation, rule, directive or order applicable to an insurance company. 



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


    "Insurance Subsidiary" means any Subsidiary of the Borrower that is now or hereafter doing business (or required to qualify or to be
licensed) under Insurance Regulations. 


    "Interest Election Request" means a request by the Borrower to convert or continue a Revolving Borrowing in accordance with
Section 2.09. 


    "Interest Payment Date" means (a) with respect to any ABR Loan (including Swingline Loans that are ABR Loans), the last day of
each March, June, September and December, (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, and (c) with respect to any Fixed Rate 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 Fixed Rate Borrowing with an Interest Period of more than 90 days' duration (unless otherwise specified in the applicable Competitive Bid Request), each day prior to the last day of such
Interest Period that occurs at intervals of 90 days' duration after the first day of such Interest Period, and any other dates that are specified in the applicable Competitive Bid Request as
Interest Payment Dates with respect to such Borrowing. 


    "Interest Period" means (a) 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, and (b) with respect to any Fixed Rate Borrowing,
the period (which shall not be less than 7 days or more than 360 days) commencing on the date of such Borrowing and ending on the date specified in the applicable Competitive Bid
Request; 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, in the case of a Eurodollar Borrowing only, such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end
on the immediately 



9





 


preceding Business Day and (ii) any Interest Period pertaining to a Eurodollar Borrowing 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. 


    "Issuing Bank" means Bank of America in its capacity as the issuer of Letters of Credit hereunder, and its successors in such capacity
as provided in Section 2.06(i). 


    "LC Commitment" means $100,000,000. 


    "LC Disbursement" means a payment made by the Issuing Bank pursuant to a Letter of Credit. 



    "LC Exposure" means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time
plus (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the Borrower at such time. The LC Exposure of any Lender at any time shall be its
Applicable Percentage of the total LC Exposure at such time. 


    "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. 


    "Letter of Credit" means any letter of credit issued pursuant to this Agreement. 


    "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 issued by any Subsidiary, any purchase option, call or similar
right of a third party with respect to such securities; provided, however, that a "Lien" shall not be deemed to arise from reverse repurchase agreements
where the Borrower is the seller or from programs where the Borrower lends securities. 



    "Loan" or "Loans" means the loans made by the Lenders to the Borrower pursuant to this
Agreement (including, without limitation, the Swingline Loans). 


    "Margin" means, with respect to any Competitive Loan bearing interest at a rate based on the LIBO Rate, the marginal rate of interest,
if any, to be added to or subtracted from the LIBO Rate to determine the rate of interest applicable to such Loan, as specified by the Lender making such Loan in its related Competitive Bid. 



10





 


    "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 its obligations under this Agreement or (c) the legal rights of or benefits available to
the Lenders under this Agreement. 


    "Material Indebtedness" means Indebtedness (other than the Loans and Letters of Credit), 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 $40,000,000. 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 the fifth anniversary of the Closing Date, as extended from time to time in accordance with Section 2.07. 


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


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


    "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 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 60 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; and 


    (e) 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. 


    "Permitted Investments" shall mean: 



    (a) cash
and Cash Equivalents; 


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




11





 



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


    (d) investments
existing as of the Closing Date and set forth in Schedule 6.08; 


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


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


    (g) equity
investments by the Borrower and its Subsidiaries in Subsidiaries of the Borrower and Indebtedness permitted under Section 6.02(b); 


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


    (i)  Acquisitions;



    (j)  readily
marketable securities acquired in conformance with the Borrower's "investment policy" dated August 5, 1998 (a copy of which has been delivered to
the Administrative Agent and the Lenders) and any amendments to such investment policy so long as such amendments do not substantially modify such investment policy; provided,
however that (i) the amount invested in equity securities (other than such securities of Subsidiaries of the Borrower) at any one time shall not exceed 20% of the amount
invested in all securities (other than securities of Subsidiaries of the Borrower) and (ii) the amount invested in repurchase agreements at any one time shall not exceed 20% of the amount
invested in all securities (other than securities of Subsidiaries of the Borrower); and 


    (k) additional
loan advances and/or investments not included within the foregoing clauses hereof, provided that such
loans, advances and/or investments made pursuant to this clause (k) shall not exceed an aggregate amount of more than ten percent (10%) of the Consolidated Assets determined as of the end of
the most recently completed fiscal year. 




    As
used herein, "investment" means all investments, in cash or by delivery of property made, directly or indirectly in, to or from any
Person, whether by acquisition of shares of capital stock, indebtedness or other obligations or securities or by loan advance, capital contribution or otherwise. 


    "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. 



    "Quoted Rate" means a fixed percentage rate per annum offered by the Swingline Lender and accepted by the Borrower with respect to a
Swingline Loan. 



12





 


    "Quoted Rate Swingline Loan" means a Swingline Loan bearing interest at a Quoted Rate. 


    "Register" has the meaning set forth in Section 9.04. 


    "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 Revolving Credit Exposures and unused Commitments representing more than 50% of
the sum of the total Revolving Credit Exposures and unused Commitments at such time; provided that, for purposes of declaring the Loans to be due and
payable pursuant to Article VII, and for all purposes after the Commitments expire or terminate, the outstanding Competitive Loans of the Lenders shall be included in their respective Revolving
Credit Exposures in determining the Required Lenders. 


    "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. 


    "Revolving Credit Exposure" means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender's
Revolving Loans, Swingline Exposure and its LC Exposure at such time. 


    "Revolving Loan" means a Loan made pursuant to Section 2.03. 



    "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. 


    "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 



13





 


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. 


    "Swingline Commitment" means the commitment of the Swingline Lender to make Swingline Loans in an aggregate principal amount at any
time outstanding of up to the Swingline Committed Amount. 


    "Swingline Committed Amount" shall have the meaning assigned to such term in Section 2.04(a). 


    "Swingline Exposure" means, at any time, the aggregate amount of all Swingline Loans that have not yet been repaid by the Borrower at
such time. The Swingline Exposure of any Lender at any time shall be its Applicable Percentage of the total Swingline Exposure at such time. 


    "Swingline Lender" means Bank of America. 


    "Swingline Loan" shall have the meaning assigned to such term in Section 2.04(a). 


    "Syndication Agent" means JPMorgan, a division of Chase Securities, Inc., in its capacity as Syndication Agent hereunder. 



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


    "364-Day Facility" means the Credit Agreement dated as of the date hereof among the Borrower, the lenders parties thereto,
Bank of America, as administrative agent, and others, providing for a $250,000,000 revolving credit facility for a 364-day period, as amended or extended from time to time. 


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


    "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, the Alternate Base Rate or, in the case of a Competitive Loan or Borrowing, the LIBO Rate or a Fixed Rate. 


    "Used Commitment" has the meaning set forth in the definition of "Commitment Utilization Percentage" in Section 1.01. 



    "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 Agreement, Loans may be classified and referred to by Class (e.g., a "Revolving Loan") or by Type
(e.g., a "Eurodollar Loan") or by Class and Type (e.g., a "Eurodollar Revolving Loan"). Borrowings also
may be classified and referred to by Class (e.g., a "Revolving Borrowing") or by Type (e.g., a
"Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar Revolving Borrowing"). 


14







  




    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 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 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 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 Revolving Loans to the Borrower from time to time during the Availability Period in an aggregate
principal amount that will not result in (a) such Lender's Revolving Credit Exposure exceeding such Lender's Commitment or (b) the sum of the total Revolving Credit Exposures plus the
aggregate principal amount of outstanding Competitive 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 Revolving Loans. 


    Section 2.02  Loans and Borrowings.



    (a) Each
Revolving Loan shall be made as part of a Borrowing consisting of Revolving Loans made by the Lenders ratably in accordance with their respective Commitments.
Each Competitive Loan shall be made in accordance with the procedures set forth in Section 2.05. 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 and Competitive Bids of the Lenders are several and no Lender shall be responsible
for any other Lender's failure to make Loans as required. 



15





 


    (b) Subject to Section 2.15, (i) each Revolving Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request in
accordance herewith, and (ii) each Competitive Borrowing shall be comprised entirely of Eurodollar Loans or Fixed Rate 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 Agreement. 


    (c) At
the commencement of each Interest Period for any Eurodollar Revolving Borrowing or ABR Revolving 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 Revolving Borrowing may be in an aggregate amount that is equal
to the entire unused balance of the total Commitments or that is required to finance the reimbursement of an LC Disbursement as contemplated by Section 2.06(e). Each Competitive Borrowing shall
be in a minimum aggregate amount of $25,000,000 and integral multiples of $5,000,000 in excess thereof. Borrowings of more than one Type and Class may be outstanding at the same time;  provided that
there shall not at any time be more than an aggregate total of ten Eurodollar Revolving Borrowings and Eurodollar Competitive Loan
Borrowings outstanding. 


    (d) Notwithstanding
any other provision of this 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 Revolving Borrowings.



    To
request a Revolving 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), three 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, including any such notice of an ABR Revolving Borrowing to finance the reimbursement of an LC Disbursement as contemplated by
Section 2.06(e). 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 2.08. 





    If
no election as to the Type of Revolving Borrowing is specified, then the requested Revolving Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to
any requested Eurodollar Revolving 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. 


16





 

    Section 2.04  Requests for Swingline Borrowings.



    (a) Subject
to the terms and conditions hereof and in reliance upon the representations and warranties set forth herein, the Swingline Lender, in its individual
capacity, agrees to make certain revolving credit loans requested by the Borrower in dollars to the Borrower (each a "Swingline Loan" and, collectively,
the "Swingline Loans") from time to time during the Availability Period for the purposes hereinafter set forth; provided,
however, (i) the aggregate principal amount of Swingline Loans outstanding at any time shall not exceed FIFTY MILLION DOLLARS
($50,000,000) (the "Swingline Committed Amount"), and (ii) the sum of the total Revolving Credit Exposures (including
Swingline Loans) plus the aggregate principal amount of outstanding Competitive Loans shall not exceed the total Commitments. Swingline Loans hereunder shall be made as ABR Loans or Quoted Rate
Swingline Loans as the Borrower may request in accordance with the provisions of this Section 2.04 and may be repaid and reborrowed in accordance with the provisions hereof. 


    (b) Whenever
the Borrower desires a Swingline Loan advance hereunder it shall give written notice (or telephonic notice promptly confirmed in writing) to the Swingline
Lender not later than 1:00 P.M. (Charlotte, North Carolina time) on the Business Day of the requested Swingline Loan advance. Each such notice shall be irrevocable and shall specify
(i) that a Swingline Loan advance is requested, (ii) the date of the requested Swingline Loan advance (which shall be a Business Day) and (iii) the principal amount of the
Swingline Loan advance requested. Each Swingline Loan shall be made as a ABR Loan or a Quoted Rate Swingline Loan and shall have such maturity date as the Swingline Lender and the Borrower shall agree
upon receipt by the Swingline Lender of any such notice from the Borrower; provided that, in the absence of such agreement, such Swingline Loan shall be
made as an ABR Loan maturing in seven Business Days. The Swingline Lender shall initiate the transfer of funds representing the Swingline Loan advance to the Borrower by 3:00 P.M. (Charlotte,
North Carolina time) on the Business Day of the requested borrowing. 


    (c) Each
Swingline Loan advance shall be in a minimum principal amount of $1,000,000 and integral multiples of $1,000,000 in excess thereof (or the remaining amount of
the Swingline Committed Amount, if less). 


    (d) The
principal amount of any Swingline Loan shall be due and payable on the earlier of (i) the maturity date agreed to by the Swingline Lender and the
Borrower with respect to such Loan (which maturity date shall not be a date more than seven (7) Business Days from the date of advance thereof) or (ii) the Maturity Date. The Swingline
Lender may, at any time, in its sole discretion, by written notice to the Borrower and the Lenders, demand repayment of its Swingline Loans by way of a Revolving Loan advance, in which case the
Borrower shall be deemed to have requested a Revolving Loan advance comprised solely of ABR Loans in the amount of such Swingline Loans; provided,
however, that as between the Swingline Lender and the Lenders, any such demand shall be deemed to have been given one Business Day prior to the Maturity Date and on the date of
the occurrence of any Event of Default and upon acceleration of the indebtedness hereunder and the exercise of remedies in accordance with the provisions of Article VII. Each Lender hereby
irrevocably agrees to make its pro rata share of each such Revolving Loan in the amount, in the manner and on the date specified in the preceding sentence  notwithstanding (A) the amount of such
borrowing may not comply with the minimum amount for advances of Revolving Loans otherwise required
hereunder, (B) whether any conditions specified in Section 4.02 are then satisfied, (C) whether a Default or an Event of Default then exists, (D) failure of any such
request or deemed request for Revolving Loan to be made by the time otherwise required hereunder, (E) whether the date of such borrowing is a date on which Revolving Loans are otherwise
permitted to be made hereunder or (F) any termination of the Commitments relating thereto immediately prior to or contemporaneously with such borrowing. In the event that any Revolving Loan
cannot for any reason be made on the date otherwise required 



17





 


above (including, without limitation, as a result of the commencement of a proceeding under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in
effect), then each Lender hereby agrees that it shall forthwith purchase (as of the date such borrowing would otherwise have occurred, but adjusted for any payments received from the Borrower on or
after such date and prior to such purchase) from the Swingline Lender its Applicable Percentage of the outstanding Swingline Loans as shall be necessary to cause each such Lender to share in such
Swingline Loans ratably based upon its Applicable Percentage (determined before giving effect to any termination of the Commitments pursuant to Section 2.10),  provided that (i) all interest
payable on the Swingline Loans shall be for the account of the Swingline Lender until the date as of which the
respective interests in the outstanding Swingline Loans are purchased and (ii) at the time any purchase of the respective interests in the outstanding Swingline Loans pursuant to this sentence
is actually made, the purchasing Lender shall be required to pay to the Swingline Lender, to the extent not paid to the Swingline Lender by the Borrower in accordance with the terms of subsection
(e)(ii) below, interest on the principal amount of the outstanding Swingline Loans purchased for each day from and including the day upon which such borrowing would otherwise have occurred to
but excluding the date of payment for such purchase, at the rate equal to the Federal Funds Effective Rate (it being understood that to the extent such interest is paid to the Swingline Lender by the
Borrower for the period from and including the day upon which such borrowing would otherwise have occurred to but excluding the date of payment for such purchase, each Lender which purchased a pro
rata interest in such Swingline Loan shall be entitled to its pro rata share of such interest payment). 


    (e) Subject
to the provisions of Section 2.14, each Swingline Loan shall bear interest as follows: 



    (i)  ABR Loans.  If such Swingline Loan is a ABR Loan, at a per annum rate equal to the Alternate Base
Rate. 


    (ii)  Quoted Rate Swingline Loans.  If such Swingline Loan is a Quoted Rate Swingline Loan, at a per
annum rate equal to the Quoted Rate applicable thereto. 




    (f)  Payment of Interest.  Interest on Swingline Loans shall be payable in arrears on each applicable
Interest Payment Date (or at such other times as may be specified herein), unless accelerated sooner pursuant to Article VII. 




    Section 2.05  Competitive Bid Procedure.



    (a) Subject
to the terms and conditions set forth herein, from time to time during the Availability Period the Borrower may request Competitive Bids and may (but shall
not have any obligation to) accept Competitive Bids and borrow Competitive Loans; provided that the sum of the total Revolving Credit Exposures plus the
aggregate principal amount of outstanding Competitive Loans at any time shall not exceed the total Commitments. To request Competitive Bids, the Borrower shall notify the Administrative Agent of such
request by telephone, in the case of a Eurodollar Borrowing, not later than 11:00 a.m. (Charlotte, North Carolina time), four Business Days before the date of the proposed Borrowing and, in the
case of a Fixed Rate Borrowing, not later than 10:00 a.m. (Charlotte, North Carolina time), one Business Day before the date of the proposed Borrowing;  provided that the Borrower may submit up to
(but not more than) three Competitive Bid Requests on the same day, but a Competitive Bid Request shall not
be made within five Business Days after the date of any previous Competitive Bid Request, unless any and all such previous Competitive Bid Requests shall have been withdrawn or all Competitive Bids
received in response thereto rejected. Each such telephonic Competitive Bid Request shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Competitive Bid
Request in a form approved by the Administrative Agent and signed by the 



18






 


Borrower. Each such telephonic and written Competitive Bid 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 a Eurodollar Borrowing or a Fixed Rate Borrowing; 


    (iv) the
Interest Period to be applicable to such Borrowing, 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 2.08. 




Promptly
following receipt of a Competitive Bid Request in accordance with this Section, the Administrative Agent shall notify the Lenders of the details thereof by telecopy, inviting the Lenders to
submit Competitive Bids. 


    (b) Each
Lender may (but shall not have any obligation to) make one or more Competitive Bids to the Borrower in response to a Competitive Bid Request. Each Competitive
Bid by a Lender must be in a form approved by the Administrative Agent and the Borrower and must be received by the Administrative Agent by telecopy, in the case of a Eurodollar Competitive Borrowing,
not later than 9:30 a.m. (Charlotte, North Carolina time), three Business Days before the proposed date of such Competitive Borrowing, and in the case of a Fixed Rate Borrowing, not later than
9:30 a.m. (Charlotte, North Carolina time), on the proposed date of such Competitive Borrowing. Competitive Bids that do not conform substantially to the form approved by the Administrative
Agent and the Borrower may be rejected by the Administrative Agent, and the Administrative Agent shall notify the applicable Lender as promptly as practicable. Each Competitive Bid shall specify
(i) the principal amount (which shall be a minimum of $5,000,000 and an integral multiple of $1,000,000 and which may equal the entire principal amount of the Competitive Borrowing requested by
the Borrower) of the Competitive Loan or Loans that the Lender is willing to make, (ii) the Competitive Bid Rate or Rates at which the Lender is prepared to make such Loan or Loans (expressed
as a percentage rate per annum in the form of a decimal to no more than four decimal places) and (iii) the Interest Period applicable to each such Loan and the last day thereof. 


    (c) The
Administrative Agent shall promptly notify the Borrower by telecopy of the Competitive Bid Rate and the principal amount specified in each Competitive Bid and
the identity of the Lender that shall have made such Competitive Bid. 


    (d) Subject
only to the provisions of this paragraph, the Borrower may accept or reject any Competitive Bid. The Borrower shall not be obligated to accept any
Competitive Bid. The Borrower shall notify the Administrative Agent by telephone, confirmed by telecopy in a form approved by the Administrative Agent, whether and to what extent it has decided to
accept or reject each Competitive Bid, in the case of a Eurodollar Competitive Borrowing, not later than 10:30 a.m. (Charlotte, North Carolina time), three Business Days before the date of the
proposed Competitive Borrowing, and in the case of a Fixed Rate Borrowing, not later than 10:30 a.m. (Charlotte, North Carolina time), on the proposed date of the Competitive Borrowing;  provided
that (i) the failure of the Borrower to give such notice shall be deemed to be a rejection of each Competitive Bid, (ii) the
Borrower shall not accept a Competitive Bid made at a particular Competitive Bid Rate if the Borrower rejects a Competitive Bid made at a lower Competitive Bid Rate unless the Borrower determines that
the higher bid is more favorable to the Borrower, (iii) the aggregate amount of the Competitive Bids accepted by the Borrower shall not exceed
the aggregate amount of the requested Competitive Borrowing specified in the related Competitive Bid Request, (iv) to the extent necessary to comply with clause (iii) above, the Borrower
may 



19





 


accept Competitive Bids at the same Competitive Bid Rate in part, which acceptance, in the case of multiple Competitive Bids at such Competitive Bid Rate, shall be made pro rata in accordance with the
amount of each such Competitive Bid, unless the Borrower determines that acceptance of Competitive Bids in some other order is more favorable to the Borrower, and (v) except pursuant to
clause (iv) above, no Competitive Bid shall be accepted for a Competitive Loan unless such Competitive Loan is in a minimum principal amount of $5,000,000 and an integral multiple of
$1,000,000; provided further that if a Competitive Loan must be in an amount less than $5,000,000 because of the provisions of clause (iv) above,
such Competitive Loan may be for a minimum of $1,000,000 or any integral multiple thereof, and in calculating the pro rata allocation of acceptances of portions of multiple Competitive Bids at a
particular Competitive Bid Rate pursuant to clause (iv) the amounts shall be rounded to integral multiples of $1,000,000 in a manner determined by the Borrower. A notice given by the Borrower
pursuant to this paragraph shall be irrevocable. 


    (e) The
Administrative Agent shall promptly notify each bidding Lender by telecopy whether or not its Competitive Bid has been accepted (and, if so, the amount and
Competitive Bid Rate so accepted), and each successful bidder will thereupon become bound, subject to the terms and conditions hereof, to make the Competitive Loan in respect of which its Competitive
Bid has been accepted. 


    (f)  If
the Administrative Agent shall elect to submit a Competitive Bid in its capacity as a Lender, it shall submit such Competitive Bid directly to the Borrower at
least one quarter of an hour earlier than the time by which the other Lenders are required to submit their Competitive Bids to the Administrative Agent pursuant to paragraph (b) of this
Section. 




    Section 2.06  Letters of Credit.



    (a)  General.  Subject to the terms and conditions set forth herein, the Borrower may request the
issuance of Letters of Credit for its own account, in a form reasonably acceptable to the Administrative Agent and the Issuing Bank, at any time and from time to time during the Availability Period.
In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by the
Borrower to, or entered into by the Borrower with, the Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control. 


    (b)  Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.  To request the issuance of a
Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall hand deliver or telecopy (or transmit by electronic communication, if arrangements for
doing so have been approved by the Issuing Bank) to the Issuing Bank and the Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal or extension) a notice
requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, the date of issuance, amendment, renewal or extension, the date on which such
Letter of Credit is to expire (which shall comply with paragraph (c) of this Section), the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. If requested by the Issuing Bank, the Borrower also shall submit a letter of credit application on the
Issuing Bank's standard form in connection with any request for a Letter of Credit. A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or
extension of each Letter of Credit the Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension, (i) the sum of the total
Revolving Credit Exposures plus the aggregate principal amount of outstanding Competitive Loans shall not exceed the total Commitments and (ii) the LC Exposure shall not exceed the LC
Commitment. 



20





 


    (c)  Expiration Date.  Each Letter of Credit shall expire at or prior to the close of business on the
earlier of (i) the date one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and
(ii) the date that is five Business Days prior to the Maturity Date. 


    (d)  Participations.  By the issuance of a Letter of Credit (or an amendment to a Letter of Credit
increasing the amount thereof) and without any further action on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby grants to each Lender, and each Lender hereby acquires from the
Issuing Bank, a participation in such Letter of Credit equal to such Lender's Applicable Percentage of the aggregate amount available to be drawn under such Letter of Credit. In consideration and in
furtherance of the foregoing, each Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Bank, such Lender's Applicable Percentage of
each LC Disbursement made by the Issuing Bank and not reimbursed by the Borrower on the date due as provided in paragraph (e) of this Section, or of any reimbursement payment required to be
refunded to the Borrower for any reason. Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and
unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or
reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. 



    (e)  Reimbursement.  If the Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit,
the Borrower shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not later than 12:00 noon (Charlotte, North Carolina time), on the date
that such LC Disbursement is made, if the Borrower shall have received notice of such LC
Disbursement prior to 12:00 noon (Charlotte, North Carolina time), on such date, or, if such notice has not been received by the Borrower prior to such time on such date, then not later than 12:00
noon (Charlotte, North Carolina time), on (i) the Business Day that the Borrower receives such notice, if such notice is received prior to 12:00 noon (Charlotte, North Carolina time), on the
day of receipt, or (ii) the Business Day immediately following the day that the Borrower receives such notice, if such notice is not received prior to such time on the day of receipt;  provided that,
 if such LC Disbursement is not less than $5,000,000, the Borrower may, subject to the conditions to borrowing set forth herein, request
in accordance with Section 2.03, Section 2.04 or 2.06 that such payment be financed with an ABR Revolving Borrowing or Swingline Loan in an equivalent amount and, to the extent so
financed, the Borrower's obligation to make such payment shall be discharged and replaced by the resulting ABR Revolving Borrowing or Swingline Loan. If the Borrower fails to make such payment when
due, the Administrative Agent shall notify each Lender of the applicable LC Disbursement, the payment then due from the Borrower in respect thereof and such Lender's Applicable Percentage thereof.
Promptly following receipt of such notice, each Lender shall pay to the Administrative Agent its Applicable Percentage of the payment then due from the Borrower, in the same manner as provided in
Section 2.08 with respect to Loans made by such Lender (and Section 2.08 shall apply, mutatis mutandis, to the payment obligations of the
Lenders), and the Administrative Agent shall promptly pay to the Issuing Bank the amounts so received by it from the Lenders. Promptly following receipt by the Administrative Agent of any payment from
the Borrower pursuant to this paragraph, the Administrative Agent shall distribute such payment to the Issuing Bank or, to the extent that Lenders have made payments pursuant to this paragraph to
reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as their interests may appear. Any payment made by a Lender pursuant to this paragraph to reimburse the Issuing Bank for any LC
Disbursement (other than the funding of ABR Revolving Loans as contemplated above) shall not constitute a Loan and shall not relieve the Borrower of its obligation to reimburse such LC Disbursement. 



21







  



    (f)  Obligations Absolute.  The Borrower's obligation to reimburse LC Disbursements as provided in
paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of: 



     (i) any
lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein; 


    (ii) any
amendment or waiver of or any consent to departure from all or any of the provisions of any Letter of Credit or this Agreement; 


    (iii) the
existence of any claim, setoff, defense or other right that the Borrower, any other party guaranteeing, or otherwise obligated with, the Borrower, any
Subsidiary or other Affiliate thereof or any other Person may at any time have against the beneficiary under any Letter of Credit, the Issuing Bank, the Administrative Agent or any Lender or any other
Person, whether in connection with this Agreement or any other related or unrelated agreement or transaction; 



    (iv) any
draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect; 


    (v) payment
by the Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit;
and 


    (vi) any
other act or omission to act or delay of any kind of the Issuing Bank, the Lenders, the Administrative Agent or any other Person or any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of the Borrower's obligations
hereunder. 




Neither
the Administrative Agent, the Lenders nor the Issuing Bank, nor any of their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or
transfer of any Letter of Credit or any payment or failure to make any payment thereunder, including any of the circumstances specified in clauses (i) through (vi) above, as well as any
error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to
any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the
Issuing Bank; provided that the provisions of this paragraph (f) shall not be construed to excuse the Issuing Bank from liability to the Borrower
to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the
Borrower that are caused by the Issuing Bank's failure to exercise the agreed standard of care (as set forth below) in determining whether drafts and other documents presented under a Letter of Credit
comply with the terms thereof. The parties hereto expressly agree that the Issuing Bank shall have exercised the agreed standard of care in the absence of gross negligence or willful misconduct on the
part of the Issuing Bank. Without limiting the generality of the foregoing, it is understood that the Issuing Bank may accept documents that appear on their face to be in substantial compliance with
the terms of a Letter of Credit, without responsibility for further investigation, regardless of any notice or information to the contrary, and may make payment upon presentation of documents that
appear on their face to be in substantial compliance with the terms of such Letter of Credit; provided that the Issuing Bank shall have the right, in
its sole discretion, to decline to accept such documents and to make such payment if such documents are not in strict compliance with the terms of such Letter of Credit. 



22





 


    (g)  Disbursement Procedures.  The Issuing Bank shall, promptly following its receipt thereof, examine
all documents purporting to represent a demand for payment under a Letter of Credit. The Issuing Bank shall promptly notify the Administrative Agent and the Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or will make an LC Disbursement thereunder; provided that any failure to give
or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to any such LC Disbursement. 


    (h)  Interim Interest.  If the Issuing Bank shall make any LC Disbursement, then, unless the Borrower
shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrower reimburses such LC Disbursement, at the rate per annum then applicable to ABR Revolving Loans; provided
that, if the Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of this Section, then Section 2.14(d) shall apply. Interest accrued pursuant to this
paragraph shall be for the account of the Issuing Bank, except that interest accrued on and after the date of payment by any Lender pursuant to paragraph (e) of this Section to reimburse the
Issuing Bank shall be for the account of such Lender to the extent of such payment. 


    (i)  Replacement of the Issuing Bank.  The Issuing Bank may be replaced at any time by written agreement
among the Borrower, the Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank. The Administrative Agent shall notify the Lenders of any such replacement of the Issuing Bank.
At the time any such replacement shall become effective, the Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 2.13(b). From and after
the effective date of any such replacement, (i) the successor Issuing Bank shall have all the rights and
obligations of the Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term "Issuing Bank" shall be deemed to refer to
such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require. After the replacement of an Issuing Bank hereunder, the replaced
Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit issued by it prior to such
replacement, but shall not be required to issue additional Letters of Credit. 


    (j)  Cash Collateralization.  If any Event of Default shall occur and be continuing, on the Business Day
that the Borrower receives notice from the Administrative Agent or the Required Lenders (or, if the maturity of the Loans has been accelerated, Lenders with LC Exposure representing greater than 50%
of the total LC Exposure) demanding the deposit of cash collateral pursuant to this paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative
Agent and for the benefit of the Lenders, an amount in cash equal to the LC Exposure as of such date plus any accrued and unpaid interest thereon;  provided that the obligation to deposit such cash
collateral shall become effective immediately, and such deposit shall become immediately due and
payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in clause (h) or (i) of Article VII. Such
deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal, over such account. Other than any interest earned on the investment of such deposits, which investments shall be made at the option
and sole discretion of the Administrative Agent and at the Borrower's risk and expense, such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such
account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC 



23





 


Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such
time or, if the maturity of the Loans has been accelerated (but subject to the consent of Lenders with LC Exposure representing greater than 50% of the total LC Exposure), be applied to satisfy other
obligations of the Borrower under this Agreement. If the Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount (to
the extent not applied as aforesaid) shall be returned to the Borrower within two Business Days after all Events of Default have been cured or waived. 




    Section 2.07  Extension of Maturity Date.



    (a) The
Borrower may request, in a notice given as herein provided to the Administrative Agent (which the Administrative Agent, working with the Borrower, will
distribute to each of the Lenders) during the 90 day period commencing on the date that is the first day after each anniversary of the Closing Date (the most recent such anniversary, the
"Current Anniversary Date"), that the Maturity Date then in
effect (the "Existing Maturity Date") be extended for a twelve month period, which notice shall specify the new Maturity Date (which shall not be later
than the fifth anniversary of the Current Anniversary Date) to be in effect following such extension (the "Requested Maturity Date"). Each Lender,
acting in its sole discretion, shall, not later than a date 30 days after its receipt of any such notice from the Borrower, notify the Borrower and the Administrative Agent in writing of its
election to extend or not to extend the Maturity Date with respect to its Commitment. Any Lender which shall not timely notify the Borrower and the Administrative Agent of its election to extend the
Maturity Date shall be deemed to have elected not to extend the Maturity Date with respect to its Commitment (any Lender who timely notifies the Borrower and the Administrative Agent of an election
not to extend its Commitment and any Lender so deemed to have elected not to extend its Commitment being referred to as a "Terminating Lender"). The
election of any Lender to agree to a requested extension shall not obligate any other Lender to agree. 


    (b) If
and only if Lenders holding Commitments that aggregate at least 662/3% of the aggregate amount of the Commitments on the date of the notice
delivered by the Borrower pursuant to paragraph (a) above (including Commitments of all Terminating Lenders on such date) shall have agreed during the 30 day period referred to in
paragraph (a) above to extend the Existing Maturity Date, then, unless the Borrower notifies the Administrative Agent in writing not later than 10 days after the expiration of the
30 day period referred to in paragraph (a) above that the Borrower rejects the extension of the Existing Maturity Date by less than all of the Lenders (in which event the Existing
Maturity Date shall remain in effect for all Lenders), (i) the Commitments of the Lenders other than Terminating Lenders (the "Continuing
Lenders") shall, subject to the other provisions of this Agreement, be extended to the Requested Maturity Date specified in the notice from the Borrower, and as to such Lenders
the term "Maturity Date", as used herein, shall on and after the date as of which the requested extension is effective mean such Requested Maturity Date,  provided that if such date is not a Business Day,
 then such Requested Maturity Date shall be the immediately preceding Business Day, and (ii) the
Commitments of the Terminating Lenders shall continue until the Existing Maturity Date, and shall then terminate, and as to the Terminating Lenders, the term "Maturity Date", as used herein, shall
continue to mean such Existing Maturity Date. Notwithstanding anything to the contrary contained in this Section 2.06, the Maturity Date may not be extended for more than two additional
twelve-month periods. 


    (c) In
the event that the Maturity Date shall have been extended for the Continuing Lenders in accordance with paragraph (b) above and, in connection with such
extension, there are Terminating Lenders, the Borrower may, at its own expense, require any Terminating Lender to transfer and assign, without recourse (in accordance with Section 9.04(b)) all
or part of its 



24





 


interests, rights and obligations under this Agreement to an assignee (which assignee may be another Lender, if another Lender accepts such assignment) that shall assume such assigned obligations and
that shall agree that its Commitment will expire on the Maturity Date in effect for Continuing Lenders pursuant to such paragraph (b); provided,
however, that (i) the Borrower shall have received a written consent of the Administrative Agent in the case of an assignee that is not a Lender (which consent shall not
unreasonably be withheld) and (ii) the assigning Lender shall have received from the Borrower or such assignee full payment in immediately available funds of the principal of, interest,
facility fees and utilization fees accrued to the date of such payment on the Loans made by it hereunder to the
extent that such Loans are subject to such assignment and all other amounts owed to it hereunder (including any amounts that would be payable to the assigning Lender pursuant to Section 2.17 if
such assignment were, instead, a prepayment of the Loans of such Lender). Any such assignee's initial Maturity Date shall be the Maturity Date in effect for the Continuing Lenders at the time of such
assignment. The Borrower shall not have any right to require a Lender to assign any part of its interests, rights and obligations under this Agreement pursuant to this paragraph (c) unless it
has notified such Lender of its intention to require the assignment thereof at least ten days prior to the proposed assignment date. 




    Section 2.08  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 or Competitive Bid Request; provided that ABR Revolving Loans made to finance the
reimbursement of an LC Disbursement as provided in Section 2.06(e) shall be remitted by the Administrative Agent to the Issuing Bank. 


    (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 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 2.09  Interest Elections.



    (a) Each
Revolving Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Eurodollar Revolving 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 Revolving 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 



25





 


the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing. This Section shall not apply to Competitive Borrowings, which may not be
converted or continued. 


    (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 Revolving 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 Revolving 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 converted to an ABR Borrowing. 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 Revolving Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Revolving Borrowing shall
be converted to an ABR Borrowing at the end of the Interest Period applicable thereto. 





    Section 2.10  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 2.12, the sum of the Revolving 



26





 


Credit Exposures plus the aggregate principal amount of outstanding Competitive 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 2.11  Repayment of Loans; Evidence of Debt.



    (a) The
Borrower hereby unconditionally promises to pay (i) 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 and (ii) to the Administrative Agent for the account of each Lender the then unpaid principal amount of each
Competitive Loan on the last day of the Interest Period applicable to such Loan. 


    (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 Class and 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 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 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 2.12  Prepayment of Loans.



    (a) The
Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, subject to prior notice in accordance with
paragraph (b) of this 



27





 


Section; provided that the Borrower shall not have the right to prepay any Competitive Loan without the prior consent of the Lender thereof. 


    (b) The
Borrower shall notify the Administrative Agent by telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of prepayment of a
Eurodollar Revolving Borrowing, not later than 11:00 a.m. (Charlotte, North Carolina time), three Business Days before the date of prepayment, or (ii) in the case of prepayment of an ABR
Revolving 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 2.10, then such notice of prepayment may be revoked if such notice of termination is revoked in
accordance with Section 2.10. Promptly following receipt of any such notice relating to a Revolving Borrowing, the Administrative Agent shall advise the Lenders of the contents thereof. Each
partial prepayment of any Revolving Borrowing shall be in an amount that would be permitted in the case of an advance of a Revolving Borrowing of the same Type as provided in Section 2.02. Each
prepayment of a Revolving 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 2.14. 




    Section 2.13  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 Revolving Credit Exposure after its Commitment terminates, then such facility fee shall continue to
accrue on the daily amount of such Lender's Revolving Credit Exposure from and including the date on which its Commitment terminates to but excluding the date on which such Lender ceases to have any
Revolving Credit Exposure. 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) The
Borrower agrees to pay to the Administrative Agent for the account of each Lender a utilization fee equal to (i) the Applicable Rate in effect from time
to time for each day on which the Commitment Utilization Percentage is less than 75%, but greater than or equal to 50% and (ii) at a rate equal to the Applicable Rate in effect from time to
time for each day on which the Commitment Utilization Percentage equals or exceeds 75%, which fee shall accrue on the daily amount of the Used Commitment of such Lender for each Excess Utilization Day
during the period from and including the Closing Date to but excluding the date on which such Lender's Commitment terminates; provided that, if such
Lender continues to have any Revolving Credit Exposure after its Commitment terminates, then such utilization fee shall continue to accrue on the daily amount of such Lender's Revolving Credit
Exposure for each Excess Utilization Day from and including the date on which its Commitment terminates to but excluding the date on which such Lender ceases to have any Revolving Credit Exposure.
Accrued utilization 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 utilization fees accruing after the date on which the Commitments terminate shall be payable
on demand. All utilization fees shall be computed on the 



28





 


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). 


    (c) The
Borrower agrees to pay (i) to the Administrative Agent for the account of each Lender a participation fee with respect to its participations in Letters
of Credit, which shall accrue at a rate per annum equal to the Applicable Rate applicable to interest on Eurodollar Revolving Loans on the average daily amount of such Lender's LC Exposure (excluding
any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Closing Date to but excluding the later of the date on which such Lender's Commitment
terminates and the date on which such Lender ceases to have any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue at the rate of 0.125% per annum on the average daily
amount of the LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Closing Date to but excluding the later of the date of
termination of the Commitments and the date on which there ceases to be any LC Exposure, as well as the Issuing Bank's standard fees with respect to the issuance, amendment, renewal or extension of
any Letter of Credit or processing of drawings thereunder. Participation fees and fronting fees accrued through and including the last day of March, June, September and December of each year shall be
payable on the third Business Day following such last day, commencing on the first such date to occur after the Closing Date; provided that all such
fees shall be payable on the date on which the Commitments terminate and any such fees accruing after the date on which the Commitments terminate shall be payable on demand. Any other fees payable to
the Issuing Bank pursuant to this paragraph shall be payable within 10 days after demand. All participation fees and fronting 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). 


    (d) 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. 


    (e) All
fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent (or to the Issuing Bank, in the case of fees
payable to it) for distribution, in the case of facility fees, utilization fees and participation fees, to the Lenders. Fees paid shall not be refundable under any circumstances. 




    Section 2.14  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 (i) in the case of a Eurodollar Revolving Loan, the LIBO Rate
for the Interest Period in effect for such Borrowing plus the Applicable Rate, or (ii) in the case of a Eurodollar Competitive Loan, the LIBO Rate for the Interest Period in effect for such
Borrowing plus (or minus, as applicable) the Margin applicable to such Loan. 


    (c) Each
Fixed Rate Loan shall bear interest at a rate per annum equal to the Fixed Rate applicable to such Loan. 


    (d) 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,
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. 



29







  




    (e) 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 (d) 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 Revolving 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. 


    (f)  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. 


    (g) 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 2.15  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 (or, in the case of a Eurodollar Competitive Loan, the Lender that is required to make such Loan) that
the LIBO Rate for such Interest Period will not, in their reasonable judgment, adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loan)
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 Revolving Borrowing to, or
continuation of any Revolving Borrowing as, a Eurodollar Borrowing shall be ineffective, (ii) if any Borrowing Request requests a Eurodollar Revolving Borrowing, such Borrowing shall be made as
an ABR Borrowing and (iii) any request by the Borrower for a Eurodollar Competitive 



30





 


Borrowing shall be ineffective; provided that (A) if the circumstances giving rise to such notice do not affect all the Lenders, then requests by
the Borrower for Eurodollar Competitive Borrowings may be made to Lenders that are not affected thereby and (B) if the circumstances giving rise to such notice affect only one Type of
Borrowings, then the other Type of Borrowings shall be permitted. 




    Section 2.16  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 or the Issuing Bank (other than any reserves included in the Statutory Reserve Rate); or 


    (ii) impose
on any Lender or the Issuing Bank or the London interbank market any other condition affecting this Agreement or Eurodollar Loans or Fixed Rate Loans made
by such Lender or any Letter of Credit or participation therein; 




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


    (b) If
any Lender or the Issuing Bank 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 or the Issuing Bank's capital or on the capital of such Lender's or the Issuing Bank's holding company, if any, as a consequence of this Agreement or the Loans made by, or
participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below that which such Lender or the Issuing Bank or such Lender's or the
Issuing Bank's holding company could have achieved but for such Change in Law (taking into consideration such Lender's or the Issuing Bank's policies and the policies of such Lender's or the Issuing
Bank's holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank or such Lender's or the Issuing Bank's holding company for any such reduction suffered. 


    (c) A
certificate of a Lender or the Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or the Issuing Bank 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 or the Issuing Bank, as the case may be, 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 or the Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of such Lender's or the
Issuing Bank's right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender or the Issuing Bank pursuant
to this Section for any increased costs or reductions incurred more than six months prior to the date that such Lender or the Issuing Bank, as the case may be, notifies the Borrower of the Change in
Law giving rise to such increased costs or reductions and of such Lender's or the Issuing Bank's intention to claim compensation therefore; provided
further



31





 


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. 


    (e) Notwithstanding
the foregoing provisions of this Section, a Lender shall not be entitled to compensation pursuant to this Section in respect of any Competitive Loan
if the Change in Law that would otherwise entitle it to such compensation shall have been publicly announced prior to submission of the Competitive Bid pursuant to which such Loan was made. 




    Section 2.17  Break Funding Payments.


    In
the event of (a) the payment of any principal of any Eurodollar Loan or Fixed Rate 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 Revolving Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice is permitted to be revocable under Section 2.12(b) and is
revoked in accordance herewith), (d) the failure to borrow any Competitive Loan after accepting the Competitive Bid to make such Loan, or (e) the assignment of any Eurodollar Loan or
Fixed Rate 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 2.20, 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 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 2.18  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 or
Issuing Bank (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, each Lender and the Issuing Bank, within 10 days after written demand therefore, for the full amount
of any Indemnified Taxes 



32





 


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, such Lender or the Issuing
Bank, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender or the Issuing Bank, or by the
Administrative Agent on its own behalf or on behalf of a Lender or the Issuing Bank, 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) Any
Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrower is located, or any
treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by
applicable law or reasonably requested by the Borrower, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or
at a reduced rate. 


    (f)  If
the Borrower pays any additional amount under this Section 2.18 in respect of any Lender and such Lender determines in its sole judgment that it has
actually received or realized in connection therewith any refund or any reduction of, or credit against, its Tax liabilities in or with respect to the taxable year in which the additional amount is
paid (a "Tax Benefit"), such Lender shall pay to the Borrower an amount that such Lender determines, in its sole judgment, is equal to the net benefit, after tax, which was obtained by such Lender in
such year as a consequence of such Tax Benefit; provided, however, that (i) such Lender may determine, in its sole judgment consistent with the policies of such Lender, whether to seek a Tax
Benefit, (ii) any Taxes that are imposed on such Lender as a result of a disallowance or reduction (including through the expiration of any tax credit carryover or carryback of such lender that
otherwise would not have expired) of any Tax Benefit with respect to which such Lender has made a payment to the Borrower pursuant to the Section 2.18(f) shall be treated
as a Tax for which the Borrower is obligated to indemnify such Lender pursuant to this Section 2.18 without any exclusions or defenses and (iii) nothing in this Section 2.18(f)
shall require such Lender to disclose any confidential information to the Borrower (including, without limitation, its tax returns). 




    Section 2.19  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, fees or reimbursement of LC Disbursements, or under
Section 2.16, 2.17 or 2.18, 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 payments to be made directly to the Issuing Bank as
expressly provided herein and except that payments pursuant to Sections 2.16, 2.17, 2.18 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 



33





 


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, unreimbursed LC Disbursements,
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 and unreimbursed LC Disbursements then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of principal and unreimbursed LC Disbursements 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 Revolving Loans or participations in LC Disbursements resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Revolving Loans and participations in LC
Disbursements 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 Revolving Loans and participations in LC Disbursements 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 Revolving Loans and participations in LC Disbursements; 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 Agreement or any payment
obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements 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 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 or the Issuing Bank hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be, the amount due. In such event, if the Borrower has not in fact made
such payment, then each of the Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or
Issuing Bank 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 2.06(d) or (e), 2.08(b) or 2.19(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. 



34





 

    Section 2.20  Mitigation Obligations; Replacement of Lenders.



    (a) If
any Lender requests compensation under Section 2.16, 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 2.18, 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 2.16 or 2.18, 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 2.16, 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 2.18, 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 Agreement (other than any outstanding Competitive Loans held by it) 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 (and, if a Commitment is being assigned, the Issuing Bank), 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 (other than Competitive Loans) and participations in LC Disbursements, 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 2.16 or payments required to be made pursuant to Section 2.18, 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. 



 
 

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 Significant 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 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, 


35





 


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, including, without limitation,
HMO Regulators and Insurance Regulators, except such as have been obtained or made and are in full force and effect, (b) will not violate any applicable law or regulation, including, without
limitation, HMO Regulations and Insurance Regulations, or the charter, by-laws or other organizational documents of the Borrower or any of its Subsidiaries or any order of any Governmental
Authority, including, without limitation, HMO Regulations and Insurance Regulations, (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 (except for any such violations,
defaults or rights that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect), and (d) will not result in the creation or imposition of any
Lien on any asset of the Borrower or any of its Subsidiaries (other than Liens permitted under Section 6.03). 


    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 December 31, 1999, audited 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 September 30, 2000. 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
December 31, 1999, 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 September 30, 2000 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 such defects in title that, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. 


    (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 as to which there is a reasonable possibility of an adverse determination and (i) that, if adversely determined, could reasonably be
expected, individually or 



36





 


in the aggregate, to result in a Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve this 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 or (iii) has received written notice of any claim with respect to any Environmental
Liability. 


    (c) Since
the date of this 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.


    Each
of the Borrower and its Subsidiaries is in compliance with all laws, rules, regulations and orders of any Governmental Authority (including the HMO Regulations and Insurance
Regulations) 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 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 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.


    None
of the reports, financial statements, certificates or other information furnished by or on behalf of the Borrower to the Administrative Agent or any Lender in connection with the
negotiation of this Agreement or delivered hereunder (when considered as a whole and 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



37





 


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  Nature of Business.


    As
of the Closing Date, the Borrower and its Subsidiaries are primarily engaged in the business of offering of health insurance products and services, including preferred provider
organization plans, point-of-sale and hybrid plans, indemnity plans, health maintenance organization plans and specialty products such as pharmacy benefit management, dental,
utilization management, vision, behavioral health, life and disability insurance, long term care insurance, flexible spending accounts, COBRA administration and Medicare supplements, managed care
services, other health care services and activities reasonably related thereto. 


    Section 3.14  Purpose of Loans and Letters of Credit.


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


 
 

ARTICLE IV
  
    CONDITIONS


    Section 4.01  Closing Date.


    The
obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective until 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 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 Agreement) that such party has signed a
counterpart of this Agreement. 


    (b) The
Administrative Agent shall have received favorable written opinions (addressed to the Administrative Agent and the Lenders and dated the Closing Date) of
Gibson, Dunn & Crutcher LLP, counsel for the Borrower, and of General Counsel to the Borrower, substantially in the form of Exhibit B, and covering such other matters relating to the
Borrower, this Agreement or the Transactions as the Required Lenders shall reasonably request. The Borrower hereby requests such counsel to deliver such opinion. 


    (c) 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, the authorization of the Transactions and any other legal matters relating to the Borrower, this Agreement or the Transactions, all in form
and substance satisfactory to the Administrative Agent and its counsel. 


    (d) The
Administrative Agent shall have received a certificate, dated the Closing Date and signed by the President, a Vice President or a Financial Officer of the
Borrower, confirming compliance, as of the Closing Date, with the conditions set forth in paragraphs (a) and (b) of Section 4.02. 



38







  




    (e) The
Administrative Agent shall have received all fees and other amounts relating to the Transaction due and payable on or prior to the Closing Date, including,
without limitation the fees set forth in the Fee Letter and to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by
the Borrower hereunder. 


    (f)  The
commitments under the Existing Credit Agreement shall have been terminated and all amounts owing thereunder shall have been paid. 




    The
Administrative Agent shall notify the Borrower and the Lenders of the Closing Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations
of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to
Section 9.02) at or prior to 3:00 p.m. (Charlotte, North Carolina time), on March 30, 2001 (and, in the event such conditions are not so satisfied or waived, the Commitments shall
terminate at such time). 


    Section 4.02  Each Credit Event.


    The
obligation of each Lender to make a Loan on the occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew or extend any Letter of Credit, is subject to the
satisfaction of the following conditions: 



    (a) The
representations and warranties of the Borrower set forth in this Agreement shall be true and correct on and as of the date of such Borrowing or the date of
issuance, amendment, renewal or extension of such Letter of Credit, as applicable (except to the extent such representations and warranties relate to an earlier date, in which case such
representations and warranties shall be true and correct as of such earlier date); provided, that the representation and warranty contained in
Section 3.04(b) shall be deemed made, and shall be required to be true and correct, only on the Closing Date. 


    (b) At
the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no
Default shall have occurred and be continuing. 




    Each
Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit 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. 


 
 

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 and all Letters of
Credit shall have expired or terminated and all LC Disbursements shall have been reimbursed, 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: 



    (a) within
100 days after the end of each fiscal year of the Borrower, its audited consolidated balance sheet and related statements of income, shareholders'
equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by PricewaterhouseCoopers LLP or
other independent public accountants of recognized national standing (without a "going concern" or like qualification or exception and without any qualification or exception as to the scope of such
audit) to the effect that such consolidated financial statements present fairly in all material respects the financial 



39





 


condition and results of operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied (the Lenders agree that the Borrower's
obligations under this paragraph (a) will be satisfied in respect of any fiscal year by delivery to the Administrative Agent, with copies for each Lender, within 100 days after the end
of such fiscal year of its annual report for such fiscal year on Form 10-K (without a "going concern" or like qualification or exception and without any qualification or exception
as to the scope of such audit) as filed with the SEC); 


    (b) 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
March 31, 2001), its consolidated balance sheet, related statements of income as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, and related
statements of cash flows for 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); 


    (c) 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, and
(ii) setting forth reasonably detailed calculations demonstrating compliance with Section 6.01; 


    (d) promptly
after the same become publicly available or after transmission or receipt thereof, copies of all periodic reports, proxy statements and registration
statements (other than exhibits thereto) filed by the Borrower or any Subsidiary with the Securities and Exchange Commission, 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 (d); 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 Agreement, as the Administrative Agent or any Lender (acting through the Administrative Agent) may reasonably request. 




    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 (5) Business Days after an executive
officer of the Borrower obtains knowledge of, the following: 



    (a) the
occurrence of any Default if such Default is continuing; and 


    (b) the
filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority (including, without limitation, HMO Regulators
and Insurance Regulators)
against or affecting the Borrower or any Affiliate thereof that, if adversely determined, could reasonably be expected to result in a Material Adverse Effect. 



40





 

    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 Significant 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 certifications, and qualifications (including, without limitation, those qualifications with respect to solvency and capitalization), and
franchises material to the conduct of its business and/or required under the HMO Regulations or the Insurance Regulations in connection with the ownership or operation of HMOs or insurance companies
except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect; provided, that the foregoing shall not apply
to 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 (other than agreements and other instruments evidencing Indebtedness,
except where the failure to pay such Indebtedness would constitute an Event of Default pursuant clause (f) of Article VII), that, if not paid, could reasonably be expected to result in a
Material Adverse Effect before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings and
(b) the Borrower or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP. 


    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,
except for ordinary wear and tear and sales and other dispositions permitted under this Agreement, 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. 


    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 entries in conformity with GAAP are made of all 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 and subject to such confidentiality restrictions as the Borrower may reasonably impose, 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
(including, without limitation, the HMO Regulations and Insurance Regulations pertaining to fiscal soundness, solvency or financial condition), except where the failure to do so, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse Effect. 


41





 

    Section 5.08  Use of Proceeds and Letters of Credit.



    The
proceeds of the Loans and the Letters of Credit will be used for the purposes described in Section 3.14. No part of the proceeds of any Loan will be used, whether directly
or indirectly, for any purpose that entails a violation of Regulation U or Regulation X of the Regulations of the Board. 


 
 

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 and all Letters of Credit have
expired or terminated and all LC Disbursements shall have been reimbursed, the Borrower covenants and agrees with the Lenders that: 


    Section 6.01  Financial Covenants.



    (a)  Consolidated Leverage Ratio.  The Borrower will not permit the Consolidated Leverage Ratio for any
period of four consecutive fiscal quarters to be greater than 3.0 to 1.0. 



    (b)  Consolidated Interest Coverage Ratio.  The Borrower will not permit the Consolidated Interest
Coverage Ratio for any period of four consecutive fiscal quarters to be less than 3.0 to 1.0. 




    Section 6.02  Subsidiary Indebtedness.


    The
Borrower will not permit any Subsidiary to create, incur, assume or permit to exist any Indebtedness, except: 



    (a) 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; 


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


    (c) Guarantees
by any Subsidiary of Indebtedness of any other Subsidiary; 


    (d) Capital
Lease Obligations and purchase money Indebtedness and any refinancings, renewals or extensions thereof; provided that the aggregate amount of Indebtedness
evidenced by Capital Lease Obligations and the aggregate principal amount of such purchase money Indebtedness, and all such refinancings, renewals or extensions, outstanding under this
clause (d) shall not at any time exceed $50,000,000; 


    (e) Hedging
Agreements in the ordinary course of business; or 


    (f)  other
unsecured Indebtedness in an aggregate principal amount not exceeding $75,000,000 at any time outstanding. 




    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, 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 (except proceeds thereof) and
(ii) such Lien shall secure only those obligations which it secures on the date hereof and extensions, renewals and replacements thereof that do not increase the outstanding principal amount
thereof; 



42





 


    (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; 


    (d) Liens
consisting of judgment or judicial attachment liens; provided that the enforcement of such Liens is
effectively stayed and all such Liens in the aggregate at any time outstanding for the Borrower and its Subsidiaries do not exceed $25,000,000; 



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



    (f)  deposits,
reserves or contingent payment arrangements required under or pursuant to HMO Regulations or Insurance Regulations or securing regulatory capital or
other financial responsibility requirements; 


    (g) Liens
arising by reason of arrangements constituting Cash Equivalents of the type specified in clause (d) of the definition of "Cash Equivalents"; 


    (h) Liens
on property securing purchase money Indebtedness (including Capital Lease Obligations), provided that
(i) such Lien attaches to such property within 90 days after the acquisition of such property, (ii) such Liens secure only the payment of the purchase money Indebtedness (and
refinancings, renewals or extensions thereof) and (iii) such Lien attaches only to the property subject to the purchase money Indebtedness and does not encumber any other property of the
Borrower or such Subsidiary; or 


    (i)  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 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 (including the stock
of any of its Subsidiaries) 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 


43





 


good faith that such liquidation, dissolution or disposition is in the best interests of the Borrower, and (v) the Borrower and its Subsidiaries may sell immaterial businesses, including
Subsidiaries. 


    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 and pursuant to the reasonable requirements of
the business of the Company or such Subsidiary, (b) 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, (c) transactions between or among the Borrower and its Subsidiaries not involving any other Affiliates or (d) as otherwise permitted by this Agreement. 


    Section 6.06  Restrictive Agreements.


    The
Borrower will not, and will not permit any of its Significant 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 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 the foregoing shall
not apply to (i) restrictions and conditions imposed by law, rule, regulation or regulatory administrative agreement or determination or by this Agreement, (ii) customary restrictions
and conditions contained in agreements relating to the sale of a Subsidiary pending such sale, provided such restrictions and conditions apply only to the Subsidiary that is to be sold and such sale
is permitted hereunder, (iii) any agreement or other instrument of a Person acquired by the Borrower or any Subsidiary at the time of such acquisition, which restriction is not applicable to
any Person, or the assets of any Person, other than the Person so acquired or the assets of the Person so acquired and was not entered into in contemplation of such acquisition,
(iv) restrictions and conditions contained in the Amended and Restated Undertakings dated as of March 5, 1996 among Blue Cross of California, a California nonprofit public benefit
corporation, the Borrower, CaliforniaCare Health Plans, Wellpoint Dental Plan, Wellpoint Pharmacy Plan, Wellpoint Life Insurance Company, Unicare Life Insurance Company and Comprehensive Integrated
Marketing Services, Inc, and in the undertakings dated as of July 31, 1997 by and among Wellpoint Health Networks Inc., Wellpoint California Services, Inc. and Blue Cross of
California or (v) restrictions and conditions contained in that certain order dated December 27, 1995 of the Georgia Department of Insurance. 


    Section 6.07  Nature of Business.



    The
Borrower will not, and will not permit any of its Significant Subsidiaries to, substantively alter the general character of its business from that conducted by such Person as of
the Closing Date. 


    Section 6.08  Advances, Investments and Loans.


    The
Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly lend money or extend credit or make advances to any Person, or purchase or acquire any
stock, obligations or securities of, or any other interest in, or make any capital contribution to, or otherwise make an investment in, any Person except for Permitted Investments. 



    Section 6.09  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 or any Subsidiary of the Borrower and
(c) other distributions in respect of the 


44





 


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; provided
that, unless the Borrower has an "investment grade rating", prior to making or declaring any Restricted Payment in excess of $50,000,000 under this clause (c), the Borrower shall provide to the
Administrative Agent a compliance certificate certifying that prior to and after giving effect to any such action, no Default will exist or be continuing. 


 
 

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 or any reimbursement obligation in respect of any LC Disbursement 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; 


    (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 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 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 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 (as to existence of the Borrower), or 5.08
or in Article VI; 


    (e) the
Borrower shall fail to observe or perform any covenant, condition or agreement contained in this 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 of principal or interest in respect of any Material Indebtedness, when and as the same shall become
due and payable (beyond any applicable grace period with respect thereto); 


    (g) (i) 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
(x) secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness or (y) any requirement to repurchase any of
the Borrower's Zero Coupon Convertible Subordinated Debentures Due 2019 (the "Securities") on or about July 2, 2002, at the option of any holder thereof, pursuant to and at the purchase price
specified in paragraph 6(a) or (b) of the Securities and Section 3.08 of the Indenture dated as of July 22, 1999 between the Borrower and The Bank of New York, as trustee,
or any similar requirement to repurchase other debt securities issued by the Borrower after the date of this Agreement or (ii) an Event of Default shall occur and be continuing under the
364-Day Facility; 



45





 


    (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 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 or for which
no adequate reserve has been established) of $25,000,000 or more; 


    (l)  an
ERISA Event shall have occurred that, when taken together with all other ERISA Events that have occurred, has resulted in a Material Adverse Effect; or 


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


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. 



46





 
 
 

ARTICLE VIII
  
    THE ADMINISTRATIVE AGENT; THE SYNDICATION AGENT


    Each
of the Lenders and the Issuing Bank 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 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 (i) with respect to the information delivered to the Administrative Agent in accordance with Section 4.01 and 5.01
hereof and (ii) as expressly requested by a Lender or as otherwise 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 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 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. 


47







  




    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 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 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
Agreement, any related agreement or any document furnished hereunder or thereunder. 


    The
Syndication Agent, in its capacity as such, shall have no duties or responsibilities, and shall incur no liabilities, under this Agreement. 


 
 

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 WellPoint Health Networks Inc., 1 WellPoint Way, Thousand Oaks, CA 91362, Attention: R. David Kretschmer (Telecopy No.
(805) 557-6834); 


    (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—Elizabeth Garver, Telephone: 704-386-8451, Telecopy:
704-409-0004. 


    (c) if
to the Issuing Bank, 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—Elizabeth Garver, Telephone: 704-386-8451, Telecopy: 704-409-0004; and 



48





 


    (d) 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 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, the Issuing Bank 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, the Issuing Bank 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 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 or issuance of
a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, any Lender or the Issuing Bank may have had notice or knowledge of such Default at
the time. 


    (b) Neither
this 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 LC Disbursement 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 LC Disbursement, 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 2.19(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 (vi) change or amend Section 2.04 without the consent of the Swingline Lender; provided further that no such agreement shall
amend, modify or otherwise affect the rights or duties of the Administrative Agent or the Issuing Bank hereunder without the prior written consent of the Administrative Agent or the Issuing Bank, as
the case may be. 




    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 Agreement or any amendments, modifications or waivers of the provisions hereof (whether or not the transactions contemplated hereby or thereby shall be consummated),
(ii) all reasonable out-of-pocket expenses incurred by the Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter 



49





 


of Credit or any demand for payment thereunder and (iii) all reasonable out-of-pocket expenses incurred by the Administrative Agent, the Issuing Bank or any Lender,
including the fees and disbursements of any counsel for the Administrative Agent, the Issuing Bank or any Lender, in connection with the enforcement or protection of its rights in connection with this
Agreement, including its rights under
this Section, or in connection with the Loans made or Letters of Credit issued hereunder, including in connection with any workout, restructuring or negotiations in respect thereof. 


    (b) The
Borrower shall indemnify the Administrative Agent, the Issuing Bank 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 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 Letter of Credit or the actual or proposed use of the proceeds therefrom (including any refusal by the Issuing Bank to honor a
demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or
alleged presence or release of Hazardous Materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to the
Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any
other theory 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. 


    (c) To
the extent that the Borrower fails to pay any amount required to be paid by it to the Administrative Agent or the Issuing Bank under paragraph (a) or
(b) of this Section, each Lender severally agrees to pay to the Administrative Agent or the Issuing Bank, as the case may be, such Lender's Applicable Percentage (determined as of the time that
the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent or the Issuing Bank 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 Agreement or any agreement or instrument
contemplated hereby, the Transactions, any Loan or Letter of Credit 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 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 Agreement, expressed or 



50





 


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, the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement. 


    (b) Any
Lender may assign to one or more assignees all or a portion of its rights and obligations under this 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 or any Lender's obligations in respect of its LC
Exposure, the Issuing Bank) must give their prior written consent to such assignment (which consent shall not be unreasonably withheld or delayed), (ii) except in the case of an assignment to a
Lender, 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 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, 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 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 Agreement, except that this clause (iii) shall not apply to rights in respect of outstanding Competitive Loans, (iv) such assigning Lender shall simultaneously
assign an identical percentage of the loans and commitments of such Lender under the 364-Day Facility to such assignee, (v) 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 (vi) 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 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 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 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 Agreement (and, in the case of an Assignment and Acceptance covering all of the assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 2.16, 2.17, 2.18 and 9.03). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does
not comply with this paragraph shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with 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 and LC Disbursements
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, the Issuing Bank and the Lenders may treat each Person whose name is recorded in the Register pursuant to the 



51





 


terms hereof as a Lender hereunder for all purposes of this 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 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 or the Issuing Bank, 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 Agreement (including all or a portion of its Commitment and the
Loans owing to it); provided that (i) such Lender's obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent, the Issuing Bank 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 Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement;  provided that
such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment,
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 2.16, 2.17 and 2.18 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 2.16 or 2.18 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 2.18 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply
with Section 2.18(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 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 



52





 


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 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 therefore, 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
Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, the Issuing Bank 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 Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or
terminated. The provisions of Sections 2.16, 2.17, 2.18 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 Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof. 


    Section 9.06  Counterparts; Integration; Effectiveness.



    This
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 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 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 Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement. 


    Section 9.07  Severability.


    Any
provision of this 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 


53





 


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 in the payment of any obligation under this Agreement 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 Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this 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
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 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 Agreement shall affect any
right that the Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement against the Borrower or its properties in the courts
of any jurisdiction. 


    (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 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 Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01. Nothing in this Agreement will
affect the right of any party to this 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, 


54





 


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 Agreement and shall not affect the construction of, or
be taken into consideration in interpreting, this Agreement. 


    Section 9.12  Confidentiality.


    Each
of the Administrative Agent, the Issuing Bank 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, and agree 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 Agreement, (e) in connection with the
exercise of any remedies hereunder or any suit, action or proceeding relating to this 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 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, the Issuing Bank or any Lender on a nonconfidential basis from a source other than the Borrower who is not, to the knowledge of the Administrative Agent, the
Issuing Bank 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, the Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by the Borrower. 


55





 


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



	BORROWER:	 	WELLPOINT HEALTH NETWORKS INC.
	

 	
 	

By:	
 	

/s/ R. DAVID KRETSCHMER   

	 	 	 	 	Name: R. David Kretschmer
	 	 	 	 	Title: Vice President
	

ADMINISTRATIVE AGENT:	
 	

BANK OF AMERICA, N.A.
	

 	
 	

By:	
 	

/s/ JOSEPH L. CORAH   

	 	 	 	 	Name: Joseph L. Corah
	 	 	 	 	Title: Principal
	

SYNDICATION AGENT:	
 	

JPMORGAN, A DIVISION OF CHASE SECURITIES INC.
	

 	
 	

By:	
 	

/s/ ANDREW T. BROCE   

	 	 	 	 	Name: Andrew T. Broce
	 	 	 	 	Title: Vice President
	

[Lender signatures follow]	
 	

 	
 	

 




56









QuickLinks


EXHIBIT 10.01

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; THE SYNDICATION AGENT


ARTICLE IX MISCELLANEOUS