Document:

<PAGE>   1

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                                  $550,000,000

                                CREDIT AGREEMENT

                           DATED AS OF MARCH 15, 2001

                                     Among

                               CAREMARK RX, INC.,
                                  as Borrower,

                                      and

                  THE INITIAL LENDERS, THE SWING LINE BANK AND
                     THE INITIAL ISSUING BANK NAMED HEREIN,
                           as Initial Lender Parties,

                                      and

                                   JPMORGAN,
                      A DIVISION OF CHASE SECURITIES INC.,
                             as Syndication Agent,

                                      and

                           FIRST UNION NATIONAL BANK,
                            as Documentation Agent,

                                      and

                         BANC OF AMERICA SECURITIES LLC
                               as Lead Arranger,

                                      and

                             BANK OF AMERICA, N.A.
                            as Administrative Agent

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<PAGE>   2

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                PAGE

         <S>                                                                                                    <C>
                                                 ARTICLE I

         SECTION 1.01.  Certain Defined Terms                                                                     1
         SECTION 1.02.  Computation of Time Periods; Other Constructional Provisions                             32
         SECTION 1.03.  Accounting Terms                                                                         33
         SECTION 1.04.  Currency Equivalents Generally                                                           33

                                                 ARTICLE II

         SECTION 2.01.  The Advances and the Letters of Credit                                                   33
         SECTION 2.02.  Making the Advances                                                                      34
         SECTION 2.03.  Issuance of and Drawings and Reimbursement Under Letters of Credit                       37
         SECTION 2.04.  Repayment of Advances                                                                    39
         SECTION 2.05.  Termination or Reduction of the Commitments                                              41
         SECTION 2.06.  Prepayments                                                                              42
         SECTION 2.07.  Interest                                                                                 44
         SECTION 2.08.  Fees                                                                                     45
         SECTION 2.09.  Conversion of Advances                                                                   45
         SECTION 2.10.  Increased Costs, Etc.                                                                    46
         SECTION 2.11.  Evidence of Debt                                                                         49
         SECTION 2.12.  Payments and Computations                                                                49
         SECTION 2.13.  Taxes                                                                                    52
         SECTION 2.14.  Sharing of Payments, Etc.                                                                54
         SECTION 2.15.  Defaulting Lenders                                                                       55
         SECTION 2.16.  Use of Proceeds                                                                          57

                                                ARTICLE III

                                     CONDITIONS OF EFFECTIVENESS AND LENDING

         SECTION 3.01.  Conditions Precedent to Initial Extensions of Credit                                     57
         SECTION 3.03.  Determinations Under Section 3.01                                                        60

                                                 ARTICLE IV

         SECTION 4.01.  Representations and Warranties                                                           60

                                                 ARTICLE V

         SECTION 5.01.  Affirmative Covenants                                                                    66
         SECTION 5.02.  Negative Covenants                                                                       69
         SECTION 5.03.  Reporting Requirements                                                                   80
         SECTION 5.04.  Financial Covenants                                                                      83

                                                 ARTICLE VI

         SECTION 6.01.  Events of Default                                                                        84
         SECTION 6.02.  Actions in Respect of the Letters of Credit upon Default                                 87
</TABLE>

                                       i
<PAGE>   3

<TABLE>
         <S>                                                                                                    <C>
                                                ARTICLE VII

         SECTION 7.01.  Authorization and Action                                                                 88
         SECTION 7.02.  Administrative Agent's Reliance, Etc.                                                    89
         SECTION 7.03.  BofA, BAS and Affiliates                                                                 90
         SECTION 7.04.  Lender Credit Decision                                                                   90
         SECTION 7.05.  Indemnification                                                                          90
         SECTION 7.06.  Successor Administrative Agent                                                           91
         SECTION 7.07.  Release of Collateral                                                                    92
         SECTION 7.08.  Release of Guarantor                                                                     92

                                               ARTICLE VIII

         SECTION 8.01.  Amendments, Etc.                                                                         93
         SECTION 8.02.  Notices, Etc.                                                                            94
         SECTION 8.03.  No Waiver; Remedies                                                                      95
         SECTION 8.04.  Indemnification                                                                          95
         SECTION 8.05.  Right of Set-off                                                                         96
         SECTION 8.06.  Binding Effect                                                                           97
         SECTION 8.07.  Assignments and Participations                                                           97
         SECTION 8.08.  No Liability of the Issuing Bank                                                        101
         SECTION 8.09.  Confidentiality                                                                         102
         SECTION 8.10.  Execution in Counterparts                                                               102
         SECTION 8.11.  Governing Law; Jurisdiction, Etc.                                                       102
         SECTION 8.12.  WAIVER OF JURY TRIAL                                                                    104
</TABLE>

                                      ii
<PAGE>   4

<TABLE>
<CAPTION>
                                   SCHEDULES
                                   ---------

<S>                                 <C>
Schedule I                 -        Commitments and Applicable Lending Offices

Schedule II                -        Existing Letters of Credit

Schedule 2.06              -        Properties held for sale

Schedule 4.01(b)           -        Subsidiaries

Schedule 4.01(d)           -        Required Authorizations, Approvals, Etc.

Schedule 4.01(x)           -        Open Years

Schedule 4.01(y)           -        Existing Investments

Schedule 5.02(a)           -        Liens

Schedule 5.02(b)           -        Indebtedness

<CAPTION>
                                    EXHIBITS
                                    --------

<S>                                 <C>
Exhibit A-1                -        Form of Term Loan  Note

Exhibit A-2                -        Form of Revolving Credit Note

Exhibit B-1                -        Form of Notice of Borrowing

Exhibit B-2                -        Form of Notice of Swing Line Borrowing

Exhibit B-3                -        Form of Notice of Conversion

Exhibit C                  -        Form of Assignment and Acceptance

Exhibit D                  -        Form of Subsidiaries Guarantee

Exhibit E-1                -        Form of Opinion of King & Spalding

Exhibit E-2                -        Form of Opinion of Foley & Lardner

Exhibit F                  -        Form of Security Agreement

Exhibit G                  -        Form of Trust Agreement
</TABLE>

                                      iii
<PAGE>   5

                                CREDIT AGREEMENT

                  CREDIT AGREEMENT dated as of March 15, 2001 among CAREMARK,
RX, INC, a Delaware corporation (the "BORROWER"), the banks, financial
institutions and other institutional lenders listed on the signature pages
hereof under the caption "Initial Lenders" (the "INITIAL LENDERS"), BANK OF
AMERICA, N.A. ("BOFA"), as the initial issuer of Letters of Credit (as
hereinafter defined) (the "INITIAL ISSUING BANK") and as the provider of the
Swing Line Facility (as hereinafter defined) (the "SWING LINE BANK"), JPMORGAN,
a division of Chase Securities Inc., as the syndication agent (the "SYNDICATION
AGENT") for the Facilities (as hereinafter defined), FIRST UNION NATIONAL BANK,
as the documentation agent (the "DOCUMENTATION AGENT"), BANC OF AMERICA
SECURITIES LLC ("BAS"), as the lead arranger and book manager (the "LEAD
ARRANGER") for the Facilities, and BofA, as the administrative agent (together
with any successor thereto appointed pursuant to Article VII, the
"ADMINISTRATIVE AGENT") for the Lender Parties (as hereinafter defined).

                             PRELIMINARY STATEMENTS

                  (1)      The Borrower entered into the Credit Agreement dated
as of September 5, 1996 (as amended and restated from time to time the
"EXISTING CREDIT AGREEMENT") with the banks, financial institutions and other
institutional lenders party thereto as lenders and Bank of America, N.A.
(formerly NationsBank, N.A.) as the administrative agent for the lenders
thereunder.

                  (2)      The Borrower has requested that the Lender Parties
replace the Existing Credit Agreement in its entirety and agree to lend to the
Borrower from time to time up to $550,000,000 at any time outstanding in order
to replace the senior credit facilities provided for under the terms of the
Existing Credit Agreement, to pay certain fees and expenses incurred in
connection with the entry by the Borrower and certain of its Subsidiaries (as
hereinafter defined) into the Loan Documents (as hereinafter defined) and for
other general corporate purposes of the Borrower and its Subsidiaries not
otherwise prohibited under the terms of the Loan Documents. The Lenders have
indicated their willingness to agree to replace the Existing Credit Agreement
in its entirety and to lend such amounts on the terms and conditions of this
Agreement.

                  NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements contained herein, the parties hereto hereby
agree as follows:

                                   ARTICLE I

                        DEFINITIONS AND ACCOUNTING TERMS

                  SECTION 1.01.  Certain Defined Terms.

                  As used in this Agreement, the following terms shall have the
following meanings (such meanings to be equally applicable to both the singular
and the plural forms of the terms defined):

                  "ACCEPTING LENDERS" has the meaning specified in Section
         2.06(d).

                  "ADMINISTRATIVE AGENT" has the meaning specified in the
         recital of parties to this Agreement.

                  "ADMINISTRATIVE AGENT'S ACCOUNT" means the account of the
         Administrative Agent maintained by the Administrative Agent with BofA
         at its office at 101 North Tryon Street, 15th Floor, Charlotte, North
         Carolina 28255, ABA No. 053-000-196, Account No. 1366212250600,
         Reference: Caremark Rx, Attention: Corporate Credit Services, or such
         other account maintained

                                       1
<PAGE>   6

         by the Administrative Agent and designated by the Administrative Agent
         from time to time as such in a written notice to the Borrower and each
         of the Lender Parties.

                  "ADVANCE" means a Term Loan Advance, a Revolving Credit
         Advance, a Swing Line Advance or a Letter of Credit Advance, as the
         context may require.

                  "AFFILIATE" means, with respect to any Person, any other
         Person that, directly or indirectly, controls, is controlled by or is
         under common control with such Person or is a director, or officer of
         such Person; provided, however, that, solely for purposes of the
         definition of "Net Cash Proceeds" set forth below in this Section
         1.01, any Person in which the Borrower or any of its Subsidiaries
         maintains a minority common Equity Interest pursuant to Section
         5.02(e)(v)(B) shall not constitute an Affiliate of the Borrower or any
         of its Subsidiaries. For purposes of this definition, the term
         "control" (including the terms "controlling", "controlled by" and
         "under common control with") of a Person means the possession, direct
         or indirect, of the power to vote 5% or more of the Voting Interests
         in such Person or to direct or cause the direction of the management
         and policies of such Person, whether through the ownership of Voting
         Interests, by contract or otherwise.

                  "AGENTS" means, collectively, the Administrative Agent, the
         Syndication Agent, the Documentation Agent, the Lead Arranger and each
         co-agent or subagent appointed by the Administrative Agent from time
         to time pursuant to Section 7.01(b).

                  "AGREEMENT" means this Credit Agreement, as the same may be
         amended, restated, supplemented or otherwise modified from time to
         time.

                  "AGREEMENT VALUE" means, for each Hedge Agreement, on any
         date of determination, an amount reasonably determined by the
         Administrative Agent equal to: (a) in the case of a Hedge Agreement
         documented pursuant to the Master Agreement (Multicurrency-Cross
         Border) published by the International Swap and Derivatives
         Association, Inc. (the "MASTER AGREEMENT"), the amount, if any, that
         would be payable by any Loan Party or any of its Subsidiaries to its
         counterparty in respect of such Hedge Agreement, as if (i) such Hedge
         Agreement was being terminated early on such date of determination,
         (ii) such Loan Party or Subsidiary was the sole "Affected Party", and
         (iii) the Administrative Agent was the sole party determining such
         payment amount (with the Administrative Agent making such
         determination pursuant to the provisions of that specific form of
         Master Agreement); or (b) in the case of a Hedge Agreement traded on
         an exchange, the mark-to-market value of such Hedge Agreement, which
         will be the unrealized gain or loss on such Hedge Agreement to the
         Loan Party or Subsidiary of a Loan Party to such Hedge Agreement
         reasonably determined by the Administrative Agent based on the
         settlement price of such Hedge Agreement on such date of
         determination, or (c) in all other cases, the mark-to-market value of
         such Hedge Agreement, which will be the unrealized gain or loss on
         such Hedge Agreement to the Loan Party or Subsidiary of a Loan Party
         to such Hedge Agreement reasonably determined by the Administrative
         Agent as the amount, if any, by which (i) the present value of the
         future cash flows to be paid by such Loan Party or Subsidiary exceeds
         (ii) the present value of the future cash flows to be received by such
         Loan Party or Subsidiary pursuant to such Hedge Agreement; capitalized
         terms used and not otherwise defined in this definition shall have the
         respective meanings set forth in the above described Master Agreement.

                  "APPLICABLE LENDING OFFICE" means (a) with respect to each of
         the Lenders, the Base Rate Lending Office of such Lender in the case
         of a Base Rate Advance and the Eurodollar Lending Office of such
         Lender in the case of a Eurodollar Rate Advance and (b) with respect
         to the Issuing Bank and the Swing Line Bank, the Base Rate Lending
         Office of the Issuing Bank and the Swing Line Bank, respectively, for
         all purposes of this Agreement.

                  "APPLICABLE MARGIN" means (a) in the case of the Term Loan
         Facility, 2.00% per annum for Base Rate Advances and 3.00% per annum
         for Eurodollar Rate Advances and (b) in the case

                                       2
<PAGE>   7

         of the Revolving Credit Facility, (i) at any time during the period
         from the date of this Agreement through the date of receipt by the
         Administrative Agent of the Required Financial Information for the
         Measurement Period ending December 31, 2000, 1.75% per annum for Base
         Rate Advances and 2.75% per annum for Eurodollar Rate Advances and
         (ii) at any time and from time to time thereafter, on any date of
         determination, a percentage per annum equal to the applicable
         percentage for the Performance Level set forth below as determined by
         reference to the Leverage Ratio for the most recently completed
         Measurement Period:

<TABLE>
<CAPTION>
                  PERFORMANCE LEVEL                    BASE RATE ADVANCES            EURODOLLAR RATE ADVANCES
                  <S>                                  <C>                           <C>
                  Performance Level I                  1.25%                         2.25%
                  -------------------
                  Less than or equal to 3.00:1

                  Performance Level II                 1.50%                         2.50%
                  --------------------
                  Less than or equal to 3.50:1

                  Performance Level III                1.75%                         2.75%
                  ---------------------
                  Less than or equal to 4.00:1

                  Performance Level IV                 2.00%                         3.00%
                  --------------------
                  Greater than 4.00:1
</TABLE>

         For the purposes of:

                           (A)      clause (b)(ii) of the immediately preceding
                  sentence, the Applicable Margin for each Base Rate Advance
                  shall be determined by reference to the Performance Level in
                  effect from time to time and the Applicable Margin for each
                  Eurodollar Rate Advance shall be determined by reference to
                  the Performance Level in effect on the first day of each
                  Interest Period for such Eurodollar Rate Advance; and

                           (B)      determining the Performance Level in
                  respect of the Applicable Margin at any date of
                  determination, no change in the Performance Level shall be
                  effective until three Business Days after the date on which
                  the Administrative Agent and the Lender Parties receive the
                  Required Financial Information reflecting such change;
                  provided, however, that if the Borrower has not delivered to
                  the Administrative Agent and the Lender Parties all of the
                  information required under this clause (B) within five
                  Business Days after the date on which such information is
                  otherwise required under Section 5.03(b) or 5.03(c), as
                  applicable, and Section 5.03(d), the Performance Level shall
                  be deemed to be at Performance Level IV for so long as such
                  information has not been submitted.

                  "APPLICABLE PERCENTAGE" means, with respect to the Commitment
         Fee, (a) at any time during the period from the date of this Agreement
         through the date of receipt by the Administrative Agent of the
         Required Financial Information for the Measurement Period ending
         December 31, 2000, (ii) 0.50% per annum and (b) at any time and from
         time to time thereafter, a rate per annum equal to the percentage set
         forth below opposite the applicable Performance Level as determined by
         reference to the Leverage Ratio for the most recently completed
         Measurement Period:

                                       3
<PAGE>   8

<TABLE>
<CAPTION>
PERFORMANCE LEVEL                     COMMITMENT FEE
<S>                                   <C>
Performance Level I                   0.375%
-------------------
Less than or equal to 3.00:1

Performance Level II                  0.50%
--------------------
Less than or equal to 3.50:1

Performance Level III                 0.50%
---------------------
Less than or equal to 4.00:1

Performance Level IV                  0.50%
--------------------
Greater than 4.00:1
</TABLE>

         For the purposes of:

                           (A)      clause (b) of the immediately preceding
                  sentence, the Applicable Percentage for the Commitment Fee
                  shall be determined by reference to the Performance Level in
                  effect from time to time; and

                           (B)      determining the Performance Level in
                  respect of the Applicable Percentage at any date of
                  determination, no change in the Performance Level shall be
                  effective until three Business Days after the date on which
                  the Administrative Agent and the Lender Parties receive the
                  Required Financial Information reflecting such change;
                  provided, however, that if the Borrower has not delivered to
                  the Administrative Agent and the Lender Parties all of the
                  information required under this clause (B) within five
                  Business Days after the date on which such information is
                  otherwise required under Section 5.03(b) or 5.03(c), as
                  applicable, and Section 5.03(d), the Performance Level shall
                  be deemed to be at Performance Level IV for so long as such
                  information has not been submitted.

                  "APPROPRIATE LENDER" means, at any time, (a) with respect to
         the Term Loan Facility or the Revolving Credit Facility, a Lender that
         has a Commitment with respect to such Facility at such time, (b) with
         respect to the Letter of Credit Facility, (i) the Issuing Bank and
         (ii) if the Revolving Credit Lenders have made Letter of Credit
         Advances pursuant to Section 2.03(c)(i) that are outstanding at such
         time, each such Revolving Credit Lender, and (c) with respect to the
         Swing Line Facility, (i) the Swing Line Bank and (ii) if the Revolving
         Credit Lenders have made Swing Line Advances pursuant to Section
         2.02(b)(ii) that are outstanding at such time, each such Revolving
         Credit Lender.

                  "APPROVED FUND" means any Fund that is administered, advised
         or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an
         entity or an Affiliate of an entity that administers, advises or
         manages a Lender.

                  "ASSIGNMENT AND ACCEPTANCE" means an assignment and
         acceptance entered into by a Lender Party and an Eligible Assignee,
         and accepted by the Administrative Agent and, if applicable, the
         Borrower, in accordance with Section 8.07 and in substantially the
         form of Exhibit C hereto.

                  "AVAILABLE AMOUNT" means, with respect to any Letter of
         Credit at any time, the maximum amount available to be drawn under
         such Letter of Credit at such time (assuming compliance at such time
         with all conditions to drawing).

                  "BAS" has the meaning specified in the recital of parties to
         this Agreement.

                                       4
<PAGE>   9

                  "BASE RATE" means a fluctuating interest rate per annum in
         effect from time to time, which rate per annum shall at all times be
         equal to the higher of:

                           (a)      the rate of interest established by BofA
                  from time to time as its prime rate (which rate of interest
                  may not be the lowest rate of interest charged by BofA to its
                  customers); and

                           (b)      the Federal Funds Rate plus 0.50%.

                  "BASE RATE ADVANCE" means an Advance that bears interest as
         provided in Section 2.07(a)(i).

                  "BASE RATE LENDING OFFICE" means, with respect to each of the
         Lender Parties, the office of such Lender Party specified as its "Base
         Rate Lending Office" opposite its name on Part B of Schedule I hereto
         or in the Assignment and Acceptance pursuant to which it became a
         Lender Party, as the case may be, or such other office of such Lender
         Party as such Lender Party may from time to time specify to the
         Borrower and the Administrative Agent for such purpose.

                  "BOFA" has the meaning specified in the recital of parties to
         this Agreement.

                  "BORROWER" has the meaning specified in the recital of
         parties to this Agreement.

                  "BORROWER COMMON STOCK" means shares of common stock of the
         Borrower, par value $0.001 per share.

                  "BORROWER'S ACCOUNT" means such account of the Borrower as is
         agreed from time to time in writing between the Borrower and the
         Administrative Agent.

                  "BORROWING" means a Term Loan Borrowing, a Revolving Credit
         Borrowing or a Swing Line Borrowing, as the context may require.

                  "BUSINESS DAY" means a day of the year on which banks are not
         required or authorized by law to close in New York, New York or
         Charlotte, North Carolina and, if the applicable Business Day relates
         to any Eurodollar Rate Advances, on which dealings are carried on in
         U.S. dollar deposits in the London interbank market.

                  "CALIFORNIA PROPERTY AND ASSETS" means all of the property
         and assets of certain Subsidiaries of the Borrower (and, solely to the
         extent comprising part of the physician practice management businesses
         of the Borrower in the State of California, of the Borrower).

                  "CALIFORNIA SETTLEMENT AGREEMENT" means the Second Amended
         and Restated Operations and Settlement Agreement dated as of September
         14, 2000, among the Borrower, MPN and the other parties thereto, as
         such California Settlement Agreement may be amended, supplemented or
         otherwise modified from time to time in accordance with the terms
         thereof, but solely to the extent permitted under the terms of the
         Loan Documents.

                  "CALIFORNIA TRANSITION PLAN" means the transition plan for
         the orderly sale or other disposition of all of the California
         Property and Assets and the resolution of all of the liabilities and
         obligations of the Borrower and certain of its Subsidiaries related
         thereto, all as contemplated by the California Settlement Agreement
         and the California Transition Plan Documents.

                  "CALIFORNIA TRANSITION PLAN DOCUMENTS" means the California
         Settlement Agreement, the Supplemental Plan Agreement and the MPN Plan
         of Reorganization, in each case as such agreement, instrument or other
         document may be amended, supplemented or otherwise modified from time
         to time in accordance with the terms thereof, but solely to the extent
         permitted under the terms of the Loan Documents.

                                       5
<PAGE>   10
                  "CAPITAL ASSETS" means, with respect to any Person, all
         equipment, fixed assets and real property or improvements of such
         Person, or replacements or substitutions therefor or additions
         thereto, that, in accordance with GAAP, have been or should be
         reflected as additions to property, plant or equipment on the balance
         sheet of such Person.

                  "CAPITAL EXPENDITURES" means, with respect to any Person for
         any period, all expenditures made directly or indirectly by such
         Person during such period for Capital Assets. For purposes of this
         definition, the purchase price of equipment that is purchased
         simultaneously with the trade-in of existing equipment or with
         insurance proceeds shall be included in Capital Expenditures only to
         the extent of the gross amount by which such purchase price exceeds
         the credit granted by the seller of such equipment for the equipment
         being traded in at such time or the amount of such insurance proceeds,
         as the case may be.

                  "CAPITALIZED LEASE" means any lease with respect to which the
         lessee is required to recognize concurrently the acquisition of
         property or an asset and the incurrence of a liability in accordance
         with GAAP.

                  "CAPTIVE PROFESSIONAL CORPORATION" means any professional
         corporation, professional association or other service corporation in
         which all of the Equity Interests are owned by one or more Persons
         other than the Borrower and its Subsidiaries, but in respect of which
         the Borrower and/or one or more of its Subsidiaries has the right to
         exercise, pursuant to a voting trust agreement or other similar
         agreement, a controlling influence over the management of such
         professional corporation, professional association or other service
         corporation (which controlling influence is limited by the
         Requirements of Law relating to the corporate practice of medicine in
         various states of the United States of America).

                  "CAREMARK" means Caremark International, Inc., a Delaware
         corporation and a wholly owned Subsidiary of the Borrower on the date
         of this Agreement.

                  "CAREMARK RECEIVABLES PURCHASE AGREEMENT" means the
         Receivables Purchase Agreement dated as of January 31, 2001 between
         Caremark Inc., as seller, and MP Receivables, as buyer, as such
         agreement may be amended, supplemented or otherwise modified hereafter
         from time to time in accordance with the terms thereof, but solely to
         the extent permitted under the terms of the Loan Documents.

                  "CAREMARK RECEIVABLES SECURITIZATION" means limited recourse
         sales and assignments from time to time by Caremark Inc. of its
         accounts receivable to MP Receivables and by MP Receivables of such
         accounts receivable or interests therein to one or more financial
         institutions; provided, however, that (a) the aggregate net investment
         made by such financial institutions in respect of all such accounts
         receivable or interests therein shall not exceed at any one time
         outstanding (i) $150,000,000 prior to December 31, 2001, (ii)
         $175,000,000 from January 1, 2002 through and including December 31,
         2002, and (iii) $200,000,000 during any calendar year thereafter, (b)
         the maximum aggregate amount which may be recovered by such financial
         institutions may not exceed the amount of the net investment made by
         them in respect of such accounts receivable or interests therein
         together with the yield thereon as set forth in the Caremark
         Receivables Securitization Documents from time to time, and (c) each
         such sale and assignment of such accounts receivable or interests
         therein shall otherwise be effected on the terms and conditions set
         forth in the Caremark Receivables Securitization Documents.

                  "CAREMARK RECEIVABLES SECURITIZATION DOCUMENTS" means,
         collectively, the Caremark Receivables Purchase Agreement, the
         Caremark Receivables Transfer Agreement and all of the other
         agreements, instruments and other documents evidencing or otherwise
         setting forth the terms of the Caremark Receivables Securitization, in
         each case as such agreement, instrument or other document may be
         amended, supplemented or otherwise modified hereafter from time to

                                       6
<PAGE>   11

         time in accordance with the terms thereof, but solely to the extent
         permitted under the terms of the Loan Documents.

                  "CAREMARK RECEIVABLES TRANSFER AGREEMENT" means the Amended
         and Restated Receivables Transfer Agreement dated as of January 31,
         2001 among MP Receivables, as transferor, Caremark Inc., as originator
         and collection agent, Redwood Receivables Corporation, Park Avenue
         Receivables Corporation, The Chase Manhattan Bank, as agent for Park
         Avenue Receivables Corporation and the PARCO APA Banks (as defined
         therein), and General Electric Capital Corporation, as agent for
         Redwood Receivables Corporation and Redwood Liquidity Providers (as
         defined therein) and as funding agent, as such agreement may be
         amended, supplemented or otherwise modified hereafter from time to
         time in accordance with the terms thereof, but solely to the extent
         permitted under the terms of the Loan Documents.

                  "CAREMARK TRUST" means Caremark Rx Capital Trust I, a
         wholly-owned Subsidiary of the Borrower duly created and validly
         existing as a statutory business trust in good standing under the
         Business Trust Act of the State of Delaware.

                  "CASH COLLATERAL ACCOUNT" has the meaning specified in the
         Security Agreement.

                  "CASH EQUIVALENTS" means any of the following types of
         Investments, to the extent owned by the Borrower or any of its
         Subsidiaries free and clear of all Liens (other than Liens created
         under the Collateral Documents):

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

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

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

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

                           (e)      repurchase agreements entered into with any
                  financial institution organized under the laws of any state
                  of the United States of America (i) the long term non-credit
                  enhanced debt obligations of which are rated at least "A2"
                  (or the then equivalent grade) by Moody's or at least "A" (or
                  the then equivalent grade) by S&P and (ii) the commercial
                  paper of which is rated as described above in clause (c) of
                  this

                                       7
<PAGE>   12

                  definition, in each case with a maturity of not more than 92
                  days from the date of acquisition thereof;

                           (f)      general obligations issued or directly and
                  fully guaranteed or otherwise supported by the full taxation
                  authority of any state of the United States of America or any
                  municipal corporation or other agency or instrumentality
                  thereof and rated at the highest rating obtainable therefor
                  from either Moody's or S&P, in each case with a maturity of
                  not more than one year from the date of acquisition thereof;

                           (g)      general obligations of any state of the
                  United States of America or any municipal corporation or
                  other agency or instrumentality thereof which, based on the
                  escrow therefor, are rated as described above in clause (f)
                  of this definition and which have been irrevocably called for
                  redemption and advance refunded through the deposit in escrow
                  of (i) readily marketable obligations solely of the type
                  described above in clause (a) of this definition or (ii)
                  other debt securities which are (A) not callable at the
                  option of the issuer thereof prior to their stated maturity,
                  (B) irrevocably pledged solely in support of the payment of
                  all principal of and interest on such general obligations and
                  (C) in an aggregate principal amount and with such stated
                  rates of interest as shall be sufficient to pay in full all
                  principal of and interest and premiums, if any, on such
                  general obligations as the same become due and payable (as
                  verified by independent public accountants of recognized
                  standing), in each case with a maturity of not more than one
                  year from the date of acquisition thereof; and

                           (h)      tax-exempt or tax adjustable rate preferred
                  stock issued by a Person organized under the laws of any
                  state of the United States of America whose long term
                  non-credit enhanced debt obligations are rated at least "A2"
                  (or the then equivalent grade) by Moody's or at least "A" (or
                  the then equivalent grade) by S&P, in each case with a
                  maturity of not more than 120 days from the date of
                  acquisition thereof.

                  "CERCLA" means the Comprehensive Environmental Response,
         Compensation and Liability Act of 1980, as amended from time to time.

                  "CERCLIS" means the Comprehensive Environmental Response,
         Compensation and Liability Information System maintained by the United
         States Environmental Protection Agency.

                  "CHANGE OF CONTROL" means, at any time:

                           (a)      any "person" or "group" (each as used in
                  Sections 13(d)(3) and 14(d)(2) of the Exchange Act) (i)
                  becomes the "beneficial owner" (as defined in Rule 13d-3 of
                  the Exchange Act), directly or indirectly, of Voting
                  Interests in the Borrower (including through securities
                  convertible into or exchangeable for such Voting Interests)
                  representing 25% or more of the combined voting power of all
                  of the Voting Interests in the Borrower (on a fully diluted
                  basis) or (ii) otherwise has the ability, directly or
                  indirectly, to elect a majority of the board of directors of
                  the Borrower;

                           (b)      during any period of 24 consecutive months,
                  whether commencing before or after the date of this
                  Agreement, individuals who at the beginning of such 24-month
                  period were Continuing Directors shall cease for any reason
                  to constitute a majority of the board of directors of the
                  Borrower;

                           (c)      any Person or two or more Persons acting in
                  concert shall have acquired by contract or otherwise, or
                  shall have entered into a contract or arrangement that, upon
                  consummation thereof, will result in its or their acquisition
                  of the power to exercise, directly or indirectly, a
                  controlling influence on the management or policies of the
                  Borrower; and

                                       8
<PAGE>   13

                           (d)      a Change of Control as defined in the
                  Convertible Securities Trust Agreement.

                  "COLLATERAL" means all of the "Collateral" referred to in the
         Collateral Documents and all other property and assets that are or are
         intended to be subject to any Lien in favor of the Collateral Trustee
         for the benefit of the Secured Parties.

                  "COLLATERAL DOCUMENTS" means, collectively, the Trust
         Agreement, the Security Agreement, the Intellectual Property Security
         Agreement, Security Agreement Supplements, IP Security Agreement
         Supplements, security agreements, pledge agreements or other similar
         agreements delivered to the Administrative Agent and the Lender
         Parties pursuant to Section 5.01(j), and each of the other agreements,
         instruments or documents that creates or purports to create a Lien in
         favor of the Collateral Trustee for the benefit of the Secured
         Parties.

                  "COLLATERAL TRUSTEE" means LaSalle Bank National Association
         in its capacity as trustee for the Secured Parties under the Trust
         Agreement or any successor trustee appointed pursuant thereto.

                  "COMMITMENT" means a Term Loan Commitment, a Revolving Credit
         Commitment, a Swing Line Commitment or a Letter of Credit Commitment,
         as the context may require.

                  "COMMITMENT FEE" has the meaning specified in Section
         2.08(a).

                  "CONFIDENTIAL INFORMATION" means information that is
         furnished to the Administrative Agent or any of the Lender Parties by
         or on behalf of the Borrower or any of its Subsidiaries in a writing
         that is conspicuously marked as confidential or otherwise on an
         expressly confidential basis, but does not include any such
         information that (a) is or becomes generally available to the public
         (other than as a result of a breach by the Administrative Agent or
         such Lender Party of its confidentiality obligations under this
         Agreement) or (b) is or becomes available to the Administrative Agent
         or such Lender Party from a source other than the Borrower or any of
         its Subsidiaries that is not, to the knowledge of the Administrative
         Agent or such Lender Party, acting in violation of a confidentiality
         agreement with the Borrower or any such Subsidiary.

                  "CONSOLIDATED" refers to the consolidation of accounts in
         accordance with GAAP.

                  "CONSOLIDATED CASH TAXES" means, with respect to any Person
         for any period, (a) the aggregate amount of all payments in respect of
         income taxes made in cash by such Person and its Subsidiaries to any
         applicable Governmental Authority during such period (other than
         payments made by the Borrower during such period in connection with
         the discontinued operations of the home infusion business sold by
         Caremark prior to its acquisition by the Borrower (which tax
         liabilities Caremark agreed to be obligated for pursuant to certain
         tax sharing arrangements between Caremark and its former parent,
         Baxter International, Inc.)) so long as all such payments do not
         exceed an aggregate amount of $20,000,000 less (b) the aggregate
         amount of all cash refunds in respect of income taxes received by such
         Person and its Subsidiaries from any applicable Governmental Authority
         during such period, after giving effect, to the extent available, to
         the application of net operating losses available to such Person or
         any such Subsidiary.

                  "CONSOLIDATED EBITDA" means (x) for any period, the sum of
         (a) the Consolidated Net Income for such period plus (b) the sum of
         each of the following expenses that have been deducted from the
         determination of the Consolidated Net Income for such period: (i) the
         Consolidated Interest Expense for such period, (ii) all income tax
         expense (whether federal, state, local, foreign or otherwise) for such
         period, (iii) all depreciation expense for such period, (iv) all
         amortization expense for such period, (v) all extraordinary noncash
         losses deducted in determining the Consolidated Net Income for such
         period but excluding all amounts so deducted in respect of current
         assets less all extraordinary noncash gains added in determining the

                                       9
<PAGE>   14

         Consolidated Net Income for such period; provided for any period, the
         amount of extraordinary noncash losses (other than extraordinary
         noncash losses incurred during the Fiscal Year ended December 31, 2000
         which may be added back in full for the relevant periods) that may be
         included in this subclause (v) shall not exceed 10% of the
         Consolidated EBITDA (before giving effect to any adjustments
         contemplated by this subclause (v)) for such period), (vi) all fees,
         costs and expenses, stamp, registration and similar taxes incurred in
         connection with the Transaction, in each case determined on a
         Consolidated basis for the Borrower and its Subsidiaries and in
         accordance with GAAP for such period and (vii) all charges for
         discontinued operations not in excess of $70,000,000 recorded as a
         result of the bankruptcy proceedings of KPC Medical Management, Inc.
         and its affiliated corporations and medical groups and (y) for each
         such period ending during the twelve-month period immediately
         following the closing of any acquisition permitted under Section
         5.02(e), an amount equal to the Consolidated EBITDA (calculated on the
         basis as provided herein) for each such acquisition for the period
         from such closing to the date of determination, annualized for the
         12-month period then ended.

                  "CONSOLIDATED INTEREST EXPENSE" means, with respect to any
         Person for any period, the gross cash interest expense paid or payable
         on all Indebtedness of such Person and its Subsidiaries during such
         period, determined on a Consolidated basis and in accordance with GAAP
         for such period, excluding the fees paid on the Effective Date to the
         Initial Lenders in respect of this Agreement but including, without
         limitation, (a) in the case of the Borrower, (i) cash interest expense
         paid or payable in respect of Indebtedness resulting from Advances and
         (ii) all fees paid or payable pursuant to Section 2.08(a), (b) the
         cash interest component, paid or payable, of all Obligations in
         respect of Capitalized Leases, (c) commissions, discounts and other
         fees and charges paid or payable in cash in connection with letters of
         credit (including, without limitation, pursuant to Section 2.08(b) in
         respect of the Letters of Credit), (d) all amortization of original
         issue discount in respect of all Indebtedness of such Person and its
         Subsidiaries, (e) the net payment, if any, paid or payable in
         connection with Hedge Agreements less the net credit, if any, received
         in connection with Hedge Agreements, (f) the aggregate Discount on all
         Transferred Interests (each as defined in Schedule A to the Caremark
         Receivables Securitization Documents) purchased under the Caremark
         Receivables Securitization on or prior to such date, (g) all Placement
         Agent Fees (as defined in Schedule A to the Caremark Receivables
         Securitization Documents) and all other program fees, facility fees,
         commitment fees and other similar fees paid or payable under or in
         respect of the Caremark Receivables Securitization and (h) all cash
         interest payments, fees and other distributions paid or payable under
         or in respect of the Convertible Preferred Securities.

                  "CONSOLIDATED NET INCOME" means, for any period, the net
         income (or net loss) of any Person and its Subsidiaries for such
         period, determined on a Consolidated basis and in accordance with
         GAAP, but excluding for each such period (without duplication):

                           (a)      the income (or loss) of any other Person
                  accrued prior to the date on which it became a Subsidiary of
                  such Person or was merged into or consolidated with such
                  Person or any of its Subsidiaries or all or substantially all
                  of the property and assets of such other Person were acquired
                  by such Person or any of its Subsidiaries;

                           (b)      the income (or loss) of any other Person
                  (other than a Subsidiary of such Person) in which a Person
                  other than such Person or any of its Subsidiaries owns or
                  otherwise holds an Equity Interest, except to the extent such
                  income (or loss) shall have been received in the form of cash
                  dividends or other distributions actually paid to such Person
                  or any of its Subsidiaries by such other Person during such
                  period;

                           (c)      the income of any Subsidiary of such Person
                  to the extent that the declaration or payment of any
                  dividends or other distributions by such Subsidiary of such
                  income is not permitted to be made or paid on the last day of
                  such period;

                                      10
<PAGE>   15

                           (d)      any gains or losses (on an after-tax basis)
                  attributable to the sale, lease, transfer or other
                  disposition of any property or assets of such Person or any
                  of its Subsidiaries;

                           (e)      any earnings or charges resulting from the
                  write-up or write-down of any property or assets of such
                  Person or any of its Subsidiaries other than in the ordinary
                  course of business; and

                           (f)      any gains attributable to the collection of
                  proceeds of insurance policies.

                  "CONSOLIDATED TOTAL ASSETS" means, at any date of
         determination, the net book value of all property and assets of any
         Person and its Subsidiaries (including, without limitation, all items
         that are treated as intangibles in accordance with GAAP) that, in
         accordance with GAAP, would be classified as such on the Consolidated
         balance sheet of such Person and its Subsidiaries at such date.

                  "CONSTITUTIVE DOCUMENTS" means, with respect to any Person,
         the certificate of incorporation or registration (including, if
         applicable, certificate of change of name), articles of incorporation
         or association, memorandum of association, charter, bylaws,
         certificate of limited partnership, partnership agreement, trust
         agreement, joint venture agreement, certificate of formation, articles
         of organization, limited liability company operating or members
         agreement, joint venture agreement or one or more similar agreements,
         instruments or documents constituting the organization or formation of
         such Person.

                  "CONTINGENT OBLIGATION" means, with respect to any Person,
         any obligation of such Person to guarantee or intended to guarantee
         any Indebtedness ("primary obligations") of any other Person (the
         "primary obligor") in any manner, whether directly or indirectly,
         including, without limitation, (a) the direct or indirect guaranty,
         endorsement (other than for collection or deposit in the ordinary
         course of business), co-making, discounting with recourse or sale with
         recourse by such Person of any primary obligation of a primary
         obligor, (b) the obligation to make take-or-pay or similar payments,
         if required, regardless of nonperformance by any other party or
         parties to an agreement or (c) any obligation of such Person, whether
         or not contingent, (i) to purchase any such primary obligation or any
         property constituting direct or indirect security therefor, (ii) to
         advance or supply funds (A) for the purchase or payment of any such
         primary obligation or (B) to maintain working capital, equity capital,
         net worth or other balance sheet condition or any income statement
         condition of the primary obligor or otherwise to maintain the solvency
         of the primary obligor, (iii) to purchase, lease or otherwise acquire
         property, assets, securities or services primarily for the purpose of
         assuring the owner of any such primary obligation of the ability of
         the primary obligor to make payment of such primary obligation or (iv)
         otherwise to assure or hold harmless the holder of such primary
         obligation against loss in respect thereof. The amount of any
         Contingent Obligation shall be deemed to be an amount equal to the
         stated or determinable amount of the primary obligation in respect of
         which such Contingent Obligation is made (or, if less, the maximum
         amount of such primary obligation for which such Person may be liable
         pursuant to the terms of the agreement, instrument or other document
         evidencing such Contingent Obligation) or, if not stated or
         determinable, the maximum reasonably anticipated liability in respect
         thereof (assuming such Person is required to perform thereunder), as
         determined by such Person in good faith.

                  "CONTINUING DIRECTOR" means, for any period, an individual
         who is a member of the board of directors of the Borrower on the first
         day of such period or who has been nominated to the board of directors
         of the Borrower by a majority of the other Continuing Directors who
         were members of the board of directors of the Borrower at the time of
         such nomination.

                  "CONVERSION", "CONVERT" and "CONVERTED" each refers to a
         conversion of Advances of one Type into Advances of the other Type
         pursuant to Section 2.09 or 2.10.

                                      11
<PAGE>   16

                  "CONVERTIBLE COMMON SECURITIES" means the 6,186,000 Common
         Securities issued by Caremark Trust pursuant to the Convertible
         Securities Trust Agreement.

                  "CONVERTIBLE PREFERRED SECURITIES" means the $200,000,000 7%
         Share Preference Redeemable Preferred Securities issued by Caremark
         Trust pursuant to the Convertible Securities Trust Agreement.

                  "CONVERTIBLE PREFERRED SECURITIES GUARANTEE" means the
         Guarantee dated as of September 29, 1999 made by the Borrower to
         guarantee the obligations of Caremark Trust in respect of the
         Convertible Preferred Securities and containing certain provisions
         subordinating the obligations of the Borrower thereunder to the
         obligations of the Borrower hereunder, as such agreement may be
         amended, supplemented or otherwise modified from time to time in
         accordance with the terms thereof, but solely to the extent permitted
         under the terms of the Loan Documents.

                  "CONVERTIBLE SECURITIES" means, collectively, the Convertible
         Preferred Securities and the Convertible Common Securities.

                  "CONVERTIBLE SECURITIES DOCUMENTS" means, collectively, the
         Convertible Securities Trust Agreement, the Convertible Subordinated
         Debentures Indenture, the Convertible Preferred Securities Guarantee,
         the Convertible Securities, the Convertible Subordinated Debentures
         and all of the other agreements, instruments, certificates, and other
         documents evidencing or otherwise setting forth the terms of the
         Convertible Securities and/or, as the case may be, the Convertible
         Subordinated Debentures, in each case as such agreement, instrument,
         certificate or other document may be amended, supplemented or
         otherwise modified hereafter from time to time in accordance with the
         terms thereof, but solely to the extent permitted under the terms of
         the Loan Documents.

                  "CONVERTIBLE SECURITIES TRUST AGREEMENT" means the Trust
         Agreement dated as of September 29, 1999 between, inter alia, the
         Borrower, Caremark Trust and Wilmington Trust Company, as Delaware
         Trustee and Property Trustee (each such expression as defined
         therein), entered into in connection with the issuance of the
         Convertible Preferred Securities and the Convertible Common Securities
         as such agreement may be amended, supplemented or otherwise modified
         from time to time in accordance with the terms thereof, but solely to
         the extent permitted under the terms of the Loan Documents.

                  "CONVERTIBLE SUBORDINATED DEBENTURES" means the $206,186,000
         7% Convertible Subordinated Debentures due 2029 issued by the Borrower
         pursuant to the terms of the Convertible Subordinated Debentures
         Indenture.

                  "CONVERTIBLE SUBORDINATED DEBENTURES INDENTURE" means the
         Indenture dated as of September 29, 1999 between the Borrower and the
         Wilmington Trust Company, as trustee, as such agreement may be
         amended, supplemented or otherwise modified hereafter from time to
         time in accordance with the terms thereof, but solely to the extent
         permitted under the terms of the Loan Documents.

                  "DECLINING LENDER" has the meaning specified in Section
         2.06(d).

                  "DEFAULT" means any Event of Default or any event or
         condition that would constitute an Event of Default but for the
         requirement that notice be given or time elapse or both.

                  "DEFAULTED ADVANCE" means, with respect to any of the Lender
         Parties at any time, the portion of any Advance required to be made by
         such Lender Party to the Borrower pursuant to Section 2.01 at or prior
         to such time that has not been made by such Lender Party or by the
         Administrative Agent for the account of such Lender Party pursuant to
         Section 2.02(e) as of such

                                      12
<PAGE>   17

         time. If a portion of a Defaulted Advance shall be deemed made
         pursuant to Section 2.15(a), the remaining portion of such Defaulted
         Advance shall be considered a Defaulted Advance originally required to
         be made pursuant to Section 2.01 on the same date as the Defaulted
         Advance so deemed made in part.

                  "DEFAULTED AMOUNT" means, with respect to any of the Lender
         Parties at any time, any amount required to be paid by such Lender
         Party to the Administrative Agent or any of the other Lender Parties
         under this Agreement or any of the other Loan Documents at or prior to
         such time that has not been so paid as of such time, including,
         without limitation, any amount required to be paid by such Lender
         Party to (a) the Swing Line Bank pursuant to Section 2.02(b)(ii) to
         purchase a portion of a Swing Line Advance made by the Swing Line
         Bank, (b) the Issuing Bank pursuant to Section 2.03(c)(i) to purchase
         a portion of a Letter of Credit Advance made by the Issuing Bank, (c)
         the Administrative Agent pursuant to Section 2.02(e) to reimburse the
         Administrative Agent for the amount of any Advance made by the
         Administrative Agent for the account of such Lender Party, (d) any of
         the other Lender Parties pursuant to Section 2.14 to purchase any
         participation in Advances owing to such other Lender Party and (e) the
         Administrative Agent or the Issuing Bank pursuant to Section 7.05 to
         reimburse the Administrative Agent or the Issuing Bank, as the case
         may be, for such Lender Party's ratable share of any amount required
         to be paid by the Lender Parties to the Administrative Agent or the
         Issuing Bank as provided therein. If a portion of a Defaulted Amount
         shall be deemed paid pursuant to Section 2.15(b), the remaining
         portion of such Defaulted Amount shall be considered a Defaulted
         Amount originally required to be paid under this Agreement or any of
         the other applicable Loan Documents on the same date as the Defaulted
         Amount so deemed paid in part.

                  "DEFAULTING LENDER" means, at any time, any of the Lender
         Parties that, at such time, (a) owes a Defaulted Advance or a
         Defaulted Amount or (b) shall take any action or be the subject of any
         action or proceeding of a type described in Section 6.01(f).

                  "DOCUMENTATION AGENT" has the meaning specified in the
         recital of parties to this Agreement.

                  "DOMESTIC SUBSIDIARY" means, at any time, any of the direct
         or indirect Subsidiaries of the Borrower that is incorporated or
         organized under the laws of any state of the United States of America
         or the District of Columbia.

                  "EFFECTIVE DATE" means the first date on which the conditions
         set forth in Section 3.01 shall have been satisfied.

                  "ELIGIBLE ASSIGNEE" means (a) with respect to any Facility
         (other than the Letter of Credit Facility), (i) a Lender; (ii) an
         Affiliate of a Lender; (iii) a commercial bank organized under the
         laws of the United States, or any State thereof having a combined
         capital and surplus of at least $100,000,000; (iv) a savings and loan
         association or savings bank organized under the laws of the United
         States, or any State thereof having a combined capital and surplus of
         at least $100,000,000; (v) a commercial bank organized under the laws
         of any other country which is a member of the OECD, or a political
         subdivision of any such country, and having a combined capital and
         surplus of at least $100,000,000, provided that such bank is acting
         through a branch, agency or Affiliate located in the United States or
         managed and controlled by a branch, agency or affiliate located in the
         United States; (vi) the central bank of any country that is a member
         of the OECD; (vii) a finance company, insurance company or other
         financial institution, fund (whether a corporation, partnership, trust
         or other entity) or other entity that is engaged in making, purchasing
         or otherwise investing in commercial loans in the ordinary course of
         its business having a combined capital and surplus of at least
         $100,000,000 or, to the extent any such Person is taking an assignment
         of Term Loan Advances only, having total assets of at least
         $100,000,000; and (viii) any other Person approved by the
         Administrative Agent and, provided no Event of Default is continuing,
         the Borrower, provided that the approval of the Administrative

                                      13
<PAGE>   18

         Agent and the Borrower, when required, shall not be unreasonably
         withheld or delayed, and (b) with respect to the Letter of Credit
         Facility, a Person that is an Eligible Assignee under subclause (iii)
         or (v) of clause (a) of this definition and is approved by the
         Administrative Agent (such approval not to be unreasonably withheld or
         delayed); provided, however, that neither any Loan Party nor any
         Affiliate of a Loan Party shall qualify as an Eligible Assignee under
         this definition.

                  "ENVIRONMENTAL ACTION" means any action, suit, demand, demand
         letter, claim, notice of noncompliance or violation, notice of
         liability or potential liability, investigation, proceeding, consent
         order or consent agreement, abatement order or other order or
         directive (conditional or otherwise) relating in any way to any
         Environmental Law, any Environmental Permit or any Hazardous Materials
         or arising from alleged injury or threat to health, safety, natural
         resources or the environment, including, without limitation, (a) by
         any Governmental Authority for enforcement, cleanup, removal,
         response, remedial or other actions or damages and (b) by any
         applicable Governmental Authority or other third party for damages,
         contribution, indemnification, cost recovery, compensation or
         injunctive relief.

                  "ENVIRONMENTAL LAW" means any Requirement of Law, or any
         judicial or agency interpretation, policy, guideline or other
         requirement of any Governmental Authority, relating to (a) the
         generation, use, handling, transportation, treatment, storage,
         disposal, release or discharge of Hazardous Materials, (b) pollution
         or the protection of the environment, health, safety or natural
         resources or (c) occupational safety and health, industrial hygiene,
         land use or the protection of human, plant or animal health or
         welfare, including, without limitation, CERCLA, in each case as
         amended from time to time, and including the regulations promulgated
         and the rulings issued from time to time thereunder.

                  "ENVIRONMENTAL PERMIT" means any permit, approval, license,
         identification number or other authorization required under any
         Environmental Law.

                  "EQUITY INTERESTS" means, with respect to any Person, all of
         the shares of capital stock of (or other ownership or profit interests
         in) such Person, all of the warrants, options or other rights for the
         purchase or other acquisition from such Person of shares of capital
         stock of (or other ownership or profit interests in) such Person, all
         of the securities convertible into or exchangeable for shares of
         capital stock of (or other ownership or profit interests in) such
         Person or warrants, rights or options for the purchase or other
         acquisition from such Person of such shares (or such other interests),
         and all of the other ownership or profit interests in such Person
         (including, without limitation, partnership, member or trust interests
         therein), whether voting or nonvoting, and whether or not such shares,
         warrants, options, rights or other interests are authorized or
         otherwise existing on any date of determination.

                  "ERISA" means the Employee Retirement Income Security Act of
         1974, as amended from time to time, and the regulations promulgated
         and the rulings issued from time to time thereunder.

                  "ERISA AFFILIATE" means any Person that for purposes of Title
         IV of ERISA is a member of the controlled group of any of the Loan
         Parties, or under common control with any of the Loan Parties, within
         the meaning of Section 414 of the Internal Revenue Code.

                  "ERISA EVENT" means:

                           (a)      (i) the occurrence of a reportable event,
                  within the meaning of Section 4043 of ERISA, with respect to
                  any Plan unless the 30-day notice requirement with respect to
                  such event has been waived by the PBGC or (ii) the
                  requirements of Section 4043(b) of ERISA are met with respect
                  to a contributing sponsor, as defined in Section 4001(a)(13)
                  of ERISA, of a Plan, and an event described in paragraph (9),
                  (10),

                                      14
<PAGE>   19

                  (11), (12) or (13) of Section 4043(c) of ERISA is reasonably
                  expected to occur with respect to such Plan within the
                  following 30 days;

                           (b)      the application for a minimum funding
                  waiver with respect to a Plan;

                           (c)      the provision by the administrator of any
                  Plan of a notice of intent to terminate such Plan pursuant to
                  Section 4041(a)(2) of ERISA (including any such notice with
                  respect to a plan amendment referred to in Section 4041(e) of
                  ERISA);

                           (d)      the cessation of operations at a facility
                  of any of the Loan Parties or any of the ERISA Affiliates
                  under the circumstances described in Section 4062(e) of
                  ERISA;

                           (e)      the withdrawal by any of the Loan Parties
                  or any of the ERISA Affiliates from a Plan or a Multiemployer
                  Plan;

                           (f)      the conditions for the imposition of a lien
                  under Section 302(f) of ERISA shall have been met with
                  respect to any Plan;

                           (g)      the adoption of an amendment to a Plan
                  requiring the provision of security to such Plan pursuant to
                  Section 307 of ERISA; or

                           (h)      the institution by the PBGC of proceedings
                  to terminate a Plan pursuant to Section 4042 of ERISA, or the
                  occurrence of any event or condition described in Section
                  4042 of ERISA, that constitutes grounds for the termination
                  of, or the appointment of a trustee to administer, a Plan.

                  "EUROCURRENCY LIABILITIES" has the meaning specified in
         Regulation D of the Board of Governors of the Federal Reserve System,
         as in effect from time to time.

                  "EURODOLLAR LENDING OFFICE" means, with respect to each of
         the Lenders, the office of such Lender specified as its "Eurodollar
         Lending Office" opposite its name on Part B of Schedule I hereto or in
         the Assignment and Acceptance pursuant to which it became a Lender, as
         the case may be (or, if no such office is specified, its Base Rate
         Lending Office), or such other office of such Lender as such Lender
         may from time to time specify to the Borrower and the Administrative
         Agent for such purpose.

                  "EURODOLLAR RATE" means, for any Interest Period for all
         Eurodollar Rate Advances comprising part of the same Borrowing, an
         interest rate per annum equal to the rate per annum obtained by
         dividing (a) the rate per annum (rounded upwards, if necessary, to the
         nearest 1/100 of 1%) at which deposits in U.S. dollars appear on page
         3750 (or any successor page thereto) of the Dow Jones Telerate Screen
         two Business Days before the first day of such Interest Period and for
         a term comparable to such Interest Period or, if such rate does not so
         appear on the Dow Jones Telerate Screen on any date of determination,
         on the Reuters Screen LIBO Page two Business Days before the first day
         of such Interest Period and for a term comparable to such Interest
         Period by (b) a percentage equal to 100% minus the Eurodollar Rate
         Reserve Percentage for such Interest Period; provided, however, that
         if the Reuters Screen LIBO Page is being used to determine the
         Eurodollar Rate at any date of determination and more than one rate is
         specified thereon as the London interbank offered rate for deposits in
         U.S. dollars, the applicable rate shall be the arithmetic mean
         (rounded upward, if necessary, to the nearest whole multiple of 1/100
         of 1% per annum) of all such rates.

                  "EURODOLLAR RATE ADVANCE" means an Advance that bears
         interest as provided in Section 2.07(a)(ii).

                  "EURODOLLAR RATE RESERVE PERCENTAGE" means, for any Interest
         Period for all of the Eurodollar Rate Advances comprising part of the
         same Borrowing, the reserve percentage

                                      15
<PAGE>   20

         applicable two Business Days before the first day of such Interest
         Period under regulations issued from time to time by the Board of
         Governors of the Federal Reserve System (or any successor thereto) for
         determining the maximum reserve requirement (including, without
         limitation, any emergency, supplemental or other marginal reserve
         requirement) for a member bank of the Federal Reserve System in New
         York, New York with respect to liabilities or assets consisting of or
         including Eurocurrency Liabilities (or with respect to any other
         category of liabilities that includes deposits by reference to which
         the interest rate on Eurodollar Rate Advances is determined) having a
         term equal to such Interest Period.

                  "EVENTS OF DEFAULT" has the meaning specified in Section
         6.01.

                  "EXCESS CASH FLOW" means, for any period (without
         duplication) the remainder, if positive, of the following :

                           (a)      the aggregate amount of cash and Cash
                  Equivalents of the Borrower and its Subsidiaries as of the
                  last day of such period , less

                           (b)      the outstanding principal amount of all
                  Revolving Credit Advances, Swingline Advances and Letter of
                  Credit Advances as of the last day of such period, less

                           (c)      the aggregate amount of all principal and
                  interest payments required to be made on the last day of such
                  period and all voluntary payments of principal (other than in
                  respect of the Revolving Credit Facility) made during such
                  period, in each case in respect of any Indebtedness of the
                  Borrower or any of its Subsidiaries, less

                           (d)      the amount of cash and Cash Equivalents of
                  the Borrower and its Subsidiaries as of the last day of such
                  period that represents proceeds of Equity Interests issued by
                  the Borrower or any of its Subsidiaries during such period or
                  proceeds of Indebtedness incurred by the Borrower or any of
                  its Subsidiaries during such period pursuant to Section
                  5.02(b)(xiii) or Section 5.02(b)(xi), less

                           (e)      $50,000,000.

                  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
         amended from time to time, and the regulations promulgated and the
         rulings issued thereunder.

                  "EXISTING CREDIT AGREEMENT" has the meaning specified in
         Preliminary Statement (1) to this Agreement.

                  "EXISTING LETTERS OF CREDIT" means the irrevocable standby
         letters of credit issued by BofA or one or more of its Affiliates
         under the terms of the Existing Credit Agreement and outstanding on
         the Effective Date, in each case as more fully described on Schedule
         II hereto.

                   "FACILITY" means the Term Loan Facility, the Revolving
         Credit Facility, the Swing Line Facility or the Letter of Credit
         Facility, as the context may require.

                  "FAIR MARKET VALUE" means, with respect to any property or
         assets (including, without limitation, any of the Equity Interests) of
         any Person on any date of determination, the value of the
         consideration obtainable in a sale of such property or assets in the
         open market on such date assuming an arm's-length sale that has been
         arranged without duress or compulsion between a willing seller and a
         willing and knowledgeable purchaser in a commercially reasonable
         manner over a reasonable period of time under all conditions necessary
         or desirable for a fair sale (taking into account the nature and
         characteristics of such property or asset); provided that in respect
         of any transaction relevant hereto in which the consideration paid is
         greater than $40,000,000, such determination shall be made in good
         faith by a majority of the members of the board of directors of the
         Borrower.

                                      16
<PAGE>   21

                  "FEDERAL FUNDS RATE" means, for any period, a fluctuating
         interest rate per annum equal for each day during such period to the
         weighted average of the rates on overnight federal funds transactions
         with members of the Federal Reserve System arranged by federal funds
         brokers, as published for such day (or, if such day is not a Business
         Day, for the immediately preceding Business Day) by the Federal
         Reserve Bank of New York or, if such rate is not so published for any
         day that is a Business Day, the average rate charged to the
         Administrative Agent (in its individual capacity) on such day on such
         transactions as determined by the Administrative Agent.

                  "FINANCE PARTIES" means, collectively, the Agents and the
         Lender Parties.

                  "FISCAL QUARTER" means, with respect to the Borrower or any
         of its Subsidiaries, the period commencing January 1 in any Fiscal
         Year and ending on the next succeeding March 31, the period commencing
         April 1 in any Fiscal Year and ending on the next succeeding June 30,
         the period commencing July 1 in any Fiscal Year and ending on the next
         succeeding September 30 or the period commencing October 1 in any
         Fiscal Year and ending on the next succeeding December 31, as the
         context may require, or, if any such Subsidiary was not in existence
         on the first day of any such period, the period commencing on the date
         on which such Subsidiary is incorporated, organized, formed or
         otherwise created and ending on the last day of such period.

                  "FISCAL YEAR" means, with respect to the Borrower or any of
         its Subsidiaries, the period commencing on January 1 in any calendar
         year and ending on the next succeeding December 31 or, if any such
         Subsidiary was not in existence on January 1 in any calendar year, the
         period commencing on the date on which such Subsidiary is
         incorporated, organized, formed or otherwise created and ending on the
         next succeeding December 31.

                  "FIXED CHARGE COVERAGE RATIO" means, with respect to the
         Borrower and its Subsidiaries for any period, the ratio of (a) the sum
         of Consolidated EBITDA of the Borrower and its Subsidiaries for such
         period and to (b) the sum (without duplication) of (i) all
         Consolidated Interest Expense of the Borrower and its Subsidiaries for
         such period, (ii) all Consolidated Cash Taxes paid by or on behalf of
         the Borrower or any of its Subsidiaries during such period and (iii)
         other than the Revolving Credit Advances scheduled to be repaid on
         March 15, 2005, the aggregate amount of all outstanding Advances
         scheduled to be repaid during such period pursuant to Section 2.04(a)
         and 2.04(b) provided that for the purposes of determining the Fixed
         Charge Coverage Ratio, the "Borrower and its Subsidiaries" shall be
         deemed not to include any of their discontinued operations (as
         determined in accordance with GAAP).

                  "FOREIGN SUBSIDIARY" means, at any time, any of the direct or
         indirect Subsidiaries of the Borrower that is not a Domestic
         Subsidiary at such time.

                  "FUND" means any Person (other than a natural Person) that is
         (or will be) an "accredited investor" (as defined in Regulation D
         under the Securities Act) engaged in making, purchasing, holding or
         otherwise investing in commercial loans and similar extensions of
         credit in the ordinary course of its business.

                  "GAAP" has the meaning specified in Section 1.03.

                  "GOVERNMENTAL AUTHORITY" means any nation or government, any
         state, province, city, municipal entity or other political subdivision
         thereof, and any governmental, executive, legislative, judicial,
         administrative or regulatory agency, department, authority,
         instrumentality, commission, board or similar body, whether federal,
         state, territorial, local or foreign.

                  "GOVERNMENTAL AUTHORIZATION" means any authorization,
         approval, consent, franchise, license, covenant, order, ruling,
         permit, certification, exemption, notice, declaration or similar
         right, undertaking or other action of, to or by, or any filing,
         qualification or registration with, any Governmental Authority.

                                      17
<PAGE>   22

                  "GRANTING LENDER" has the meaning specified in Section
         8.07(k).

                  "GUARANTEE SUPPLEMENT" has the meaning specified in Section
         8(b) of the Subsidiaries Guarantee.

                  "GUARANTOR" means each Material Subsidiary of the Borrower
         party to the Subsidiaries Guarantee or, as the case may be, a
         Guarantee Supplement.

                  "HAZARDOUS MATERIALS" means (a) petroleum or petroleum
         products, by-products or breakdown products, radioactive materials,
         asbestos-containing materials, polychlorinated biphenyls and radon gas
         and (b) any other chemicals, materials or substances designated,
         classified or regulated as hazardous or toxic or as a pollutant or
         contaminant under any Environmental Law.

                  "HEDGE AGREEMENTS" means, collectively, interest rate swap,
         cap or collar agreements, interest rate future or option contracts,
         commodity future or option contracts, currency swap agreements,
         currency future or option contracts and other similar agreements.

                  "HEDGE BANKS" means, collectively, any Persons which have
         entered into interest rate Hedge Agreements permitted under Section
         5.02(b)(iii).

                  "IMMATERIAL SUBSIDIARY" means, at any time, any of the
         Subsidiaries of the Borrower that does not constitute a Material
         Subsidiary at such time.

                  "INDEBTEDNESS" means, with respect to any Person (without
         duplication):

                           (a)      all indebtedness of such Person for
                  borrowed money;

                           (b)      all Obligations of such Person for the
                  deferred purchase price of property and assets or services
                  (other than (i) trade payables or other accounts payable
                  incurred in the ordinary course of such Person's business and
                  not past due for more than one year after the date on which
                  each such trade payable or account payable was created and
                  (ii) deferred compensation to employees paid in the ordinary
                  course of business and in accordance with the past business
                  practices of such Person);

                           (c)      all Obligations of such Person evidenced by
                  notes, bonds, debentures or other similar instruments, or
                  upon which interest payments are customarily made;

                           (d)      all Obligations of such Person created or
                  arising under any conditional sale or other title retention
                  agreement with respect to property or assets acquired by such
                  Person (even though the rights and remedies of the seller or
                  the lender under such agreement in the event of default are
                  limited to repossession or sale of such property or assets);

                           (e)      all Obligations of such Person as lessee
                  under Capitalized Leases;

                           (f)      all Obligations, contingent or otherwise,
                  of such Person under acceptance, letter of credit or similar
                  facilities;

                           (g)      all Obligations of such Person to purchase,
                  redeem, retire, defease or otherwise make any payment in
                  respect of any Equity Interests in such Person or any other
                  Person, valued, in the case of Redeemable Preferred
                  Interests, at the greater of its voluntary or involuntary
                  liquidation preference plus accrued and unpaid dividends;

                           (h)      all Obligations, contingent or otherwise,
                  of such Person in respect of Hedge Agreements, in each case
                  valued at the Agreement Value thereof;

                                      18
<PAGE>   23

                           (i)      all Off Balance Sheet Liabilities of such
                  Person;

                           (j)      all Contingent Obligations of such Person
                  in respect of Indebtedness described in any other clause of
                  this definition of any other Person; and

                           (k)      all Indebtedness referred to in clauses (a)
                  through (j) above secured by any Lien on property or assets
                  (including, without limitation, accounts and contract rights)
                  owned by such Person, even though such Person has not assumed
                  or become liable for the payment of such Indebtedness,
                  valued, in the case of any such Indebtedness as to which
                  recourse for the payment thereof is expressly limited to the
                  property or assets on which such Lien is granted, at the
                  lesser of (i) the stated or determinable amount of the
                  Indebtedness that is so secured or, if not stated or
                  determinable, the maximum reasonably anticipated liability in
                  respect thereof (assuming such Person is required to perform
                  thereunder) and (ii) the Fair Market Value of such property
                  or assets.

                  The Indebtedness of any Person shall include (i) all
         Obligations of the types described in clauses (a) through (k) above of
         any partnership in which such Person is a general partner and (ii) all
         Obligations of the types described in clauses (a) through (k) above of
         such Person to the extent such Person remains legally liable in
         respect thereof, notwithstanding that any such Obligation is deemed to
         be extinguished under GAAP at any date of determination.

                  "INDEMNIFIED PARTY" has the meaning specified in Section
         8.04(b).

                  "INFORMATION MEMORANDUM" means the information memorandum
         dated February 2001 used by the Lead Arranger in connection with the
         syndication of the Commitments.

                  "INITIAL EXTENSIONS OF CREDIT" means, collectively, the
         initial Borrowings under one or more of the Facilities and/or the
         initial issuances of one or more Letters of Credit made (or deemed to
         have been made) on the Effective Date.

                  "INITIAL ISSUING BANK" has the meaning specified in the
         recital of parties to this Agreement.

                  "INITIAL LENDERS" has the meaning specified in the recital of
         parties to this Agreement.

                  "INTELLECTUAL PROPERTY SECURITY AGREEMENT" has the meaning
         specified in Section 3.01(g)(viii).

                  "INTEREST COVERAGE RATIO" means, with respect to the Borrower
         and its Subsidiaries for any period, the ratio of (a) Consolidated
         EBITDA of the Borrower and its Subsidiaries for such period to (b)
         Consolidated Interest Expense of the Borrower and its Subsidiaries for
         such period provided that for the purposes of determining the Interest
         Coverage Ratio, the "Borrower and its Subsidiaries" shall be deemed
         not to include any of their discontinued operations (as determined in
         accordance with GAAP).

                  "INTEREST PERIOD" means, for each of the Eurodollar Rate
         Advances comprising part of the same Borrowing, the period commencing
         on the date of such Eurodollar Rate Advance or the date of the
         Conversion of any Base Rate Advance into such Eurodollar Rate Advance,
         as the case may be, and ending on the last day of the period selected
         by the Borrower pursuant to the provisions below and, thereafter, each
         subsequent period commencing on the last day of the immediately
         preceding Interest Period and ending on the last day of the period
         selected by the Borrower pursuant to the provisions set forth below.
         The duration of each such Interest Period shall be one, two, three or
         six months as the Borrower may, upon notice received by the
         Administrative Agent not later than 11:00 A.M. (Charlotte, North
         Carolina time) on the third Business Day prior to the first day of
         such Interest Period, select; provided, however, that:

                                      19
<PAGE>   24

                           (a)      the Borrower may not select any Interest
                  Period with respect to any Eurodollar Rate Advance under a
                  Facility at any time that ends (i) in the case of the Term
                  Loan Facility, after the scheduled Term Loan Maturity Date,
                  and (ii) in the case of the Revolving Credit Facility, after
                  the scheduled Termination Date for such Facility;

                           (b)      Interest Periods commencing on the same
                  date for Eurodollar Rate Advances comprising part of the same
                  Borrowing shall be of the same duration;

                           (c)      whenever the last day of any Interest
                  Period would otherwise occur on a day other than a Business
                  Day, the last day of such Interest Period shall be extended
                  to occur on the next succeeding Business Day; provided,
                  however, that if such extension would cause the last day of
                  such Interest Period to occur in the next succeeding calendar
                  month, the last day of such Interest Period shall occur on
                  the immediately preceding Business Day; and

                           (d)      whenever the first day of any Interest
                  Period occurs on a day of an initial calendar month for which
                  there is no numerically corresponding day in the calendar
                  month that succeeds such initial calendar month by the number
                  of months equal to the number of months in such Interest
                  Period, such Interest Period shall end on the last Business
                  Day of such succeeding calendar month.

                  "INTERNAL REVENUE CODE" means the Internal Revenue Code of
         1986, as amended from time to time, and the regulations promulgated
         and the rulings issued thereunder.

                  "INVESTMENT" means, with respect to any Person, (a) any
         direct or indirect purchase or other acquisition (whether for cash,
         securities, property, services or otherwise) by such Person of, or of
         a beneficial interest in, any Equity Interests or Indebtedness of any
         other Person, (b) any direct or indirect purchase or other acquisition
         (whether for cash, securities, property, services or otherwise) by
         such Person of all or substantially all of the property and assets of
         any other Person or of any division, branch or other unit of operation
         of any other Person, (c) any direct or indirect redemption,
         retirement, purchase or other acquisition for value by such Person
         from any other Person of any Equity Interests in such other Person,
         (d) the making of a deposit by such Person with, or any direct or
         indirect loan, advance, other extension of credit or capital
         contribution by such Person to, or any other investment by such Person
         in, any other Person (including, without limitation, any indebtedness
         or accounts receivable from such other Person that are not current
         assets or did not arise from sales to such other Person in the
         ordinary course of business and any arrangement pursuant to which the
         investor incurs Indebtedness of the types referred to in clause (j) or
         (k) of the definition of "Indebtedness" set forth above in this
         Section 1.01 in respect of such other Person) and (e) any agreement to
         make any Investment (including any "short sale" or any sale of any
         securities at a time when such securities are not owned by the Person
         entering into such sale). The amount of any Investment shall be the
         original cost of such Investment plus the cost of all additions
         thereto, without any adjustments for increases or decreases in value,
         or write-ups, write-downs or write-offs with respect to such
         Investment.

                  "IP SECURITY AGREEMENT SUPPLEMENT" has the meaning specified
         in the Security Agreement.

                  "ISSUING BANK" means the Initial Issuing Bank and each other
         Person to which the Letter of Credit Commitment has been assigned
         pursuant to Section 8.07, in each case for so long as the Initial
         Issuing Bank or such other Person, as the case may be, shall be a
         party to this Agreement in such capacity.

                  "L/C CASH COLLATERAL ACCOUNT" has the meaning specified in
         the Trust Agreement.

                  "L/C RELATED DOCUMENTS" has the meaning specified in Section
         2.03(c)(ii)(A).

                                      20
<PAGE>   25

                  "LEAD ARRANGER" has the meaning specified in the recital of
         parties to this Agreement.

                  "LENDER PARTY" means any Lender, the Issuing Bank or the
         Swing Line Bank, as the context may require.

                  "LENDERS" means, collectively, the Initial Lenders and each
         Person that becomes a Lender pursuant to Section 8.07, in each case
         for so long as such Initial Lender or such other Person, as the case
         may be, shall a party to this Agreement in such capacity.

                  "LETTER OF CREDIT" has the meaning specified in Section
         2.01(d).

                  "LETTER OF CREDIT ADVANCE" means an advance made by the
         Issuing Bank or any of the Revolving Credit Lenders pursuant to
         Section 2.03(c)(i).

                  "LETTER OF CREDIT AGREEMENT" has the meaning specified in
         Section 2.03(a).

                  "LETTER OF CREDIT COMMITMENT" means, with respect to the
         Issuing Bank at any time, the amount set forth opposite the Issuing
         Bank's name on Part B of Schedule I hereto under the caption "Letter
         of Credit Commitment" or, if the Issuing Bank has entered into one or
         more Assignment and Acceptances, the amount set forth for the Issuing
         Bank in the Register maintained by the Administrative Agent pursuant
         to Section 8.07(e) as the Issuing Bank's "Letter of Credit
         Commitment", as such amount may be reduced at or prior to such time
         pursuant to Section 2.05.

                  "LETTER OF CREDIT FACILITY" means, at any time, an amount
         equal to the lesser of (a) the amount of the Letter of Credit
         Commitment at such time and (b) $50,000,000, as such amount may be
         reduced at or prior to such time pursuant to Section 2.05.

                  "LEVERAGE RATIO" means, with respect to the Borrower and its
         Subsidiaries at any date of determination, the ratio of (a) (i) all
         Indebtedness of the Borrower and its Subsidiaries outstanding on such
         date that would (or would be required to) appear on the Consolidated
         balance sheet of the Borrower and its Subsidiaries less the amount of
         any such Indebtedness arising under or attributable to the Convertible
         Preferred Securities plus (ii) to the extent not otherwise included in
         subclause (a)(i) of this definition, (A) the face amount of all
         letters of credit (including, without limitation, all Letters of
         Credit) issued for the account of the Borrower or any of its
         Subsidiaries and (B) the aggregate Net Investment in respect of all
         Transferred Interests (each as defined in Schedule A to the Caremark
         Receivables Securitization Documents) purchased under the Caremark
         Receivables Securitization on or prior to such date to (b)
         Consolidated EBITDA of the Borrower and the Material Subsidiaries for
         the most recently completed Measurement Period prior to such date
         provided that for the purposes of determining the Leverage Ratio, the
         "Borrower and its Subsidiaries" shall be deemed not to include any of
         their discontinued operations (as determined in accordance with GAAP).

                  "LIEN" means, with respect to any Person, (a) any mortgage,
         lien (statutory or other), pledge, hypothecation, security interest,
         charge or encumbrance of any kind, (b) any assignment, deposit
         arrangement or lease intended as, or having the effect of, security,
         (c) any easement, right of way or other encumbrance on title to real
         property or (d) any interest or title of any vendor, lender or other
         secured party under any conditional sale or other title retention
         agreement.

                  "LOAN DOCUMENTS" means, collectively, for all purposes of
         this Agreement and the Notes and any amendment, supplement or other
         modification hereof or thereof and for all other purposes, (i) this
         Agreement, (ii) the Notes, (iii) the Subsidiaries Guarantee, (iv) the
         Collateral Documents, (v) each Letter of Credit Agreement and (vi)
         each of the other agreements evidencing any of the Obligations of any
         of the Loan Parties, or supporting any of the other Obligations of

                                      21
<PAGE>   26

         any of the Loan Parties, owing to the Finance Parties, as amended,
         supplemented or otherwise modified hereafter from time to time in
         accordance with the terms thereof and Section 8.01.

                  "LOAN PARTIES" means, collectively, the Borrower and each of
         the Guarantors.

                  "MATERIAL ADVERSE CHANGE" means any material adverse change
         in the business, condition (financial or otherwise), operations,
         liabilities (actual or contingent), properties or prospects of the
         Borrower, individually, or the Borrower and its Subsidiaries, taken as
         a whole; provided that the occurrence or subsistence of any such
         material adverse change which has been disclosed by the Borrower in
         any filing made with the Securities and Exchange Commission prior to
         the date of this Agreement shall not constitute a Material Adverse
         Change.

                  "MATERIAL ADVERSE EFFECT" means a material adverse effect on
         (a) the business, condition (financial or otherwise), operations,
         liabilities (actual or contingent), properties or prospects of the
         Borrower and its Subsidiaries, taken as a whole, (b) the rights and
         remedies of the Administrative Agent or any of the Lender Parties
         under any of the Loan Documents or (c) the ability of any of the Loan
         Parties to perform their respective Obligations under any of the Loan
         Documents to which it is or is to be a party (including for purposes
         of clauses (a) and (b) of this definition the imposition of materially
         burdensome conditions thereon); provided that the occurrence or
         subsistence of any such material adverse effect which has been
         disclosed by the Borrowers in any filing made with the Securities and
         Exchange Commission prior to the date of this Agreement shall not
         constitute a Material Adverse Effect.

                  "MATERIAL SUBSIDIARY" means, at any date of determination,
         any Subsidiary of the Borrower (x) other than MP Receivables, that
         either individually or, together with its Subsidiaries, taken as a
         whole, (a) owned more than 5% of the Consolidated Total Assets of the
         Borrower and its Subsidiaries as of the last day of the most recently
         completed Fiscal Quarter on or prior to such date or (b) accounted for
         more than 5% of the Consolidated Net Income of the Borrower and its
         Subsidiaries for the most recently completed Fiscal Quarter on or
         prior to such date, in each case as reflected in the Required
         Financial Information most recently delivered to the Administrative
         Agent and the Lender Parties on or prior to such date and determined
         in accordance with GAAP for such period; provided, however, that
         solely for purposes of determining whether a Subsidiary of the
         Borrower that was not a Subsidiary thereof on the first day of the
         most recently completed Fiscal Quarter on or prior to any such date
         constitutes a "Material Subsidiary" at such date, the organization,
         creation, purchase or other acquisition of such Subsidiary shall be
         given pro forma effect as though it had occurred on the first day of
         such Fiscal Quarter; and provided further that in the event at any
         time the aggregate Total Assets or the Net Income, as the case may be,
         of the Immaterial Subsidiaries is in excess of 5% of the aggregate
         Consolidated Total Assets or Consolidated Net Income of the Borrower
         and its Subsidiaries, respectively, then the percentages set forth in
         respect of Material Subsidiaries above shall be reduced so that the
         aggregate Consolidated Total Assets or Consolidated Net Income of the
         remaining Immaterial Subsidiaries (after giving effect to such
         reduction and the resulting increase in number of Material
         Subsidiaries) is less than 5% of the aggregate Consolidated Total
         Assets or Consolidated Net Income of the Borrower and its
         Subsidiaries, or (y) which is designated in writing by the Borrower to
         the Administrative Agent as a "Material Subsidiary" under this
         Agreement.

                  "MEASUREMENT PERIOD" means, at any date of determination, the
         most recently completed four consecutive Fiscal Quarters on or
         immediately prior to such date.

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

                  "MP RECEIVABLES" means MP Receivables Company, a Delaware
         corporation and a wholly-owned indirect Subsidiary of the Borrower, or
         any other Person organized under the laws of the United States or any
         State thereof and a wholly-owned direct or indirect Subsidiary of the

                                      22
<PAGE>   27

         Borrower, in each case formed by the Borrower in connection with the
         Caremark Receivables Securitization.

                  "MPN" means MedPartners Provider Network, Inc., a California
         corporation and a wholly-owned Subsidiary of the Borrower on the date
         of this Agreement.

                  "MPN PLAN OF REORGANIZATION" means the Second Amended Chapter
         11 Plan of MedPartners Provider Network, Inc. dated July 7, 2000, as
         amended, supplemented or otherwise modified from time to time in
         accordance with the terms thereof, but solely to the extent permitted
         under the terms of the Loan Documents.

                  "MULTIEMPLOYER PLAN" means a multiemployer plan (as defined
         in Section 4001(a)(3) of ERISA) to which any of the Loan Parties or
         any of the ERISA Affiliates is making or accruing an obligation to
         make contributions, or has within any of the preceding five plan years
         made or accrued an obligation to make contributions.

                  "MULTIPLE EMPLOYER PLAN" means a single employer plan (as
         defined in Section 4001(a)(15) of ERISA) that (a) is maintained for
         employees of any of the Loan Parties or any of the ERISA Affiliates
         and at least one Person other than the Loan Parties and the ERISA
         Affiliates or (b) was so maintained and in respect of which any of the
         Loan Parties or any of the ERISA Affiliates is reasonably expected to
         have liability under Section 4064 or 4069 of ERISA in the event such
         plan has been or were to be terminated.

                  "NET CASH PROCEEDS" means, with respect to any sale, lease,
         transfer or other disposition of any property or assets (other than
         the sale of any Equity Interests of Team Health) or, as the case may
         be, the incurrence or issuance of any Indebtedness, or the sale or
         issuance of any Equity Interests in any Person (other than the sale of
         any Equity Interests of Team Health), the aggregate amount of cash
         received from time to time (whether as initial consideration or
         through payment or disposition of deferred consideration) by or on
         behalf of such Person for its own account in connection with any such
         transaction, after deducting therefrom (without duplication) only:

                           (a)      reasonable and customary brokerage
                  commissions, underwriting fees and discounts, legal fees,
                  accounting fees, finder's fees and other similar fees and
                  commissions and reasonable and customary printing expenses
                  and, solely in the case of any sale, lease, transfer or other
                  disposition of any property or assets, other reasonable and
                  customary costs and expenses incurred in connection with such
                  sale, lease, transfer or other disposition, in each case
                  under this clause (a) to the extent, but only to the extent,
                  that the amounts so deducted are actually paid (i) at the
                  time of the receipt of such cash or (ii) if later, within 30
                  days after the consummation of such transaction (based on
                  such Person's reasonable estimate of the aggregate amount of
                  all such commissions, discounts, fees, costs and expenses
                  therefor at the time of the consummation of such
                  transaction);

                           (b)      the amount of taxes payable in connection
                  with or as a result of such transaction to the extent, but
                  only to the extent, that the amounts so deducted are actually
                  paid at the time of receipt of such cash or, so long as such
                  Person is not otherwise indemnified therefor, are reserved
                  for in accordance with GAAP at the time of receipt of such
                  cash based upon such Person's reasonable estimate of such
                  taxes;

                           (c)      in the case of the sale, lease, transfer or
                  other disposition of any property or asset, the outstanding
                  principal amount of, the premium or penalty, if any, on, and
                  any accrued and unpaid interest on, any Indebtedness (other
                  than the Indebtedness under or in respect of the Loan
                  Documents) that is secured by a Lien on the property and
                  assets subject to such sale, lease, transfer or other
                  disposition and is required to be repaid under the terms
                  thereof as a result of such sale, lease, transfer or other
                  disposition, in each case

                                      23
<PAGE>   28

                  under this clause (c) to the extent, but only to the extent,
                  that the amounts so deducted are actually paid at the time of
                  the receipt of such cash; and

                           (d)      in the case of the sale, lease, transfer or
                  other disposition of any property and assets, the aggregate
                  amount of all reasonable and customary post-closing purchase
                  price adjustments to the cash consideration received by the
                  Borrower or any of its Subsidiaries for one or more prior
                  sales, leases, transfers or other dispositions of their
                  property and assets pursuant to Section 5.02(d)(vii) to the
                  extent (and only to the extent) that such purchase price
                  adjustments are for working capital reconciliations
                  determined on the basis of actual (as opposed to estimated)
                  financial statement information delivered pursuant to the
                  terms of the documentation for such prior sale, lease,
                  transfer or other disposition;

                  provided, however, that, notwithstanding any of the foregoing
                  provisions of this definition, (A) any and all amounts so
                  deducted by any such Person pursuant to clauses (a) through
                  (c) of this definition shall be properly attributable to the
                  transaction or to the property or assets that are the subject
                  thereof and shall be payable solely to one or more Persons
                  that are not Affiliates of such Person or of any of the Loan
                  Parties or any Affiliate of any of the Loan Parties and (B)
                  if, at the time any of the commissions, discounts, fees,
                  costs, expenses, taxes, contingent liabilities, insurance
                  premiums, notes or deferred payment obligations referred to
                  in clause (a) or (b) of this definition are actually paid or
                  otherwise satisfied, the reserve therefor or the amount
                  otherwise retained by such Person for the payment or
                  satisfaction thereof exceeds the amount so paid or otherwise
                  satisfied, then the amount of such excess reserve or retained
                  amount, as the case may be, shall constitute "Net Cash
                  Proceeds" on and as of the date of such payment or other
                  satisfaction for all purposes of this Agreement and, to the
                  extent required under Sections 2.05(b) and 2.06(b), the
                  Borrower shall reduce the Commitments on such date in
                  accordance with the terms of Section 2.05(b) and shall prepay
                  the outstanding Advances on such date in accordance with the
                  terms of Section 2.06(b), in an amount equal to the amount of
                  such excess reserve or retained amount.

                  "NOTE" means a Term Loan Note or a Revolving Credit Note, as
         the context may require.

                  "NOTICE OF BORROWING" has the meaning specified in Section
         2.02(a).

                  "NOTICE OF CONVERSION" has the meaning specified in Section
         2.09(a).

                  "NOTICE OF ISSUANCE" has the meaning specified in Section
         2.03(a).

                  "NOTICE OF RENEWAL" has the meaning specified in Section
         2.01(d).

                  "NOTICE OF SWING LINE BORROWING" has the meaning specified in
         Section 2.02(b).

                  "NOTICE OF TERMINATION" has the meaning specified in Section
         2.01(d).

                  "NPL" means the National Priorities List under CERCLA.

                  "OBLIGATION" means, with respect to any Person, any payment,
         performance or other obligation of such Person of any kind, including,
         without limitation, any liability of such Person on any claim, whether
         or not the right of any creditor to payment in respect of such claim
         is reduced to judgment, liquidated, unliquidated, fixed, contingent,
         matured, disputed, undisputed, legal, equitable, secured or unsecured,
         and whether or not such claim is discharged, stayed or otherwise
         affected by any proceeding referred to in Section 6.01(f). Without
         limiting the generality of the immediately preceding sentence, the
         Obligations of the Loan Parties under or in respect of the Loan
         Documents include (a) the obligation to pay principal, interest,
         Letter of Credit commissions, charges, expenses, fees, attorneys' fees
         and disbursements, indemnity

                                      24
<PAGE>   29

         payments and other amounts payable by any of the Loan Parties under or
         in respect of any of the Loan Documents and (b) the obligation of any
         of the Loan Parties to reimburse any amount in respect of any of the
         items described above in clause (a) of this definition that the
         Administrative Agent or any of the Lender Parties, in its sole
         discretion, may elect to pay or advance on behalf of such Loan Party.

                  "OFF BALANCE SHEET LIABILITIES" means, with respect to any
         Person, (a) any repurchase obligation or liability, contingent or
         otherwise, of such Person with respect to any accounts or notes
         receivable sold, transferred or otherwise disposed of by such Person,
         (b) any repurchase obligation or liability, contingent or otherwise,
         of such Person with respect to property or assets leased by such
         Person as lessee and (c) all Obligations, contingent or otherwise, of
         such Person under any synthetic lease, tax retention operating lease,
         off balance sheet loan or similar off balance sheet financing if the
         transaction giving rise to such Obligation (i) is considered
         indebtedness for borrowed money for tax purposes but is classified as
         an Operating Lease or (ii) does not (and is not required to) appear as
         a liability on the Consolidated balance sheet of such Person and its
         Subsidiaries, but excluding from the foregoing provisions of this
         definition any obligations or liabilities of any such Person as lessee
         under any Operating Lease so long as the terms of such Operating Lease
         do not require any payment by or on behalf of such Person at the
         scheduled termination date of such Operating Lease, pursuant to a
         required purchase by or on behalf of such Person of the property or
         assets subject to such Operating Lease, or under any arrangements
         pursuant to which such Person guarantees or otherwise assures any
         other Person of the value of the property or assets subject to such
         Operating Lease.

                  "OPEN YEAR" means, with respect to any Person, any year for
         which United States federal income tax returns have been filed by or
         on behalf of such Person and for which the expiration of the
         applicable statute of limitations for assessment, reassessment or
         collection has not occurred (whether by reason of extension or
         otherwise).

                  "OPERATING LEASE" means, with respect to any Person, any
         lease (including, without limitation, leases that may be terminated by
         the lessee at any time) of any property (whether real, personal or
         mixed) that is not a Capitalized Lease or a lease under which such
         Person is the lessor.

                  "OTHER TAXES" has the meaning specified in Section 2.13(b).

                  "PBGC" means the Pension Benefit Guaranty Corporation or any
         successor thereto.

                  "PERFORMANCE LEVEL" means Performance Level I, Performance
         Level II, Performance Level III and Performance Level IV as identified
         in the definition of "Applicable Margin" and "Applicable Percentage"
         specified above, in each case as the context may require.

                  "PERMITTED LIENS" means the following types of Liens
         (excluding any such Lien imposed pursuant to Section 401(a)(29) or
         412(n) of the Internal Revenue Code or by ERISA or any such Lien
         relating to or imposed in connection with any Environmental Action),
         in each case as to which no enforcement, collection, execution, levy
         or foreclosure proceeding shall have been commenced:

                           (a)      Liens for taxes, assessments and
                  governmental charges or levies to the extent not otherwise
                  required to be paid under Section 5.01(b);

                           (b)      Liens imposed by law, such as
                  materialmen's, mechanics', carriers', workmen's, storage and
                  repairmen's Liens and other similar Liens arising in the
                  ordinary course of business and securing obligations (other
                  than Indebtedness for borrowed money) (i) that are not
                  overdue for a period of more than 90 days or (ii) the amount,
                  applicability or validity of which are being contested in
                  good faith and by appropriate

                                      25
<PAGE>   30

                  proceedings diligently conducted and with respect to which
                  the Borrower or its applicable Subsidiary, as the case may
                  be, has established reserves in accordance with GAAP;

                           (c)      pledges or deposits to secure obligations
                  incurred in the ordinary course of business under workers'
                  compensation laws, unemployment insurance or other similar
                  social security legislation (other than in respect of
                  employee benefit plans subject to ERISA) or to secure public
                  or statutory obligations;

                           (d)      Liens securing the performance of, or
                  payment in respect of, bids, tenders, government contracts
                  (other than for the repayment of borrowed money), surety and
                  appeal bonds and other obligations of a similar nature
                  incurred in the ordinary course of business;

                           (e)      any interest or title of a lessor or
                  sublessor and any restriction or encumbrance to which the
                  interest or title of such lessor or sublessor may be subject
                  that is incurred in the ordinary course of business and,
                  either individually or when aggregated with all other
                  Permitted Liens in effect on any date of determination, is
                  not reasonably expected to have a Material Adverse Effect;

                           (f)      Liens arising out of judgments or awards
                  that do not constitute an Event of Default under Section
                  6.01(g) or 6.01(h) and in respect of which the Borrower or
                  any of its Subsidiaries subject thereto shall be prosecuting
                  an appeal or proceedings for review in good faith and,
                  pending such appeal or proceedings, shall have secured within
                  ten Business Days after the entry thereof a subsisting stay
                  of execution and shall be maintaining reserves, in accordance
                  with GAAP, with respect to any such judgment or award; and

                           (g)      easements, rights of way, zoning
                  restrictions and other encumbrances and survey exceptions,
                  title irregularities and other similar restrictions on title
                  to, or the use of, real property that do not, either
                  individually or in the aggregate, (i) materially detract from
                  the value of such real property or (ii) materially and
                  adversely affect the use of such real property for its
                  intended purposes or the conduct of the business of the
                  Borrower and its Subsidiaries in the ordinary course and, in
                  any case, that were not incurred in connection with and do
                  not secure Indebtedness or other extensions of credit.

                  "PERMITTED RECEIVABLES SECURITIZATIONS" means the Caremark
         Receivables Securitization, with the maximum face amount of accounts
         receivable which may be sold and the minimum price which may be paid
         for such accounts receivables pursuant to the Caremark Receivables
         Securitization being such face amount as may be sold from time to time
         and such price as may be paid from time to time pursuant to the
         Caremark Receivables Securitization Documents.

                  "PERMITTED SALE-LEASEBACK TRANSACTION" means any sale,
         transfer or other disposition of any real property and related
         improvements, fixtures and equipment owned by the Borrower or any of
         its Subsidiaries as of the date of this Agreement to any lender or
         investor and leased back by the Borrower or such Subsidiary, as the
         case may be, upon or promptly following such sale, transfer or other
         disposition (whether under a Capitalized Lease or an Operating Lease);
         provided that:

                           (a)      the gross proceeds received from any such
                  sale, transfer or other disposition shall be at least equal
                  to the Fair Market Value of the real property and related
                  improvements, fixtures and equipment so sold, transferred or
                  otherwise disposed of, determined at the time of such sale,
                  transfer or other disposition; and

                           (b)      at least 80% of the value of the aggregate
                  consideration received from any such sale, transfer or other
                  disposition shall be in cash.

                                      26
<PAGE>   31

                  "PERSON" means an individual, partnership, corporation
         (including a business trust), limited liability company, unlimited
         liability company, joint stock company, trust, unincorporated
         association, joint venture or other entity, or a government or any
         political subdivision or agency thereof.

                  "PLAN" means a Single Employer Plan or a Multiple Employer
         Plan, as the context may require.

                  "PLEDGED DEBT" has the meaning specified in the Security
         Agreement.

                  "PLEDGED SHARES" has the meaning specified in the Security
         Agreement.

                  "PREFERRED INTERESTS" means, with respect to any Person,
         Equity Interests issued by such Person that are entitled to a
         preference or priority over any other Equity Interests issued by such
         Person upon any distribution of such Person's property and assets,
         whether by dividend or upon liquidation.

                  "PREPAYMENT AMOUNT" has the meaning specified in Section
         2.06(d).

                  "PREPAYMENT DATE" has the meaning specified in Section
         2.06(d).

                  "PRIMARY OBLIGATIONS" has the meaning specified in the
         definition of "Contingent Obligation" set forth above in this Section
         1.01.

                  "PRIMARY OBLIGOR" has the meaning specified in the definition
         of "Contingent Obligation" set forth above in this Section 1.01.

                  "PRO RATA SHARE" of any amount means, with respect to any of
         the Lenders at any time, the product of (a) a fraction the numerator
         of which is the amount of such Lender's Commitment(s) under the
         applicable Facility or Facilities at such time (or, if the Commitments
         shall have been terminated pursuant to Section 2.05 or 6.01 at or
         prior to such time, such Lender's Commitment(s) under the applicable
         Facility or Facilities as in effect immediately prior to such
         termination) and the denominator of which is the aggregate amount of
         such Facility or Facilities at such time (or, if the Commitments shall
         have been terminated pursuant to Section 2.05 or 6.01 at or prior to
         such time, the applicable Facility or Facilities as in effect
         immediately prior to such termination) multiplied by (b) such amount.

                  "RECEIPT DATE" has the meaning specified in Section 2.06(d).

                  "REDEEMABLE" means, with respect to any Equity Interest
         (including, without limitation, Preferred Interests), any Indebtedness
         or any other right or Obligation, any such Equity Interest,
         Indebtedness, right or Obligation that (a) the issuer has undertaken
         to redeem at a fixed or determinable date or dates, whether by
         operation of a sinking fund or otherwise, or upon the occurrence of a
         condition not solely within the control of the issuer or (b) is
         redeemable at the option of the holder.

                  "REGISTER" has the meaning specified in Section 8.07(e).

                  "REQUIRED FINANCIAL INFORMATION" means, at any date of
         determination, the Consolidated financial statements of the Borrower
         and its Subsidiaries most recently delivered to the Administrative
         Agent and the Lender Parties on or prior to such date pursuant to, and
         satisfying all of the requirements of, Section 5.03(b) or 5.03(c) and
         accompanied by the certificates and other information required to be
         delivered together therewith pursuant to Section 5.03(d).

                                      27
<PAGE>   32

                  "REQUIRED LENDERS" means, at any time, Lenders owed or
         holding at least a majority in interest of the sum of (a) the
         aggregate principal amount of all Advances outstanding at such time,
         (b) the aggregate Available Amount of all Letters of Credit
         outstanding at such time and (c) the aggregate Unused Revolving Credit
         Commitments at such time; provided, however, that if any Lender shall
         be a Defaulting Lender at such time, there shall be excluded from the
         determination of Required Lenders at such time (i) the aggregate
         principal amount of all Advances owing to such Lender (in its capacity
         as a Lender) and outstanding at such time, (ii) such Lender's Pro Rata
         Share of the aggregate Available Amount of all Letters of Credit
         outstanding at such time and (iii) the Unused Revolving Credit
         Commitment of such Lender at such time. For purposes of this
         definition, the aggregate principal amount of Swing Line Advances
         owing to the Swing Line Bank and outstanding at such time and Letter
         of Credit Advances owing to the Issuing Bank and outstanding at such
         time and the Available Amount of all Letters of Credit outstanding at
         such time shall be deemed to be owed to the Revolving Credit Lenders
         in accordance with their respective Revolving Credit Commitments at
         such time.

                  "REQUIRED PRINCIPAL PAYMENTS" means, with respect to any
         Person for any period, the sum of all regularly scheduled principal
         payments or redemptions and all required prepayments, repurchases,
         redemptions or similar acquisitions for value of outstanding
         Indebtedness made or required to be made during such period, but
         excluding any such payments to the extent refinanced through the
         incurrence of additional Indebtedness otherwise expressly permitted
         under Section 5.02(b)(xiii).

                  "REQUIREMENTS OF LAW" means, with respect to any Person, all
         laws, constitutions, statutes, treaties, ordinances, rules and
         regulations, all orders, writs, decrees, injunctions, judgments,
         determinations and awards of an arbitrator, a court or any other
         Governmental Authority, and all Governmental Authorizations, binding
         upon or applicable to such Person or to any of its property, assets or
         businesses.

                  "RESPONSIBLE OFFICER" means the chief executive officer, the
         president, the chief financial officer, the principal accounting
         officer or the treasurer (or the equivalent of any of the foregoing)
         of the Borrower or any of its Subsidiaries or any other officer,
         partner or member (or person performing similar functions) of the
         Borrower or any of its Subsidiaries responsible for overseeing the
         administration of, or reviewing compliance with, all or any portion of
         this Agreement or any of the other Loan Documents.

                  "REVOLVING CREDIT ADVANCE" means, with respect to each of the
         Revolving Credit Lenders, any advance made by such Revolving Credit
         Lender to the Borrower pursuant to Section 2.01(b).

                  "REVOLVING CREDIT BORROWING" means a borrowing consisting of
         simultaneous Revolving Credit Advances of the same Type made by the
         Revolving Credit Lenders.

                  "REVOLVING CREDIT COMMITMENT" means, with respect to any of
         the Revolving Credit Lenders at any time, the amount set forth
         opposite such Revolving Credit Lender's name on Schedule I hereto
         under the caption "Revolving Credit Commitment" or, if such Revolving
         Credit Lender has entered into one or more Assignment and Acceptances,
         the amount set forth for such Revolving Credit Lender in the Register
         maintained by the Administrative Agent pursuant to Section 8.07(e) as
         such Revolving Credit Lender's "Revolving Credit Commitment", as such
         amount may be reduced at or prior to such time pursuant to Section
         2.05.

                  "REVOLVING CREDIT FACILITY" means, at any time, the aggregate
         Revolving Credit Commitments of all of the Revolving Credit Lenders at
         such time.

                  "REVOLVING CREDIT LENDER" means, at any time, any of the
         Lenders that has a Revolving Credit Commitment at such time.

                                      28
<PAGE>   33

                  "REVOLVING CREDIT NOTE" means a promissory note of the
         Borrower payable to the order of any of the Revolving Credit Lenders,
         in substantially the form of Exhibit A-2 hereto, evidencing the
         aggregate indebtedness of the Borrower to such Revolving Credit Lender
         resulting from the Revolving Credit Advances made by such Revolving
         Credit Lender.

                  "S&P" means Standard & Poor's, a division of The McGraw-Hill
         Companies, Inc.

                  "SECURED OBLIGATIONS" has the meaning specified in Section 2
         of the Security Agreement.

                  "SECURED PARTIES" means, collectively, the Agents, the Lender
         Parties, the Hedge Banks, the Collateral Trustee and the holders of
         the Senior Notes.

                  "SECURITIES ACT" means the Securities Act of 1933, as
         amended, and the regulations promulgated and the rulings issued
         thereunder.

                  "SECURITY AGREEMENT" has the meaning specified in Section
         3.01(g)(vii).

                  "SECURITY AGREEMENT SUPPLEMENT" has the meaning specified in
         the Security Agreement.

                  "SENIOR FINANCIAL OFFICER" means the chief executive officer,
         the chief financial officer, the principal accounting officer or the
         treasurer of the Borrower.

                  "SENIOR NOTES" means the 7-3/8% senior unsecured notes of the
         Borrower due 2006 in an aggregate principal amount of $450,000,000
         issued pursuant to the terms of the Senior Notes Indenture.

                  "SENIOR NOTES DOCUMENTS" means the Senior Notes Indenture,
         the Senior Notes and all of the other agreements, instruments and
         other documents pursuant to which the Senior Notes were issued or
         otherwise setting forth the terms of the Senior Notes, in each case as
         such agreement, instrument or other document may be amended,
         supplemented or otherwise modified hereafter from time to time in
         accordance with the terms thereof, but solely to the extent permitted
         under the terms of the Loan Documents.

                  "SENIOR NOTES INDENTURE" means the Indenture dated as of
         October 8, 1996 between the Borrower and U.S. Bank Trust National
         Association (as successor to The First National Bank of Chicago), as
         Trustee, as such agreement may be amended, supplemented or otherwise
         modified hereafter from time to time in accordance with the terms
         thereof, but solely to the extent permitted under the terms of the
         Loan Documents.

                  "SINGLE EMPLOYER PLAN" means a single employer plan (as
         defined in Section 4001(a)(15) of ERISA) that (a) is maintained for
         employees of any of the Loan Parties or any of the ERISA Affiliates
         and no Person other than the Loan Parties and the ERISA Affiliates or
         (b) was so maintained and in respect of which any of the Loan Parties
         or any of the ERISA Affiliates is reasonably expected to have
         liability under Section 4069 of ERISA in the event such plan has been
         or were to be terminated.

                  "SOLVENT" means, with respect to any Person on any date of
         determination, that, on such date:

                           (a)      the fair value of the property and assets
                  of such Person is greater than the total amount of
                  liabilities (including, without limitation, contingent
                  liabilities) of such Person;

                           (b)      the present fair salable value of the
                  property and assets of such Person is not less than the
                  amount that will be required to pay the probable liability of
                  such Person on its debts as they become absolute and matured;

                                      29
<PAGE>   34

                           (c)      such Person does not intend to, and does
                  not believe that it will, incur debts or liabilities beyond
                  such Person's ability to pay such debts and liabilities as
                  they mature; and

                           (d)      such Person is not engaged in business or
                  in a transaction, and is not about to engage in business or
                  in a transaction, for which such Person's property and assets
                  would constitute an unreasonably small capital.

         The amount of contingent liabilities of any such Person at any time
         shall be computed as the amount that, in the light of all of the facts
         and circumstances existing at such time, represents the amount that
         can reasonably be expected to become an actual or matured liability.

                  "SPC" has the meaning specified in Section 8.07(k).

                  "SPECIAL PURPOSE VEHICLE" means (a) in the case of the
         Caremark Receivables Securitization, MP Receivables and (b) in the
         case of any other Permitted Receivables Securitization, any Person
         that is not a Material Subsidiary (i) which has been organized for the
         sole purpose of effecting one or more Permitted Receivables
         Securitizations, (ii) which has no property, assets or liabilities
         other than those directly acquired or incurred in connection with such
         Permitted Receivables Securitizations, (iii) all of the liabilities
         and other Obligations of which are nonrecourse for the payment or
         performance thereof to the Borrower or any of its Subsidiaries other
         than reasonable and customary liabilities for the breach of
         representations and warranties of the Borrower or any of its
         Subsidiaries that are not related to the creditworthiness of the
         accounts receivable of the Borrower or any of its Subsidiaries and
         (iv) the legal structure (if other than a corporation, limited
         partnership or limited liability company organized under the laws of
         any state of the United States of America) and the capitalization of
         which have been approved by the Administrative Agent, such approval
         not to be unreasonably withheld or delayed.

                  "SUBORDINATED DEBT" means any unsecured Indebtedness of the
         Borrower subordinated in right of payment to the payment in full of
         the Obligations of the Borrower hereunder and such other senior
         obligations of the Borrower as are provided therein; provided that (i)
         the negative covenants in such subordinated Indebtedness are less
         restrictive than the negative covenants in this Agreement as in effect
         at the time such subordinated Indebtedness is incurred, (ii) the
         affirmative covenants in such subordinated Indebtedness are no more
         burdensome than the affirmative covenants in this Agreement as in
         effect at the time such subordinated Indebtedness is incurred, (iii)
         such subordinated Indebtedness does not cross-default to other
         Indebtedness other than default in payment at final stated maturity
         (but may cross-accelerate to other Indebtedness of the Borrower) and
         contains other events of default customary for subordinated debt
         instruments prevailing at the time such subordinated Indebtedness is
         incurred and (iv) the subordination provisions in such subordinated
         Indebtedness are acceptable to the Administrative Agent in its
         reasonable discretion.

                  "SUBSIDIARIES GUARANTEE" has the meaning specified in Section
         3.01(g)(v).

                  "SUBSIDIARY" means, with respect to any Person, any
         corporation, partnership, joint venture, limited liability company,
         unlimited liability company, trust or estate of which (or in which)
         more than 50% of:

                           (a)      the issued and outstanding shares of
                  capital stock having ordinary voting power to elect a
                  majority of the board of directors of such corporation
                  (irrespective of whether at the time shares of capital stock
                  of any other class or classes of such corporation shall or
                  might have voting power upon the occurrence of any
                  contingency);

                           (b)      the interest in the capital or profits of
                  such partnership, joint venture, limited liability company or
                  unlimited liability company; or

                                      30
<PAGE>   35

                           (c)      the beneficial interest in such trust or
                  estate,

         is at the time, directly or indirectly, owned or controlled by such
         Person, by such Person and one or more of its other Subsidiaries or by
         one or more of such Person's other Subsidiaries; provided, however,
         that, notwithstanding any of the other provisions of this Agreement,
         none of the Captive Professional Corporations shall constitute a
         Subsidiary of the Borrower or any of its Subsidiaries for purposes of
         the Loan Documents.

                  "SUPPLEMENTAL PLAN AGREEMENT" means the Amended and Restated
         Supplemental Plan Agreement, among MPN, the Borrower, Consenting MPI
         Subs (as defined therein), Consenting MPPs (as defined therein) and
         the Consenting Plans (as defined therein), in the form attached to the
         Disclosure Statement which accompanied the MPN Plan of Reorganization,
         as amended, supplemented or otherwise modified from time to time in
         accordance with the terms thereof, but solely to the extent permitted
         under the terms of the Loan Documents.

                  "SWING LINE ADVANCE" means an advance made by (a) the Swing
         Line Bank pursuant to Section 2.01(c) or (b) any of the Revolving
         Credit Lenders pursuant to Section 2.02(b)(ii).

                  "SWING LINE BANK" has the meaning specified in the recital of
         parties to this Agreement.

                  "SWING LINE BORROWING" means a borrowing consisting of (a) a
         Swing Line Advance made by the Swing Line Bank pursuant to Section
         2.01(c) or (b) simultaneous Swing Line Advances made by the Revolving
         Credit Lenders pursuant to Section 2.02(b)(ii).

                  "SWING LINE COMMITMENT" means, with respect to the Swing Line
         Bank at any time, the amount set forth opposite the Swing Line Bank's
         name on Part B of Schedule I hereto under the caption "Swing Line
         Commitment", as such amount may be reduced at or prior to such time
         pursuant to Section 2.05.

                  "SWING LINE FACILITY" means, at any time, an amount equal to
         the lesser of (a) the amount of the Swing Line Commitment at such time
         and (b) $25,000,000, as such amount may be reduced at or prior to such
         time pursuant to Section 2.05.

                  "SYNDICATION AGENT" has the meaning specified in the recital
         of parties to this Agreement.

                  "TAXES" has the meaning specified in Section 2.13(a).

                  "TEAM HEALTH" means Team Health, Inc. and each of its
         Subsidiaries comprising part of the contract services division of the
         Borrower.

                  "TERM LOAN ADVANCE" means, with respect to each of the Term
         Loan Lenders, the single advance to be made on the Effective Date by
         such Term Loan Lender to the Borrower pursuant to Section 2.01(a).

                  "TERM LOAN BORROWING" means a borrowing consisting of
         simultaneous Term Loan Advances of the same Type made by the Term Loan
         Lenders.

                  "TERM LOAN COMMITMENT" means, with respect to any of the Term
         Loan Lenders at any time, the amount set forth opposite such Term Loan
         Lender's name on Part B of Schedule I hereto under the caption "Term
         Loan Commitment" or, if such Term Loan Lender has entered into one or
         more Assignment and Acceptances, the amount set forth for such Term
         Loan Lender in the Register maintained by the Administrative Agent
         pursuant to Section 8.07(e) as such Term Loan Lender's "Term
         Commitment", as such amount may be reduced at or prior to such time
         pursuant to Section 2.05.

                                      31
<PAGE>   36

                  "TERM LOAN FACILITY" means, at any time, the aggregate Term
         Loan Commitments of all of the Term Loan Lenders at such time.

                  "TERM LOAN LENDER" means, at any time, any of the Lenders
         that has a Term Loan Commitment at such time.

                  "TERM LOAN MATURITY DATE" means the earlier of (a) the date
         of termination in whole of the Term Loan Commitments of the Term Loan
         Lenders pursuant to Section 2.05 or 6.01 and (b) March 15, 2006.

                  "TERM LOAN NOTE" means a promissory note of the Borrower
         payable to the order of any of the Term Loan Lenders, in substantially
         the form of Exhibit A-1 hereto, evidencing the indebtedness of the
         Borrower to such Term Loan Lender resulting from the Term Loan Advance
         made by such Term Loan Lender.

                  "TERMINATION DATE" means the earlier of (a) the date of
         termination in whole of all of the Commitments of the Lender Parties
         pursuant to Section 2.05 or 6.01 and (b) (i) with respect to the Term
         Loan Facility, the Term Loan Maturity Date, and (ii) with respect to
         the Revolving Credit Facility and the Swing Line Facility, March 15,
         2005.

                  "TRANSACTION" means, collectively, (a) the entering into by
         the Borrower and certain of its Subsidiaries of the Loan Documents to
         which they are or are intended to be a party and (b) the payment of
         the fees and expenses incurred in connection with the consummation of
         the foregoing.

                  "TRUST AGREEMENT" has the meaning specified in Section
         3.01(g)(vi).

                  "TYPE" refers to the distinction between Advances bearing
         interest at the Base Rate and Advances bearing interest at the
         Eurodollar Rate.

                  "UNUSED REVOLVING CREDIT COMMITMENT" means, with respect to
         any of the Revolving Credit Lenders at any time, (a) the Revolving
         Credit Commitment of such Revolving Credit Lender at such time less
         (b) the sum of:

                           (i)      the aggregate principal amount of all
                  Revolving Credit Advances, Swing Line Advances and Letter of
                  Credit Advances made by such Revolving Credit Lender (in its
                  capacity as a Lender) and outstanding at such time; and

                           (ii)     such Revolving Credit Lender's Pro Rata
                  Share of (A) the aggregate Available Amount of all Letters of
                  Credit outstanding at such time, (B) the aggregate principal
                  amount of all Letter of Credit Advances made by the Issuing
                  Bank (in its capacity as the Issuing Bank) pursuant to
                  Section 2.03(c)(i) and outstanding at such time, (C) the
                  aggregate principal amount of all Swing Line Advances made by
                  the Swing Line Bank (in its capacity as the Swing Line Bank)
                  pursuant to Section 2.01(c) and outstanding at such time.

                  "VOTING INTERESTS" means shares of capital stock issued by a
         corporation, or equivalent Equity Interests in any other Person, the
         holders of which are ordinarily, in the absence of contingencies,
         entitled to vote for the election of directors (or persons performing
         similar functions) of such Person, even if the right so to vote has
         been suspended by the happening of such a contingency.

                  "WITHDRAWAL LIABILITY" has the meaning specified in Part I of
         Subtitle E of Title IV of ERISA.

                  SECTION 1.02. Computation of Time Periods; Other
Constructional Provisions. In this Agreement and the other Loan Documents, in
the computation of periods of time from a specified date to

                                      32
<PAGE>   37

a later specified date, the word "from" means "from and including", the word
"through" means "through and including" and the words "to" and "until" each
means "to but excluding". References in this Agreement or any of the other Loan
Documents to any agreement, instrument or other document "as amended" shall
mean and be a reference to such agreement, instrument or other document as
amended, amended and restated, supplemented or otherwise modified hereafter
from time to time in accordance with its terms, but solely to the extent
permitted hereunder. In this Agreement, the words "herein", "hereof" and words
of similar import refer to the entirety of this Agreement and not to any
particular Section, subsection, or Article of this Agreement.

                  SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the Consolidated financial statements of the Borrower and its Subsidiaries
referred to in Section 4.01(f) ("GAAP").

                  SECTION 1.04. Currency Equivalents Generally. Any amount
specified in this Agreement (other than in Articles II, VII and VIII) or any of
the other Loan Documents to be in U.S. dollars shall also include and be a
reference to the equivalent of such amount in any currency other than U.S.
dollars, such equivalent amount to be determined at the rate of exchange quoted
by BofA in Charlotte, North Carolina at the close of business on the Business
Day immediately preceding any date of determination thereof to prime banks in
New York, New York for the spot purchase in the New York foreign exchange
market of such amount in U.S. dollars with such other currency.

                                   ARTICLE II

                       AMOUNTS AND TERMS OF THE ADVANCES
                           AND THE LETTERS OF CREDIT

                  SECTION 2.01.  The Advances and the Letters of Credit.

                  (a)      The Term Loan Advances. Each Term Loan Lender
severally agrees, on the terms and conditions hereinafter set forth, to make a
single Term Loan Advance in U.S. dollars to the Borrower on the Effective Date
in an amount not to exceed the Term Loan Commitment of such Term Loan Lender at
such time. The Term Loan Borrowing shall consist of Term Loan Advances made
simultaneously by the Term Loan Lenders in accordance with their respective Pro
Rata Shares of the Term Loan Facility. Amounts borrowed under this Section
2.01(a) and repaid or prepaid may not be reborrowed.

                  (b)      The Revolving Credit Advances. Each Revolving Credit
Lender severally agrees, on the terms and conditions hereinafter set forth, to
make Revolving Credit Advances in U.S. dollars to the Borrower from time to
time on any Business Day during the period from the Effective Date until the
Termination Date for the Revolving Credit Facility, in each case in an amount
not to exceed the Unused Revolving Credit Commitment of such Revolving Credit
Lender at such time. Each Revolving Credit Borrowing shall be in an aggregate
amount of $5,000,000 or an integral multiple of $500,000 in excess thereof
(other than a Borrowing the proceeds of which shall be used solely to repay or
prepay in full outstanding Swing Line Advances or the outstanding Letter of
Credit Advances) or, if less, the amount of the aggregate Unused Revolving
Credit Commitments at such time. Each Revolving Credit Borrowing shall consist
of Revolving Credit Advances made simultaneously by the Revolving Credit
Lenders in accordance with their respective Pro Rata Shares of the Revolving
Credit Facility. Within the limits of each Revolving Credit Lender's Unused
Revolving Credit Commitment in effect from time to time, the Borrower may
borrow under this Section 2.01(b), prepay pursuant to Section 2.06(a) and
reborrow under this Section 2.01(b).

                  (c)      The Swing Line Advances. The Borrower may request
the Swing Line Bank to make, and the Swing Line Bank shall make, unless it
promptly notifies the Borrower of its reasonable objection to doing so, on the
terms and conditions hereinafter set forth, Swing Line Advances to the

                                      33
<PAGE>   38

Borrower from time to time on any Business Day during the period from the
Effective Date until the Termination Date for the Swing Line Facility in an
amount (i) for all outstanding Swing Line Advances not to exceed the Swing Line
Facility on such Business Day and (ii) for each such Swing Line Advance not to
exceed the aggregate Unused Revolving Credit Commitments of the Revolving
Credit Lenders on such Business Day. No Swing Line Advance shall be used for
the purpose of funding the payment of principal of any other Swing Line
Advance. Each Swing Line Advance shall be in an amount of $1,000,000 or an
integral multiple of $500,000 in excess thereof and shall be comprised of a
Base Rate Advance. Within the limits of the first sentence of this Section
2.01(c), so long as the Swing Line Bank has not notified the Borrower of its
reasonable objection to making Swing Line Advances, the Borrower may borrow
under this Section 2.01(c), repay pursuant to Section 2.04(c) or prepay
pursuant to Section 2.06(a) and reborrow under this Section 2.01(c).

                  (d)      Letters of Credit. The Borrower, the Issuing Bank
and each of the Revolving Credit Lenders hereby agree that each of the Existing
Letters of Credit shall, on and after the Effective Date, continue as and be
deemed for all purposes of this Agreement to be a Letter of Credit issued and
outstanding under the terms of this Agreement. The Issuing Bank agrees, on the
terms and conditions hereinafter set forth, to issue standby letters of credit
(each a "LETTER OF CREDIT") in U.S. dollars for the account of the Borrower in
favor of any Person (other than the Borrower or any of its Subsidiaries) from
time to time on any Business Day during the period from the Effective Date to
ten Business Days before the scheduled Termination Date for the Revolving
Credit Facility (i) in an aggregate Available Amount for all outstanding
Letters of Credit not to exceed the Letter of Credit Facility on such Business
Day and (ii) in an Available Amount for each such Letter of Credit not to
exceed the aggregate Unused Revolving Credit Commitment of the Revolving Credit
Lenders on such Business Day. No Letter of Credit shall have an expiration date
(including all rights of the Borrower or the beneficiary of such Letter of
Credit to require renewal) later than the earlier of (A) ten Business Days
prior to the scheduled Termination Date for the Revolving Credit Facility and
(B) one year after the date of issuance thereof, but any such Letter of Credit
may by its terms be renewable annually upon notice (a "NOTICE OF RENEWAL")
given to the Issuing Bank and the Administrative Agent on or prior to any date
for notice of renewal set forth in such Letter of Credit but in any event at
least three Business Days prior to the date of the proposed renewal of such
Letter of Credit and upon fulfillment of the applicable conditions set forth in
Article III, unless such Issuing Bank has notified the Borrower (with a copy to
the Administrative Agent) on or prior to the date for notice of termination set
forth in such Letter of Credit but in any event at least ten Business Days
prior to the date of automatic renewal of its election not to renew such Letter
of Credit (a "NOTICE OF TERMINATION"); provided that the terms of each of the
Letters of Credit that is automatically renewable annually (1) shall require
the Issuing Bank to give the beneficiary of such Letter of Credit notice of any
Notice of Termination, (2) shall permit such beneficiary, upon receipt of such
notice, to draw under such Letter of Credit prior to the date on which such
Letter of Credit otherwise would have been automatically renewed and (3) shall
not permit the expiration date (after giving effect to any renewal) of such
Letter of Credit in any event to be extended to a date that is later than ten
Business Days prior to the scheduled Termination Date for the Revolving Credit
Facility. If either a Notice of Renewal is not given by the Borrower or a
Notice of Termination is given by the Issuing Bank pursuant to the immediately
preceding sentence, the related Letter of Credit shall expire on the date on
which it otherwise would have been automatically renewed; provided, however,
that in the absence of receipt of a Notice of Renewal the Issuing Bank may in
its discretion, unless instructed to the contrary by the Administrative Agent
or the Borrower, deem that a Notice of Renewal had been timely delivered and,
in such case, a Notice of Renewal shall be deemed to have been so delivered for
all purposes under this Agreement. Within the limits of the Letter of Credit
Facility, and subject to the limits referred to above in this Section 2.01(d),
the Borrower may request the issuance of Letters of Credit under this Section
2.01(d), repay any Letter of Credit Advances resulting from drawings thereunder
pursuant to Section 2.03(b) and request the issuance of additional Letters of
Credit under this Section 2.01(d).

                  SECTION 2.02.  Making the Advances.

                  (a)      Except as otherwise provided in Section 2.02(b) or
2.03 or in respect of any Borrowing requested to be made on the Effective Date
(in which case notice shall be given not later than

                                      34
<PAGE>   39

one Business Day prior to the Effective Date and which Borrowing shall be
comprised of Base Rate Advances), each Borrowing (other than a Swing Line
Borrowing) shall be made on notice, given not later than 1:00 P.M. (Charlotte,
North Carolina time) on the third Business Day prior to the date of the
proposed Borrowing in the case of a Borrowing comprised of Eurodollar Rate
Advances, or on the same Business Day as the date of the proposed Borrowing in
the case of a Borrowing comprised of Base Rate Advances, by the Borrower to the
Administrative Agent, which shall give prompt notice thereof to each of the
Appropriate Lenders by telecopier. Each notice of a Borrowing (a "NOTICE OF
BORROWING") shall be by telephone, confirmed promptly (and, in any event, on
the same Business Day) in writing, or by telecopier, shall be in substantially
the form of Exhibit B-1 hereto and duly executed by a Responsible Officer of
the Borrower, and shall specify therein: (i) the requested date of such
Borrowing (which shall be a Business Day); (ii) the Facility under which such
Borrowing is requested to be made; (iii) the Type of Advances requested to
comprise such Borrowing; (iv) the requested aggregate principal amount of such
Borrowing; and (v) in the case of a Borrowing comprised of Eurodollar Rate
Advances, the requested duration of the initial Interest Period for each such
Advance. Each Appropriate Lender shall, before 3:00 P.M. (Charlotte, North
Carolina time) on the date of such Borrowing, make available for the account of
its Applicable Lending Office to the Administrative Agent at the Administrative
Agent's Account, in same day funds, such Lender's Pro Rata Share of such
Borrowing. After the Administrative Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article III, the
Administrative Agent will make such funds available to the Borrower by
crediting the Borrower's Account; provided, however, that, in the case of any
Revolving Credit Borrowing, the Administrative Agent shall first make a portion
of such funds equal to the aggregate principal amount of any Swing Line
Advances and Letter of Credit Advances made by the Swing Line Bank and the
Issuing Bank, respectively, and by any Revolving Credit Lender and outstanding
on the date of such Revolving Credit Borrowing, together with all accrued and
unpaid interest thereon to and as of such date, available to the Swing Line
Bank or the Issuing Bank and to each such Revolving Credit Lender for repayment
of such outstanding Swing Line Advances and Letter of Credit Advances.

                  (b)      (i)      Each Swing Line Borrowing shall be made
         initially by the Swing Line Bank on notice, given not later than 3:00
         P.M. (Charlotte, North Carolina time) on the date of the proposed
         Swing Line Borrowing, by the Borrower to the Swing Line Bank and the
         Administrative Agent. Each notice of a Swing Line Borrowing (a "NOTICE
         OF SWING LINE BORROWING") shall be by telephone, confirmed promptly
         (and, in any event, on the same Business Day) in writing, or by
         telecopier, shall be in substantially the form of Exhibit B-2 hereto
         and duly executed by a Responsible Officer of the Borrower, and shall
         specify therein: (A) the requested date of such Swing Line Borrowing
         (which shall be a Business Day); (B) the requested amount of such
         Swing Line Borrowing; and (C) the requested maturity of such Swing
         Line Borrowing (which maturity shall be no later than the 30th day
         after the requested date of such Swing Line Borrowing). Unless the
         Swing Line Bank promptly notifies the Borrower of its reasonable
         objection to making such Swing Line Borrowing, the Swing Line Bank
         will make the amount thereof available for the account of its
         Applicable Lending Office to the Administrative Agent at the
         Administrative Agent's Account, in same day funds. After the
         Administrative Agent's receipt of such funds and upon fulfillment of
         the applicable conditions set forth in Article III, the Administrative
         Agent will make such funds available to the Borrower by crediting the
         Borrower's Account.

                           (ii)     Upon demand by the Swing Line Bank, with a
         copy of such demand to the Administrative Agent (which shall give
         prompt notice thereof to each of the Revolving Credit Lenders), each
         of the Revolving Credit Lenders shall purchase from the Swing Line
         Bank, and the Swing Line Bank shall sell and assign to each of the
         Revolving Credit Lenders, such Revolving Credit Lender's Pro Rata
         Share of each of the outstanding Swing Line Advances owing to the
         Swing Line Bank as of the date of such demand, by making available for
         the account of its Applicable Lending Office to the Administrative
         Agent at the Administrative Agent's Account for the account of the
         Swing Line Bank, in same day funds, an amount equal to its Pro Rata
         Share of each such outstanding Swing Line Advance. Promptly after
         receipt of such funds, the Administrative Agent shall transfer such
         funds to the Swing Line Bank at its Applicable

                                      35
<PAGE>   40

         Lending Office. Each of the Revolving Credit Lenders hereby agrees to
         purchase its Pro Rata Share of each outstanding Swing Line Advance
         owing to the Swing Line Bank for which a demand for the purchase
         thereof has been made on (A) the Business Day on which demand therefor
         is made by the Swing Line Bank so long as notice of such demand is
         given not later than 2:00 P.M. (Charlotte, North Carolina time) on such
         Business Day or (B) the first Business Day next succeeding such demand
         if notice of such demand is given after such time. The Borrower hereby
         agrees to each such sale and assignment. Upon any such assignment by
         the Swing Line Bank to any of the Revolving Credit Lenders of a portion
         of a Swing Line Advance owing to the Swing Line Bank, the Swing Line
         Bank represents and warrants to such Revolving Credit Lender that the
         Swing Line Bank is the legal and beneficial owner of such interest
         being assigned by it, free and clear of any adverse claim, but makes no
         other representation or warranty and assumes no responsibility with
         respect to such Swing Line Advance, any of the Loan Documents or any of
         the Loan Parties. If and to the extent that any of the Revolving Credit
         Lenders shall not have so made its Pro Rata Share of any applicable
         Swing Line Advance available to the Administrative Agent in accordance
         with the foregoing provisions of this subsection (b)(ii), such
         Revolving Credit Lender hereby agrees to pay to the Administrative
         Agent forthwith on demand the amount of its Pro Rata Share of such
         Swing Line Advance, together with all accrued and unpaid interest
         thereon, for each day from the date of demand therefor by the Swing
         Line Bank therefor until the date on which such amount is paid to the
         Administrative Agent, at the Federal Funds Rate. If any of the
         Revolving Credit Lenders shall pay to the Administrative Agent the
         amount of its Pro Rata Share of any applicable Swing Line Advance for
         the account of the Swing Line Bank on any Business Day, such amount so
         paid in respect of principal shall constitute a Swing Line Advance made
         by such Revolving Credit Lender on such Business Day for all purposes
         of this Agreement, and the outstanding principal amount of the
         applicable Swing Line Advance made by the Swing Line Bank shall be
         reduced by such amount on such Business Day.

                           (iii)    The Obligation of each of the Revolving
         Credit Lenders to purchase their respective Pro Rata Shares of each
         outstanding Swing Line Advance owing to the Swing Line Bank upon
         demand for the purchase thereof pursuant to clause (ii) of this
         Section 2.02(b) shall be absolute, unconditional and irrevocable, and
         shall be made strictly in accordance with the terms thereof under all
         circumstances, including, without limitation, the following
         circumstances:

                                    (A)      any lack of validity or
                           enforceability of any of the Loan Documents or any
                           of the other agreements or instruments relating
                           thereto;

                                    (B)      the existence of any claim,
                           setoff, defense or other right that such Revolving
                           Credit Lender may have at any time against the Swing
                           Line Bank, the Borrower or any other Person, whether
                           in connection with the transactions contemplated by
                           the Loan Documents or any unrelated transaction;

                                    (C)      the occurrence and continuance of
                           any Default; or

                                    (D)      any other circumstance or
                           happening whatsoever, whether or not similar to any
                           of the foregoing.

                           (iv)     The failure of any of the Revolving Credit
         Lenders to purchase its Pro Rata Share of any outstanding Swing Line
         Advance owing to the Swing Line Bank for which a demand for the
         purchase thereof has been made pursuant to clause (ii) of this Section
         2.02(b) shall not relieve any of the other Revolving Credit Lenders of
         its obligation to purchase its Pro Rata Share of such outstanding
         Swing Line Advance on the date of demand therefor, but none of the
         Revolving Credit Lenders shall be responsible for the failure of any
         of the other Revolving Credit Lenders to purchase its Pro Rata Share
         of such outstanding Swing Line Advance on the date of demand therefor.

                                      36
<PAGE>   41

                  (c)      Anything in subsection (a) of this Section 2.02 to
the contrary notwithstanding, the Borrower may not select Eurodollar Rate
Advances for any Borrowing if the aggregate amount of such Borrowing is less
than $5,000,000 or if the obligation of the Appropriate Lenders to make
Eurodollar Rate Advances shall then be suspended pursuant to Section 2.09(b) or
2.10. In addition, the Term Loan Advances may not be outstanding as part of
more than one Borrowing comprised of Eurodollar Rate Advances and the Revolving
Credit Advances may not be outstanding as part of more than eight separate
Borrowings comprised of Eurodollar Rate Advances.

                  (d)      Each Notice of Borrowing and Notice of Swing Line
Borrowing shall be irrevocable and binding on the Borrower. In the case of any
Borrowing that the related Notice of Borrowing specifies is to be comprised of
Eurodollar Rate Advances, the Borrower shall indemnify each of the Appropriate
Lenders against any loss, cost or expense incurred by such Lender as a result
of any failure to fulfill on or before the date specified in such Notice of
Borrowing for such Borrowing the applicable conditions set forth in Article
III, including, without limitation, any loss (excluding loss of anticipated
profits), cost or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by such Lender to fund the Eurodollar Rate
Advance to be made by such Lender as part of such Borrowing when such
Eurodollar Rate Advance, as a result of such failure, is not made on such date.
A certificate of the Lender requesting compensation pursuant to this subsection
(d), submitted to the Borrower by such Lender (with a copy to the
Administrative Agent) and specifying therein the amount of such additional
compensation (including the basis of calculation thereof), shall be conclusive
and binding for all purposes, absent manifest error.

                  (e)      Unless the Administrative Agent shall have received
notice from an Appropriate Lender prior to the date of any Borrowing under a
Facility under which such Lender has a Commitment that such Lender will not
make available to the Administrative Agent such Lender's Pro Rata Share of such
Borrowing, the Administrative Agent may assume that such Lender has made the
amount of such Pro Rata Share available to the Administrative Agent on the date
of such Borrowing in accordance with subsection (a) of this Section 2.02 and
the Administrative Agent may, in reliance upon such assumption, make a
corresponding amount available to the Borrower on such date. If and to the
extent that such Lender shall not have so made the amount of such Pro Rata
Share available to the Administrative Agent, such Lender and the Borrower
severally agree to repay or to pay to the Administrative Agent forthwith on
demand such corresponding amount, together with all accrued and unpaid interest
thereon, for each day from the date on which such corresponding amount is made
available to the Borrower until the date on which such corresponding amount is
repaid or paid to the Administrative Agent, at (i) in the case of the Borrower,
the interest rate applicable under Section 2.07 at such time to Advances
comprising part of such Borrowing and (ii) in the case of such Lender, the
Federal Funds Rate. If such Lender shall pay to the Administrative Agent such
corresponding amount, such corresponding amount so paid shall constitute such
Lender's Advance as part of such Borrowing for all purposes under this
Agreement.

                  (f)      The failure of any of the Lenders to make the
Advance to be made by it as part of any Borrowing shall not relieve any of the
other Lenders of its obligation, if any, hereunder to make its Advance on the
date of such Borrowing, but none of the Lenders shall be responsible for the
failure of any of the other Lenders to make the Advance to be made by such
other Lender on the date of any Borrowing.

                  SECTION 2.03. Issuance of and Drawings and Reimbursement
Under Letters of Credit.

                  (a)      Request for Issuance. Each Letter of Credit shall be
issued upon notice, given not later than 12:00 noon. (Charlotte, North Carolina
time) on the second Business Day prior to the date of the proposed issuance of
such Letter of Credit (or such later day as the Issuing Bank in its sole
discretion shall agree), by the Borrower to the Issuing Bank, which shall give
the Administrative Agent and each of the Revolving Credit Lenders prompt notice
thereof by telecopier. Each notice of issuance of a Letter of Credit (a "NOTICE
OF ISSUANCE") shall be by telephone, confirmed promptly (and, in any event, on
the same Business Day) in writing, or by telecopier, shall be duly executed by
a Responsible Officer of the Borrower, and shall specify therein: (i) the
requested date of such issuance (which shall be a Business

                                      37
<PAGE>   42

Day); (ii) the requested Available Amount of such Letter of Credit; (iii) the
requested expiration date of such Letter of Credit (which shall comply with the
requirements of Section 2.01(d)); (iv) the name and address of the proposed
beneficiary of such Letter of Credit; and (v) the proposed form of such Letter
of Credit, and shall be accompanied by such application and agreement for
letter of credit as the Issuing Bank may specify to the Borrower for use in
connection with such requested Letter of Credit (a "LETTER OF CREDIT
AGREEMENT"). If the requested form of such Letter of Credit is acceptable to
the Issuing Bank in its reasonable discretion, the Issuing Bank will, upon
fulfillment of the applicable conditions set forth in Article III, make such
Letter of Credit available to the Borrower at its office referred to in Section
8.02 or as otherwise agreed with the Borrower in connection with such issuance.
If and to the extent that the provisions of any Letter of Credit Agreement
shall conflict with this Agreement, the provisions of this Agreement shall
govern.

                  (b)      Letter of Credit Reports. The Issuing Bank shall
furnish to the Administrative Agent and each of the Revolving Credit Lenders on
the first Business Day of each calendar quarter a written report setting forth
(i) the issuance and expiration dates of all Letters of Credit issued during
the immediately preceding calendar quarter and the drawings under all Letters
of Credit outstanding during such immediately preceding calendar quarter and
(ii) the average daily aggregate Available Amount of all Letters of Credit
outstanding during the immediately preceding calendar quarter.

                  (c)      Drawing and Reimbursement. (i) The payment by the
Issuing Bank of a draft drawn under any Letter of Credit shall constitute for
all purposes of this Agreement the making by the Issuing Bank of a Letter of
Credit Advance, which shall be a Base Rate Advance, in the amount of such
draft. Upon demand by the Issuing Bank, with a copy of such demand to the
Administrative Agent, each of the Revolving Credit Lenders shall purchase from
the Issuing Bank, and the Issuing Bank shall sell and assign to each of the
Revolving Credit Lenders, such Revolving Credit Lender's Pro Rata Share of each
of the outstanding Letter of Credit Advances owing to the Issuing Bank as of
the date of such demand, by making available for the account of its Applicable
Lending Office to the Administrative Agent for the account of the Issuing Bank,
at the Administrative Agent's Account, in same day funds, an amount equal to
its Pro Rata Share of each such outstanding Letter of Credit Advance. Promptly
after receipt of such funds, the Administrative Agent shall transfer such funds
to the Issuing Bank at its Applicable Lending Office. Each of the Revolving
Credit Lenders hereby agrees to purchase its Pro Rata Share of each outstanding
Letter of Credit Advance owing to the Issuing Bank for which a demand for the
purchase thereof has been made on (A) the Business Day on which demand therefor
is made by the Issuing Bank so long as notice of such demand is given not later
than 2:00 P.M. (Charlotte, North Carolina time) on such Business Day or (B) the
first Business Day next succeeding such demand if notice of such demand is
given after such time. The Borrower hereby agrees to each such sale and
assignment. Upon any such assignment by the Issuing Bank to any of the
Revolving Credit Lenders of a portion of a Letter of Credit Advance owing to
the Issuing Bank, the Issuing Bank represents and warrants to such Revolving
Credit Lender that the Issuing Bank is the legal and beneficial owner of such
interest being assigned by it, free and clear of any adverse claim, but makes
no other representation or warranty and assumes no responsibility with respect
to such Letter of Credit Advance, any of the Loan Documents or any of the Loan
Parties. If and to the extent that any of the Revolving Credit Lenders shall
not have so made its Pro Rata Share of any applicable Letter of Credit Advance
available to the Administrative Agent in accordance with the foregoing
provisions of this subsection (c)(i), such Revolving Credit Lender hereby
agrees to pay to the Administrative Agent forthwith on demand the amount of its
Pro Rata Share of such Letter of Credit Advance, together with all accrued and
unpaid interest thereon, for each day from the date of demand therefor by the
Issuing Bank until the date on which such amount is paid to the Administrative
Agent, at the Federal Funds Rate. If any of the Revolving Credit Lenders shall
pay to the Administrative Agent the amount of its Pro Rata Share of any
applicable Letter of Credit Advance for the account of the Issuing Bank on any
Business Day, such amount so paid in respect of principal shall constitute a
Letter of Credit Advance made by such Revolving Credit Lender on such Business
Day for all purposes of this Agreement, and the outstanding principal amount of
the applicable Letter of Credit Advance made by the Issuing Bank shall be
reduced by such amount on such Business Day.

                                      38
<PAGE>   43

                           (ii)     The Obligation of each of the Revolving
         Credit Lenders to purchase their respective Pro Rata Shares of each
         outstanding Letter of Credit Advance owing to the Issuing Bank upon
         demand for the purchase thereof pursuant to clause (i) of this Section
         2.03(c) shall be absolute, unconditional and irrevocable, and shall be
         made strictly in accordance with the terms thereof under all
         circumstances, including, without limitation, the following
         circumstances:

                                    (A)      any lack of validity or
                           enforceability of any of the Loan Documents, any of
                           the Letter of Credit Agreements, any of the Letters
                           of Credit or any of the other agreements or
                           instruments relating thereto (collectively, the "L/C
                           RELATED DOCUMENTS");

                                    (B)      the existence of any claim,
                           setoff, defense or other right that such Revolving
                           Credit Lender may have at any time against any
                           beneficiary or any transferee of a Letter of Credit
                           (or any Persons for whom any such beneficiary or any
                           such transferee may be acting), the Issuing Bank,
                           the Borrower or any other Person, whether in
                           connection with the transactions contemplated by the
                           L/C Related Documents or any unrelated transaction;

                                    (C)      the occurrence and continuance of
                           any Default; or

                                    (D)      any other circumstance or
                           happening whatsoever, whether or not similar to any
                           of the foregoing.

                  (d)      Failure to Make Letter of Credit Advances. The
failure of any of the Revolving Credit Lenders to purchase its Pro Rata Share
of any outstanding Letter of Credit Advance owing to the Issuing Bank for which
a demand for the purchase thereof has been made pursuant to Section 2.03(c)(i)
shall not relieve any of the other Revolving Credit Lenders of its obligation
to purchase its Pro Rata Share of such outstanding Letter of Credit Advance on
the date of demand therefor, but none of the Revolving Credit Lenders shall be
responsible for the failure of any of the other Revolving Credit Lenders to
purchase its Pro Rata Share of such outstanding Letter of Credit Advance on the
date of demand therefor.

                  SECTION 2.04.  Repayment of Advances.

                  (a)      Term Loan Facility. The Borrower shall repay to the
Administrative Agent for the ratable account of the Term Loan Lenders on each
of the dates set forth below the Term Loan Advances in an amount equal to the
percentage of the aggregate principal amount of all Term Loan Advances
outstanding on the Effective Date and set forth opposite such dates (in each
case which amounts shall be reduced as a result of the application of
prepayments in accordance with Section 2.06):

<TABLE>
<CAPTION>
                  DATE                                                            PERCENTAGE
                  ----                                                            ----------

                  <S>                                                             <C>
                  June 30, 2001                                                        0.25%
                  September 30, 2001                                                   0.25%
                  December 31, 2001                                                    0.25%
                  March 31, 2002                                                       0.25%
                  June 30, 2002                                                        0.25%
                  September 30, 2002                                                   0.25%
                  December 31, 2002                                                    0.25%
                  March 31, 2003                                                       0.25%
                  June 30, 2003                                                        0.25%
                  September 30, 2003                                                   0.25%
                  December 31, 2003                                                    0.25%
                  March 31, 2004                                                       0.25%
                  June 30, 2004                                                        0.25%
</TABLE>

                                      39
<PAGE>   44

<TABLE>
<CAPTION>
                  DATE                                                            PERCENTAGE
                  ----                                                            ----------

                  <S>                                                             <C>
                  September 30, 2004                                                   0.25%
                  December 31, 2004                                                    0.25%
                  March 31, 2005                                                       0.25%
                  June 30, 2005                                                        0.25%
                  September 30, 2005                                                   0.25%
                  December 31, 2005                                                    0.25%
                  March 15, 2006                                                      95.25%
</TABLE>

provided, however, that, notwithstanding the foregoing provisions of this
Section 2.04(a), the final principal repayment installment of the Term Loan
Advances shall be repaid in full on the Termination Date for the Term Loan
Facility and in any event shall be in an amount equal to the aggregate
principal amount of all Term Loan Advances outstanding on such date.

                  (b)      Revolving Credit Facility. The Borrower shall repay
to the Administrative Agent for the ratable account of the Revolving Credit
Lenders on the Termination Date for the Revolving Credit Facility the aggregate
principal amount of all Revolving Credit Advances outstanding on such date.

                  (c)      Swing Line Advances. The Borrower shall repay to the
Administrative Agent for the account of the Swing Line Bank and, if applicable,
each of the Revolving Credit Lenders on the earlier of (i) the maturity date
for each Swing Line Advance as specified in the related Notice of Swing Line
Borrowing (which maturity shall be no later than the 30th day after the date on
which such Swing Line Borrowing was initially made by the Swing Line Bank) and
(ii) the Termination Date for the Revolving Credit Facility, the principal
amount of each such Swing Line Advance made by each of them and outstanding on
such date.

                  (d)      Letter of Credit Advances.

                           (i)      The Borrower shall repay to the
         Administrative Agent for the account of the Issuing Bank and, if
         applicable, each of the Revolving Credit Lenders on the earlier of (A)
         the date of demand therefor and (B) the Termination Date for the
         Revolving Credit Facility, the principal amount of each such Letter of
         Credit Advance made by each of them and outstanding on such date.

                           (ii)     The Obligations of the Borrower under this
         Agreement, any of the Letter of Credit Agreements and any of the other
         agreements or instruments relating to any Letter of Credit shall be
         absolute, unconditional and irrevocable, and shall be paid strictly in
         accordance with the terms of this Agreement, such Letter of Credit
         Agreement and such other agreement or instrument under all
         circumstances (subject to the rights afforded to the Borrower under
         Section 8.08), including, without limitation, the following
         circumstances:

                                    (A)      any lack of validity or
                           enforceability of any of the L/C Related Documents;

                                    (B)      any change in the time, manner or
                           place of payment of, or in any of the other terms
                           of, all or any of the Obligations of the Borrower in
                           respect of any of the L/C Related Documents or any
                           other amendment or waiver of or any consent to
                           departure from all or any of the L/C Related
                           Documents;

                                    (C)      the existence of any claim,
                           setoff, defense or other right that the Borrower may
                           have at any time against any beneficiary or any
                           transferee of a Letter of Credit (or any Persons for
                           whom any such beneficiary or any such transferee may
                           be acting), the Issuing Bank or any other Person,
                           whether in

                                      40
<PAGE>   45

                           connection with the transactions contemplated by the
                           L/C Related Documents or any unrelated transaction;

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

                                    (E)      payment by the Issuing Bank under
                           a Letter of Credit against presentation of a draft
                           or certificate that does not strictly comply with
                           the terms of such Letter of Credit;

                                    (F)      any exchange, release or
                           nonperfection of any Collateral or other collateral,
                           or any release or amendment or waiver of or consent
                           to departure from the Subsidiaries Guarantee or any
                           other guarantee, for all or any of the Obligations
                           of the Borrower in respect of the L/C Related
                           Documents; or

                                    (G)      any other circumstance or
                           happening whatsoever, whether or not similar to any
                           of the foregoing, including, without limitation, any
                           other circumstance that might otherwise constitute a
                           defense available to, or a discharge of, the
                           Borrower or a guarantor.

                  SECTION 2.05.  Termination or Reduction of the Commitments.

                  (a)      Optional. The Borrower, upon at least three Business
Days' notice to the Administrative Agent (but in any event no more frequently
than three times during each Fiscal Quarter), may terminate in whole or reduce
in part the Unused Revolving Credit Commitments; provided, however, that each
partial reduction of the Revolving Credit Facility shall be in an aggregate
amount of $25,000,000 or an integral multiple of $5,000,000 in excess thereof
or, if less, the aggregate amount of the Revolving Credit Facility.

                  (b)      Mandatory.

                           (i)      On the Effective Date, after giving effect
         to the Term Loan Borrowing to be made on such date, and from time to
         time thereafter upon each repayment or prepayment of the Term Loan
         Advances, the Term Loan Facility shall be automatically and
         permanently reduced by an amount equal to the amount by which the Term
         Loan Facility immediately prior to such reduction exceeds the
         aggregate principal amount of the Term Loan Advances outstanding at
         such time.

                           (ii)     The Swing Line Facility shall be
         automatically and permanently reduced on the date of each reduction in
         the Revolving Credit Facility by the amount, if any, by which the
         amount of the Swing Line Facility on such date exceeds the amount of
         the Revolving Credit Facility on such date (after giving effect to
         such reduction of the Revolving Credit Facility on such date).

                           (iii)    The Letter of Credit Facility shall be
         automatically and permanently reduced on the date of each reduction in
         the Revolving Credit Facility by the amount, if any, by which the
         amount of the Letter of Credit Facility on such date exceeds the
         amount of the Revolving Credit Facility on such date (after giving
         effect to such reduction of the Revolving Credit Facility on such
         date).

                  (c)      Application of Commitment Reductions. Upon each
reduction of any of the Facilities pursuant to this Section 2.05, the
Commitment of each of the Appropriate Lenders under such Facility shall be
reduced by such Lender's Pro Rata Share of the amount by which such Facility is
reduced.

                                      41
<PAGE>   46

                  SECTION 2.06. Prepayments.

                  (a)      Optional. The Borrower may, upon at least three
Business Days' notice to the Administrative Agent stating the Facility under
which Advances are proposed to be prepaid and the proposed date and aggregate
principal amount of the prepayment, and if such notice is given the Borrower
shall, prepay the aggregate principal amount of the Advances comprising part of
the same Borrowing and outstanding on such date, in whole or ratably in part;
provided, however, that (i) each partial prepayment of the Term Loan Advances or
Revolving Credit Advances shall be in an aggregate principal amount of
$5,000,000 or an integral multiple of $500,000 in excess thereof and (ii) no
such prepayment of a Eurodollar Rate Advance shall be made other than on the
last day of an Interest Period therefor. Each prepayment of the Term Loan
Advances pursuant to this subsection (a) shall be applied ratably to the
principal repayment installments thereof in inverse order of maturity.

                  (b)      Mandatory.

                           (i)      The Borrower shall, on the earlier of (A)
         the tenth day following the date on which the Borrower delivers to the
         Lender Parties the Required Financial Information and (B) 105 days
         after the end of each Fiscal Year, commencing with such audited
         Consolidated financial statements for the Fiscal Year ending December
         31, 2001 prepay an aggregate principal amount of the Advances
         comprising part of the same Borrowings equal to 50% of the amount of
         Excess Cash Flow for such Fiscal Year. Each prepayment of Advances
         required to be made pursuant to this clause (i) shall be applied to the
         Term Loan Facility and to the principal repayment installments thereof
         in inverse order of maturity on a pro rata basis.

                           (ii)     The Borrower shall, on the date of receipt
         of the Net Cash Proceeds by the Borrower or any of its Subsidiaries
         from:

                           (A)      the sale, lease, transfer or other
                  disposition of any property or assets of the Borrower or any
                  of its Subsidiaries (other than (x) the assets listed in
                  Schedule 2.06 and (y) any other property or assets expressly
                  permitted to be sold, leased, transferred or disposed of under
                  clause (i), (ii), (iii), (iv), (vi), (viii), (ix), (x) or (xi)
                  of Section 5.02(d) and, except to the extent such reduction is
                  expressly required thereunder, under clause (v) of Section
                  5.02(d);

                           (B)      the incurrence or issuance by the Borrower
                  or any of its Subsidiaries of any Indebtedness (other than
                  Indebtedness expressly permitted to be incurred or issued
                  pursuant to clause (i), (ii), (iii), (iv), (v), (vi), (vii),
                  (viii), (ix), (x), (xi), (xii), (xiv), (xv) or (xvi) of
                  Section 5.02(b) and Subordinated Debt permitted to be issued
                  under Section 5.02(b)(xiii) and which is used to effect any
                  acquisition permitted hereunder, provided that in the case in
                  which the proceeds of such issuance are contemplated to be
                  used to effect such acquisition, then all the proceeds thereof
                  are used within 120 days of such issuance to effect such
                  acquisition and any such proceeds not so used by such 120th
                  day shall be applied as a prepayment as provided herein); and

                           (C)      the issuance or sale by the Borrower or any
                  of its Subsidiaries of any Equity Interests therein (other
                  than the issuance by the Borrower of Equity Interests (i) upon
                  the conversion of the Convertible Preferred Securities upon
                  exchange thereof for Convertible Subordinated Debentures and
                  the immediate conversion of such Convertible Subordinated
                  Debentures, as provided in the Convertible Securities Trust
                  Agreement, (ii) to employees of the Borrower or its
                  Subsidiaries in the ordinary course of business or (iii) to
                  effect any acquisition permitted hereunder, provided that in
                  the case in which the proceeds of such issuance are
                  contemplated to be used to effect such acquisition, then all
                  the proceeds thereof are used within 120 days of such issuance
                  to effect such acquisition

                                       42
<PAGE>   47

                  and any such proceeds not so used by such 120th day shall be
                  applied as a prepayment as provided herein),

prepay an aggregate principal amount of the Advances comprising part of the same
Borrowings equal to 100% of the amount of such Net Cash Proceeds. Each
prepayment of Advances pursuant to this clause (ii) shall be applied to the Term
Loan Facility and to the principal repayment installments thereof in inverse
order of maturity on a pro rata basis.

                           (iii)    The Borrower shall, on each Business Day,
         prepay an aggregate principal amount of the Revolving Credit Advances
         comprising part of the same Borrowings, the Letter of Credit Advances
         and the Swing Line Advances and, if applicable, deposit an amount into
         the L/C Cash Collateral Account equal to the amount by which (A) the
         sum of (1) the aggregate principal amount of all Revolving Credit
         Advances, Letter of Credit Advances and Swing Line Advances outstanding
         on such Business Day and (2) the aggregate Available Amount of all
         Letters of Credit outstanding on such Business Day exceeds (B) the
         Revolving Credit Facility on such Business Day (after giving effect to
         any permanent reduction thereof pursuant to Section 2.05 on such
         Business Day).

                           (iv)     The Borrower shall, on each Business Day,
         pay to the Administrative Agent for deposit into the L/C Cash
         Collateral Account an amount sufficient to cause the aggregate amount
         on deposit in the L/C Cash Collateral Account on such Business Day to
         equal the amount by which (A) the aggregate Available Amount of all
         Letters of Credit outstanding on such Business Day exceeds (B) the
         Letter of Credit Facility on such Business Day (after giving effect to
         any permanent reduction thereof pursuant to Section 2.05 on such
         Business Day).

                           (v)      Notwithstanding any of the other provisions
         of clause (ii) of this Section 2.06(b), so long as no Default under
         Section 6.01(a) or 6.01(f) or Event of Default shall have occurred and
         be continuing, if, on any date on which a prepayment of Term Loan
         Advances would otherwise be required to be made pursuant to clause (ii)
         of this Section 2.06(b), the aggregate amount of Net Cash Proceeds
         required by such clause to be applied to prepay Term Loan Advances on
         such date is less than or equal to $10,000,000, the Borrower may defer
         such prepayment until the date that is ten Business Days after the
         aggregate amount of Net Cash Proceeds or other amounts otherwise
         required hereunder to prepay Term Loan Advances and not previously so
         applied equals at least $10,000,000. Upon the occurrence of a Default
         under Section 6.01(a) or 6.01(f) or an Event of Default, the Borrower
         shall immediately prepay the Term Loan Advances comprising part of the
         same Borrowings in the amount of all Net Cash Proceeds received by the
         Borrower and other amounts, as applicable, that are required to be
         applied to prepay Term Loan Advances under this Section 2.06 but which
         have not previously been so applied.

                  (c)      Prepayments to Include Accrued Interest, Etc. All
prepayments under this Section 2.06 shall be made together with (A) accrued and
unpaid interest to the date of such prepayment on the principal amount so
prepaid and (B) in the case of any such prepayment of a Eurodollar Rate Advance
on a date other than the last day of an Interest Period therefor, any amounts
owing in respect of such Eurodollar Rate Advance pursuant to Section 8.04(c).

                  (d)      Term Loan Opt-Out. Any Term Loan Lender, at its
option, may elect not to accept any prepayment of the Term Loan Facility under
this Section 2.06. Upon receipt by the Administrative Agent of any such
prepayment, the amount of the prepayment that is available to prepay the Term
Loan Advances shall be deposited into a suspense account of the Administrative
Agent (the "PREPAYMENT AMOUNT"), pending application of such amount on the
Prepayment Date as set forth below and promptly after such receipt (the date of
such receipt being the "RECEIPT DATE"), the Administrative Agent shall give
notice by way of telephone (to be confirmed promptly thereafter by way of
telecopy) to the Term Loan Lenders of the amount available to prepay the Term
Loan Advances and the date on which such prepayment shall be made (the
"PREPAYMENT DATE"), such Prepayment Date to occur on the third

                                       43
<PAGE>   48

Business Day after the Receipt Date. Any Term Loan Lender declining such
prepayment (a "DECLINING LENDER") shall give written notice to the
Administrative Agent of its decision to do so by 11:00 A.M. (Charlotte, North
Carolina time) on the second Business Day after the Receipt Date provided that
failure by any Term Loan Lender to serve any such notice on the Administrative
Agent shall be deemed to be an acceptance by such Term Loan Lender of the
proposed prepayment. On the Prepayment Date, an amount equal to that portion of
the Prepayment Amount payable to the Term Loan Lenders other than the Declining
Lenders (such Term Loan Lenders being the "ACCEPTING LENDERS") shall be applied
by the Borrower to prepay Term Loan Advances owing to such Accepting Lenders on
a pro rata basis in inverse order of maturity. Any amounts that would otherwise
have been applied to prepay Advances under the Term Loan Facility owing to
Declining Lenders shall instead be applied ratably to prepay the remaining Term
Loan Advances in inverse order of maturity as provided in Section 2.06(a) or
(b), as applicable; provided further that on prepayment in full of all Term Loan
Advances owing to Accepting Lenders, the remainder of any Prepayment Amount
shall be applied ratably to prepay Term Loan Advances owing to Declining Lenders
in inverse order of maturity.

                  SECTION 2.07. Interest.

                  (a)      Scheduled Interest. The Borrower shall pay interest
on the unpaid principal amount of each Advance owing to each Lender Party from
the date of such Advance until such principal amount shall be paid in full, at
the following rates per annum:

                           (i)      Base Rate Advances. During such periods as
         such Advance is a Base Rate Advance, a rate per annum equal at all
         times to the sum of (A) the Base Rate in effect from time to time and
         (B) the Applicable Margin for such Base Rate Advance in effect from
         time to time, payable in arrears quarterly on the last day of each
         June, September, December and March during such periods and on the date
         such Base Rate Advance shall be Converted or paid in full.

                           (ii)     Eurodollar Rate Advances. During such
         periods as such Advance is a Eurodollar Rate Advance, a rate per annum
         equal at all times during each Interest Period for such Advance to the
         sum of (A) the Eurodollar Rate for such Advance for such Interest
         Period and (B) the Applicable Margin for such Advance in effect on the
         first day of such Interest Period, payable in arrears on the last day
         of such Interest Period and, if such Interest Period has a duration of
         more than three months, on each day that occurs during such Interest
         Period every three months from the first day of such Interest Period
         and on the date such Eurodollar Rate Advance shall be Converted or paid
         in full.

                  (b)      Default Interest. Upon the occurrence and during the
continuance of a Default under Section 6.01(a) or 6.01(f) or any Event of
Default, the Borrower shall pay interest on (i) the unpaid principal amount of
each Advance owing to each Lender Party, payable in arrears on the dates
referred to in clause (i) or (ii) of Section 2.07(a), as applicable, and on
demand, at a rate per annum equal at all times to 2% per annum above the rate
per annum required to be paid on such Advance pursuant to clause (i) or (ii) of
Section 2.07(a), as applicable, and (ii) to the fullest extent permitted under
applicable law, the amount of any interest, fee or other amount payable under
this Agreement or any of the other Loan Documents to any of the Agents or any of
the Lender Parties that is not paid when due, from the date such amount shall be
due until such amount shall be paid in full, payable in arrears on the date such
amount shall be paid in full and on demand, at a rate per annum equal at all
times to 2% per annum above the rate per annum required to be paid, in the case
of interest, on the Type of Advance on which such interest has accrued pursuant
to clause (i) or (ii) of Section 2.07(a), as applicable, and, in all other
cases, on Base Rate Advances pursuant to clause (i) of Section 2.07(a).

                  (c)      Notice of Interest Rate. Promptly after receipt of a
Notice of Borrowing pursuant to Section 2.02(a), a Notice of Conversion pursuant
to Section 2.09(a) or a notice of selection of an Interest Period pursuant to
the definition of "Interest Period" set forth in Section 1.01, the
Administrative Agent shall give notice to the Borrower and each of the
Appropriate Lenders of the applicable interest

                                       44
<PAGE>   49

rate determined by the Administrative Agent for purposes of clause (i) or (ii)
of Section 2.07(a), as applicable.

                  SECTION 2.08. Fees.

                  (a)      Commitment Fee. The Borrower shall pay to the
Administrative Agent for the account of the Lenders a fee (the "COMMITMENT
FEE"), from the date of this Agreement in the case of each of the Initial
Lenders and from the effective date specified in the Assignment and Acceptance
pursuant to which it became a Lender in the case of each of the other Lenders
until the Termination Date for the Revolving Credit Facility, payable in arrears
quarterly on the last day of each June, September, December and March,
commencing June 30, 2001, and on the Termination Date for the Revolving Credit
Facility, at the rate per annum equal to the Applicable Percentage in effect
from time to time on the sum of (i) the average daily Unused Revolving Credit
Commitment of each of the Revolving Credit Lenders and (ii) such Revolving
Credit Lender's Pro Rata Share of the average daily outstanding Swing Line
Advances during such quarter; provided, however, that no commitment fee shall
accrue on any of the Commitments of a Defaulting Lender so long as such Lender
shall be a Defaulting Lender.

                  (b)      Letter of Credit Fees, Etc.

                           (i)      The Borrower shall pay to the Administrative
         Agent for the account of each of the Revolving Credit Lenders a
         commission, payable in arrears quarterly on the last day of each June,
         September, December and March, commencing June 30, 2001, on the
         earliest to occur of the full drawing, expiration, termination or
         cancellation of any Letter of Credit and on the Termination Date for
         the Revolving Credit Facility, on such Revolving Credit Lender's Pro
         Rata Share of the average daily aggregate Available Amount of all
         Letters of Credit outstanding from time to time during such quarter at
         the rate per annum equal to the Applicable Margin in effect at such
         time for Eurodollar Rate Advances under the Revolving Credit Facility.

                           (ii)     The Borrower shall pay to the Issuing Bank,
         for its own account, such commissions, issuance fees, fronting fees,
         transfer fees and other fees and charges in connection with the
         issuance or administration of each Letter of Credit as the Borrower and
         the Issuing Bank shall from time to time agree.

                  (c)      Agent's Fees. The Borrower shall pay to the
Administrative Agent for the account of the Agents such fees as may from time to
time be agreed between the Borrower and the Administrative Agent.

                  SECTION 2.09. Conversion of Advances.

                  (a)      Optional. The Borrower may on any Business Day, upon
notice given to the Administrative Agent not later than 1:00 P.M. (Charlotte,
North Carolina time) on the third Business Day prior to the date of the proposed
Conversion in the case of a Conversion of Base Rate Advances into Eurodollar
Rate Advances or of Eurodollar Rate Advances of one Interest Period into
Eurodollar Rate Advances of another Interest Period, or 1:00 P.M. (Charlotte,
North Carolina time) on the Business Day immediately preceding the date of the
proposed Conversion in the case of a Conversion of Eurodollar Rate Advances into
Base Rate Advances, and subject to the provisions of Section 2.10, Convert all
or any portion of the Advances of one Type comprising the same Borrowing into
Advances of the other Type; provided, however, that:

                           (i)      any Conversion of Eurodollar Rate Advances
         into Base Rate Advances shall be made only on the last day of an
         Interest Period for such Eurodollar Rate Advances;

                           (ii)     any Conversion of Base Rate Advances into
         Eurodollar Rate Advances shall be made only if no Default under Section
         6.01(a) or 6.01(f) or Event of Default shall have

                                       45
<PAGE>   50

         occurred and be continuing and shall be in an amount not less than the
         minimum amount specified in Section 2.02(c);

                           (iii)    no Conversion of any Advances shall result
         in more separate Borrowings than permitted under Section 2.02(c); and

                           (iv)     each Conversion of Advances comprising part
         of the same Borrowing under any Facility shall be made among the
         Appropriate Lenders in accordance with their respective Pro Rata Shares
         of such Facility.

Each notice of a Conversion (a "NOTICE OF CONVERSION") shall be delivered by
telephone, confirmed promptly (and, in any event, on the same Business Day) in
writing, or by telecopier, shall be in substantially the form of Exhibit B-3
hereto and duly executed by a Responsible Officer of the Borrower, and shall,
within the restrictions set forth in the immediately preceding sentence, specify
therein:

                  (A)      the requested date of such Conversion (which shall be
         a Business Day);

                  (B)      the Advances requested to be Converted; and

                  (C)      if such Conversion is into Eurodollar Rate Advances,
         the requested duration of the Interest Period for such Eurodollar Rate
         Advances.

The Administrative Agent shall give each of the Appropriate Lenders prompt
notice of each Notice of Conversion received by it, by telecopier. Each Notice
of Conversion shall be irrevocable and binding on the Borrower.

                  (b)      Mandatory.

                           (i)      On the date on which the aggregate unpaid
         principal amount of Eurodollar Rate Advances comprising part of any
         Borrowing shall be reduced, by payment or prepayment or otherwise, to
         less than $5,000,000, such Eurodollar Rate Advances shall be
         automatically Converted into Base Rate Advances.

                           (ii)     If the Borrower shall fail to select the
         duration of any Interest Period for any Eurodollar Rate Advances in
         accordance with the provisions contained in the definition of "Interest
         Period" set forth in Section 1.01, the Administrative Agent will
         forthwith so notify the Borrower and the Appropriate Lenders, whereupon
         each such Eurodollar Rate Advance will automatically, on the last day
         of the then existing Interest Period therefor, Convert into a Base Rate
         Advance.

                           (iii)    Upon the occurrence and during the
         continuance of any Default under Section 6.01(a) or 6.01(f) or any
         Event of Default, (A) each Eurodollar Rate Advance will automatically,
         on the last day of the then existing Interest Period therefor, Convert
         into a Base Rate Advance and (B) the obligation of the Lenders to make,
         or to Convert Advances into, Eurodollar Rate Advances shall be
         suspended.

                  SECTION 2.10. Increased Costs, Etc.

                  (a)      If, due to either (i) the introduction of or any
change (other than any change by way of the imposition of or increase in reserve
requirements included in the Eurodollar Rate Reserve Percentage) in or in the
interpretation or application of any Requirement of Law after the date of this
Agreement or (ii) the compliance with any directive, guideline or request from
any central bank or other Governmental Authority or any change therein or in the
interpretation, application, implementation, administration or enforcement
thereof, that, in any case under this clause (ii), becomes effective or is
issued or made after the date of this Agreement (whether or not having the force
of law), there shall be any increase in the cost to any of the Lender Parties of
agreeing to make or making, agreeing to

                                       46
<PAGE>   51

participate in or participating in, agreeing to renew or renewing or funding or
maintaining any Advances of either Type, or of agreeing to issue or of issuing,
maintaining or participating in Letters of Credit or of agreeing to make or of
making or maintaining Swing Line Advances or Letter of Credit Advances, or any
reduction in the amount owing to any of the Lender Parties or their respective
Applicable Lending Offices under this Agreement in respect of any Advances of
either Type (excluding, for purposes of this Section 2.10, any such increased
costs resulting from (A) Taxes or Other Taxes (as to which Section 2.13 shall
govern) and (B) changes in the basis of taxation of overall net income or
overall gross income by the United States of America or the jurisdiction under
the laws of which such Lender Party is organized or has either of its Applicable
Lending Offices or any political subdivision thereof), then the Borrower hereby
agrees to pay, from time to time upon demand by such Lender Party (with a copy
of such demand to the Administrative Agent), to the Administrative Agent for the
account of such Lender Party additional amounts sufficient to compensate or to
reimburse such Lender Party for all such increased costs or reduced amounts.
Each of the Lender Parties shall, as promptly as practicable after such Lender
Party obtains knowledge of such circumstances and the determination of such
Lender Party to request additional compensation from the Borrower pursuant to
this subsection (a), provide notice to the Administrative Agent and the Borrower
of the circumstances entitling such Lender Party to such additional compensation
and the amount of such additional compensation (including the basis of
calculation thereof), which notice shall be conclusive and binding for all
purposes, absent manifest error; provided, however, that none of the Lender
Parties shall be entitled to additional compensation under this subsection (a)
for any such cost incurred or reduced amount suffered from and after the date
that is 180 days prior to the date such Lender Party first delivers such notice
to the Borrower. In determining any such additional compensation, such Lender
Party may use reasonable averaging and attribution methods. If any of the
Lenders requests additional compensation from the Borrower under this subsection
(a) in respect of its making, participating in or renewing Eurodollar Rate
Advances, the Borrower may, upon notice to such Lender (with a copy of such
notice to the Administrative Agent), suspend the obligation of such Lender to
make, participate in and/or renew Eurodollar Rate Advances until the
circumstances giving rise to such request no longer exist and, during such time,
all Eurodollar Rate Advances that would otherwise be made by such Lender as part
of any Borrowing shall be made instead as Base Rate Advances and all payments of
principal of and interest on such Base Rate Advances shall, notwithstanding the
provisions of Section 2.07, be made at the same time as payments on the
Eurodollar Rate Advances otherwise comprising part of such Borrowing.

                  (b)      If any of the Lender Parties determines that
compliance with any Requirement of Law or any directive, guideline or request
from any central bank or other Governmental Authority (whether or not having the
force of law), or any change therein or in the interpretation, application,
implementation, administration or enforcement thereof, that is enacted or
becomes effective, or is implemented or is first required or expected to be
complied with after the date of this Agreement, affects the amount of capital
required or expected to be maintained by such Lender Party (or either of the
Applicable Lending Offices of such Lender Party) or by any Person controlling
such Lender Party and that the amount of such capital is increased by or is
based upon the existence of the commitment of such Lender Party to lend
hereunder or to issue or participate in Letters of Credit hereunder and other
commitments of such type or the issuance or maintenance of or participation in
the Letters of Credit (or similar contingent obligations), then the Borrower
hereby agrees to pay, upon demand by such Lender Party (with a copy of such
demand to the Administrative Agent), to the Administrative Agent for the account
of such Lender Party, from time to time as specified by such Lender Party,
additional amounts sufficient to compensate such Lender Party or such Person in
light of such circumstances, to the extent that such Lender Party or such Person
reasonably determines such increase in capital to be allocable to the existence
of the commitment of such Lender Party to lend or to issue or participate in
Letters of Credit hereunder or to the issuance or maintenance of or
participation in any Letters of Credit. Each of the Lender Parties shall, as
promptly as practicable after such Lender Party obtains knowledge of such
circumstances and the determination of such Lender Party to request additional
compensation from the Borrower pursuant to this subsection (b), provide notice
to the Administrative Agent and the Borrower of the circumstances entitling such
Lender Party to such additional compensation and the amount of such additional
compensation (including the basis of calculation thereof), which notice shall be
conclusive and binding for all purposes, absent manifest error; provided,
however, that none of the Lender Parties shall

                                       47
<PAGE>   52

be entitled to additional compensation under this subsection (b) for any such
increases in capital required from and after the date that is 180 days prior to
the date such Lender Party first delivers such notice to the Borrower. In
determining any such additional compensation, such Lender Party may use
reasonable averaging and attribution methods.

                  (c)      If, with respect to any Eurodollar Rate Advances
under any of the Facilities, Lenders owed or holding not less than a majority in
interest of the aggregate principal amount of all Advances outstanding under
such Facility at any time notify the Administrative Agent that the Eurodollar
Rate for any Interest Period for such Advances will not adequately reflect the
cost to such Lenders of making, participating in or renewing, or funding or
maintaining, their Eurodollar Rate Advances for such Interest Period, the
Administrative Agent shall forthwith so notify the Borrower and the Appropriate
Lenders, whereupon (i) each such Eurodollar Rate Advance under such Facility
will automatically, on the last day of the then existing Interest Period
therefor, Convert into a Base Rate Advance and (ii) the obligation of the
Appropriate Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended until the Administrative Agent shall notify the
Borrower (promptly following notice thereof from the Appropriate Lenders) that
such Lenders have determined that the circumstances causing such suspension no
longer exist.

                  (d)      Notwithstanding any of the other provisions of this
Agreement, if the introduction of or any change in or in the interpretation of
any Requirements of Law shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for any Lender or its
Eurodollar Lending Office to perform its obligations hereunder to make
Eurodollar Rate Advances or to continue to fund or maintain Eurodollar Rate
Advances hereunder, then, upon notice thereof and demand therefor by such Lender
to the Borrower through the Administrative Agent, (i) each Eurodollar Rate
Advance of such Lender will automatically, on the last day of the then existing
Interest Period therefor, if permitted under applicable law, or otherwise upon
demand, Convert into a Base Rate Advance and (ii) the obligation of such Lender
to make, or to Convert Advances into, Eurodollar Rate Advances shall be
suspended until the Administrative Agent shall notify the Borrower (promptly
following notice thereof from such Lender) that such Lender has determined that
the circumstances causing such suspension no longer exist. If the obligation of
a Lender to make Eurodollar Rate Advances is suspended pursuant to this
subsection (d), then until the circumstances that gave rise to such suspension
no longer apply to such Lender, all Eurodollar Rate Advances that would
otherwise be made by such Lender as part of any Borrowing shall be made instead
as Base Rate Advances and all payments of principal of and interest on such Base
Rate Advances shall, notwithstanding the provisions of Section 2.07, be made at
the same time as payments on the Eurodollar Rate Advances otherwise comprising
part of such Borrowing.

                  (e)      Each of the Lenders hereby agrees that, upon the
occurrence of any circumstances entitling such Lender to additional compensation
or to cease making, participating in or renewing, or funding or maintaining,
Eurodollar Rate Advances under any of the foregoing provisions of this Section
2.10, such Lender shall use reasonable efforts (consistent with its internal
policy and with legal and regulatory restrictions) to designate a different
Eurodollar Rate Lending Office for any Eurodollar Rate Advances affected by such
circumstances if the making of such designation, in the case of subsection (a)
or (b) of this Section 2.10, would avoid the need for, or reduce the amount of,
any such additional amounts that may thereafter accrue or, in the case of
subsection (c) or (d) of this Section 2.10, would allow such Lender to continue
to perform its obligations to make, to participate in or renew, or to fund or
maintain, Eurodollar Rate Advances, and, in any such case, would not, in the
reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.

                  (f)      If (i) any of the Lenders entitled to additional
compensation under any of the foregoing provisions of this Section 2.10 shall
fail to designate a different Eurodollar Rate Lending Office as provided in
subsection (e) of this Section 2.10 or if the circumstances entitling any of the
Lender Parties to additional compensation under subsection (a) or (b) of this
Section 2.10 shall continue to be in effect notwithstanding such designation or
since subsection (e) of this Section 2.10 is inapplicable or (ii) the inadequacy
or illegality contemplated under subsection (c) or (d) of this Section 2.10,
respectively,

                                       48
<PAGE>   53

shall continue with respect to any of the Lenders notwithstanding such
designation, then, subject to the terms of Section 8.07(a), the Borrower may
cause such Lender Party to (and, if the Borrower so demands, such Lender Party
shall) assign all of its rights and obligations under this Agreement to one or
more other Persons in accordance with Section 8.07(a); provided that if, upon
such demand by the Borrower, such Lender Party elects to waive its request for
additional compensation pursuant to subsection (a) or (b) of this Section 2.10,
the demand by the Borrower for such Lender Party to so assign all of its rights
and obligations under the Agreement shall thereupon be deemed withdrawn. Nothing
in subsection (e) of this Section 2.10 or this subsection (f) shall affect or
postpone any of the rights of any of the Lender Parties or any of the
Obligations of the Borrower under any of the foregoing provisions of this
Section 2.10 in any manner.

                  SECTION 2.11. Evidence of Debt.

                  (a)      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 Advance owing to such Lender from
time to time, including the amounts of principal and interest payable and paid
to such Lender from time to time hereunder.

                  (b)      The Register maintained by the Administrative Agent
pursuant to Section 8.07(e) shall include accounts for each Lender, in which
accounts (taken together) shall be recorded (i) the date and amount of each
Advance made hereunder, (ii) the terms of each Assignment and Acceptance
delivered to and accepted by it, (iii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iv) the amount of any sum received by the Administrative Agent
from the Borrower hereunder and each Lender's share thereof.

                  (c)      The entries made as provided in this Section 2.11
shall be conclusive and binding for all purposes, absent manifest error.

                  SECTION 2.12. Payments and Computations.

                  (a)      The Borrower shall make each payment hereunder and
under the Notes, irrespective of any right of counterclaim or setoff (except as
otherwise provided in Section 2.15), not later than 1:00 P.M. (Charlotte, North
Carolina time) on the day when due in U.S. dollars to the Administrative Agent
at the Administrative Agent's Account in same day funds, with payments received
by the Administrative Agent after 1:00 P.M. (Charlotte, North Carolina time) on
any such day being deemed to have been received on the next succeeding Business
Day. The Administrative Agent will promptly thereafter cause like funds to be
distributed (i) if such payment by the Borrower is in respect of principal,
interest, Commitment Fees or any of the other Obligations then due and payable
hereunder and under the Notes to more than one of the Lender Parties, to such
Lender Parties for the accounts of their respective Applicable Lending Offices
in accordance with their respective Pro Rata Shares of the amounts of such
Obligations due and payable to such Lender Parties at such time and (ii) if such
payment by the Borrower is in respect of any of the Obligations then due and
payable hereunder to one Lender Party, to such Lender Party for the account of
its Applicable Lending Office, in each case to be applied in accordance with the
terms of this Agreement. Upon its acceptance of an Assignment and Acceptance and
recording of the information contained therein in the Register pursuant to
Section 8.07(e), from and after the effective date of such Assignment and
Acceptance, the Administrative Agent shall make all payments hereunder and under
the Notes in respect of the interest assigned thereby to the Lender Party
assignee thereunder, and the parties to such Assignment and Acceptance shall
make all appropriate adjustments in such payments for periods prior to such
effective date directly between themselves.

                  (b)      The Borrower hereby authorizes each of the Lender
Parties, if and to the extent payment owed to such Lender Party is not made when
due hereunder or, in the case of any Lender, under the Note held by such Lender,
to charge from time to time against any or all of the Borrower's accounts with
such Lender Party any amount so due.

                                       49
<PAGE>   54

                  (c)      All computations of interest based on the Base Rate
shall be made by the Administrative Agent on the basis of a year of 365 or 366
days, as the case may be, and all computations of interest based on the
Eurodollar Rate or the Federal Funds Rate and of fees and Letter of Credit
commissions shall be made by the Administrative Agent on the basis of a year of
360 days, in each case for the actual number of days (including the first day
but excluding the last day) occurring in the period for which such interest,
fees or commissions are payable. Each determination by the Administrative Agent
of an interest rate, fee or commission hereunder shall be conclusive and binding
for all purposes, absent manifest error.

                  (d)      Whenever any payment hereunder or under the Notes
shall be stated to be due on a day other than a Business Day, such payment shall
be made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of interest or Commitment
Fees, as the case may be; provided, however, that, if such extension would cause
payment of interest on or principal of Eurodollar Rate Advances to be made in
the next succeeding calendar month, such payment shall be made on the
immediately preceding Business Day.

                  (e)      Unless the Borrower or any Lender Party has notified
the Administrative Agent prior to the date any payment is required to be made by
it to the Administrative Agent hereunder, that the Borrower or such Lender
Party, as the case may be, will not make such payment, the Administrative Agent
may assume that the Borrower or such Lender Party, as the case may be, has
timely made such payment and may (but shall not be so required to), in reliance
thereon, make available a corresponding amount to the Person entitled thereto.
If and to the extent that such payment was not in fact made to the
Administrative Agent in immediately available funds, then:

                  (i)      if the Borrower failed to make such payment, each
         Lender Party shall forthwith on demand repay to the Administrative
         Agent the portion of such assumed payment that was made available to
         such Lender Party in immediately available funds, together with
         interest thereon in respect of each day from and including the date
         such amount was made available by the Administrative Agent to such
         Lender Party to the date such amount is repaid to the Administrative
         Agent in immediately available funds, at the Federal Funds Rate from
         time to time in effect; and

                  (ii)     if any Lender Party failed to make such payment, such
         Lender Party shall forthwith on demand pay to the Administrative Agent
         the amount thereof in immediately available funds, together with
         interest thereon for the period from the date such amount was made
         available by the Administrative Agent to the Borrower to the date such
         amount is recovered by the Administrative Agent (the "COMPENSATION
         PERIOD") at a rate per annum equal to the Federal Funds Rate from time
         to time in effect. If such Lender Party pays such amount to the
         Administrative Agent, then such amount shall constitute such Lender
         Party's Advance included in the applicable Borrowing. If such Lender
         Party does not pay such amount forthwith upon the Administrative
         Agent's demand therefor, the Administrative Agent may make a demand
         therefor upon the Borrower, and the Borrower shall pay such amount to
         the Administrative Agent, together with interest thereon for the
         Compensation Period at a rate per annum equal to the rate of interest
         applicable to the applicable Borrowing. Nothing herein shall be deemed
         to relieve any Lender Party from its obligation to fulfill its
         applicable Commitment or to prejudice any rights which the
         Administrative Agent or the Borrower may have against any Lender Party
         as a result of any default by such Lender Party hereunder.

                  A notice from the Administrative Agent to any Lender Party
with respect to any amount owing under this subsection (e) shall be conclusive,
absent manifest error.

                  (f)      Whenever any payment received by the Administrative
Agent under this Agreement or any of the other Loan Documents is insufficient to
pay in full all amounts due and payable to the Finance Parties under or in
respect of this Agreement and the other Loan Documents on any date,

                                       50
<PAGE>   55

such payment shall be distributed by the Administrative Agent and applied by the
Finance Parties in the following order of priority:

                           (i)      first, to the payment of all of the fees,
         indemnification payments, costs and expenses that are due and payable
         to the Agents (solely in their respective capacities as Agents) under
         or in respect of this Agreement or any of the other Loan Documents on
         such date, ratably in accordance with the respective aggregate amounts
         of all such fees, indemnification payments, costs and expenses owing to
         the Agents on such date;

                           (ii)     second, to the payment of all of the fees,
         indemnification payments, costs and expenses that are due and payable
         to the Issuing Bank and the Swing Line Bank (solely in their respective
         capacities as Issuing Bank and Swing Line Bank) under or in respect of
         this Agreement or any of the other Loan Documents on such date, ratably
         in accordance with the respective aggregate amounts of all such fees,
         indemnification payments, costs and expenses owing to the Issuing Bank
         and the Swing Line Bank on such date;

                           (iii)    third, to the payment of all of the
         indemnification payments, costs and expenses that are due and payable
         to the Lender Parties under Section 8.04 hereof, Section 12 of the
         Subsidiaries Guarantee or the applicable section of any of the other
         Loan Documents on such date, ratably in accordance with the respective
         aggregate amounts of all such indemnification payments, costs and
         expenses owing to the Lender Parties on such date;

                           (iv)     fourth, to the payment of all of the amounts
         that are due and payable to the Administrative Agent and the Lender
         Parties under Sections 2.10 and 2.13 hereof or Section 5 of the
         Subsidiaries Guarantee on such date, ratably in accordance with the
         respective aggregate amounts thereof owing to the Agents and the Lender
         Parties on such date;

                           (v)      fifth, to the payment of all of the fees
         that are due and payable to the Lenders under Section 2.08 on such
         date, ratably in accordance with the respective aggregate Commitments
         of the Lenders under the applicable Facilities on such date;

                           (vi)     sixth, to the payment of all of the accrued
         and unpaid interest on the Obligations of the Borrower under or in
         respect of the Loan Documents that is due and payable to the
         Administrative Agent and the Lender Parties under Section 2.07(b) on
         such date, ratably in accordance with the respective aggregate amounts
         of all such interest owing to the Administrative Agent and the Lender
         Parties on such date;

                           (vii)    seventh, to the payment of all of the
         accrued and unpaid interest on the Advances that is due and payable to
         the Administrative Agent and the Lender Parties under Section 2.07(a)
         on such date, ratably in accordance with the respective aggregate
         amounts of all such interest owing to the Administrative Agent and the
         Lender Parties on such date;

                           (viii)   eighth, to the payment of the principal
         amount of all of the outstanding Advances that is due and payable to
         the Administrative Agent and the Lender Parties on such date, ratably
         in accordance with the respective aggregate amounts of all such
         principal owing to the Administrative Agent and the Lender Parties on
         such date; and

                           (ix)     ninth, to the payment of all other
         Obligations of the Finance Parties owing under or in respect of the
         Loan Documents that are due and payable to the Administrative Agent and
         the other Finance Parties on such date, ratably in accordance with the
         respective aggregate amounts of all such Obligations owing to the
         Administrative Agent and the other Finance Parties on such date.

If the Administrative Agent receives funds for application to the Obligations of
the Loan Parties under or in respect of the Loan Documents under circumstances
for which the Loan Documents do not specify the

                                       51
<PAGE>   56

Advances or the Facility to which, or the manner in which, such funds are to be
applied, the Administrative Agent may, but shall not be obligated to, elect to
distribute such funds to each of the Lender Parties in accordance with such
Lender Party's Pro Rata Share of the sum of (A) the aggregate principal amount
of all Advances outstanding at such time and (B) the aggregate Available Amount
of all Letters of Credit outstanding at such time, in repayment or prepayment of
such of the outstanding Advances or other Obligations then owing to such Lender
Party.

                  SECTION 2.13. Taxes.

                  (a)      Any and all payments by the Borrower hereunder or
under the Notes shall be made, in accordance with Section 2.12, free and clear
of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each of the Lender Parties and each of the
Agents, taxes that are imposed on its overall net income by the United States
and taxes that are imposed on its overall net income (and franchise taxes
imposed in lieu thereof) by the state or foreign jurisdiction under the laws of
which such Lender Party or such Agent, as the case may be, is organized or is a
resident, or has a fixed place of business or a permanent establishment, or any
political subdivision of any of the foregoing, and, in the case of each of the
Lender Parties, taxes that are imposed on its overall net income (and franchise
taxes imposed in lieu thereof) by the state or foreign jurisdiction of either of
its Applicable Lending Offices or any political subdivision thereof (all such
nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities in respect of payments hereunder or under the Notes being,
collectively, "TAXES"). If the Borrower shall be required under any applicable
Requirements of Law to deduct any Taxes from or in respect of any sum payable
hereunder or under any of the Notes to any of the Lender Parties or any of the
Agents, (i) the sum payable by the Borrower shall be increased as may be
necessary so that after the Borrower and the Administrative Agent have made all
required deductions (including deductions applicable to additional sums payable
under this Section 2.13) such Lender Party or such Agent, 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 all such deductions and (iii)
the Borrower shall pay the full amount deducted to the relevant taxation
authority or other Governmental Authority in accordance with applicable
Requirements of Law.

                  (b)      In addition, the Borrower shall pay any present or
future stamp, recording, documentary, excise, property or similar taxes, charges
or levies that arise from any payment made hereunder or under the Notes or from
the execution, delivery or registration of, any performance under, or otherwise
with respect to, this Agreement or the Notes (collectively, "OTHER TAXES").

                  (c)      The Borrower shall indemnify each of the Lender
Parties and each of the Agents for, and hold each of them harmless against, the
full amount of Taxes and Other Taxes, and the full amount of taxes of any kind
imposed by any jurisdiction on amounts payable under this Section 2.13, imposed
on or paid by such Lender Party or such Agent, as the case may be, and any
liability (including penalties, additions to tax, interest and expenses) arising
therefrom or with respect thereto. The indemnity by the Borrower provided for in
this subsection (c) shall apply and be made whether or not the Taxes or Other
Taxes for which indemnification hereunder is sought have been correctly or
legally asserted; provided, however, that such Lender or such Agent seeking such
indemnification shall take all reasonable actions (consistent with its internal
policy and legal and regulatory restrictions) requested by the Borrower to
assist the Borrower in recovering the amounts paid thereby pursuant to this
subsection (c) from the relevant taxation authority or other Governmental
Authority. Amounts payable by the Borrower under the indemnity set forth in this
subsection (c) shall be paid within 30 days from the date on which the
applicable Lender or Agent, as the case may be, makes written demand therefor.

                  (d)      Within 30 days after the date of any payment of
Taxes, the Borrower shall furnish to the Administrative Agent, at its address
referred to in Section 8.02, the original or a certified copy of a receipt
evidencing payment thereof, to the extent such a receipt is issued therefor, or
other written proof of payment thereof that is reasonably satisfactory to the
Administrative Agent. In the case of any payment hereunder or under the Notes by
or on behalf of the Borrower through an account or

                                       52
<PAGE>   57

branch outside the United States, or on behalf of the Borrower by a payor that
is not a United States person, if the Borrower determines that no Taxes are
payable in respect thereof, the Borrower shall furnish, or shall cause such
payor to furnish, to the Administrative Agent, at its address referred to in
Section 8.02, an opinion of counsel reasonably acceptable to the Administrative
Agent stating that such payment is exempt from Taxes. For purposes of this
subsection (d) and subsection (e) of this Section 2.13, the terms "United
States" and "United States person" shall have the meanings specified in Section
7701 of the Internal Revenue Code.

                  (e)      Each of the Lender Parties organized under the laws
of a jurisdiction outside the United States shall, on or prior to the date of
its execution and delivery of this Agreement in the case of each of the Initial
Lenders, the Swing Line Bank and the Initial Issuing Bank, and on the date of
the Assignment and Acceptance pursuant to which it becomes a Lender Party in the
case of each of the other Lender Parties, and from time to time thereafter as
reasonably requested in writing by the Borrower or the Administrative Agent (but
only so long thereafter as such Lender Party remains lawfully able to do so),
provide each of the Borrower and the Administrative Agent with two original
Internal Revenue Service forms W-8BEN, W-8ECI or W-8IMY or, in the case of any
of the Lender Parties that is claiming exemption from United States withholding
tax under Section 871(h) or 881(c) of the Internal Revenue Code with respect to
payments of "portfolio interest", form W-8BEN (and, if such Lender Party
delivers a form W-8BEN, a certificate representing that such Lender Party is not
(i) a "bank" for purposes of Section 881(c) of the Internal Revenue Code, (ii) a
ten-percent shareholder (within the meaning of Section 871(h)(3)(B) of the
Internal Revenue Code) of the Borrower or (iii) a controlled foreign corporation
related to the Borrower (within the meaning of Section 864(d)(4) of the Internal
Revenue Code), as appropriate), or any successor or other form prescribed by the
Internal Revenue Service, certifying that such Lender Party is exempt from or
entitled to a reduced rate of United States withholding tax on payments pursuant
to this Agreement or the Notes or, in the case of any of the Lender Parties
delivering a form W-8BEN, certifying that such Lender Party is a foreign
corporation, partnership, estate or trust. If the forms referred to above in
this subsection (e) that are provided by a Lender Party at the time such Lender
Party first becomes a party to this Agreement indicate a United States interest
withholding tax rate in excess of zero, withholding tax at such rate shall be
considered excluded from Taxes unless and until such Lender Party provides the
appropriate form certifying that a lesser rate applies, whereupon withholding
tax at such lesser rate shall be considered excluded from Taxes solely for the
periods governed by such form. However, if, on the date of the Assignment and
Acceptance pursuant to which a Lender Party becomes a party to this Agreement,
the Lender Party assignor was entitled to payments under subsection (a) of this
Section 2.13 in respect of United States withholding tax with respect to
interest paid at such date, then, to such extent (and only to such extent), the
term "Taxes" shall include (in addition to withholding taxes that may be imposed
in the future or other amounts otherwise includable in Taxes) United States
withholding tax, if any, applicable with respect to such Lender Party assignee
on such date. If any of the forms, certificates or other documents referred to
in this subsection (e) requires the disclosure of information, other than
information necessary to compute the tax payable and information required on the
date hereof by Internal Revenue Service form W-8BEN, W-8ECI or W-8IMY (or the
related certificate described above), that a Lender Party reasonably considers
to be confidential, such Lender Party shall give notice thereof to the Borrower
and the Administrative Agent and shall not be obligated to include in such form,
certificate or document such confidential information. None of the Lender
Parties shall be entitled to payment pursuant to subsection (a) or (c) of this
Section 2.13 with respect to any additional Taxes that resulted solely and
directly from the change in either of the Applicable Lending Offices of such
Lender Party (other than any such additional Taxes that are imposed as a result
of a change in any applicable Requirements of Law, or in the interpretation or
application thereof, occurring after the date of such change), unless such
change is made pursuant to the terms of Section 2.10(e) or subsection (g) of
this Section 2.13 or otherwise as a result of a request therefor by the
Borrower.

                  (f)      For any period with respect to which any of the
Lender Parties has failed to provide the Borrower with the appropriate form,
certificate or other document described in subsection (e) of this Section 2.13
(other than if such failure is due to a change in any applicable Requirements of
Law, or in the interpretation or application thereof, occurring after the date
on which a form, certificate or other

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<PAGE>   58

document originally was required to be provided or if such form, certificate or
other document otherwise is not required under subsection (e) of this Section
2.13), such Lender Party shall not be entitled to indemnification under
subsection (a) or (c) of this Section 2.13 with respect to Taxes imposed by the
United States by reason of such failure; provided, however, that should a Lender
Party become subject to Taxes because of its failure to deliver a form,
certificate or other document required hereunder, the Borrower shall take such
steps as such Lender Party shall reasonably request to assist such Lender Party
in recovering such Taxes.

                  (g)      Each of the Lender Parties hereby agrees that, upon
the occurrence of any circumstances entitling such Lender Party to additional
amounts pursuant to this Section 2.13, such Lender Party shall use reasonable
efforts (consistent with its internal policy and legal and regulatory
restrictions) to designate a different Applicable Lending Office if the making
of such a change would avoid the need for, or reduce the amount of, any such
additional amounts that may thereafter accrue and would not, in the reasonable
judgment of such Lender Party, be otherwise disadvantageous to such Lender
Party.

                  (h)      If any of the Lender Parties entitled to additional
compensation under any of the foregoing provisions of this Section 2.13 shall
fail to designate a different Applicable Lending Office as provided in
subsection (g) of this Section 2.13, then, subject to the terms of Section
8.07(a), the Borrower may cause such Lender Party to (and, if the Borrower so
demands, such Lender Party shall) assign all of its rights and obligations under
this Agreement to one or more other Persons in accordance with Section 8.07(a);
provided that if, upon such demand by the Borrower, such Lender Party elects to
waive its request for additional compensation pursuant to this Section 2.13, the
demand by the Borrower for such Lender Party to so assign all of its rights and
obligations under the Agreement shall thereupon be deemed withdrawn. Nothing in
subsection (g) of this Section 2.13 or this subsection (h) shall affect or
postpone any of the rights of any of the Lender Parties or any of the
Obligations of the Borrower under any of the foregoing provisions of this
Section 2.13 in any manner.

                  SECTION 2.14. Sharing of Payments, Etc. If any of the Lender
Parties shall obtain at any time any payment (whether voluntary, involuntary,
through the exercise of any right of setoff, or otherwise) (a) on account of
Obligations due and payable to such Lender Party under or in respect of this
Agreement or any of the other Loan Documents at such time (other than pursuant
to Section 2.10, 2.13, 8.04 or 8.07) in excess of its ratable share (according
to the proportion of (i) the amount of such Obligations due and payable to such
Lender Party at such time to (ii) the aggregate amount of the Obligations due
and payable to all of the Lender Parties at such time) of payments on account of
the Obligations due and payable to all of the Lender Parties under or in respect
of this Agreement and the other Loan Documents at such time obtained by all of
the Lender Parties at such time or (b) on account of Obligations owing (but not
due and payable) to such Lender Party under or in respect of this Agreement or
any of the other Loan Documents at such time (other than pursuant to Section
2.10, 2.13, 8.04 or 8.07) in excess of its ratable share (according to the
proportion of (i) the amount of such Obligations owing (but not due and payable)
to such Lender Party at such time to (ii) the aggregate amount of the
Obligations owing (but not due and payable) to all of the Lender Parties under
or in respect of this Agreement and the other Loan Documents at such time) of
payments on account of the Obligations owing (but not due and payable) to all of
the Lender Parties under or in respect of this Agreement and the other Loan
Documents at such time obtained by all of the Lender Parties at such time, such
Lender Party shall forthwith purchase from the other Lender Parties such
interests or participating interests in the Obligations due and payable or owing
to them, as the case may be, as shall be necessary to cause such purchasing
Lender Party to share the excess payment ratably with each of them; provided,
however, that if all or any portion of such excess payment is thereafter
recovered from such purchasing Lender Party, such purchase from each of the
other Lender Parties shall be rescinded and such other Lender Party shall repay
to the purchasing Lender Party the purchase price to the extent of such Lender
Party's ratable share (according to the proportion of (A) the purchase price
paid to such Lender Party to (B) the aggregate purchase price paid to all of the
Lender Parties) of such recovery, together with an amount equal to such Lender
Party's ratable share (according to the proportion of (1) the amount of such
other Lender Party's required repayment to (2) the total amount so recovered
from the purchasing Lender Party) of any such interest or participating

                                       54
<PAGE>   59

interest or other amount paid or payable by the purchasing Lender Party in
respect of the total amount so recovered. The Borrower hereby agrees that any of
the Lender Parties so purchasing a participation from another Lender Party
pursuant to this Section 2.14 may, to the fullest extent permitted under
applicable law, exercise all its rights of payment (including the right of
setoff) with respect to such participation as fully as if such Lender Party were
the direct creditor of the Borrower in the amount of such participation.

                  SECTION 2.15. Defaulting Lenders.

                  (a)      If, at any time, (i) any of the Lender Parties shall
be a Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted
Advance to the Borrower and (iii) the Borrower shall be required to make any
payment hereunder or under any of the other Loan Documents to or for the account
of such Defaulting Lender, then the Borrower may, so long as no Default shall
occur or be continuing at such time and to the fullest extent permitted under
applicable law, set off and otherwise apply the Obligation of the Borrower to
make such payment to or for the account of such Defaulting Lender against the
obligation of such Defaulting Lender to make such Defaulted Advance. If, on any
date, the Borrower shall so set off and otherwise apply its obligation to make
any such payment against the obligation of such Defaulting Lender to make any
such Defaulted Advance on or prior to such date, the amount so set off and
otherwise applied by the Borrower shall constitute for all purposes of this
Agreement and the other Loan Documents an Advance by such Defaulting Lender made
on the date of such setoff and application under the Facility pursuant to which
such Defaulted Advance was originally required to have been made pursuant to
Section 2.01. Such Advance shall be a Base Rate Advance and shall be considered,
for all purposes of this Agreement, to comprise part of the Borrowing in
connection with which such Defaulted Advance was originally required to have
been made pursuant to Section 2.01, even if the other Advances comprising such
Borrowing shall be Eurodollar Rate Advances on the date such Advance is deemed
to be made pursuant to this subsection (a). The Borrower shall notify the
Administrative Agent at any time the Borrower exercises its right of setoff
pursuant to this subsection (a) and shall set forth in such notice (A) the name
of the Defaulting Lender and the Defaulted Advance required to be made by such
Defaulting Lender and (B) the amount set off and otherwise applied in respect of
such Defaulted Advance pursuant to this subsection (a). Any portion of such
payment otherwise required to be made by the Borrower to or for the account of
such Defaulting Lender which is paid by the Borrower, after giving effect to the
amount set off and otherwise applied by the Borrower pursuant to this subsection
(a), shall be applied by the Administrative Agent as specified in subsection (b)
or (c) of this Section 2.15.

                  (b)      If, at any time, (i) any of the Lender Parties shall
be a Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Amount
to any of the Agents or any of the Lender Parties and (iii) the Borrower shall
make any payment hereunder or under any of the other Loan Documents to the
Administrative Agent for the account of such Defaulting Lender, then the
Administrative Agent may, on its behalf or on behalf of such other Agents or
such other Lender Parties and to the fullest extent permitted under applicable
law, apply at such time the amount so paid by the Borrower to or for the account
of such Defaulting Lender to the payment of each such Defaulted Amount to the
extent required to pay in full such Defaulted Amount. If the Administrative
Agent shall so apply any such amount to the payment of any such Defaulted Amount
on any date, the amount so applied by the Administrative Agent shall constitute
for all purposes of this Agreement and the other Loan Documents payment, to such
extent, of such Defaulted Amount on such date. Any such amount so applied by the
Administrative Agent shall be retained by the Administrative Agent or
distributed by the Administrative Agent to such other Agents or such other
Lender Parties, ratably in accordance with the respective portions of such
Defaulted Amounts payable at such time to the Administrative Agent, such other
Agents and such other Lender Parties and, if the amount of such payment made by
the Borrower shall at such time be insufficient to pay all Defaulted Amounts
owing to the Agents and the other Lender Parties at such time, then in the
following order of priority:

                  (A)      first, to the Agents for any Defaulted Amount then
         owing to the Agents (solely in their capacities as Agents), ratably in
         accordance with the respective Defaulted Amounts owing to the Agents on
         such date;

                                       55
<PAGE>   60

                  (B)      second, to the Swing Line Bank and the Issuing Bank
         for any Defaulted Amounts then owing to them (solely in their
         respective capacities as Swing Line Bank and Issuing Bank), ratably in
         accordance with the respective Defaulted Amounts owing to the Swing
         Line Bank and the Issuing Bank on such date; and

                  (C)      third, to any of the other Lender Parties for any
         Defaulted Amounts then owing to such other Lender Parties, ratably in
         accordance with such respective Defaulted Amounts owing to such other
         Lender Parties on such date.

Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Administrative Agent pursuant to this subsection (b), shall be applied by the
Administrative Agent as specified in subsection (c) of this Section 2.15.

                  (c)      If, at any time, (i) any Lender Party shall be a
Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted Advance
or a Defaulted Amount and (iii) the Borrower, the Administrative Agent or any of
the other Lender Parties shall be required to pay or distribute any amount
hereunder or under any of the other Loan Documents to or for the account of such
Defaulting Lender, then the Borrower or such other Lender Party shall pay such
amount to the Administrative Agent to be held by the Administrative Agent, to
the fullest extent permitted under applicable law, in escrow or the
Administrative Agent shall, to the fullest extent permitted under applicable
law, hold in escrow such amount otherwise held by it. Any funds held by the
Administrative Agent in escrow under this subsection (c) shall be deposited by
the Administrative Agent in an account with BofA, in the name and under the
control of the Administrative Agent, but subject to the provisions of this
subsection (c). The terms applicable to such account, including the rate of
interest payable with respect to the credit balance of such account from time to
time, shall be BofA standard terms applicable to escrow accounts maintained with
it. Any interest credited to such account from time to time shall be held by the
Administrative Agent in escrow under, and applied by the Administrative Agent
from time to time in accordance with the terms of, this subsection (c). The
Administrative Agent shall, to the fullest extent permitted under applicable
law, apply all funds so held in escrow from time to time to the extent necessary
to make any Advances required to be made by such Defaulting Lender and to pay
any amount payable by such Defaulting Lender hereunder and under the other Loan
Documents to the Administrative Agent, any of the other Agents or any of the
other Lender Parties, as and when such Advances or amounts are required to be
made or paid and, if the amount so held in escrow shall at any time be
insufficient to make and pay all such Advances and all such amounts required to
be made or paid to the Agents and the other Lender Parties at such time, then in
the following order of priority:

                  (A)      first, to the Agents for any amounts then due and
         payable by such Defaulting Lender to the Agents (solely in their
         capacities as Agents) hereunder and under the other Loan Documents,
         ratably in accordance with such respective amounts due and payable to
         the Agents on such date;

                  (B)      second, to the Swing Line Bank and the Issuing Bank
         for any amounts then due and payable by such Defaulting Lender to them
         (solely in their respective capacities as Swing Line Bank and Issuing
         Bank) hereunder and under the other Loan Documents, ratably in
         accordance with such respective amounts due and payable to the Swing
         Line Bank and the Issuing Bank on such date;

                  (C)      third, to any of the other Lender Parties for any
         amount then due and payable by such Defaulting Lender to such other
         Lender Parties hereunder and under the other Loan Documents, ratably in
         accordance with such respective amounts due and payable to such other
         Lender Parties on such date; and

                  (D)      fourth, to the Borrower for any Advance then required
         to be made by such Defaulting Lender pursuant to one or more of the
         Commitments of such Defaulting Lender.

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<PAGE>   61

If any of the Lender Parties that is a Defaulting Lender shall, at any time,
cease to be a Defaulting Lender, any funds held by the Administrative Agent in
escrow at such time with respect to such Lender Party shall be distributed by
the Administrative Agent to such Lender Party and applied by such Lender Party
to the Obligations owing to such Lender Party at such time under or in respect
of this Agreement and the other Loan Documents, ratably in accordance with the
respective amounts of such Obligations outstanding at such time.

                  (d)      The rights and remedies against a Defaulting Lender
under this Section 2.15 are in addition to other rights and remedies that the
Borrower may have against such Defaulting Lender with respect to any Defaulted
Advance and that the Administrative Agent or any of the other Lender Parties may
have against such Defaulting Lender with respect to any Defaulted Amount.

                  SECTION 2.16. Use of Proceeds. The proceeds of the Advances
shall be available, and the Borrower hereby agrees that it shall use such
proceeds, solely to refinance existing Indebtedness (including, without
limitation, obligations under the Existing Credit Agreement), to pay certain
fees and expenses contemplated by the Loan Documents and for other general
corporate purposes of the Borrower and its Subsidiaries not otherwise prohibited
under the terms of the Loan Documents.

                                   ARTICLE III

                     CONDITIONS OF EFFECTIVENESS AND LENDING

                  SECTION 3.01. Conditions Precedent to Initial Extensions of
Credit. The obligation of each Lender to make an Advance or any Issuing Bank to
issue a Letter of Credit on the occasion of the Initial Extensions of Credit
hereunder is subject to the satisfaction of the following conditions precedent:

                  (a)      The Lender Parties shall be reasonably satisfied with
the organizational and legal structure and capitalization of each Loan Party and
each of its Subsidiaries (including, without limitation, the terms and
conditions of the Constitutive Documents and each class of Equity Interests in
the Borrower and each such Subsidiary and of each agreement or instrument
relating to such structure or capitalization).

                  (b)      All of the Governmental Authorizations, and all of
the consents, approvals and authorizations of, notices and filings to or with,
and other actions by, any other Person necessary in connection with any aspect
of the Transaction, any of the Loan Documents or any of the other transactions
contemplated thereby shall have been obtained (without the imposition of any
conditions that are not reasonably acceptable to the Lender Parties) and shall
remain in full force and effect; all applicable waiting periods shall have
expired without any action being taken by any competent authority; and no
Requirement of Law shall be applicable in the reasonable judgment of the Lender
Parties that restrains, prevents or imposes materially adverse conditions upon
any aspect of the Transaction, any of the Loan Documents or any of the other
transactions contemplated thereby.

                  (c)      Before giving effect and immediately after giving pro
forma effect to the Transaction, no Material Adverse Change shall have occurred
since December 31, 1999.

                  (d)      There shall exist no action, suit, investigation,
litigation, arbitration or proceeding pending or, to the best knowledge of the
Borrower, threatened against or affecting the Borrower or any of its
Subsidiaries or any of the property or assets thereof in any court or before any
arbitrator or by or before any Governmental Authority of any kind (i) that,
either individually or in the aggregate, is reasonably expected to have a
Material Adverse Effect or (ii) which purports to affect the legality, validity,
binding effect or enforceability of any aspect of the Transaction, any of the
Loan Documents or any of the other transactions contemplated thereby.

                  (e)      Each aspect of the Transaction shall have been
consummated or shall be consummated on the Effective Date in compliance with all
applicable Requirements of Law. All amounts owing by the Borrower or any of its
Subsidiaries to the lenders and agents under the Existing Credit

                                       57
<PAGE>   62

Agreement (other than the Existing Letters of Credit which on the Effective Date
shall become Letters of Credit hereunder) shall have been, or concurrently with
the Initial Extensions of Credit made on the Effective Date shall be, paid in
full, and all commitments of the lenders thereunder shall have been, or
concurrently with the Initial Extensions of Credit made on the Effective Date
shall be, terminated in accordance with the terms of the Existing Credit
Agreement.

                  (f)      All of the fees and expenses of the Agents that are
required to be paid by the Borrower pursuant to Section 2.08(c) shall have been
or, concurrently with the Initial Extensions of Credit made on the Effective
Date shall be, paid in full.

                  (g)      The Administrative Agent shall have received on or
before the Effective Date the following in form and substance reasonably
satisfactory to it (unless otherwise specified):

                           (i)      The Term Loan Notes, payable to the order of
         the Term Loan Lenders, and the Revolving Credit Notes, payable to the
         order of the Revolving Credit Lenders.

                           (ii)     Certified copies of the resolutions of the
         board of directors (or persons performing similar functions) of each
         Loan Party approving the Transaction and each of the Loan Documents to
         which it is or is to be a party, and of all documents evidencing
         necessary Governmental Authorizations, or other necessary consents,
         approvals, authorizations, notices, filings or actions, with respect to
         the Transaction and any of the Loan Documents to which it is or is to
         be a party.

                           (iii)    A copy of a certificate of the Secretary of
         State (or equivalent Governmental Authority) of the jurisdiction of
         organization of each Loan Party listing the certificate or articles of
         incorporation (or similar Constitutive Document) of each such Loan
         Party and each amendment thereto on file in the office of such
         Secretary of State (or such Governmental Authority) and certifying (A)
         that such amendments are the only amendments to such Person's
         certificate or articles of incorporation (or similar Constitutive
         Document) on file in its office, (B) if customarily available in such
         jurisdiction, that such Person has paid all franchise taxes (or the
         equivalent thereof) to the date of such certificate and (C) that such
         Person is duly organized and is in good standing under the laws of the
         jurisdiction of its organization.

                           (iv)     A certificate of the Secretary or an
         Assistant Secretary (or a person performing similar functions) of each
         Loan Party certifying as to:

                                    (A)      the absence of any amendments to
                           the certificate or articles of incorporation (or
                           similar Constitutive Document) of such Loan Party
                           since the date of the Secretary of State's (or
                           equivalent Governmental Authority's), or the
                           Secretary's or Assistant Secretary's (or equivalent
                           person's) certificate referred to in clause (iv) of
                           this Section 3.01(g), or any steps taken by the board
                           of directors (or persons performing similar
                           functions) or the shareholders, partners, members or
                           equivalent persons of such Loan Party to effect or
                           authorize any further amendment, supplement or other
                           modification thereto;

                                    (B)      the accuracy and completeness of
                           the bylaws (or similar Constitutive Documents) of
                           such Loan Party as in effect on the date on which the
                           resolutions of the board of directors (or persons
                           performing similar functions) of such Loan Party
                           referred to in clause (ii) of this Section 3.01(g)
                           were adopted and on the Effective Date (a copy of
                           which shall be attached to such certificate); and

                                    (C)      the names and true signatures of
                           the officers of such Loan Party authorized to sign
                           each of the Loan Documents to which it is or is to be
                           a party and the other agreements, instruments and
                           documents to be delivered hereunder and thereunder.

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<PAGE>   63

                           (v)      A guarantee, in substantially the form of
         Exhibit D hereto (the "SUBSIDIARIES GUARANTEE"), duly executed by each
         of the Domestic Subsidiaries that are Material Subsidiaries.

                           (vi)     A trust agreement in substantially the form
         of Exhibit G hereto (the "TRUST AGREEMENT"), duly executed by the
         Borrower and each of the Domestic Subsidiaries that are Material
         Subsidiaries in favor of the Collateral Trustee.

                           (vii)    A pledge and security agreement in
         substantially the form of Exhibit F hereto (together with each other
         security agreement and security agreement supplement delivered pursuant
         to Section 5.01(j), in each case as amended, the "SECURITY
         AGREEMENT")), duly executed by each Loan Party, together with:

                                    (A)      certificates representing the
                           Pledged Shares referred to therein accompanied by
                           undated stock powers executed in blank;

                                    (B)      executed financing statements to be
                           filed under the Uniform Commercial Code of all
                           jurisdictions that the Administrative Agent may deem
                           necessary or desirable in order to perfect and
                           protect the first priority Liens created under the
                           Security Agreement, covering the Collateral described
                           in the Security Agreement;

                                    (C)      all other documents for recording
                           or filing with respect to the Security Agreement that
                           the Administrative Agent may deem necessary or
                           desirable in order to perfect and protect the Liens
                           created thereby;

                                    (D)      to the extent the same is
                           obtainable on or before the date of this Agreement,
                           evidence of insurance naming the Collateral Trustee
                           as additional insured and loss payee with such
                           responsible and reputable insurance companies or
                           associations, and in such amounts and covering such
                           risks, required by the terms of the Security
                           Agreement; and

                                    (E)      evidence that all other action that
                           the Administrative Agent and, as the case may be, the
                           Collateral Trustee, may deem necessary or desirable
                           in order to perfect and protect the first priority
                           liens and security interests created under the
                           Security Agreement has been taken.

                           (viii)   An intellectual property security agreement
         in substantially the form annexed to the Security Agreement (together
         with each other intellectual property security agreement and
         intellectual property security agreement supplement delivered pursuant
         to Section 5.01(j), in each case as amended, the "INTELLECTUAL PROPERTY
         SECURITY AGREEMENT"), duly executed by each Loan Party, together with
         executed security agreements to be filed with the Patent and Trademark
         Office and Uniform Commercial Code financing statements.

                           (ix)     Copies, certified by a Responsible Officer
         of the Borrower, of (A) the audited Consolidated financial statements
         of the Borrower and its Subsidiaries for the Fiscal Year ended December
         31, 1999 , accompanied by an unqualified opinion of Ernst & Young LLP,
         independent accountants of the Borrower, (B) the unaudited financial
         statements of the Borrower and its Subsidiaries for the Fiscal Year
         ended December 31, 2000, duly certified by a Responsible Officer of the
         Borrower, and (C) forecasts prepared by management of the Borrower, in
         form and substance reasonably satisfactory to the Lender Parties, of
         balance sheets, income statements and cash flow statements on a
         quarterly basis for the Fiscal Year in which the Effective Date occurs
         and on an annual basis for each Fiscal Year thereafter through the
         scheduled final Termination Date.

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<PAGE>   64

                           (x)      A duly completed and executed Notice of
         Borrowing for each Borrowing to be made on the Effective Date and
         Notice of Issuance for each Letter of Credit to be issued on the
         Effective Date.

                           (xi)     A favorable opinion of King & Spalding,
         counsel for the Loan Parties, in substantially the form of Exhibit E-1
         hereto, and addressing such other matters as any of the Lender Parties
         through the Administrative Agent may reasonably request.

                           (xii)    A favorable opinion of Foley & Lardner,
         California counsel to Caremark, Inc., in substantially the form of
         Exhibit E-2 hereto and as to such other matters as any Lender Party
         through the Administrative Agent may reasonably request.

                  SECTION 3.02. Conditions Precedent to Each Borrowing and
Issuance and Renewal. The obligation of each Appropriate Lender to make an
Advance (other than a Letter of Credit Advance made by the Issuing Bank or a
Revolving Credit Lender pursuant to Section 2.03(c) and a Swing Line Advance
made by a Revolving Credit Lender pursuant to Section 2.02(b)) on the occasion
of each Borrowing (including the initial Borrowing), and the obligation of the
Issuing Bank to issue a Letter of Credit (including the initial issuance) or
renew a Letter of Credit and the right of the Borrower to request a Swing Line
Borrowing, shall be subject to the further conditions precedent that on the date
of such Borrowing or issuance or renewal the following statements shall be true
(and each of the giving of the applicable Notice of Borrowing, Notice of Swing
Line Borrowing, Notice of Issuance or Notice of Renewal and the acceptance by
the Borrower of the proceeds of such Borrowing or of such Letter of Credit or
the renewal of such Letter of Credit shall constitute a representation and
warranty by the Borrower that both on the date of such notice and on the date of
such Borrowing or issuance or renewal such statements are true):

                  (a)      the representations and warranties contained in each
Loan Document are correct in all material respects on and as of such date,
before and after giving effect to such Borrowing or issuance or renewal and to
the application of the proceeds therefrom, as though made on and as of such
date, other than any such representations or warranties that, by their terms,
refer to a specific date other than the date of such Borrowing or issuance or
renewal, in which case as of such specific date; and

                  (b)      no Default has occurred and is continuing, or would
result from such Borrowing or issuance or renewal or from the application of the
proceeds therefrom.

                  SECTION 3.03. Determinations Under Section 3.01. For purposes
of determining compliance with the conditions specified in Section 3.01, each of
the Lender Parties shall be deemed to have consented to, approved or accepted or
to be satisfied with each document or other matter required thereunder to be
consented to or approved by, or acceptable or satisfactory to, the Lender
Parties unless an officer of the Administrative Agent responsible for the
transactions contemplated by the Loan Documents shall have received notice from
such Lender Party prior to the Effective Date specifying its objection thereto
and, if any such Lender has a Commitment on such date under any of the
Facilities under which a Borrowing is to be made (or deemed to have been made)
on such date, such Lender Party shall not have made available to the
Administrative Agent such Lender Party's Pro Rata Share of such Borrowing.

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

                  SECTION 4.01. Representations and Warranties. The Borrower
hereby represents and warrants as follows:

                  (a)      Each Loan Party and each of its Subsidiaries (i) is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, (ii) is duly

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qualified and in good standing as a foreign corporation in each other
jurisdiction in which it owns or leases property or in which the conduct of its
business requires it to so qualify or be licensed except where the failure to so
qualify or be licensed would not be reasonably likely to have a Material Adverse
Effect and (iii) has all requisite power and authority (including, without
limitation, all Governmental Authorizations) to own or lease and operate its
properties and to carry on its business as now conducted and as proposed to be
conducted.

                  (b)      Set forth on Part A of Schedule 4.01(b) hereto is a
complete and accurate list of all of the Subsidiaries of the Borrower as of the
date of this Agreement, showing, as to each such Subsidiary, the correct legal
name thereof, the legal structure thereof, the jurisdiction of its organization,
the number and type of each class of its Equity Interests authorized and the
number outstanding, and the percentage of each such class of its Equity
Interests outstanding on such date that are owned by any of the Loan Parties,
and stating, as of such date, the number of shares covered by all outstanding
options, warrants, rights of conversion or purchase and similar rights and
whether or not such Subsidiary constitutes a Material Subsidiary. Except as set
forth on Part A of Schedule 4.01(b) hereto, as of the date of this Agreement,
all of the outstanding Equity Interests in each of the Subsidiaries of the
Borrower are owned directly or indirectly by one or more of the Loan Parties,
free and clear of all Liens (including, without limitation, preemptive or other
similar rights of the holders thereof) except those created under the Collateral
Documents. All of the outstanding Equity Interests in the Borrower and each of
its Subsidiaries have been validly issued and are fully paid and nonassessable.

                  (c)      The execution, delivery and performance by each Loan
Party of each of the Loan Documents to which it is or is to be a party, and the
consummation of the Transaction and the transactions contemplated hereby, are
within such Loan Party's corporate powers, have been duly authorized by all
necessary action (including, without limitation, all necessary shareholder,
partner, member or other similar action) and do not:

                           (i)      contravene the Constitutive Documents of
         such Loan Party;

                           (ii)     violate any Requirement of Law;

                           (iii)    conflict with or result in the breach of, or
         constitute a default under, any loan agreement, indenture, mortgage,
         deed of trust, lease, instrument, contract or other agreement binding
         on or affecting such Loan Party, any of its Subsidiaries or any of
         their respective property or assets; or

                           (iv)     except for the Liens created under the
         Collateral Documents, result in or require the creation or imposition
         of any Lien upon or with respect to any of the property or assets of
         such Loan Party or any of its Subsidiaries.

                  No Loan Party nor any of its Subsidiaries is in violation of
any Requirement of Law or in breach of any loan agreement, indenture, mortgage,
deed of trust, lease, instrument, contract or other agreement referred to in the
immediately preceding sentence, the violation or breach of which, either
individually or in the aggregate, is reasonably expected to have a Material
Adverse Effect.

                  (d)      No Governmental Authorization, and no other
authorization or approval or other action by, and no notice to or filing with,
any Governmental Authority or any other third party is required for (i) the due
execution, delivery, recordation, filing or performance by any Loan Party of any
Loan Document to which it is or is to be a party, or for the consummation of the
Transaction or the transactions contemplated hereby, (ii) the grant by any Loan
Party of the Liens granted by it pursuant to the Collateral Documents, (iii) the
perfection or maintenance of the Liens created under the Collateral Documents
(including the first priority nature thereof) or (iv) the exercise by any Agent
or any Lender Party of its rights under the Loan Documents or the remedies in
respect of the Collateral pursuant to the Collateral Documents, except for the
authorizations, approvals, actions, notices and filings listed on

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<PAGE>   66

Schedule 4.01(d) hereto, all of which have been duly obtained, taken, given or
made and are in full force and effect.

                  (e)      This Agreement has been, and each of the other Loan
Documents when delivered hereunder will have been, duly executed and delivered
by each of the Loan Parties intended to be a party thereto. This Agreement is,
and each of the other Loan Documents when delivered hereunder will be, the
legal, valid and binding obligations of each of the Loan Parties intended to be
a party thereto, enforceable against such Loan Party in accordance with their
respective terms, except to the extent such enforceability may be limited by the
effect of applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally or by
general principles of equity.

                  (f)      The Consolidated balance sheets of the Borrower and
its Subsidiaries as of December 31, 1999, and the related Consolidated
statements of operations and cash flow, and changes in stockholders' equity, of
the Borrower and its Subsidiaries for the respective Fiscal Years then ended, in
each case including the schedules and notes thereto and accompanied by an
unqualified opinion of Ernst & Young LLP, the independent public accountants of
the Borrower, copies of all of which have been furnished to the Lender Parties,
fairly present the Consolidated financial condition of the Borrower and its
Subsidiaries as at such dates and the Consolidated results of operations and
cash flow of the Borrower and its Subsidiaries for the respective periods ended
on such dates. All of the Consolidated financial statements referred to above in
this Section 4.01(f), including the schedules and notes thereto, have been
prepared in accordance with generally accepted accounting principles applied
consistently throughout the respective periods covered thereby.

                  (g)      The Consolidated balance sheet of the Borrower and
its Subsidiaries as of December 31, 2000, and the related Consolidated
statements of operations and cash flow, and changes in stockholders' equity, of
the Borrower and its Subsidiaries for the twelve-month period then ended, duly
certified by a Responsible Officer of the Borrower, copies of all of which have
been furnished to the Lender Parties, fairly present, subject to normal year-end
audit adjustments, the Consolidated financial condition of the Borrower and its
Subsidiaries as at such date and the Consolidated results of operations and cash
flow of the Borrower and its Subsidiaries for the period ended on such date. All
of the Consolidated financial statements referred to above in this Section
4.01(g) have been prepared, subject to normal year-end audit adjustments and the
absence of notes thereto, in accordance with generally accepted accounting
principles applied consistently throughout the period covered thereby.

                  (h)      The forecasted Consolidated balance sheets,
statements of operations and cash flow statements of the Borrower and its
Subsidiaries delivered to the Lender Parties pursuant to Section 3.01(g)(ix) or
5.03(e) were prepared in good faith on the basis of the assumptions stated
therein, which assumptions were reasonable in the light of conditions existing
at the time of delivery of such forecasts, and represented, at the time of
delivery thereof to the Lender Parties, the Borrower's reasonable estimate of
its future financial performance (although the actual results during the periods
covered by such forecasts may differ from the forecasted results).

                  (i)      Neither the Information Memorandum nor any other
information (other than financial projections and pro forma information)
furnished by or on behalf of the Borrower or any of its Subsidiaries to any of
the Agents or any of the Lender Parties or any of their representatives or
advisors in connection with the negotiation and syndication of the Loan
Documents or pursuant to the terms of the Loan Documents contained any untrue
statement of a material fact or omitted to state a material fact necessary to
make the statements made therein, in light of the circumstances in which any
such statements were made, not misleading. No fact, event, condition or
circumstance is known to any of the Loan Parties which is reasonably expected to
have a Material Adverse Effect, which has not been set forth herein, in the
financial statements referred to in subsection (f) or (g) of this Section 4.01
or in writing to the Agents and the Lender Parties prior to the Initial
Extensions of Credit.

                  (j)      There is no action, suit, investigation, litigation,
arbitration or proceeding pending or, to the best knowledge of the Borrower,
threatened against or affecting the Borrower or any of

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<PAGE>   67

its Subsidiaries or any of the property or assets thereof in any court or before
any arbitrator or by or before any Governmental Authority of any kind (i) that,
either individually or in the aggregate, is reasonably expected to have a
Material Adverse Effect or (ii) which purports to affect the legality, validity,
binding effect or enforceability of any aspect of any Loan Document or any of
the transactions contemplated hereby.

                  (k)      The Borrower and each of its Subsidiaries have good
and sufficient title to, or a valid and enforceable leasehold interest in, all
of the property and assets (real and personal) purported to be owned by them
(other than property and assets that, both individually and in the aggregate,
are not material to the business, financial condition or operations of the
Borrower or the Subsidiary thereof that owns them), in each case free and clear
of all Liens other than the Liens expressly permitted under this Agreement. All
of the material leases under which the Borrower or any of its Subsidiaries is a
lessor or a lessee are valid and subsisting and are in full force and effect.

                  (l)      The Borrower and each of its Subsidiaries own or have
the legal right to use all of the patents, licenses, franchises, copyrights,
service marks, trademarks, trade secrets and trade names (or other rights
thereto) that are necessary to own or lease and operate their respective
property and assets and to conduct their respective businesses as now conducted
and as proposed to be conducted, without known conflict with the rights of any
other Person (other than patents, licenses, franchises, copyrights, service
marks, trademarks, trade secrets and trade names (or other rights thereto) that,
both individually and in the aggregate, are not material to the business,
financial condition or operations of the Borrower or the Subsidiary thereof that
owns or otherwise possesses them). No action, suit, investigation, litigation,
arbitration or proceeding is pending or, to the best knowledge of the Borrower,
threatened challenging the use by the Borrower or any of its Subsidiaries of any
such patent, license, franchise, copyright, service mark, trademark, trade
secret, trade name or other right, or the validity or effectiveness thereof,
except for any such action, suit, investigation, litigation, arbitration or
proceeding that, either individually or in the aggregate, is not reasonably
expected to have a Material Adverse Effect.

                  (m)      None of the proceeds of any Advance or the drawings
under any Letter of Credit will be used to acquire any equity security of a
class which is registered pursuant to Section 12 of the Exchange Act. Neither
the Borrower nor any of its Subsidiaries is engaged in the business of extending
credit for the purpose of purchasing or carrying any "margin stock" (within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System
(12 CFR 207)). None of the proceeds of any Advance or the drawings under any
Letter of Credit will be used to purchase or carry any margin stock or to extend
credit to others for the purpose of purchasing or carrying margin stock.

                  (n)      Neither the Borrower nor any of its Subsidiaries is
an "investment company" or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company" (each as defined in the
Investment Company Act of 1940, as amended). None of the making (or deemed
making) of any Advance, the issuance (or deemed issuance) of any Letter of
Credit or the application of the proceeds therefrom, or the repayment of any
Advance by the Borrower, or the consummation of the Transaction or any
transactions contemplated hereby, will violate any provision of the Investment
Company Act of 1940, as amended, or any rule, regulation or order of the
Securities and Exchange Commission thereunder. Neither the Borrower nor any of
its Subsidiaries is a "holding company" or an "affiliate" of a "holding company"
or a "subsidiary company" of a "holding company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended.

                  (o)      The Borrower is, individually and together with its
Subsidiaries taken as a whole, Solvent.

                  (p)      Neither the Borrower nor any of its Subsidiaries is a
party to any loan agreement, indenture, mortgage, deed of trust, lease,
instrument, contract or other agreement or is subject to any restriction in its
Constitutive Documents or any other corporate, partnership, limited liability
company or similar restriction that, either individually or in the aggregate, is
reasonably expected to have a Material Adverse Effect.

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<PAGE>   68

                  (q)      Neither the business nor the property or assets of
the Borrower or any of its Subsidiaries have been affected by any fire,
explosion, accident, strike, lockout or other labor dispute, drought, storm,
hail, earthquake, embargo or other act of God or of the public enemy or other
casualty (whether or not covered by insurance) that, either individually or in
the aggregate, is reasonably expected to have a Material Adverse Effect.

                  (r)      Except as, either individually or in the aggregate,
is not reasonably expected to have a Material Adverse Effect, there is (i) no
unfair labor practice complaint pending or, to the best knowledge of the
Borrower, threatened against the Borrower or any of its Subsidiaries by or
before any Governmental Authority, and no grievance or arbitration proceeding
pending or, to the best knowledge of the Borrower, threatened against the
Borrower or any of its Subsidiaries which arises out of or under any collective
bargaining agreement, (ii) no strike, labor dispute, slowdown, stoppage or
similar action or grievance pending or, to the best knowledge of the Borrower,
threatened against the Borrower or any of its Subsidiaries and (iii) to the best
knowledge of the Borrower, no union representation question existing with
respect to the employees of the Borrower or any of its Subsidiaries and no union
organizing activity taking place with respect to any of the employees of any of
them.

                  (s)      No ERISA Event has occurred or is reasonably expected
to occur with respect to any Plan that, either individually or in the aggregate,
has resulted or is reasonably expected to result in any material liability of
any of the Loan Parties or any of the ERISA Affiliates. Schedule B (Actuarial
Information) to the most recent annual report (form 5500 series) for each of the
Plans, copies of which have been filed with the Internal Revenue Service and
furnished to the Lender Parties, is complete and accurate and fairly presents
the funding status of such Plan; and, since the date of such Schedule B, there
has been no material adverse change in the funding status of such Plan. Neither
any of the Loan Parties nor any of the ERISA Affiliates (i) has incurred or is
reasonably expected to incur any Withdrawal Liability to any Multiemployer Plan
or (ii) has been notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or has been terminated, within the
meaning of Title IV of ERISA, and no such Multiemployer Plan is reasonably
expected to be in reorganization or to be terminated, within the meaning of
Title IV of ERISA.

                  (t)      The operations and properties of the Borrower and
each of its Subsidiaries comply in all material respects with all applicable
Environmental Laws and Environmental Permits; all past noncompliance with such
Environmental Laws and Environmental Permits has been resolved without any
material ongoing obligations or costs; and no circumstance exists that, either
individually or in the aggregate, is reasonably expected to (i) form the basis
of an Environmental Action against the Borrower or any of its Subsidiaries or
any of their properties that, either individually or in the aggregate, is
reasonably expected to have a Material Adverse Effect or (ii) cause any such
property to be subject to any restrictions on ownership, occupancy, use or
transferability under any Environmental Law that, either individually or in the
aggregate, is reasonably expected to have a Material Adverse Effect.

                  (u)      (i) None of the properties owned or operated by the
Borrower or any of its Subsidiaries is listed or proposed for listing on the NPL
or on the CERCLIS or any analogous foreign, state or local list or, to the best
knowledge of the Borrower, is adjacent to any such property; and (ii) except as,
either individually or in the aggregate, is not reasonably expected to have a
Material Adverse Effect, (A) there are no, and never have been any, underground
or aboveground storage tanks or any surface impoundments, septic tanks, pits,
sumps or lagoons in which Hazardous Materials are being or have been treated,
stored or disposed of on any property owned or operated by the Borrower or any
of its Subsidiaries or, to the best knowledge of the Borrower, on any property
formerly owned or operated by the Borrower or any of its Subsidiaries, (B) there
is no asbestos or asbestos-containing material on any property owned or operated
by the Borrower or any of its Subsidiaries and (C) Hazardous Materials have not
been released, discharged or disposed of on any property owned or operated by
the Borrower or any of its Subsidiaries.

                  (v)      Neither the Borrower nor any of its Subsidiaries is
undertaking, either individually or together with other potentially responsible
parties, any investigation or assessment or

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<PAGE>   69

remedial or response action relating to any actual or threatened release,
discharge or disposal of Hazardous Materials at any site, location or operation,
either voluntarily or pursuant to the order of any Governmental Authority or the
requirements of any Environmental Law. All Hazardous Materials generated, used,
treated, handled or stored at, or transported to or from, any property owned or
operated by the Borrower or any of its Subsidiaries have been disposed of in a
manner that, either individually or in the aggregate, is not reasonably expected
to result in material liability to the Borrower or any of its Subsidiaries.

                  (w)      The Borrower and each of its Subsidiaries has filed,
has caused to be filed or has been included in all tax returns (federal, state,
local and foreign) required to be filed and has paid all taxes, assessments,
levies, fees and other charges shown thereon to be due and payable, together
with applicable interest and penalties, except for any such taxes, assessments,
levies, fees and other charges the amount, applicability or validity of which is
being contested in good faith and by appropriate proceedings diligently
conducted and with respect to which the Borrower or such Subsidiary, as the case
may be, has established appropriate and adequate reserves in accordance with
GAAP.

                  (x)      Set forth on Part A of Schedule 4.01(x) hereto is a
complete and accurate list, as of the date of this Agreement, of each of the
Open Years of the Borrower and each of its Subsidiaries. There are no
adjustments to (i) the federal income tax liability (including, without
limitation, interest and penalties) of the Borrower or any of its Subsidiaries
proposed in writing by the Internal Revenue Service with respect to Open Years
or (ii) any foreign, state or local tax liability (including, without
limitation, interest and penalties) of the Borrower or any of its Subsidiaries
proposed in writing by any foreign, state or local taxation authority or other
Governmental Authority that, in the aggregate for clauses (i) and (ii) of this
sentence, would exceed $50,000,000. No issue has been raised by the Internal
Revenue Service in respect of Open Years or by any such foreign, state or local
taxation authorities or other Governmental Authorities that, either individually
or in the aggregate, is reasonably expected to have a Material Adverse Effect.
Except as set forth on Part B of Schedule 4.01(x) hereto, neither the Borrower
nor any of its Subsidiaries has entered into an agreement or waiver or been
requested to enter into an agreement or waiver extending any statute of
limitations relating to the assessment, reassessment, payment or collection of
taxes of the Borrower or any such Subsidiary, or is aware of any circumstances
that would cause the taxable years or other taxable periods of the Borrower or
any such Subsidiary to no longer be subject to the normally applicable statute
of limitations. Neither the Borrower nor any of its Subsidiaries has provided,
with respect to itself or any property held by it, any consent under Section
341(f) of the Internal Revenue Code.

                  (y)      Set forth on Schedule 4.01(y) hereto is a complete
and accurate list, as of the date of this Agreement, of all of the Investments
(other than cash and Cash Equivalents and intercompany Investments expressly
permitted under Section 5.02(e)(iii)) held by the Borrower or any of its
Subsidiaries, showing, as of such date, the amount, the obligor or issuer
thereof and the maturity, if any, thereof.

                  (z)      On or before the Effective Date, each Loan Party will
have executed all documents necessary to perfect and protect the security
interests in the Collateral created under the Collateral Documents, and upon the
appropriate filing of such documents the Collateral Documents will create in
favor of the Collateral Trustee for the benefit of the Secured Parties a valid
and perfected first priority security interest in the Collateral, subject to the
exceptions set forth therein, securing the payment of the Secured Obligations.
The Loan Parties are the legal and beneficial owners of the Collateral free and
clear of any Lien, except for the Liens created or permitted under the Loan
Documents.

                  (aa)     The Indebtedness incurred by the Borrower under this
Agreement constitutes "Senior Indebtedness" within the meaning of the
Convertible Subordinated Debentures Indenture.

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                                    ARTICLE V

                            COVENANTS OF THE BORROWER

                  SECTION 5.01. Affirmative Covenants. So long as any of the
Advances or any of the other Obligations of any Loan Party under or in respect
of any of the Loan Documents shall remain unpaid, any of the Letters of Credit
shall remain outstanding or any of the Lender Parties shall have any Commitment
hereunder, the Borrower will, at all times:

                  (a)      Compliance with Laws, Maintenance of Governmental
Authorizations, Etc. (i) Comply, and cause each of its Subsidiaries to comply,
in all material respects, with all applicable Requirements of Law and (ii)
except as provided in Section 5.01(d), obtain and maintain in effect all
Governmental Authorizations that are necessary (A) to own or lease and operate
their respective property and assets and to conduct their respective businesses
as now conducted and as proposed to be conducted, except where and to the extent
that the failure to obtain or maintain in effect any such Governmental
Authorization, either individually or in the aggregate, is not reasonably
expected to have a Material Adverse Effect, or (B) for the due execution,
delivery or performance by the Borrower or any of its Subsidiaries of any of the
Loan Documents or for the consummation of any transaction contemplated hereby.

                  (b)      Payment of Taxes, Etc. Pay and discharge, and cause
each of its Subsidiaries to pay and discharge, to the extent due and payable and
before the same shall become delinquent, (i) all taxes, assessments,
reassessments, levies and other governmental charges imposed upon it or upon its
property, assets, income or franchises and (ii) all lawful claims that, if
unpaid, might by law become a Lien upon its property and assets or any part
thereof; provided, however, that neither the Borrower nor any of its
Subsidiaries shall be required to pay or discharge any such tax, assessment,
reassessment, levy, charge or claim the amount, applicability or validity of
which is being contested in good faith and by proper proceedings diligently
conducted and as to which appropriate and adequate reserves are being maintained
in accordance with GAAP, unless and until (i) such contest could subject the
Borrower or any of its Subsidiaries to any criminal penalty or liability or any
of the Agents or any of the Lender Parties to any criminal penalty or liability
or (except for nonmaterial fines for which such Agent or such Lender Party is
fully indemnified under Section 8.04) any civil penalty or liability or (ii) any
Lien resulting therefrom attaches to its property and assets and becomes
enforceable by its creditors.

                  (c)      Maintenance of Insurance. Maintain, and cause each of
its Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as are usually
carried by companies engaged in similar businesses and owning similar properties
in the same general areas in which the Borrower or such Subsidiary operates.

                  (d)      Preservation of Corporate Existence, Etc. Preserve
and maintain, and cause each of its Subsidiaries to preserve and maintain, its
existence, legal structure, organization, rights (statutory and pursuant to its
Constitutive Documents), permits, licenses, approvals, privileges and
franchises; provided, however, that the Borrower and its Subsidiaries (i) may
consummate any merger or consolidation otherwise expressly permitted under
Section 5.02(c), (ii) may wind up, liquidate or dissolve any of their respective
inactive Subsidiaries to the extent otherwise expressly permitted under Section
5.02(d)(iv) and (iii) may amend, supplement or otherwise modify their rights
under their respective Constitutive Documents to the extent otherwise expressly
permitted under Section 5.02(m); and provided further, however, that neither the
Borrower nor any of its Subsidiaries shall be required to preserve any permit,
license, approval, privilege or franchise if the board of directors (or persons
performing similar functions) of the Borrower or such Subsidiary shall determine
in good faith that the preservation thereof is no longer desirable in the
conduct of the business of the Borrower or such Subsidiary, as the case may be,
and that the loss thereof is not disadvantageous in any material respect to the
Borrower, such Subsidiary or the Lender Parties or, solely in the case of any
such permit, license or qualification to do business as a foreign corporation,
limited partnership or limited liability company in any jurisdiction, that the
loss

                                       66
<PAGE>   71

thereof, either individually or in the aggregate, is not reasonably expected to
have a Material Adverse Effect.

                  (e)      Visitation Rights. At any reasonable time and from
time to time, upon reasonable notice, permit the Administrative Agent or any of
the Lender Parties, or any agents or representatives thereof (so long as such
agents or representatives are or agree to be bound by the provisions of Section
8.09), to examine and make copies of and abstracts from the records and books of
account of, and to visit the properties of, the Borrower and its Subsidiaries
and to discuss the affairs, finances and accounts of the Borrower and/or any of
its Subsidiaries with any of their officers or directors and with their
independent public accountants.

                  (f)      Keeping of Books. Keep, and cause each of its
Subsidiaries to keep, proper books of record and account in which full and
accurate entries shall be made of all of the financial transactions and the
property, assets and businesses of the Borrower and each of its Subsidiaries
(including, without limitation, the establishment and maintenance of adequate
and appropriate reserves) in accordance with all generally accepted accounting
principles in effect from time to time and with all applicable Requirements of
Law.

                  (g)      Maintenance of Properties, Etc. Maintain and
preserve, and cause each of its Subsidiaries to maintain and preserve, all of
its properties that are used or useful in the conduct of its business in good
working order and condition, ordinary wear and tear and casualty and
condemnation excepted.

                  (h)      Compliance with Terms of Leaseholds. Make all
payments and otherwise perform all obligations in respect of all leases of real
property to which the Borrower or any of its Subsidiaries is a party, keep such
leases in full force and effect and not allow such leases to lapse or to be
terminated or any rights to renew such leases to be forfeited or canceled, in
each case except to the extent that, in the reasonable business judgment of the
Borrower or the Subsidiary of the Borrower that is the lessee thereof, it is in
the best interest of the Borrower or such Subsidiary, as the case may be, to
allow or to cause such nonperformance, lapse, termination, forfeiture or
cancellation, and such nonperformance, lapse, termination, forfeiture or
cancellation either individually or in the aggregate, is not reasonably expected
to have a Material Adverse Effect.

                  (i)      Transactions with Affiliates. Conduct, and cause each
of its Subsidiaries to conduct, directly or indirectly, all transactions or
series of related transactions (including, without limitation, the purchase,
sale, lease, transfer or exchange of property or assets of any kind or the
rendering of services of any kind) otherwise permitted under the Loan Documents
with any of their Affiliates on terms that are fair and reasonable and no less
favorable to the Borrower or any of its Subsidiaries than it would obtain in a
comparable arm's-length transaction with a Person not an Affiliate thereof,
other than:

                           (i)      any transaction or series of related
         transactions solely between or among the Borrower and one or more of
         the Material Subsidiaries, between or among one or more of the Material
         Subsidiaries, or between or among one or more of the Immaterial
         Subsidiaries, in each case to the extent such transaction or series of
         related transactions is otherwise permitted under the terms of the Loan
         Documents;

                           (ii)     the grant by the Borrower of options to
         purchase Borrower Common Stock from time to time to officers and
         directors of the Borrower and its Subsidiaries so long as, in each
         case, (A) the grant thereof and the price for the issuance of Borrower
         Common Stock upon the exercise thereof shall have been approved in good
         faith by the board of directors of the Borrower or a committee thereof,
         (B) such option satisfies the requirements for exemption set forth in
         Rule 16b-3 of the Exchange Act and (C) neither the grant of such option
         nor the issuance and sale of any Borrower Common Stock upon the
         exercise thereof shall result in a Change of Control; and

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<PAGE>   72

                           (iii)    the performance by the Borrower from time to
         time of its Obligations under the California Transition Plan and the
         California Transition Plan Documents in accordance with the respective
         terms thereof.

                  (j)      Covenant to Guarantee Obligations and Give Security.

                           (i)      Promptly upon the acquisition by the
         Borrower or one of its Domestic Subsidiaries of Equity Interests in any
         Domestic Subsidiary that is a Material Subsidiary or, in the event any
         Domestic Subsidiary of the Borrower satisfies the standards of a
         "Material Subsidiary" within 30 days thereafter, the Borrower will
         cause such Domestic Subsidiary to enter into a Guarantee Supplement;
         and

                           (ii)     (x) upon the acquisition by the Borrower or
         one of its Domestic Subsidiaries of Equity Interests in any Subsidiary
         that is a Material Subsidiary, (y) in the event any Domestic Subsidiary
         of the Borrower satisfies the standards of a "Material Subsidiary", or
         (z) upon the acquisition by any Loan Party of any personal property
         with a Fair Market Value in excess of $1,000,000 (and in the case of
         equipment or inventory, such equipment or inventory in any one
         jurisdiction has a Fair Market Value in excess of $1,000,000),
         including any interests in joint ventures or Subsidiaries, or any note
         in a principal amount in excess of $1,000,000 or other property with a
         Fair Market Value in excess of $1,000,000, which, in the reasonable
         judgment of the Administrative Agent, shall not already be subject to a
         perfected security interest in favor of the Collateral Trustee for the
         benefit of the Secured Parties and which is intended to be subject to a
         Lien under the Collateral Documents, then the Borrower shall, in each
         case at the Borrower's sole expense and within 30 days after such
         event, (I) deliver all such property (provided that, in the case of
         Equity Interests in any Foreign Subsidiary, not more than 65% of such
         Equity Interests shall be so delivered) to the Collateral Trustee (to
         the extent that a security interest therein is perfected by possession)
         and duly execute and deliver, and cause each such Domestic Subsidiary
         and each direct and indirect parent of such Domestic Subsidiary (if it
         has not already done so) to duly execute and deliver, to the Collateral
         Trustee, pledges, assignments and other security agreements, as
         specified by and in form and substance reasonably satisfactory to the
         Administrative Agent, securing payment of all the Secured Obligations
         and constituting Liens on all such properties, (II) take, and cause
         such Domestic Subsidiary or such parent to take, whatever action
         (including, without limitation, the filing of Uniform Commercial Code
         financing statements, the giving of notices and the endorsement of
         notices on title documents) may be necessary or advisable in the
         reasonable opinion of the Administrative Agent to vest in the
         Collateral Trustee (or in any representative of the Collateral Trustee
         designated by the Collateral Trustee) valid and subsisting Liens on the
         properties purported to be subject to the pledges, assignments and
         security agreements delivered pursuant to this Section 5.01(j),
         enforceable against all third parties in accordance with their terms,
         and (III) deliver to the Collateral Trustee, upon the reasonable
         request of the Administrative Agent in its sole discretion, a signed
         copy of a favorable opinion of counsel for the Borrower as to such
         guarantee, pledges, assignments and security agreements.

                  (k)      Further Assurances.

                           (i)      Promptly upon request by any Agent or any
         Lender Party through the Administrative Agent, correct, and cause each
         of its Subsidiaries promptly to correct, any material defect or error
         that may be discovered in any Loan Document or in the execution,
         acknowledgment, filing or recordation thereof; and

                           (ii)     Promptly upon request by any Agent or any
         Lender Party through the Administrative Agent, do, execute,
         acknowledge, deliver, record, re-record, file, re-file, register and
         re-register any and all such further acts, pledge agreements,
         assignments, financing statements and continuations thereof,
         termination statements, notices of assignment, transfers, certificates,
         assurances and other instruments as any Agent, or any Lender Party
         through the

                                       68
<PAGE>   73

         Administrative Agent, may reasonably require from time to time in order
         to (A) carry out more effectively the purposes of the Loan Documents,
         (B) to the fullest extent permitted by applicable law, subject any Loan
         Party's or any of its Subsidiaries' personal properties, assets, rights
         or interests to the Liens now or hereafter intended to be covered by
         any of the Collateral Documents, (C) perfect and maintain the validity,
         effectiveness and priority of any of the Collateral Documents and any
         of the Liens intended to be created thereunder and (D) assure, convey,
         grant, assign, transfer, preserve, protect and confirm more effectively
         unto each of the Finance Parties the rights granted or now or hereafter
         intended to be granted to them under any Loan Document or under any
         other instrument executed in connection with any Loan Document to which
         any Loan Party is or is to be a party.

                           (iii)    Use its reasonable best efforts to, and
         cause each of the other Loan Parties to, complete as soon as
         practicable on or after the Effective Date the information required to
         be set forth in Schedule 4 to the Security Agreement.

                  SECTION 5.02. Negative Covenants. So long as any of the
Advances or any of the other Obligations of any Loan Party under or in respect
of any of the Loan Documents shall remain unpaid, any of the Letters of Credit
shall remain outstanding or any of the Lender Parties shall have any Commitment
hereunder, the Borrower will not, at any time:

                  (a)      Liens, Etc. Create, incur, assume or suffer to exist,
or permit any of its Subsidiaries to create, incur, assume or suffer to exist,
any Lien on or with respect to any of its property or assets of any character
(including, without limitation, accounts), whether now owned or hereafter
acquired, or sign or file or suffer to exist, or permit any of its Subsidiaries
to sign or file or suffer to exist, under the Uniform Commercial Code or any
similar Requirements of Law of any jurisdiction, a financing statement (or the
equivalent thereof) that names the Borrower or any of its Subsidiaries as
debtor, or sign or suffer to exist, or permit any of its Subsidiaries to sign or
suffer to exist, any security agreement authorizing any secured party thereunder
to file any such financing statement (or the equivalent thereof), or sign or
suffer to exist, or permit any of its Subsidiaries to sign or suffer to exist,
any agreement or arrangement for the sale of any of its property or assets
subject to an understanding or agreement, contingent or otherwise, to repurchase
such property or assets (including sales of accounts receivable with recourse to
the Borrower or any of its Subsidiaries), or assign as collateral, or permit any
of its Subsidiaries to assign as collateral, any accounts or other right to
receive income, except:

                           (i)      Liens created under the Collateral
         Documents;

                           (ii)     Permitted Liens;

                           (iii)    Liens existing on the date of this Agreement
         and described on Schedule 5.02(a) hereto;

                           (iv)     purchase money Liens upon or in real
         property or equipment acquired or held by the Borrower or any of its
         Subsidiaries in the ordinary course of business to secure the purchase
         price of such real property or equipment or to secure Indebtedness
         incurred solely for the purpose of financing the acquisition,
         construction or improvement of any such real property or equipment to
         be subject to such Liens, or Liens existing on any such real property
         or equipment at the time of its acquisition or the completion of its
         construction (other than any such Liens created in contemplation of
         such acquisition that do not secure the purchase price of such real
         property or equipment); provided, however, that no such Lien shall
         extend to or cover any property or assets other than the real property
         or equipment being so acquired, constructed or improved; and provided
         further that (A) the principal amount of Indebtedness secured by any
         such Lien shall not exceed 75% of the lesser of (1) the cost (including
         all such Indebtedness secured thereby, whether or not assumed) to the
         Borrower or the applicable Subsidiary of the real property or equipment
         to be subject to any such Lien and (2) the Fair Market Value of such
         real property or equipment, determined as of the date of acquisition,
         construction or improvement

                                       69
<PAGE>   74

         thereof, and (B) any Indebtedness secured by Liens shall otherwise be
         expressly permitted under Section 5.02(b)(v) and shall not otherwise be
         prohibited under the terms of the Loan Documents;

                           (v)      Liens arising in connection with Capitalized
         Leases otherwise permitted under Section 5.02(b)(vi) and not otherwise
         prohibited under the terms of the Loan Documents; provided that no such
         Lien shall extend to or cover any property or assets other than the
         property or assets subject to such Capitalized Leases;

                           (vi)     deposits and letters of credit to secure the
         performance of leases of property (whether real, personal or mixed) of
         the Borrower and its Subsidiaries (excluding Capitalized Leases) in the
         ordinary course of business; provided that no such Lien shall extend to
         or cover any property or assets other than such deposit or such letter
         of credit and the property and assets subject to such lease, as
         applicable; and provided further that any such lease is not otherwise
         prohibited under the terms of the Loan Documents;

                           (vii)    Liens arising solely from precautionary
         filings of financing statements under the Uniform Commercial Code of
         the applicable jurisdictions in respect of Operating Leases of the
         Borrower or any of its Subsidiaries not otherwise prohibited under the
         terms of the Loan Documents;

                           (viii)   Liens on the accounts receivables of
         Caremark Inc. and MP Receivables, on the contracts and other property
         and assets related thereto and on the proceeds thereof arising solely
         in connection with the Caremark Receivables Securitization;

                           (ix)     Liens arising under the California
         Transition Plan Documents as in effect on the date hereof;

                           (x)      Other Liens securing Indebtedness in an
         aggregate outstanding principal amount not to exceed $15,000,000,
         provided that such Liens shall not extend to any of the Collateral; and

                           (xi)     the replacement, extension or renewal of any
         Lien permitted by clauses (iii) through (vi) above upon or in the same
         property and assets theretofore subject thereto; provided that no such
         extension, renewal or replacement shall extend to or cover any property
         or assets not theretofore subject to the Lien being extended, renewed
         or replaced and shall not secure any additional Indebtedness or other
         Obligations; and provided further that any Indebtedness secured by such
         Liens shall otherwise be permitted under the terms of the Loan
         Documents.

                  (b)      Indebtedness. Create, incur, assume or suffer to
exist, or permit any of its Subsidiaries to create, incur, assume or suffer to
exist, directly or indirectly, any Indebtedness other than:

                           (i)      Indebtedness under the Loan Documents;

                           (ii)     Indebtedness existing on the Effective Date
         and described on Schedule 5.02(b) hereto;

                           (iii)    Indebtedness of the Borrower in respect of
         interest rate Hedge Agreements entered into from time to time after the
         date of this Agreement with counterparties that are Lender Parties at
         the time such interest rate Hedge Agreement is entered into; provided
         that, in all cases under this clause (iii), all such interest rate
         Hedge Agreements shall be nonspeculative in nature (including, without
         limitation, with respect to the term and purpose thereof);

                           (iv)     Indebtedness of (A) the Borrower owing to
         any of the Material Subsidiaries, (B) any of the Material Subsidiaries
         owing to the Borrower or any of the other

                                       70
<PAGE>   75

         Material Subsidiaries, (C) any of the Immaterial Subsidiaries owing to
         the Borrower or any of the Material Subsidiaries to the extent the
         proceeds thereof are used solely to pay costs associated with the
         discontinued operations of such Immaterial Subsidiary, and (D)
         Indebtedness of any of the Immaterial Subsidiaries owing to any of the
         other Immaterial Subsidiaries;

                           (v)      Indebtedness incurred after the date of this
         Agreement and secured by Liens expressly permitted under Section
         5.02(a)(iv) in an aggregate principal amount not to exceed, when
         aggregated with the principal amount of all Indebtedness incurred under
         clause (vi) of this Section 5.02(b), $50,000,000 at any time
         outstanding;

                           (vi)     Capitalized Leases incurred after the date
         of this Agreement which, when aggregated with the principal amount of
         all Indebtedness incurred under clause (v) of this Section 5.02(b), do
         not exceed $50,000,000 at any time outstanding;

                           (vii)    Contingent Obligations of the Borrower
         guaranteeing all or any portion of the outstanding Obligations of any
         of the Material Subsidiaries; provided that each such Obligation is
         otherwise permitted under the terms of the Loan Documents;

                           (viii)   Contingent Obligations of the Borrower
         guaranteeing one or more Obligations of any of the Immaterial
         Subsidiaries to the extent such Obligations are incurred solely to pay
         costs associated with the discontinued operations of such Immaterial
         Subsidiary;

                           (ix)     Off Balance Sheet Liabilities in an
         aggregate principal amount not to exceed $25,000,000 at any time
         outstanding;

                           (x)      Indebtedness incurred under one or more
         Permitted Receivables Securitizations;

                           (xi)     unsecured Indebtedness not otherwise
         permitted under this Section 5.02(b) in an aggregate amount not to
         exceed $75,000,000 at any time outstanding;

                           (xii)    endorsement of negotiable instruments for
         deposit or collection or similar transactions in the ordinary course of
         business;

                           (xiii)   Subordinated Debt incurred by the Borrower
         in an aggregate principal amount not in excess of $200,000,000 at any
         time outstanding and which provides for no scheduled payment or
         mandatory prepayments of principal earlier than six months after the
         scheduled maturity of the Term Loan Advances;

                           (xiv)    Indebtedness comprised of reasonable and
         customary indemnities given by the Borrower or any of its Subsidiaries,
         or guarantees or other similar undertakings by the Borrower entered
         into in lieu thereof, in favor of the purchaser of property and assets
         of the Borrower and its Subsidiaries being sold, leased transferred or
         otherwise disposed of in accordance with Section 5.02(d)(vii) and
         covering liabilities incurred by the Borrower or its applicable
         Subsidiary in respect of such property and assets prior to the date of
         consummation of the sale, lease, transfer or other disposition thereof,
         which indemnities, guarantees or undertakings are required under the
         terms of the documentation for such sale, lease, transfer or other
         disposition;

                           (xv)     Indebtedness comprised of liabilities or
         other Obligations assumed or retained by the Borrower or any of its
         Subsidiaries from Subsidiaries of the Borrower that are, or all or
         substantially all of the property and assets of which are, sold,
         leased, transferred or otherwise disposed of pursuant to Section
         5.02(d)(vii); provided that such liabilities or other Obligations were
         not created or incurred in contemplation of the related sale, lease,
         transfer or other disposition; and provided further that the assumption
         or retention of such liabilities or other Obligations was agreed to by
         management of the Borrower in good faith and in connection with

                                       71
<PAGE>   76

         determining the Fair Market Value of the related property and assets at
         the time of the sale, lease, transfer or other disposition thereof; and

                           (xvi)    Indebtedness extending the maturity of, or
         refunding, refinancing or replacing, in whole or in part, any
         Indebtedness incurred under clause (ii) of this Section 5.02(b);
         provided, however, that (A) the aggregate principal amount of such
         extended, refunding, refinancing or replacement Indebtedness shall not
         be increased above the principal amount thereof and the premium, if
         any, thereon outstanding immediately prior to such extension,
         refunding, refinancing or replacement, (B) the direct and contingent
         obligors therefor shall not be changed as a result of or in connection
         with such extension, refunding, refinancing or replacement, (C) such
         extended, refunding, refinancing or replacement Indebtedness shall not
         mature prior to the stated maturity date or mandatory redemption date
         of the Indebtedness being so extended, refunded, refinanced or
         replaced, (D) if the Indebtedness being so extended, refunded,
         refinanced or replaced is subordinated in right of payment or otherwise
         to the Obligations of the Borrower or any of its Subsidiaries under and
         in respect of the Loan Documents, such extended, refunding, refinancing
         or replacement Indebtedness shall be subordinated to such Obligations
         to at least the same extent, and (E) immediately before and immediately
         after giving pro forma effect to any such extension, refunding,
         refinancing or replacement, no Default shall have occurred and be
         continuing.

                  (c)      Mergers, Etc.

                           (i)      Merge into or consolidate with any Person or
         permit any Person to merge into or consolidate with it, or permit any
         of its Subsidiaries to do so, except that:

                                    (A)      any of the Subsidiaries may merge
                           into or consolidate with the Borrower; provided that
                           the Borrower is the surviving corporation;

                                    (B)      any of the Subsidiaries of the
                           Borrower may merge into or consolidate with any of
                           the Material Subsidiaries; provided that the Person
                           formed by such merger or consolidation is a Material
                           Subsidiary;

                                    (C)      any of the Immaterial Subsidiaries
                           may merge into or consolidate with any of the other
                           Immaterial Subsidiaries;

                                    (D)      in connection with any purchase or
                           other acquisition of Equity Interests in, or property
                           and assets of, any Person permitted under Section
                           5.02(e)(vi), the Borrower may permit any other Person
                           to merge into or consolidate with it (provided that
                           the Borrower is the surviving entity), and any of the
                           Subsidiaries of the Borrower may merge into or
                           consolidate with any other Person or permit any other
                           Person to merge into or consolidate with it; provided
                           that (x) if such Subsidiary is a Material Subsidiary,
                           the Person formed by such merger or consolidation
                           shall be a Material Subsidiary, (y) if such
                           Subsidiary is a non-wholly owned Domestic Subsidiary,
                           the Person formed by such merger or consolidation
                           shall be a Domestic Subsidiary and (z) if such
                           Subsidiary is a Foreign Subsidiary, the Person formed
                           by such merger or consolidation shall be a Subsidiary
                           of the Borrower; and provided further that the Person
                           with which such Subsidiary is merging or
                           consolidating (1) shall be engaged in substantially
                           the same lines of business as one or more of the
                           businesses of the Borrower and the Material
                           Subsidiaries in the ordinary course and (2) shall not
                           have any contingent liabilities that could reasonably
                           be expected to be material to the Borrower and its
                           Subsidiaries, taken as a whole (as determined in good
                           faith by the board of directors (or persons
                           performing similar functions) of the Borrower or such
                           Subsidiary if the board of directors is otherwise
                           approving such transaction, and in each other case,
                           by a Senior Financial Officer); and

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<PAGE>   77

                                    (E)      in connection with any sale,
                           transfer or other disposition of all or substantially
                           all of the Equity Interests in, or the property and
                           assets of, any Person permitted under Section
                           5.02(d)(vii), any of the Subsidiaries of the Borrower
                           may merge into or consolidate with any other Person
                           or permit any other Person to merge into or
                           consolidate with it.

                           (ii)     In all cases under this Section 5.02(c), (A)
         any such permitted merger or consolidation shall be effected in
         compliance with all applicable Requirements of Law, (B) all
         Governmental Authorizations, and all consents, approvals and
         authorizations of, and notices and filings to or with, and other
         actions by, any other Person necessary in connection with such merger
         or consolidation shall have been obtained or made, (C) to the extent
         applicable, the relevant Loan Parties shall have complied with Section
         5.01(j), and (D) immediately before and immediately after giving pro
         forma effect to such merger or consolidation, no Default shall have
         occurred and be continuing.

                           (iii)    In the case of any merger or consolidation
         effected pursuant to clause (D) or (E) of Section 5.02(c)(i),
         immediately after giving effect to such merger or consolidation, the
         Borrower and its Subsidiaries shall be in pro forma compliance with all
         of the covenants set forth in Section 5.04, such compliance to be
         determined on the basis of the Required Financial Information most
         recently delivered to the Administrative Agent and the Lender Parties
         as though such merger or consolidation had been consummated as of the
         first day of the fiscal period covered thereby.

                  (d)      Sales, Etc. of Assets. Sell, lease, transfer or
otherwise dispose of, or permit any of its Subsidiaries to sell, lease, transfer
or otherwise dispose of, any property or assets (including, without limitation,
substantially all of the property and assets constituting the business of a
division, branch or other unit of operation and any Equity Interests), or grant
any option or other right to purchase, lease or otherwise acquire any property
or assets, except that:

                           (i)      the Borrower and its Subsidiaries may sell
         inventory in the ordinary course of business;

                           (ii)     the Borrower and its Subsidiaries may sell,
         lease, transfer or otherwise dispose of property and assets in a
         transaction otherwise permitted by Section 5.02(a), 5.02(c), 5.02(e) or
         5.02(f) and may sell, transfer or otherwise dispose of Equity Interests
         in Team Health;

                           (iii)    (A) the Borrower may sell, lease, transfer
         or otherwise dispose of any of its property or assets to any of the
         Material Subsidiaries, (B) any of the Material Subsidiaries may sell,
         lease, transfer or otherwise dispose of any of its property or assets
         to the Borrower or any of the other Material Subsidiaries, (C) any of
         the Immaterial Subsidiaries may sell, lease, transfer or otherwise
         dispose of any of its property or assets for Fair Market Value to the
         Borrower or any of its Subsidiaries, and (D) any of the Immaterial
         Subsidiaries may sell, lease, transfer or otherwise dispose of any of
         its property and assets to any of the Immaterial Subsidiaries; provided
         that immediately before and immediately after giving pro forma effect
         to such sale, lease, transfer or other disposition, no Default shall
         have occurred and be continuing;

                           (iv)     any Subsidiary of the Borrower that is no
         longer actively engaged in any business or activities and does not have
         property and assets with an aggregate book value or Fair Market Value
         in excess of $1,000,000 may be wound up, liquidated or dissolved so
         long as such winding up, liquidation or dissolution is determined in
         good faith by management of the Borrower to be in the best interests of
         the Borrower and its Subsidiaries;

                           (v)      the Borrower and its Subsidiaries (A) may
         sell tangible property and assets that are replaced, or the replacement
         of which has been commenced and substantially completed, within 120
         days after the date of such sale with tangible property and assets of
         equal

                                       73
<PAGE>   78

         or greater value as determined in good faith by management of the
         Borrower) and (B) may sell, lease, transfer or otherwise dispose of any
         obsolete, damaged or worn out equipment thereof or any other equipment
         that is otherwise no longer useful in the conduct of their businesses;
         provided, however, that, in the case of subclause (v)(A) above, if such
         tangible property and assets are not replaced, or the replacement
         thereof has not been substantially completed within such 120 day
         period, then the Net Cash Proceeds of such sale shall be applied on the
         last day of such period to prepay the Term Loan Advances outstanding at
         such time in accordance with, and to the extent required under, Section
         2.06(b);

                           (vi)     the Borrower and its Subsidiaries may lease
         or sublease real property to the extent required for their respective
         businesses and operations in the ordinary course so long as such lease
         or sublease is not otherwise prohibited under the terms of the Loan
         Documents;

                           (vii)    the Borrower and its Subsidiaries may sell,
         lease, transfer or otherwise dispose of property and assets not
         otherwise permitted to be sold, leased, transferred or disposed of
         pursuant to this Section 5.02(d) so long as the aggregate book value of
         all of the property and assets of the Borrower and its Subsidiaries
         sold, leased, transferred or otherwise disposed of pursuant to this
         clause (vii) does not exceed $50,000,000; provided that:

                                    (A)      the gross proceeds received from
                           any such sale, lease, transfer or other disposition
                           shall be at least equal to the Fair Market Value of
                           the property and assets so sold, leased, transferred
                           or otherwise disposed of, determined at the time of
                           such sale, lease, transfer or other disposition; and

                                    (B)      at least 80% of the value of the
                           aggregate consideration received from any such sale,
                           lease, transfer or other disposition shall be in
                           cash; provided, that property and assets with an
                           aggregate book value not more than $10,000,000 may be
                           sold, leased, transferred or otherwise disposed of in
                           any period of twelve consecutive months pursuant to
                           this clause (vii) even in the circumstances where
                           less than 80% at the consideration received therefor
                           is in cash.

                           (viii)   the Borrower and its Subsidiaries may
         consummate one or more Permitted Sale-Leaseback Transactions;

                           (ix)     the Borrower and its Subsidiaries may
         consummate the Caremark Receivables Securitization;

                           (x)      the Borrower and its Subsidiaries may sell,
         transfer or otherwise dispose of property and assets to any health care
         provider or provider group, or any Person formed thereby, upon the
         disassociation of such health care provider or provider group from the
         businesses and operations of the Borrower and its Subsidiaries in a
         manner that is consistent with the past business practices of the
         Borrower and its Subsidiaries and so long as such property and assets
         are used solely in the business and operation of such health care
         provider or provider group; provided that immediately before and
         immediately after giving pro forma effect to any such sale, transfer or
         other disposition, no Default shall have occurred and be continuing;

                           (xi)     the Borrower and its Subsidiaries may sell,
         transfer or otherwise dispose of all or any portion of their property
         and assets, in accordance with the California Transition Plan;
         provided, that immediately before and immediately after giving pro
         forma effect to any such sale, transfer or other disposition, no
         Default shall have occurred and be continuing; and

                           (xii)    so long as no Default has occurred and is
         continuing, the Borrower and its Subsidiaries may grant any option or
         other right to purchase any property or asset in a transaction that is
         otherwise permitted under clause (vii) of this Section 5.02(d).

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<PAGE>   79

                  (e)      Investments in Other Persons. Purchase, acquire, make
or hold, or permit any of its Subsidiaries to purchase, acquire, make or hold,
any Investment in any Person, except:

                           (i)      Investments existing on the date of this
         Agreement and described on Schedule 4.01(y) hereto;

                           (ii)     Investments in cash and Cash Equivalents;

                           (iii)    Investments by:

                                    (A)      the Borrower in any of the Material
                                             Subsidiaries;

                                    (B)      any of the Subsidiaries of the
                                             Borrower in the Borrower or any of
                                             the Material Subsidiaries;

                                    (C)      the Borrower or any of the Material
                                             Subsidiaries in one or more
                                             Immaterial Subsidiaries to the
                                             extent the proceeds thereof are
                                             used solely to pay costs associated
                                             with discontinued operations of
                                             such Immaterial Subsidiary;

                                    (D)      Caremark Inc. in MP Receivables (1)
                                             constituting capital contributions
                                             of its accounts receivables and
                                             related property and assets to MP
                                             Receivables pursuant to, and in
                                             accordance with the requirements
                                             of, the Caremark Receivables
                                             Securitization Documents or (2)
                                             evidenced by the Subordinated Note
                                             (as defined in Section 3.2(b) of
                                             the Caremark Receivables Purchase
                                             Agreement); and

                                    (E)      any of the Immaterial Subsidiaries
                                             in any of the other Immaterial
                                             Subsidiaries;

                           (iv)     Investments by the Borrower and its
         Subsidiaries in account debtors received in connection with the
         bankruptcy or reorganization, or in settlement of the delinquent
         obligations of financially troubled suppliers or customers, in the
         ordinary course of business and in accordance with applicable
         collection and credit policies established by the Borrower or such
         Subsidiary, as the case may be;

                           (v)      (A) promissory notes, contingent payment
         obligations and other noncash consideration received as partial payment
         of the purchase price of any property or assets sold, leased,
         transferred or otherwise disposed of in accordance with Section
         5.02(d)(vii) and (B) common Equity Interests in Persons that cease to
         constitute Subsidiaries of the Borrower as a result of the sale, lease,
         transfer or other disposition of at least 85% of the common Equity
         Interests in such Subsidiary pursuant to, and in accordance with the
         terms of, Section 5.02(d)(vii) or the redemption and issuance and sale
         of at least 85% of the common Equity Interests in such Person other
         than the Borrower or any of its Affiliates pursuant to, and in
         accordance with the terms of, Section 5.02(f)(iv);

                           (vi)     the purchase or other acquisition of the
         Equity Interests in, or all or substantially all of the property and
         assets of, any Person or business unit or division that, upon the
         consummation thereof, will be, or will be property and/or assets of, a
         Material Subsidiary in which at least 80% of every class of Equity
         Interests therein (on a fully diluted basis) will be owned legally and
         beneficially by the Borrower or any of the other Material Subsidiaries,
         or will be merged with or into a Material Subsidiary, with the
         surviving entity being a Material Subsidiary; provided that, with
         respect to each such purchase or other acquisition made pursuant to
         this clause (vi):

                                       75
<PAGE>   80

                                    (A)      any newly created or acquired
                           Subsidiary resulting from such purchase or other
                           acquisition shall comply with the requirements of
                           Sections 5.01(j) and 5.02(k); and

                                    (B)      the lines of business of the Person
                           to be (or the property and assets of which are to be)
                           so purchased or otherwise acquired shall be
                           substantially the same lines of business as one or
                           more of the businesses of the Borrower and the
                           Material Subsidiaries in the ordinary course;

                                    (C)      the aggregate cash consideration
                           (excluding all Equity Interests and Subordinated Debt
                           issued, transferred or incurred to the sellers
                           thereof, all indemnities, earnouts and other
                           contingent payment obligations to the Sellers
                           thereof, but including the aggregate amounts paid or
                           to be paid under deferred purchase price, noncompete,
                           consulting and other affiliated agreements with the
                           sellers thereof and all assumptions of debt,
                           liabilities and other obligations in connection
                           therewith) paid by or on behalf the Borrower and its
                           Subsidiaries for any such purchase or other
                           acquisition (or series of related purchases or other
                           acquisitions) shall not exceed $50,000,000, provided,
                           that the cash proceeds of an issuance of Equity
                           Interests or incurrence of Subordinated Debt
                           permitted hereunder made in contemplation of such
                           acquisition where such cash proceeds are used for
                           such acquisition within 120 days of such issuance or
                           incurrence shall not be deemed cash consideration
                           subject to the limitations of this clause;

                                    (D)      the aggregate cash consideration
                           (excluding all Equity Interests and Subordinated Debt
                           issued, transferred or incurred to the sellers
                           thereof, all indemnities, earnouts and other
                           contingent payment obligations to the Sellers
                           thereof, but including the aggregate amounts paid or
                           to be paid under deferred purchase price, noncompete,
                           consulting and other affiliated agreements with the
                           sellers thereof and all assumptions of debt,
                           liabilities and other obligations in connection
                           therewith) paid by or on behalf the Borrower and its
                           Subsidiaries for all such purchases and other
                           acquisitions effected after the date of this
                           Agreement shall not exceed $200,000,000, provided,
                           that the cash proceeds of an issuance of Equity
                           Interests or incurrence of Subordinated Debt
                           permitted hereunder made in contemplation of such
                           acquisition where such cash proceeds are used for
                           such acquisition within 120 days of such issuance or
                           incurrence shall not be deemed cash consideration
                           subject to the limitations of this clause; and

                                    (E)      (1) immediately before and after
                           giving pro forma effect to any such purchase or other
                           acquisition, no Default shall have occurred and be
                           continuing, (2) immediately after giving effect to
                           such purchase or other acquisition, the Borrower and
                           its Subsidiaries shall be in pro forma compliance
                           with all of the covenants set forth in Section 5.04,
                           such compliance to be determined on the basis of the
                           Required Financial Information most recently
                           delivered to the Administrative Agent and the Lender
                           Parties as though such purchase or other acquisition
                           had been consummated as of the first day of the
                           fiscal period covered thereby, and (3) if the
                           aggregate cash consideration (as determined above)
                           paid by or on behalf of the Borrower and its
                           Subsidiaries for any such purchase or other
                           acquisition (or series of related purchases or other
                           acquisitions) shall exceed $30,000,000, the Borrower
                           shall have delivered to the Administrative Agent, on
                           behalf of the Lender Parties, at least two Business
                           Days prior to the date on which any such purchase or
                           other acquisition is consummated, a certificate of a
                           Responsible Officer of the Borrower, in form and
                           substance reasonably satisfactory to the
                           Administrative Agent, certifying that all of the
                           applicable requirements set forth in this clause (vi)
                           will be satisfied on or prior to the date of such
                           consummation (and including a schedule setting forth

                                       76
<PAGE>   81

                           the computations used by the Borrower in determining
                           the pro forma compliance with all of the covenants
                           set forth in Section 5.04 in accordance with the
                           foregoing provisions of this subclause (vi)(E)); and

                           (vii)    Investments by the Borrower or any of its
         Subsidiaries (A) (whether in the form of cash, property or services
         contributed, or otherwise) in (I) physician connectivity joint ventures
         in an aggregate amount not to exceed $25,000,000 during the term of
         this Agreement and (II) other joint ventures in an aggregate amount not
         to exceed $25,000,000 during the term of this Agreement and (B) not
         otherwise permitted under this Section 5.02(e) in an aggregate amount
         not to exceed $25,000,000 during the term of this Agreement, provided
         that, in the case of each Investment under this clause (vii), (i)
         immediately before and after giving pro forma effect thereto, no
         Default shall have occurred and be continuing and (2) immediately after
         giving effect thereto, the Borrower and its Subsidiaries shall be in
         pro forma compliance with all the covenants set forth in Section 5.04,
         such compliance to be determined on the basis of the Required Financial
         Information most recently delivered to the Administrative Agent and the
         Lender Parties as though such Investment had been made as of the first
         day of the fiscal period covered thereby.

                  (f)      Restricted Payments. Declare or pay any dividends on,
purchase, redeem, retire, defease or otherwise acquire for value any of its
Equity Interests, now or hereafter outstanding, return any capital to its
stockholders, partners or members (or the equivalent persons thereof) as such,
make any distribution of property, assets, Equity Interests, obligations or
securities to its stockholders, partners or members (or the equivalent persons
thereof) as such, or permit any of its Material Subsidiaries to do any of the
foregoing, or permit any of its Subsidiaries to purchase, redeem, retire,
defease or otherwise acquire for value any Equity Interests in the Borrower, or
to issue or sell any Equity Interests therein, except that:

                           (i)      the Borrower may declare and make dividends
         and other distributions payable solely in additional Borrower Common
         Stock;

                           (ii)     any of the Material Subsidiaries of the
         Borrower may declare and pay or make dividends and other distributions
         in cash or in additional common Equity Interests therein, or issue or
         sell additional Equity Interests therein, to the Borrower or any of the
         Material Subsidiaries;

                           (iii)    any of the non-wholly owned Material
         Subsidiaries of the Borrower may declare and pay or make dividends and
         other distributions, and may issue and sell additional common Equity
         Interests therein, to its shareholders, partners or members (or the
         equivalent persons thereof) generally so long as the Borrower and each
         of the Material Subsidiaries that own any of the Equity Interests
         therein receive at least their respective proportionate shares of any
         such dividend, distribution or issuance of common Equity Interests
         (based upon their relative holdings of the Equity Interests therein and
         taking into account the relative preferences, if any, of the various
         classes of the Equity Interests therein);

                           (iv)     Caremark Trust may declare and pay dividends
         in respect of the Convertible Preferred Securities as provided in the
         Convertible Securities Trust Agreement; and

                           (v)      provided that no Event of Default has
         occurred and is continuing, the Borrower may declare and pay dividends
         on, and purchase, redeem, retire, defease or otherwise acquire for
         value, any of its Equity, Interests, return any capital to its
         stockholders, as such, and make any distribution of property, assets,
         Equity Interests, obligations or securities to its stockholders, as
         such, provided that the aggregate amount of all such dividends,
         purchases, redemptions, retirements, defeasances, returns of capital
         and distributions do not exceed $10,000,000 in any year or $50,000,000
         during the term of this Agreement, provided, further, that to the
         extent the entire $10,000,000 is not used in any one year as provided
         herein, then fifty percent of such unused portion thereof can be used
         as provided herein in any subsequent year,

                                       77
<PAGE>   82

         and provided, further, that in all circumstances the Borrower shall not
         at any time make any such dividends, purchases, redemptions,
         retirements, defeasances, returns of capital or distributions unless
         the Leverage Ratio as of the most recently ended Measurement Period
         prior thereto is less than or equal to 3.0 to 1.0.

                  (g)      Capital Expenditures. Make, or permit any of its
Subsidiaries to make, any Capital Expenditures that would cause the aggregate
amount of all such Capital Expenditures made by the Borrower and its
Subsidiaries in any Fiscal Year to exceed the amount set forth below opposite
such Fiscal Year, provided that to the extent the entire amount of permitted
Capital Expenditures as set forth below for each Fiscal Year is not used in the
respective Fiscal Year, then fifty percent of such unused portion thereof will
be available for Capital Expenditures in the immediately succeeding Fiscal Year:

<TABLE>
<CAPTION>
                             FISCAL YEAR
                              ENDING IN                          AMOUNT
                             -----------                         ------
                            <S>                               <C>
                            December 2001                     $50,000,000
                            December 2002                     $60,000,000
                            December 2003                     $70,000,000
                            December 2004                     $80,000,000
                            and thereafter
</TABLE>

                  (h)      Prepayments, Etc. of Subordinated Debt.

                           (i)      Prepay, redeem, purchase, defease or
         otherwise satisfy prior to the scheduled maturity thereof in any
         manner, or make any payment in violation of any subordination terms of,
         any Subordinated Debt.

                           (ii)     Amend, modify or change in any manner any of
         the terms or conditions of:

                                    (A)      the Senior Notes Documents;

                                    (B)      the Convertible Securities
                                             Documents; or

                                    (C)      the Caremark Receivables
                                             Securitization Documents, except
                                             (1) to the extent necessary to
                                             increase the aggregate net
                                             investment made by financial
                                             institutions in respect of all the
                                             accounts receivable of Caremark,
                                             Inc. and MP Receivables Company or
                                             the interests therein to not more
                                             than at any one time outstanding
                                             (a) $150,000,000 prior to December
                                             31, 2001, (b) $175,000,000 from
                                             January 1, 2002 through and
                                             including December 31, 2002, and
                                             (c) $200,000,000 during any
                                             calendar year thereafter or (2)
                                             otherwise as, either individually
                                             or in the aggregate, is not
                                             reasonably expected to have a
                                             Material Adverse Effect; or

                                    (D)      any documents governing or
                                             evidencing Subordinated Debt if the
                                             effect of such amendment,
                                             modification or change is (1) to
                                             impose negative covenants in such
                                             Subordinated Debt that are not less
                                             restrictive than the negative
                                             covenants in this Agreement as in
                                             effect at the time of such
                                             amendment, modification or change,
                                             (2) to impose affirmative covenants
                                             in such Subordinated Debt that are
                                             more burdensome than the
                                             affirmative covenants in this
                                             Agreement as in effect at the time
                                             of such amendment, modification or
                                             change, (3) to provide for a

                                       78
<PAGE>   83

                                             cross-default to other Indebtedness
                                             other than default in payment at
                                             final stated maturity (but may
                                             provide for a cross-acceleration to
                                             other Indebtedness of the Borrower)
                                             or to provide for other events of
                                             default that are not customary for
                                             subordinated debt instruments
                                             prevailing at the time such
                                             amendment, modification or change
                                             or (4) the subordination provisions
                                             in such Subordinated Debt.

                           (iii)    Permit any of its Subsidiaries to do any of
         the foregoing.

                  (i)      Change in Nature of Business. Make, or permit any of
its Subsidiaries to make, any change in the nature of its business that would
cause the Borrower or such Subsidiary to no longer be primarily engaged in one
or more of the businesses engaged in by the Borrower and its Subsidiaries on the
date of this Agreement (other than solely as a result of the discontinuation of
the physician practice management businesses of the Borrower and its
Subsidiaries, and the sale, lease, transfer or the disposition of the property
and assets of the Borrower and its Subsidiaries comprising part of such
businesses, in accordance with the terms of the Loan Documents).

                  (j)      Amendments to Constitutive Documents. Amend, or
permit any of its Subsidiaries to amend, its Constitutive Documents, except in
the case of the bylaws (or equivalent organizational documents) of the Borrower
or any such Subsidiary where such amendment, either individually or in the
aggregate, is not reasonably expected to have a Material Adverse Effect.

                  (k)      Accounting Changes, Etc. Make or permit, or permit
any of its Subsidiaries to make or permit, any change in (i) its accounting
policies or reporting practices, except (A) as required by generally accepted
accounting principles in effect at the time of such change or by applicable
Requirements of Law or (B) as the Borrower (in consultation with its independent
public accountants) reasonably believes it will be required to adopt under
generally accepted accounting principles within the next succeeding 12 months
and which would not affect any of the covenants set forth in Section 5.04 (or
the computation thereof) or (ii) its Fiscal Year.

                  (l)      Amendments, Etc. to Material Documents.

                           (i)      Cancel or terminate any California
         Transition Plan Document or consent to or accept any cancellation or
         termination thereof, amend, modify or change in any manner any term or
         condition of any California Transition Plan Document or give any
         consent, waiver or approval thereunder, waive any default under or any
         breach of any term or condition of any California Transition Plan
         Document, agree in any manner to any other amendment, modification or
         change of any term or condition of any California Transition Plan
         Document, or take any other action in connection with any California
         Transition Plan Document that, either individually or in the aggregate,
         is reasonably expected to have a Material Adverse Effect, or permit any
         of its Subsidiaries to do any of the foregoing.

                           (ii)     The Borrower will not cancel or terminate
         the Trust Agreement nor consent to or accept any cancellation or
         termination thereof, nor amend, modify or change in any manner, or
         agree to amend, modify or change in any manner, any term or condition
         of the Trust Agreement, nor give any consent, waiver or approval
         thereunder nor waive any default or breach of any term or condition of
         the Trust Agreement, or take any other action in connection with the
         Trust Agreement that in each case, either individually or in the
         aggregate, may reasonably be expected to adversely affect the rights or
         interest of the Finance Parties.

                  (m)      Partnerships, Etc. Be or become a general partner in
any general or limited partnership or joint venture, or permit any of its
Subsidiaries to do so, unless (i) all of the Equity Interests (including,
without limitation, all ownership or profit interests) in such general or
limited partnership or joint venture are owned by the Borrower and/or one or
more of the Material Subsidiaries or (ii) the sole

                                       79
<PAGE>   84

property and assets of the Subsidiary of the Borrower that is or is to be the
general partner in such general or limited partnership or joint venture consist
of its interests in one or more of such partnerships or joint ventures.

                  (n)      Speculative Transactions. Engage, or permit any of
its Subsidiaries to engage, in any transaction involving commodity options or
futures contracts or any other type of Hedge Agreement which is speculative in
nature (including, without limitation, with respect to the term and purpose
thereof).

                  SECTION 5.03. Reporting Requirements. So long as any of the
Advances or any of the other Obligations of any Loan Party under or in respect
of any of the Loan Documents shall remain unpaid, any of the Letters of Credit
shall remain outstanding or any of the Lender Parties shall have any Commitment
hereunder, the Borrower will furnish to the Administrative Agent and the Lender
Parties:

                  (a)      Default Notices. As soon as possible and in any event
within one Business Day after a Responsible Officer of the Borrower or any of
its Subsidiaries knows or has reason to know of the occurrence of each Default
or any event, development or occurrence that, either individually or in the
aggregate, is reasonably expected to have a Material Adverse Effect continuing
on the date of such statement, a statement of such Responsible Officer or a
Responsible Officer of the Borrower setting forth the details of such Default or
such event, development or occurrence (including, without limitation, the
anticipated effect thereof), the period of time such Default or such event,
development or occurrence has existed and been continuing and the action that
the Borrower has taken and/or proposes to take with respect thereto.

                  (b)      Quarterly Financials. As soon as available and in any
event within 50 days after the end of each of the first three Fiscal Quarters of
each Fiscal Year, a Consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such Fiscal Quarter and Consolidated statements of
operations, stockholders' equity and cash flows of the Borrower and its
Subsidiaries for the period commencing at the end of the previous Fiscal Quarter
and ending with the end of such Fiscal Quarter and for the period commencing at
the end of the previous Fiscal Year and ending with the end of such Fiscal
Quarter, setting forth in comparative form, in the case of each such
Consolidated balance sheet, the corresponding figures as of the last day of the
corresponding period in the immediately preceding Fiscal Year and, in the case
of each such Consolidated statement of operations, stockholders' equity and cash
flows, the corresponding figures for the corresponding period in the immediately
preceding Fiscal Year, all in reasonable detail.

                  (c)      Annual Financials. As soon as available and in any
event within 95 days after the end of each Fiscal Year in the case of each
Fiscal Year after the Fiscal Year ended December 31, 2000, a copy of the annual
audit report for such Fiscal Year for the Borrower and its Subsidiaries,
including therein the Consolidated balance sheets of the Borrower and its
Subsidiaries as of the end of such Fiscal Year and Consolidated statements of
operations, stockholders' equity and cash flows of the Borrower and its
Subsidiaries for such Fiscal Year, accompanied by an unqualified opinion, or an
opinion otherwise reasonably acceptable to the Required Lenders, of Arthur
Andersen LLP or other independent public accountants of recognized standing
reasonably acceptable to the Required Lenders, setting forth in comparative
form, in the case of each such Consolidated balance sheet, the corresponding
figures as of the last day of the immediately preceding Fiscal Year, and, in the
case of each such Consolidated statement of operations, stockholders' equity and
cash flows, the corresponding figures for the corresponding period in the
immediately preceding Fiscal Year, together with (i) a letter from Arthur
Andersen LLP or other independent public accountants of recognized standing
reasonably acceptable to the Required Lenders stating that, in the course of
their regular audit of the Consolidated financial statements of the Borrower and
its Subsidiaries, which audit was conducted by such accountants in accordance
with generally accepted auditing standards, such accountants have not obtained
any knowledge that a Default has occurred and is continuing or if, in the
opinion of such accountants, a Default as it relates to financial matters has
occurred and is continuing, a statement as to the status and nature thereof,
(ii) a schedule in form satisfactory to the Administrative Agent of the
computations used

                                       80
<PAGE>   85

by such accountants in determining, as of the end of such Fiscal Year,
compliance with the covenants contained in Sections 5.02(g) and 5.04 (including
with respect to each such Section, where applicable, the calculations of the
maximum or minimum amount, ratio or percentage, as the case may be, permissible
under the terms of such Section, and the calculation of the amount, ratio or
percentage then in existence) and (iii) in the event of any change in the
generally accepted accounting principles used by the Borrower in the preparation
of the audited Consolidated financial statements referred to above in this
Section 5.03(c) from GAAP, the Borrower shall also provide a reasonably detailed
description of such changes and, if and to the extent necessary for the
determination of compliance with Section 5.02(g) or 5.04, a statement of
reconciliation conforming such audited Consolidated financial statements to
GAAP.

                  (d)      Compliance Certificate. Together with each delivery
to the Administrative Agent and Lender Parties of the Consolidated financial
statements of the Borrower and its Subsidiaries referred to in Sections 5.03(b)
and 5.03(c), a certificate of a Senior Financial Officer, in form and substance
reasonably satisfactory to the Administrative Agent:

                           (i)      duly certifying that, subject, in the case
         of any such financial statements delivered pursuant to Section 5.03(b),
         to normal year-end audit adjustments, (A) the Consolidated financial
         statements of the Borrower and its Subsidiaries delivered with such
         certificate fairly present the Consolidated financial condition of the
         Borrower and its Subsidiaries as of the last day of such Fiscal Quarter
         or such Fiscal Year, as the case may be, and the Consolidated results
         of operations and cash flows of the Borrower and its Subsidiaries for
         the Fiscal Quarter or the Fiscal Year ended on such date, and (B) the
         Consolidated financial statements of the Borrower and its Subsidiaries
         delivered with such certificate have been prepared in accordance with
         GAAP;

                           (ii)     duly certifying that no Default has occurred
         and is continuing or, if a Default has occurred and is continuing, a
         statement as to the nature thereof, the period of time such Default has
         existed and been continuing and the action that the Borrower has taken
         and/or proposes to take with respect thereto; and

                           setting forth a schedule of the computations used by
         the Borrower in determining compliance with the covenants contained in
         Sections 5.02(g) and 5.04 (including with respect to each such Section,
         where applicable, the calculations of the maximum or minimum amount,
         ratio or percentage, as the case may be, permissible under the terms of
         such Section, and the calculation of the amount, ratio or percentage
         then in existence).

                  (e)      Forecasts. As soon as available and in any event
within 60 days after the first day of each Fiscal Year, commencing with the
Fiscal Year ending December 31, 2001, Consolidated forecasts prepared by
management of the Borrower of balance sheets and statements of operations and
cash flows on an annual basis for such Fiscal Year and each of the Fiscal Years
thereafter through the scheduled final Termination Date, in the form of the
forecasts delivered by the Borrower pursuant to Section 3.01(g)(x)(C) or
otherwise in a form reasonably satisfactory to the Administrative Agent and
setting forth in comparative form the corresponding figures for the immediately
preceding Fiscal Year.

                  (f)      Licenses, Etc. Promptly and in any event within five
Business Days after receipt thereof, notice of any actual, pending or threatened
suspension, termination, or revocation of any of the Governmental Authorizations
of the Borrower or any of its Subsidiaries that are necessary to own or lease
and operate their respective property and assets and to conduct their respective
businesses as now conducted and as proposed to be conducted, or any enjoinment,
barring or suspension of the ability of the Borrower or any such Subsidiary to
conduct any of its businesses in the ordinary course, that, either individually
or in the aggregate, is reasonably expected to have a Material Adverse Effect.

                  (g)      Litigation. Promptly and in any event within five
Business Days after the earlier of knowledge of a Responsible Officer thereof or
receipt by the Borrower or any of its Subsidiaries of service of process in
connection therewith, notice of all actions, suits, investigations, litigation,
arbitrations and proceedings against or affecting the Borrower or any of its
Subsidiaries or any of the

                                       81
<PAGE>   86

property or assets thereof in any court or before any arbitrator or by or before
any Governmental Authority of any kind (i) that, either individually or in the
aggregate, is reasonably expected to have a Material Adverse Effect or (ii) that
purports to affect the legality, validity, binding effect or enforceability of
any aspect of the Transaction, any of the Loan Documents or the Transaction
Documents or any of the other transactions contemplated thereby; and, promptly
after the occurrence thereof, (A) notice of any material and adverse change in
the status or any material and adverse change in the financial effect on the
Borrower or any of its Subsidiaries of any such action, suit, investigation,
litigation, arbitration or proceeding (and, in each case, upon the reasonable
request of the Administrative Agent, any other information available to the
Borrower or any of its Subsidiaries with respect to any of the foregoing that
would enable the Administrative Agent and the Lender Parties to more fully
evaluate such action, suit, investigation, litigation, arbitration or
proceeding) and (B) copies of any reports or other statements (other than
routine reports and other statements prepared in the ordinary course of business
that are not reasonably expected to result in any material and adverse action)
that the Borrower or any of its Subsidiaries may furnish to or file with any
Governmental Authority, unless the Borrower or such Subsidiary is precluded from
disclosing any such report or statement pursuant to a confidentiality agreement
with the applicable Governmental Authority.

                  (h)      ERISA Events and ERISA Reports; Plan Terminations,
Etc. (i) Promptly and in any event within ten days after any of the Loan Parties
or any of the ERISA Affiliates knows or has reason to know that any ERISA Event
has occurred, a statement of a Responsible Officer of the Borrower describing
such ERISA Event, the period of time such ERISA Event has existed and been
continuing and the action, if any, that the Borrower, such other applicable Loan
Party or such ERISA Affiliate has taken and/or proposes to take with respect
thereto, together with materials or information filed or to be filed with any
Governmental Authority or any trustee for any Plan as a result of such ERISA
Event; (ii) on the date on which any records, documents or other information
must be furnished to the PBGC with respect to any Plan pursuant to Section 4010
of ERISA, a copy of such records, documents and information; (iii) promptly and
in any event within two Business Days after receipt thereof by any of the Loan
Parties or any of the ERISA Affiliates, copies of each notice from the PBGC
stating its intention to terminate any Plan or to have a trustee appointed to
administer any Plan; (iv) promptly and in any event within 30 days after the
filing thereof with the Internal Revenue Service, a copy of Schedule B
(Actuarial Information) to the annual report (form 5500) with respect to each of
the Plans; and (v) promptly and in any event within five Business Days after
receipt thereof by any of the Loan Parties or any of the ERISA Affiliates from
the sponsor of a Multiemployer Plan, copies of each notice concerning (A) the
imposition of Withdrawal Liability by any such Multiemployer Plan, (B) the
reorganization or termination, within the meaning of Title IV of ERISA, of any
such Multiemployer Plan or (C) the amount of liability incurred, or that is
reasonably expected to be incurred, by such Loan Party or any such ERISA
Affiliate in connection with any event described in subclause (v)(A) or (v)(B)
of this Section 5.03(k).

                  (i)      Environmental Conditions. Promptly and in any event
within five Business Days after a Responsible Officer of the Borrower or any of
its Subsidiaries becomes aware of the assertion or occurrence thereof:

                           (i)      notice of any condition or occurrence on or
         arising from any property owned or operated by the Borrower or any of
         its Subsidiaries that resulted or is alleged by any Governmental
         Authority to have resulted in noncompliance in any material respect by
         the Borrower or such Subsidiary with any applicable Environmental Law
         or Environmental Permit;

                           (ii)     any condition or occurrence on any property
         owned or operated by the Borrower or any of its Subsidiaries that is
         reasonably expected to cause such property to be subject to any
         restrictions on the ownership, occupancy, use or transferability by the
         Borrower or such Subsidiary of such property under any Environmental
         Law which, either individually or in the aggregate, is reasonably
         expected to have a Material Adverse Effect; and

                           (iii)    the taking of any removal or remedial action
         in response to the actual or alleged presence of any Hazardous Material
         on any property owned or operated by the Borrower

                                       82
<PAGE>   87

         or any of its Subsidiaries as required by any Environmental Law, any
         Environmental Permit or any Governmental Authority.

         All such notices shall describe in reasonable detail the nature of the
         condition, occurrence, removal or remedial action described therein
         and, in the case of each such condition or occurrence, the action that
         the Borrower or such Subsidiary has taken and/or proposes to take with
         respect thereto.

                  (j)      Insurance. Within 30 days of a request of the
Administrative Agent, a report summarizing the insurance coverage in effect for
the Borrower and each of its Subsidiaries, specifying therein the type, carrier,
amount, deductibles and co-insurance requirements and expiration dates thereof
and containing such additional information as any of the Lender Parties, through
the Administrative Agent, may reasonably request.

                  (k)      Other Information. Such other information respecting
the business, condition (financial or otherwise), operations, liabilities
(actual or contingent), performance, properties or prospects of the Borrower or
any of its Subsidiaries as any of the Lender Parties, through the Administrative
Agent, may from time to time reasonably request.

                  SECTION 5.04. Financial Covenants. So long as any of the
Advances or any of the other Obligations of any Loan Party under or in respect
of any of the Loan Documents shall remain unpaid, any of the Letters of Credit
shall remain outstanding or any of the Lender Parties shall have any Commitment
hereunder, the Borrower will:

                  (a)      Leverage  Ratio.  Maintain a Leverage Ratio at all
times  during  each period set forth below of not more than the amount set forth
opposite such period set forth below:

<TABLE>
<CAPTION>
                         PERIOD                              RATIO
                         ------                              -----
                  <S>                                        <C>
                  March 15, 2001 through                     4.50:1
                  March 31, 2002

                  April 1, 2002 through                      4.25:1
                  December 31, 2002

                  January 1, 2003 through                    4.00:1
                  December 31, 2003

                  January 1, 2004 through                    3.50:1
                  December 31, 2004

                  January 1, 2005 and                        3.00:1
                  thereafter
</TABLE>

                  (b)      Fixed Charge Coverage Ratio. Maintain a Fixed Charge
Coverage Ratio as of the last day of each Measurement Period set forth below of
not less than the amount set forth opposite such Measurement Period set forth
below:

<TABLE>
<CAPTION>
                      MEASUREMENT PERIOD
                          ENDING IN                          RATIO
                      ------------------                     -----
                  <S>                                        <C>
                  March 31, 2001                             2.00:1
                  June 30, 2001                              2.00:1
                  September 30, 2001                         2.00:1
</TABLE>

                                       83
<PAGE>   88

<TABLE>
<CAPTION>
                      MEASUREMENT PERIOD
                          ENDING IN                          RATIO
                      ------------------                     -----
                  <S>                                        <C>
                  December 31, 2001                          2.00:1
                  March 31, 2002                             2.00:1
                  June 30, 2002                              2.25:1
                  September 30, 2002                         2.25:1
                  December 31, 2002                          2.50:1
                  March 31, 2003                             2.50:1
                  June 30, 2003                              2.50:1
                  September 30, 2003                         2.50:1
                  December 31, 2003                          2.50:1
                  March 31, 2004                             2.75:1
                  June 30, 2004                              2.75:1
                  September 30, 2004                         2.75:1
                  December 31, 2004                          2.75:1
                  March 31, 2005 and thereafter              3.00:1
</TABLE>

                  (c)      Interest Coverage Ratio. Maintain an Interest
Coverage Ratio as of the last day of each Measurement Period set forth below of
not less than the amount set forth opposite such Measurement Period set forth
below:

<TABLE>
<CAPTION>
                      MEASUREMENT PERIOD
                          ENDING IN                          RATIO
                      ------------------                     -----
                  <S>                                        <C>
                  March 31, 2001                             2.00:1
                  June 30, 2001                              2.00:1
                  September 30, 2001                         2.00:1
                  December 31, 2001                          2.00:1
                  March 31, 2002                             2.00:1
                  June 30, 2002                              2.25:1
                  September 30, 2002                         2.25:1
                  December 31, 2002                          2.50:1
                  March 31, 2003                             2.50:1
                  June 30, 2003                              2.50:1
                  September 30, 2003                         2.50:1
                  December 31, 2003                          2.50:1
                  March 31, 2004                             2.75:1
                  June 30, 2004                              2.75:1
                  September 30, 2004                         2.75:1
                  December 31, 2004                          2.75:1
                  March 31, 2005 and thereafter              3.00:1
</TABLE>

                                   ARTICLE VI

                                EVENTS OF DEFAULT

                  SECTION 6.01. Events of Default. If any of the following
events ("EVENTS OF DEFAULT") shall occur and be continuing:

                  (a)      the Borrower shall fail to pay any principal of or
any interest on any Advance when the same shall become due and payable, or any
of the Loan Parties shall fail to make any other

                                       84
<PAGE>   89

payment under or in respect of any of the Loan Documents required to have been
made by it, when the same shall become due and payable, in each case whether by
scheduled maturity or at a date fixed for prepayment or by acceleration, demand
or otherwise; or

                  (b)      any representation or warranty made by any of the
Loan Parties (or any of their respective officers) under or in connection with
any of the Loan Documents (including, without limitation, in any certificate,
report, statement or other writing at any time furnished (or deemed to have been
furnished) to the Administrative Agent or any of the Lender Parties by or on
behalf of any of the Loan Parties) shall prove to have been incorrect in any
material respect on the date as of which it was made or deemed made; or

                  (c)      (i) the Borrower shall fail to perform or observe any
term, covenant or agreement contained in Section 2.16, 5.01(b), 5.01(e) or
5.01(i) or Section 5.02, 5.03 or 5.04 or (ii) any of the other Loan Parties
shall fail to perform or observe any term, covenant or agreement contained in
Section 4 or 7 of the Subsidiaries Guarantee on its part to be performed or
observed; or

                  (d)      any of the Loan Parties shall fail to perform or
observe any term, covenant or agreement contained in any of the Loan Documents
on its part to be performed or observed that is not otherwise referred to in
Section 6.01(c) if such failure shall remain unremedied for at least 30
consecutive days after the earlier of the date on which (i) a Responsible
Officer of the Borrower or any of its Subsidiaries first becomes aware of such
failure and (ii) written notice thereof shall have been given to the Borrower by
the Administrative Agent or any of the Lender Parties; or

                  (e)      (i) the Borrower or any of its Subsidiaries shall
fail to pay any principal of, premium or interest on, or any other amount
payable in respect of, one or more items of Indebtedness of the Borrower and its
Subsidiaries (excluding Indebtedness outstanding hereunder) that is outstanding
(or under which one or more Persons have a commitment to extend credit) in an
aggregate principal amount (or, in the case of any Hedge Agreement, having an
Agreement Value) of at least $10,000,000 at the time of such failure, when the
same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreements or
instruments relating to all such Indebtedness; or (ii) any other event shall
occur or condition shall exist under the agreements or instruments relating to
one or more items of Indebtedness of the Borrower and its Subsidiaries
(excluding Indebtedness outstanding hereunder) that is outstanding (or under
which one or more Persons have a commitment to extend credit) in an aggregate
principal amount (or, in the case of any Hedge Agreement, having an Agreement
Value) of at least $10,000,000 at the time of such other event or condition, and
shall continue after the applicable grace period, if any, specified in all such
agreements or instruments, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such Indebtedness
or otherwise to cause, or to permit the holder thereof to cause, such
Indebtedness to mature; or (iii) one or more items of Indebtedness of the
Borrower and its Subsidiaries (excluding Indebtedness outstanding hereunder)
that is outstanding (or under which one or more Persons have a commitment to
extend credit) in an aggregate principal amount (or, in the case of any Hedge
Agreement, having an Agreement Value) of at least $10,000,000 shall be declared
to be due and payable or required to be prepaid or redeemed (other than by a
regularly scheduled or required prepayment or redemption), purchased or
defeased, or an offer to prepay, redeem, purchase or defease such Indebtedness
shall be required to be made, in each case prior to the stated maturity thereof;
or

                  (f)      the Borrower or any of its Subsidiaries shall
generally not pay its debts as such debts become due, or shall admit in writing
its inability to pay its debts generally, or shall make a general assignment for
the benefit of creditors; or any proceeding shall be instituted by or against
the Borrower or any of its Subsidiaries seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, administrator or other similar official for it or for any substantial
part of its property and assets and, in the case of any such proceeding
instituted against it (but

                                       85
<PAGE>   90

not instituted by it) that is being diligently contested by it in good faith,
either such proceeding shall remain undismissed or unstayed for a period of at
least 60 consecutive days or any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or other similar official for, it
or any substantial part of its property and assets) shall occur; or any event or
action analogous to or having a substantially similar effect to any of the
events or actions set forth above in this Section 6.01(f) (other than a solvent
reorganization) shall occur under the Requirements of Law of any jurisdiction
applicable to the Borrower or any of its Subsidiaries; or the Borrower or any of
its Subsidiaries shall take any corporate, partnership, limited liability
company or other similar action to authorize any of the actions set forth above
in this Section 6.01(f); provided that any action or circumstance permitted
under Section 5.01(h) shall not be deemed to result in an Event of Default under
this Section 6.01(f); or

                  (g)      one or more judgments or orders for the payment of
money in excess of $10,000,000 in the aggregate shall be rendered against one or
more of the Borrower and its Subsidiaries and shall remain unsatisfied and
either (i) enforcement proceedings shall have been commenced by any creditor
upon any such judgment or order or (ii) there shall be any period of at least
ten consecutive Business Days during which a stay of enforcement of any such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect; provided, however, that any such judgment or order shall not give rise
to an Event of Default under this Section 6.01(g) if and for so long as (A) the
amount of such judgment or order which remains unsatisfied is covered by a valid
and binding policy of insurance between the defendant and the insurer covering
full payment thereof and (B) such insurer has been notified, and has not
disputed the claim made for payment, of the amount of such judgment or order; or

                  (h)      one or more nonmonetary judgments or orders
(including, without limitation, writs or warrants of attachment, garnishment,
execution, distraint or similar process) shall be rendered against the Borrower
or any of its Subsidiaries that, either individually or in the aggregate, is
reasonably expected to have a Material Adverse Effect and there shall be any
period of at least ten consecutive Business Days during which a stay of
enforcement of any such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or

                  (j)      any provision of any of the Loan Documents after
delivery thereof pursuant to Sections 3.01, 5.01(j) or 5.01(k) shall for any
reason (other than pursuant to the terms thereof) cease to be valid and binding
on or enforceable against any of the Loan Parties intended to be a party to it,
or any such Loan Party shall so state in writing;

                  (k)      any Collateral Document or financing statement after
delivery thereof pursuant to Sections 3.01, 5.01(j) or 5.01(k) shall for any
reason (other than pursuant to the terms thereof) cease to create a valid and
perfected Lien on the Collateral purported to be covered thereby subject only to
Liens permitted thereby; or

                  (l)      any of the following events or conditions shall have
occurred and such event or condition, when aggregated with any and all other
such events or conditions set forth in this subsection (k), has resulted or is
reasonably expected to result in liabilities of the Loan Parties and/or the
ERISA Affiliates in an aggregate amount exceeding $10,000,000 at any time:

                           (i)      any ERISA Event shall have occurred with
         respect to a Plan; or

                           (ii)     any of the Loan Parties or any of the ERISA
         Affiliates shall have been notified by the sponsor of a Multiemployer
         Plan that it has incurred Withdrawal Liability to such Multiemployer
         Plan; or

                           (iii)    any of the Loan Parties or any of the ERISA
         Affiliates shall have been notified by the sponsor of a Multiemployer
         Plan that such Multiemployer Plan is in reorganization, is insolvent or
         is being terminated, within the meaning of Title IV of ERISA, and, as a
         result of such reorganization, insolvency or termination, the aggregate
         annual contributions

                                       86
<PAGE>   91

         of the Loan Parties and the ERISA Affiliates to all of the
         Multiemployer Plans that are in reorganization, are insolvent or being
         terminated at such time have been or will be increased over the amounts
         contributed to such Multiemployer Plans for the plan years of such
         Multiemployer Plans immediately preceding the plan year in which such
         reorganization, insolvency or termination occurs; or

                           (iv)     any "accumulated funding deficiency" (as
         defined in Section 302 of ERISA and Section 412 of the Internal Revenue
         Code), whether or not waived, shall exist with respect to one or more
         of the Plans, or any Lien shall exist on the property and assets of any
         of the Loan Parties or any of the ERISA Affiliates in favor of the PBGC
         or any Plan; or

                  (m)      the Borrower or any of its Subsidiaries shall suspend
or discontinue all or any part of its businesses and operations other than in
the ordinary course of business (determined on the basis of past practices) and
such suspension or discontinuance, either individually or in the aggregate, is
reasonably expected to have a Material Adverse Effect; or

                  (n)      a Change of Control shall occur; or

                  (o)      an "Event of Default" (as defined in the Senior Notes
Indenture) shall have occurred and be continuing under the Senior Notes
Indenture; or

                  (p)      a "Termination Event" (as defined in the Caremark
Receivables Securitization Documents (or any similar event or circumstance under
any instrument, agreement or other document evidencing or otherwise setting
forth the terms and conditions of any other Permitted Receivables
Securitization)) shall have occurred and be continuing under the Caremark
Receivables Securitization Documents (or any such similar instruments,
agreements or other documents);

then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrower,
declare the Commitments of each of the Lender Parties and the obligation of each
of the Lender Parties to make Advances (other than Letter of Credit Advances by
the Issuing Bank or any of the Revolving Credit Lenders pursuant to Section
2.03(c)(i) and Swing Line Advances by any of the Revolving Credit Lenders
pursuant to Section 2.02(b)(ii)) and of the Issuing Bank to issue Letters of
Credit to be terminated, whereupon the same shall forthwith terminate, and (ii)
shall at the request, or may with the consent, of the Required Lenders, (A) by
notice to the Borrower, declare the Notes, all interest thereon and all other
amounts payable under or in respect of this Agreement and the other Loan
Documents to be forthwith due and payable, whereupon the Notes, all such
interest and all such other amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrower and (B) by notice to each
party required under the terms of any agreement in support of which a Letter of
Credit is issued, request that all of the Obligations under such agreement be
declared to be due and payable; provided, however, that in the event of an
actual or deemed entry of an order for relief with respect to any Loan Party
under the United States Federal Bankruptcy Code or a similar order or action
under any other Requirements of Law covering the protection of creditors' rights
or the relief of debtors applicable to any Loan Party, (1) the Commitments of
each of the Lender Parties and the obligation of each of the Lender Parties to
make Advances (other than Letter of Credit Advances by the Issuing Bank or any
of the Revolving Credit Lenders pursuant to Section 2.03(c)(i) and Swing Line
Advances by any of the Revolving Credit Lenders pursuant to Section 2.02(b)(ii))
and of the Issuing Bank to issue Letters of Credit shall automatically be
terminated and (2) the Notes, all such interest and all such amounts shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
the Borrower.

                  SECTION 6.02. Actions in Respect of the Letters of Credit upon
Default. If any Event of Default shall have occurred and be continuing, the
Administrative Agent may, or shall at the request of the Required Lenders,
irrespective of whether it is taking any of the actions described in Section
6.01 or otherwise, make demand upon the Borrower to, and forthwith upon such
demand the Borrower will, pay

                                       87
<PAGE>   92

to the Collateral Trustee in same day funds at the Collateral Trustee's office
designated in such demand, for deposit in the L/C Cash Collateral Account, an
amount equal to the aggregate Available Amount of all Letters of Credit then
outstanding; provided, however, that in the event of an actual or deemed entry
of an order for relief with respect to any Loan Party under the United States
Federal Bankruptcy Code or a similar order or action under any other
Requirements of Law covering the protection of creditors' rights or the relief
of debtors applicable to any Loan Party, the Borrower, without requirement of
demand by the Administrative Agent or any other Person, will forthwith pay to
the Collateral Trustee in same day funds at the Collateral Trustee's office for
deposit in the L/C Cash Collateral Account an amount equal to such aggregate
Available Amount. If at any time the Administrative Agent or, as the case may
be, the Collateral Trustee, determines that any funds held in the L/C Cash
Collateral Account are subject to any right or claim of any Person other than
the Secured Parties or that the total amount of such funds is less than the
aggregate Available Amount of all Letters of Credit, the Borrower will,
forthwith upon demand by the Administrative Agent, pay to the Collateral
Trustee, as additional funds to be deposited and held in the L/C Cash Collateral
Account, an amount equal to the excess of (a) such aggregate Available Amount
over (b) the total amount of funds, if any, then held in the L/C Cash Collateral
Account that the Administrative Agent determines to be free and clear of any
such right and claim. Upon the drawing of any Letter of Credit for which funds
are on deposit in the L/C Cash Collateral Account, such funds shall be applied
to reimburse the Issuing Bank or Revolving Credit Lenders, as applicable, in the
manner provided for in the Security Agreement and to the extent permitted by
applicable law.

                                   ARTICLE VII

                                   THE AGENTS

                  SECTION 7.01.  Authorization and Action.

                  (a)      Each of the Lender Parties (in its respective
capacities as a Lender, a Swing Line Bank and the Issuing Bank, in each case if
applicable) hereby appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such powers and discretion under
this Agreement and the other Loan Documents as are delegated to the
Administrative Agent by the terms hereof and thereof, together with such powers
and discretion as are reasonably incidental thereto. As to any matters not
expressly provided for under the Loan Documents (including, without limitation,
enforcement or collection of the Notes), the Administrative Agent shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding upon all of the Lender Parties and all holders of
Notes; provided, however, that the Administrative Agent shall not be required to
take any action (i) that exposes the Administrative Agent to personal liability
or that is contrary to this Agreement or to applicable Requirements of Law or
(ii) as to which the Administrative Agent has not received adequate security or
indemnity (whether pursuant to Section 7.05 or otherwise). If the security or
indemnity furnished to the Administrative Agent for any purpose under or in
respect of the Loan Documents shall, in the good faith opinion of the
Administrative Agent, be insufficient or become impaired, then the
Administrative Agent may require additional security or indemnity and cease, or
not commence, to follow the directions or take the actions indemnified against
until such additional security or indemnity is furnished. The Administrative
Agent agrees to give to each of the Lender Parties prompt notice of each notice
given to it by the Borrower pursuant to the terms of this Agreement.

                  (b)      The Administrative Agent may from time to time in its
discretion appoint any of the Lender Parties or any of the Affiliates of a
Lender Party to act as its co-agent or subagent or attorney-in-fact for purposes
of executing any of the duties and responsibilities of the Administrative Agent
under or in respect of this Agreement or any of the other Loan Documents. In
such capacity, such co-agents, subagents and attorneys-in-fact shall be entitled
to the benefits of all provisions of this Article VII (including, without
limitation, Section 7.05, as though such co-agents or subagents or
attorneys-in-fact were the "Administrative Agent" under the Loan Documents) as
if set forth in full herein with respect

                                       88
<PAGE>   93

thereto. The Administrative Agent shall not be responsible for any gross
negligence or willful misconduct of any of the co-agents or subagents or
attorneys-in-fact selected by it with reasonable care.

                  (c)      None of the Syndication Agent, the Documentation
Agent and the Lead Arranger shall have any powers or discretion under this
Agreement or any of the other Loan Documents, and the Borrower, the
Administrative Agent and each of the Lender Parties hereby acknowledge that none
of the Syndication Agent, the Documentation Agent or the Lead Arranger has any
liability under this Agreement or under any of the other Loan Documents.

                  (d)      The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default or Event of Default unless
the Administrative Agent has received written notice from a Lender Party or the
Borrower specifying such Default or Event of Default and stating that such
notice is a "Notice of Default". In the event that the Administrative Agent
receives such a notice of the occurrence of a Default or Event of Default, the
Administrative Agent shall give prompt notice thereof to the Lender Parties. The
Administrative Agent shall (subject to Section 7.02) take such action with
respect to such Default or Event of Default as shall reasonably be directed by
the Required Lenders; provided that, unless and until the Administrative Agent
shall have received such directions, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interest of the Lender Parties including, without limitation, serving
notice of the occurrence of a Default or Event of Default on the Collateral
Trustee.

                  SECTION 7.02. Administrative Agent's Reliance, Etc. Neither
the Administrative Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it or them under
or in connection with the Loan Documents, except for its or their own gross
negligence or willful misconduct as determined in a final, nonappealable
judgment by a court of competent jurisdiction. Without limiting the generality
of the immediately preceding sentence, the Administrative Agent:

                  (a)      may treat the payee of any Note as the holder thereof
until the Administrative Agent receives and accepts an Assignment and Acceptance
entered into by the Lender that is the payee of such Note, as assignor, and an
Eligible Assignee, as assignee, as provided in Section 8.07;

                  (b)      may consult with legal counsel (including counsel for
any of the Loan Parties), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice or statements of such
counsel, accountants or experts;

                  (c)      makes no representation or warranty to any of the
Secured Parties and shall not be responsible to any of the Secured Parties for
any statements, representations or warranties (whether written or oral) made in
or in connection with the Loan Documents;

                  (d)      shall not have any duty to ascertain or to inquire as
to the performance or observance of any of the terms, covenants or conditions of
any of the Loan Documents on the part of any of the Loan Parties or to inspect
the property and assets (including the books and records) of any of the Loan
Parties;

                  (e)      shall not be responsible to any Person for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of any of the Loan Documents or any other instrument or document furnished
pursuant thereto; and

                                       89
<PAGE>   94

                  (f)      shall incur no liability under or in respect of any
of the Loan Documents by acting upon any notice, consent, order, certificate or
other instrument, writing or communication (which may be by telephone, telecopy
or E-mail) believed by it to be genuine and signed or sent or made by or on
behalf of the proper party or parties.

                  SECTION 7.03.  BofA, BAS and Affiliates. With respect to its
Commitments, the Advances made by it and the Note or Notes issued to it, BofA
(and any successor acting as the Administrative Agent) in its capacity as a
Lender Party hereunder shall have the same rights and powers under the Loan
Documents as any other Lender Party and may exercise the same as though it were
not acting as the Administrative Agent; and the terms "Lender", "Lenders",
"Lender Party", "Lender Parties", "Finance Party," "Finance Parties," "Secured
Party" or "Secured Parties" shall, unless otherwise expressly indicated, include
BofA in its individual capacity. BofA (and any successor acting as the
Administrative Agent), BAS and their respective Affiliates may (without having
to account therefor to any Lender Party) accept deposits from, lend money to,
make investments in, provide services to, and generally engage in any kind of
lending, trust, or other business with any Loan Party or any of its or their
respective Subsidiaries or Affiliates as if it were not acting as an Agent, and
BofA (and any successor acting as the Administrative Agent), BAS and their
respective affiliates may accept fees and other consideration from any Loan
Party or any of its or their respective Subsidiaries or Affiliates, or any
Person that may do business with or own securities of any Loan Party or any such
Subsidiary or Affiliate, for services in connection with this Agreement or
otherwise without having to account for the same to the Lender Parties.

                  SECTION 7.04.  Lender Credit Decision. Each of the Lender
Parties hereby acknowledges that it has, independently and without reliance upon
any of the Agents or any of the other Lender Parties and based on the financial
statements referred to in Section 4.01 and such other documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each of the Lender Parties also hereby acknowledges that it
will, independently and without reliance upon any of the Agents or any of the
other Lender Parties and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement. Except for notices, reports,
and other documents and information expressly required to be furnished to the
Lender Parties by the Administrative Agent hereunder, the Administrative Agent
shall not have any duty or responsibility to provide any Lender Party with any
credit or other information concerning the affairs, financial condition, or
business of any Loan Party or any of its Subsidiaries or Affiliates that may
come into the possession of the Administrative Agent or any of its Affiliates.

                  SECTION 7.05.  Indemnification.

                  (a)      Each of the Lenders hereby severally agrees to
indemnify the Administrative Agent (to the extent not promptly reimbursed by the
Borrower) from and against such Lender's ratable share (determined as provided
below in this subsection (a)) of any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever that may be imposed on, incurred by, or
asserted against the Administrative Agent in any way relating to or arising out
of the Loan Documents or any action taken or omitted by the Administrative Agent
under the Loan Documents; provided, however, that none of the Lenders shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Administrative Agent's gross negligence or willful misconduct as
determined in a final, nonappealable judgment by a court of competent
jurisdiction. In the case of any claim, investigation, litigation or proceeding
to which the indemnity in this subsection (a) applies, such indemnity shall be
effective whether or not such claim, investigation, litigation or proceeding is
brought by the Administrative Agent, any of the Lender Parties or a third party.
Without limiting any of the provisions of the immediately preceding sentence,
each of the Lenders hereby agrees to reimburse the Administrative Agent promptly
upon demand for its ratable share of any costs and expenses (including, without
limitation, reasonable fees and expenses of counsel) incurred by the
Administrative Agent in connection with the preparation, execution, delivery,
administration,

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modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement or any of the other Loan Documents, to
the extent that the Administrative Agent is not promptly reimbursed for such
costs and expenses by the Borrower. For purposes of this subsection (a), the
Lenders' respective ratable shares of any amount shall be determined, at any
time, according to the sum of (i) the aggregate principal amount of all Advances
owing to the respective Lenders and outstanding at such time, (ii) the
respective Lender's Pro Rata Shares of the aggregate Available Amount of all
Letters of Credit outstanding at such time, (iii) the aggregate unused portions
of the Term Loan Commitments of the respective Lenders at such time (if any) and
(iv) the aggregate Unused Revolving Credit Commitments of the respective Lenders
at such time; provided that the aggregate principal amount of all Swing Line
Advances owing to the Swing Line Bank and all Letter of Credit Advances owing to
the Issuing Bank shall be considered to be owed to the Revolving Credit Lenders
ratably in accordance with their respective Revolving Credit Commitments. The
failure of any of the Lenders to reimburse the Administrative Agent promptly
upon demand for its ratable share of any amount required to be paid by the
Lenders to the Administrative Agent as provided in this subsection (a) shall not
relieve any of the other Lenders of its obligation hereunder to reimburse the
Administrative Agent for its ratable share of such amount, but none of the
Lenders shall be responsible for the failure of any of the other Lenders to
reimburse the Administrative Agent for such other Lender's ratable share of such
amount.

                  (b)      Each of the Revolving Credit Lenders hereby severally
agrees to indemnify the Issuing Bank (to the extent not promptly reimbursed by
the Borrower) from and against such Revolving Credit Lender's ratable share
(based upon their respective Revolving Credit Commitments) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against the Issuing Bank in any way
relating to or arising out of the Loan Documents or any action taken or omitted
by the Issuing Bank under the Loan Documents; provided, however, that none of
the Revolving Credit Lenders shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Issuing Bank's gross
negligence or willful misconduct as determined in a final, nonappealable
judgment by a court of competent jurisdiction. In the case of any claim,
investigation, litigation or proceeding to which the indemnity in this
subsection (b) applies, such indemnity shall be effective whether or not such
claim, investigation, litigation or proceeding is brought by the Issuing Bank,
any of the Lender Parties or a third party. Without limiting any of the
provisions of the immediately preceding sentence, each of the Revolving Credit
Lenders hereby agrees to reimburse the Issuing Bank promptly upon demand for its
ratable share (based upon their respective Revolving Credit Commitments) of any
costs and expenses (including, without limitation, fees and expenses of counsel)
incurred by the Issuing Bank in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement or any of the other
Loan Documents, to the extent that the Issuing Bank is not promptly reimbursed
for such costs and expenses by the Borrower. The failure of any of the Revolving
Credit Lenders to reimburse the Issuing Bank promptly upon demand for its
ratable share of any amount required to be paid by the Revolving Credit Lenders
to the Issuing Bank as provided in this subsection (b) shall not relieve any of
the other Revolving Credit Lenders of its obligation hereunder to reimburse the
Issuing Bank for its ratable share of such amount, but none of the Revolving
Credit Lenders shall be responsible for the failure of any of the other
Revolving Credit Lenders to reimburse the Issuing Bank for such other Revolving
Credit Lender's ratable share of such amount.

                  (c)      Without prejudice to the survival of any other
agreement of any of the Lenders hereunder, the agreement and obligations of each
of the Lenders contained in this Section 7.05 shall survive the payment in full
of all principal, interest and other amounts payable under (and specified in)
this Agreement and the other Loan Documents.

                  SECTION 7.06.  Successor Administrative Agent. The
Administrative Agent may resign as to any or all of the Facilities at any time
by giving written notice thereof to the Lender Parties and the Borrower and may
be removed as to all of the Facilities at any time with or without cause by the
Required

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Lenders. Upon any such resignation or removal, the Required Lenders shall have
the right to appoint a successor Administrative Agent as to such of the
Facilities as to which the Administrative Agent has resigned or been removed;
provided that, so long as no Default shall have occurred and be continuing, the
Borrower shall have the right to consent to any such successor Administrative
Agent, such consent not to be unreasonably withheld and to be deemed to have
been given if the Borrower does not object to the proposed successor
Administrative Agent within five Business Days after receiving notice thereof.
If no successor Administrative Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment, within 30 days after
the retiring Administrative Agent's giving of notice of resignation or the
Required Lenders' removal of the retiring Administrative Agent, then the
retiring Administrative Agent may, on behalf of the Lenders and the other
Finance Parties, appoint a successor Administrative Agent, which shall be a
commercial bank organized under the laws of the United States of America or of
any state thereof and having a combined capital and surplus of at least
$500,000,000. If within 45 days after written notice is given of the retiring
Administrative Agent's resignation or removal as to any or all of the Facilities
under this Section 7.06 no successor Administrative Agent shall have been
appointed and shall have accepted such appointment, then on such 45th day (a)
the retiring Administrative Agent's resignation or removal shall become
effective as to such of the Facilities as to which the Administrative Agent has
resigned or been removed, (b) the retiring Administrative Agent shall thereupon
be discharged from its duties and obligations as to such Facilities under the
Loan Documents and (c) the Required Lenders shall thereafter perform all duties
and obligations of the retiring Administrative Agent as to such Facilities under
the Loan Documents until such time, if any, as the Required Lenders appoint a
successor Administrative Agent as provided above in this Section 7.06. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent as to all of the Facilities, such successor Administrative
Agent shall succeed to and become vested with all the rights, powers,
discretion, privileges and duties of the retiring Administrative Agent, and the
retiring Administrative Agent shall be discharged from its duties and
obligations under the Loan Documents. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent as to less
than all of the Facilities, such successor Administrative Agent shall succeed to
and become vested with all the rights, powers, discretion, privileges and duties
of the retiring Administrative Agent as to such Facilities, other than with
respect to funds transfers and other similar aspects of the administration of
Borrowings under such Facilities, issuances of Letters of Credit
(notwithstanding any resignation as Administrative Agent with respect to the
Letter of Credit Facility) and payments by the Borrower in respect of such
Facilities, and the retiring Administrative Agent shall be discharged from its
duties and obligations under the Loan Documents as to such Facilities, other
than as aforesaid. After any retiring Administrative Agent's resignation or
removal hereunder as Administrative Agent as to all of the Facilities shall
become effective, the provisions of this Article VII shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was Administrative
Agent as to any of the Facilities under this Agreement.

                  SECTION 7.07.  Release of Collateral. Upon the payment of all
Notes and all other amounts payable under the Loan Documents, the termination of
all Letters of Credit and the termination of all commitments of the Lender
Parties hereunder, the Lender Parties hereby agree that all Collateral is
released from the security interest granted under the respective Collateral
Documents, and upon the sale, lease, transfer or other disposition of any item
of Collateral of any Loan Party in accordance with the terms of the Loan
Documents, the Lender Parties hereby agree that such item of Collateral is
released from the security interest granted under the respective Collateral
Documents. In connection therewith, the Lender Parties hereby irrevocably
authorize the Administrative Agent from time to time to instruct the Collateral
Trustee to release any such Collateral or to consent to any such release
pursuant to the Trust Agreement, as applicable. The Administrative Agent will,
at the Borrower's expense, execute and deliver to the respective Loan Party such
documents as such Loan Party may reasonably request to evidence the release of
such item of Collateral from the security interest granted under the Collateral
Documents.

                  SECTION 7.08.  Release of Guarantor. Upon the sale of
outstanding shares of capital stock and other equity, ownership and profit
interests in any Guarantor in a transaction which is permitted under Section
5.02(d) where such Guarantor ceases to be a Subsidiary, then upon request by the
Borrower, the Administrative Agent, on behalf of each Lender Party, shall
confirm in writing that the

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<PAGE>   97

liability of such Guarantor under the Subsidiaries Guaranty is released and
discharged effective when such transaction is consummated and all requirements
hereunder in connection therewith are satisfied, including with respect to the
application of the proceeds of such sale. Such confirmation from the
Administrative Agent (a) shall establish conclusively that the liability of such
Guarantor under the Subsidiaries Guarantee is released and discharged and (b)
may be relied on, without further inquiry, by the purchaser in such transaction
and each of its transferees. Each Lender Party hereby irrevocably authorizes the
Administrative Agent to release any Guarantor from time to time to the extent
provided for herein and to execute any document reasonably required in
connection therewith.

                                  ARTICLE VIII

                                  MISCELLANEOUS

                  SECTION 8.01.  Amendments, Etc. No amendment or waiver of any
provision of this Agreement, the Notes, the Trust Agreement or any of the other
Loan Documents (except to the extent otherwise expressly provided for therein),
nor consent to any departure by any of the Loan Parties therefrom, shall in any
event be effective unless the same shall be in writing and signed (or, in the
case of the Collateral Documents, consented to) by the Required Lenders, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that:

                  (a)      no amendment, waiver or consent shall, unless in
writing and signed by all of the Lenders (other than any of the Lenders that is,
at such time, a Defaulting Lender), do any of the following at any time:

                           (i)      waive any of the conditions specified in
         Section 3.01 or, in the case of the Initial Extensions of Credit,
         Section 3.02;

                           (ii)     change the number of Lenders or the
         percentage of the Commitments or the aggregate outstanding principal
         amount of Advances or the aggregate Available Amount of outstanding
         Letters of Credit that, in each case, shall be required for the Lender
         Parties or any of them to take any action hereunder;

                           (iii)    except to the extent contemplated herein,
         release all or substantially all of the Subsidiaries that are a party
         to the Subsidiaries Guarantee from their Obligations thereunder;

                           (iv)     release all or substantially all of the
         Collateral in any transaction or series of transactions;

                           (v)      amend Section 2.14 or this Section 8.01; or

                           (vi)     permit the Borrower to select an Interest
         Period having a duration longer than six months.

                  (b)      no amendment, waiver or consent shall, unless in
writing and signed by the Required Lenders and each of the Lenders (other than
any of the Lenders that is, at such time, a Defaulting Lender) that has a
Commitment under the Term Loan Facility or the Revolving Credit Facility or is
owed any amounts under or in respect thereof, if such Lender is directly and
adversely affected by such amendment, waiver or consent:

                           (i)      increase the Commitments of such Lender or
         subject such Lender to any additional Obligations;

                           (ii)     reduce the principal of, or interest on, the
         Notes held by such Lender or any fees or other amounts payable
         hereunder to such Lender, other than the amount of any interest payable
         under Section 2.07(b).

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<PAGE>   98

                           (iii)    postpone any date scheduled for any payment
         of principal pursuant to Section 2.04 of, or interest pursuant to
         Section 2.07(a) on, the Notes held by such Lender or any fees or other
         amounts payable under Section 2.08 to such Lender; or

                           (iv)     change the order of  application of any
         prepayment set forth in Section 2.06 in any manner that materially
         affects such Lender; and

provided further that no amendment, waiver or consent shall, unless in writing
and signed by the Swing Line Bank or the Issuing Bank, as the case may be, in
addition to the Lenders required above to take such action, affect the rights or
duties of the Swing Line Bank or the Issuing Bank, respectively, under this
Agreement or any of the other Loan Documents; and provided further that no
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above to take such
action, affect the rights or duties of the Administrative Agent under this
Agreement or any of the other Loan Documents. Notwithstanding any of the
foregoing provisions of this Section 8.01, none of the defined terms set forth
in Section 1.01 shall be amended, supplemented or otherwise modified hereafter
in any manner that would change the meaning, purpose or effect of this Section
8.01 or any Section referred to herein unless such amendment, supplement or
modification is agreed to in writing by the number and percentage of Lenders
(and the Issuing Bank, the Swing Line Bank and Administrative Agent, in each
case if applicable) otherwise required to amend such Section under the terms of
this Section 8.01.

                  SECTION 8.02.  Notices, Etc.

                  (a)      All notices and other communications provided for
hereunder shall be in writing and mailed, telecopied or delivered:

                           (i)      if to the Borrower,  at its address at 3000
         Galleria Tower, Suite 1000, Birmingham, Alabama 35244, Telecopier No.:
         (205) 733-9780, Attention: Mr. Peter J. Clemens, IV, with a copy of
         each notice relating to the occurrence and continuance (or potential
         occurrence) of any Default, to the General Counsel of the Borrower at
         the same address (Telecopier No.: (205) 982-7709);

                           (ii)     if to any of the Initial Lenders, the Swing
         Line Bank or the Initial Issuing Bank, at its Base Rate Lending Office
         specified opposite its name on Schedule I hereto;

                           (iii)    if to any of the other Lender Parties, at
         its Base Rate Lending Office specified on Schedule I to the Assignment
         and Acceptance pursuant to which it became a Lender Party; and

                           (iv)     if to the Administrative Agent, at its
         address at Independence Center, 101 North Tryon Street, 15th Floor,
         Charlotte, North Carolina 28255 (Telecopier No. (704) 386-9923),
         Attention: Corporate Credit Services; or

                           (v)      as to the Borrower or the Administrative
         Agent, at such other address as shall be designated by such party in a
         written notice to each of the other parties and, as to each other
         party, or such other address as shall be designated by such party in a
         written notice to each of the Borrower and the Administrative Agent.

All such notices and communications shall, when mailed or telecopied, be
effective when deposited in the mail or transmitted by telecopier, respectively,
addressed as aforesaid, except that notices and communications to the
Administrative Agent pursuant to Article II, III or VII shall not be effective
until received by the Administrative Agent. Delivery by telecopier of an
executed counterpart of a signature page to any amendment or waiver of any
provision of this Agreement or the Notes or of any Exhibit hereto to be executed
and delivered hereunder shall be effective as delivery of an original executed
counterpart thereof.

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<PAGE>   99

                  (b)      If any notice required under this Agreement is
permitted to be made, and is made, by telephone, actions taken or omitted to be
taken in reliance thereon by the Administrative Agent or any of the Lender
Parties shall be binding upon the Borrower and the other Loan Parties
notwithstanding any inconsistency between the notice provided by telephone and
any subsequent writing in confirmation thereof provided to the Administrative
Agent or such Lender Party; provided that any such action taken or omitted to be
taken by the Administrative Agent or such Lender Party shall have been in good
faith and in accordance with the terms of this Agreement.

                  SECTION 8.03.  No Waiver; Remedies. No failure on the part of
any of the Lender Parties or the Administrative Agent to exercise, and no delay
in exercising, any right, power or privilege hereunder or under any Note or any
other Loan Document shall operate as a waiver thereof or consent thereto; nor
shall any single or partial exercise of any such right, power or privilege
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The remedies herein provided are cumulative and not
exclusive of any remedies provided under applicable law.

                  SECTION 8.04.  Indemnification.

                  (a)      The Borrower hereby agrees to pay on demand (i) all
reasonable costs and expenses of the Agents in connection with the preparation,
execution, delivery, administration, modification and amendment of or any
consent or waiver under the Loan Documents and the other documents to be
delivered thereunder (including, without limitation, (A) all due diligence,
collateral review, syndication, transportation, computer, duplication, audit,
appraisal, insurance, consultant, search, filing and recording fees and expenses
and (B) the reasonable fees and expenses of counsel for each Agent with respect
thereto, with respect to advising such Agent as to its rights and
responsibilities, or the perfection, protection or preservation of rights or
interests, under the Loan Documents, with respect to negotiations with any of
the Loan Parties or with other creditors of any of the Loan Parties or any of
their Subsidiaries arising out of any Default or any events or circumstances
that may give rise to a Default and with respect to presenting claims in or
otherwise participating in or monitoring any bankruptcy, insolvency or other
similar proceeding involving creditors' rights generally and any proceeding
ancillary thereto) and (ii) all costs and expenses of the Administrative Agent
and the Lender Parties in connection with the enforcement of the Loan Documents
and the other documents to be delivered thereunder, whether in any action, suit
or litigation, any bankruptcy, insolvency or other similar proceeding affecting
creditors' rights generally (including, without limitation, the reasonable fees
and expenses of counsel for the Administrative Agent and each of the Lender
Parties with respect thereto).

                  (b)      The Borrower hereby agrees to indemnify, defend and
save, and hold harmless each of the Finance Parties and each of their respective
affiliates, officers, directors, trustees, employees, agents and advisors (each
an "INDEMNIFIED PARTY") from and against, and shall pay on demand, any and all
claims, damages, losses, liabilities and expenses (including, without
limitation, reasonable fees and expenses of counsel) that may be incurred by or
asserted or awarded against any Indemnified Party, in each case arising out of
or in connection with or by reason of (including, without limitation, in
connection with any investigation, litigation or proceeding or preparation of a
defense in connection therewith) (i) the Transaction (or any aspect thereof),
the Facilities, the actual or proposed use of the proceeds of the Advances or
the Letters of Credit, the Loan Documents or any of the transactions
contemplated thereby, (ii) any acquisition or proposed acquisition by the
Borrower or any of its Subsidiaries or Affiliates of all or any portion of the
Equity Interests in, or all or substantially all the property and assets of, any
other Person or (iii) the actual or alleged presence of Hazardous Materials on
any property the Borrower or any of its Subsidiaries or any Environmental Action
relating in any way to the Borrower or any of its Subsidiaries, except to the
extent such claim, damage, loss, liability or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party's gross negligence or willful misconduct. In the
case of an investigation, litigation or other proceeding to which the indemnity
in this subsection (b) applies, such indemnity shall be effective whether or not
such investigation, litigation or proceeding is brought by any of the Loan
Parties, its directors, shareholders or creditors or an Indemnified Party or any
Person, whether or not any Indemnified Party is otherwise a party thereto and
whether or not the Transaction or any of the other transactions contemplated
hereby is

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<PAGE>   100

consummated. If and to the extent that the indemnity in this subsection (b) is
unenforceable for any reason, the Borrower hereby agrees to make to each
applicable Indemnified Party the maximum contribution to the payment of the
claims, damages, losses, liabilities and expenses (including, without
limitation, reasonable fees and expenses of counsel) for which the indemnity in
this subsection (b) has been determined to be unenforceable that is permitted
under applicable law. The Borrower also agrees not to assert any claim against
any of the Finance Parties or any of their respective affiliates, officers,
directors, employees, agents and advisors, on any theory of liability, for
special, indirect, consequential or punitive damages arising out of or otherwise
relating to the Transaction (or any aspect thereof), the Facilities, the actual
or proposed use of the proceeds of the Advances or the Letters of Credit, the
Loan Documents or any of the transactions contemplated thereby, except to the
extent, in the case of any such Person, that such claim is found in a final,
nonappealable judgment by a court of competent jurisdiction to have resulted
from such Person's gross negligence or willful misconduct.

                  (c)      If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance is made by the Borrower to or for the account of a
Lender Party other than on the last day of the Interest Period for such Advance,
as a result of a payment or Conversion pursuant to Section 2.06, 2.09(b)(i) or
2.10(d), acceleration of the maturity of the Notes pursuant to Section 6.01 or
for any other reason, or by an Eligible Assignee to a Lender Party other than on
the last day of the Interest Period for such Advance upon an assignment of
rights and obligations under this Agreement pursuant to Section 8.07 as a result
of a demand by the Borrower pursuant to Section 8.07(a), or if the Borrower
fails to make any payment or prepayment of an Advance for which a notice of
prepayment has been given or that is otherwise required to be made, whether
pursuant to Section 2.04, 2.06 or 6.01 or otherwise, the Borrower shall, upon
demand by such Lender Party (with a copy of such demand to the Administrative
Agent), pay to the Administrative Agent for the account of such Lender Party any
amounts required to compensate such Lender Party for any additional losses,
costs or expenses that it may reasonably incur as a result of such payment or
Conversion or such failure to pay or prepay, as the case may be, including,
without limitation, any loss (excluding loss of anticipated profits), cost or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by any Lender Party to fund or maintain such Advance.

                  (d)      If any of the Loan Parties fails to pay when due any
costs, expenses or other amounts payable by it under or in respect of any of the
Loan Documents (including, without limitation, fees and expenses of counsel and
indemnification payments), such amount may be paid on behalf of such Loan Party
by the Administrative Agent or any of the Lender Parties, in its sole
discretion.

                  (e)      Without prejudice to the survival of any other
agreement of any of the Loan Parties hereunder or under or in respect of any
other Loan Document, the agreements and obligations of the Borrower contained in
Sections 2.10 and 2.12 and this Section 8.04 shall survive the payment in full
of principal, interest and all other amounts payable hereunder and under and in
respect of any of the other Loan Documents.

                  SECTION 8.05.  Right of Set-off. Upon (a) the occurrence and
during the continuance of any Event of Default and (b) the making of the request
or the granting of the consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.01, each of the Lender Parties and each of their
respective Affiliates is hereby authorized at any time and from time to time, to
the fullest extent permitted under applicable law, to set off and otherwise
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
Party or such affiliate to or for the credit or the account of the Borrower
against any and all of the Obligations of the Borrower now or hereafter existing
under this Agreement and the Note or Notes, if any, held by such Lender Party,
irrespective of whether such Lender Party shall have made any demand under this
Agreement or such Note or Notes and although such obligations may be unmatured.
Each of the Lender Parties hereby agrees promptly to notify the Borrower after
any such setoff and application; provided, however, that the failure to give
such notice shall not affect the validity of such setoff and application. The
rights of each of the Lender Parties and their respective Affiliates under this
Section 8.05 are in addition to other rights and

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<PAGE>   101

remedies (including, without limitation, other rights of setoff) that such
Lender Party and its respective Affiliates may have.

                  SECTION 8.06.  Binding Effect. This Agreement shall become
effective when it shall have been executed by the Borrower and the
Administrative Agent and when the Administrative Agent shall have been notified
by each of the Initial Lenders, the Swing Line Bank and the Initial Issuing Bank
that such Initial Lender, the Swing Line Bank and the Initial Issuing Bank has
executed it and, thereafter, shall be binding upon and inure to the benefit of,
and be enforceable by, the Borrower, each of the Agents and each of the Lender
Parties and their respective successors and assigns, except that the Borrower
shall not have the right to assign its rights hereunder or any interest herein
without the prior written consent of the Lender Parties.

                  SECTION 8.07.  Assignments and Participations.

                  (a)      Each of the Lenders may, and so long as no Default
under Section 6.01(a) or 6.01(f) or Event of Default has occurred and is
continuing, if demanded by the Borrower (following (i) a demand by such Lender
for the payment of additional compensation pursuant to Section 2.10(a), 2.10(b)
or 2.13 or (ii) an assertion by such Lender pursuant to Section 2.10(c) or
2.10(d) that it is impractical or unlawful for such Lender to make Eurodollar
Rate Advances), upon at least five Business Days' notice to such Lender and the
Administrative Agent, each of the Lenders will, assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitment or
Commitments, the Advances owing to it and the Note or Notes held by it);
provided, however, that:

                  (A)      each such assignment with respect to any of the
         Facilities shall be of a uniform, and not a varying, percentage of all
         rights and obligations under and in respect of such Facility;

                  (B)      except in the case of an assignment to a Person that
         immediately prior to such assignment was a Lender, an Affiliate of any
         Lender or an Approved Fund of any Lender or an assignment of all of a
         Lender's rights and obligations under one or more of the Facilities,
         the aggregate amount of the Commitments being assigned to such Eligible
         Assignee pursuant to each such assignment (determined as of the date of
         the Assignment and Acceptance with respect to such assignment) shall in
         no event be less than $1,000,000 in respect of an assignment in
         relation to the Term Loan Facility, $2,500,000 in respect of an
         assignment in relation to any other Facility or such other amount(s) as
         the Administrative Agent and the assigning Lender and, so long as no
         Default under Section 6.01(a) or 6.01(f) or Event of Default is
         continuing, the Borrower shall agree to such assignment (which
         agreement, in each relevant case, by the Administrative Agent and the
         Borrower shall not be unreasonably withheld or delayed);

                  (C)      each such assignment shall be to an Eligible
         Assignee;

                  (D)      each such assignment made as a result of a demand by
         the Borrower pursuant to this Section 8.07(a) shall be arranged by the
         Borrower with the approval of the Administrative Agent, which approval
         shall not be unreasonably withheld or delayed, and shall be either an
         assignment of all of the rights and obligations of the assigning Lender
         under this Agreement or an assignment of a portion of such rights and
         obligations made concurrently with another such assignment or other
         such assignments that, in the aggregate, cover all of the rights and
         obligations of the assigning Lender under this Agreement;

                  (E)      no Lender shall be obligated to make any such
         assignment as a result of a demand by the Borrower pursuant to this
         Section 8.07(a) unless and until such Lender shall have received one or
         more payments from either the Borrower or one or more Eligible
         Assignees in an aggregate amount at least equal to the aggregate
         outstanding principal amount of all Advances owing to such Lender,
         together with accrued interest thereon to the date of payment of such

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         principal amount and all other amounts payable to such Lender under
         this Agreement and the Notes (including, without limitation, any
         amounts owing under Sections 2.10, 2.12 and 8.04);

                  (F)      the parties to each such assignment shall execute and
         deliver to the Administrative Agent, for its acceptance and recording
         in the Register, an Assignment and Acceptance, together with any Note
         or Notes subject to such assignment;

                  (G)      except in the case of an assignment by any of the
         Lenders to an Affiliate or an Approved Fund of such Lender, the Lender
         assignor (or, if such assignment is being made pursuant to a demand by
         the Borrower therefor under this Section 8.07(a), the Borrower or the
         Lender assignee) shall pay to the Administrative Agent a processing and
         recordation fee of $3,500; and

                  (H)      no such assignments shall be permitted without the
         consent of the Administrative Agent until the Administrative Agent
         shall have notified the Lender Parties that syndication of the
         Commitments hereunder has been completed.

                  (b)      The Issuing Bank may assign to any other Person all,
but not a portion of, its rights and obligations under the undrawn portion of
its Letter of Credit Commitment at any time; provided, however, that:

                           (i)      each such assignment shall be to an Eligible
         Assignee;

                           (ii)     the parties to each such assignment shall
         execute and deliver to the Administrative Agent, for its acceptance and
         recording in the Register, an Assignment and Acceptance, together with
         a processing and recordation fee of $3,500; and

                           (iii)    no such assignments shall be permitted
         without the consent of the Administrative Agent until the
         Administrative Agent shall have notified the Lender Parties that
         syndication of the Commitments hereunder has been completed.

The Swing Line Bank may not assign or otherwise transfer to any other person any
of its rights or obligations under its Swing Line Commitment.

                  (c)      Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in such Assignment and
Acceptance, (i) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, have the rights and obligations of a Lender
or the Issuing Bank hereunder and (ii) the Lender or Issuing Bank assignor
thereunder shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
(other than its rights under Sections 2.10, 2.12 and 8.04 (and other similar
provisions of the other Loan Documents that are specified under the terms of
such other Loan Documents to survive the payment in full of the Obligations of
the Loan Parties under or in respect of the Loan Documents) to the extent any
claim thereunder relates to an event arising prior to such assignment) and be
released from its obligations (other than its obligations under Section 7.05 to
the extent any claim thereunder relates to an event arising prior to such
assignment) under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the remaining portion of an assigning Lender's or
Issuing Bank's rights and obligations under this Agreement, such Lender or
Issuing Bank shall cease to be a party hereto). If the assignee is not
incorporated under the laws of the United States of America or a state thereof,
it shall deliver to the Borrower and the Administrative Agent certification as
to exemption from deduction or withholding of Taxes in accordance with Section
2.13.

                  (d)      By executing and delivering an Assignment and
Acceptance, each Lender Party assignor thereunder and the assignee thereunder
confirm to and agree with each other and the other parties hereto as follows:

                                       98
<PAGE>   103

                           (i)      other than as provided in such Assignment
         and Acceptance, such assigning Lender Party makes no representation or
         warranty and assumes no responsibility with respect to any statements,
         warranties or representations made in or in connection with this
         Agreement or any of the other Loan Documents, or the execution,
         legality, validity, enforceability, genuineness, sufficiency or value
         of, or the perfection or priority of any Lien created or purported to
         be created under or in connection with, any Loan Document, or any other
         instrument or document furnished pursuant thereto;

                           (ii)     such assigning Lender or Issuing Bank makes
         no representation or warranty and assumes no responsibility with
         respect to the financial condition of the Borrower or any of the other
         Loan Parties or the performance or observance by the Borrower or any of
         the other Loan Parties of any of its Obligations under or in respect of
         any of the Loan Documents, or any other instrument or document
         furnished pursuant thereto;

                           (iii)    such assignee confirms that it has received
         a copy of this Agreement, together with copies of the financial
         statements referred to in Section 4.01 and such other documents and
         information as it has deemed appropriate to make its own credit
         analysis and decision to enter into such Assignment and Acceptance;

                           (iv)     such assignee will, independently and
         without reliance upon any of the Agents, such assigning Lender or any
         of the other Lender Parties and based on such documents and information
         as it shall deem appropriate at the time, continue to make its own
         credit decisions in taking or not taking action under this Agreement;

                           (v)      such assignee confirms that it is an
         Eligible Assignee;

                           (vi)     such assignee appoints and authorizes the
         Administrative Agent to take such action as an agent on its behalf and
         to exercise such powers and discretion under the Loan Documents as are
         delegated to the Administrative Agent by the terms hereof, together
         with such powers and discretion as are reasonably incidental thereto;
         and

                           (vii)    such assignee agrees that it will perform in
         accordance with their terms all of the obligations that by the terms of
         this Agreement are required to be performed by it as a Lender Party.

                  (e)      The Administrative Agent, acting for this purpose
(but only for this purpose) as the agent of the Borrower, shall maintain at its
address set forth in Section 8.02 a copy of each Assignment and Acceptance
delivered to and accepted by it and a register for the recordation of the names
and addresses of the Lender Parties and the Commitment under each of the
Facilities of, and principal amount of the Advances owing under each of the
Facilities to, each of the Lender Parties from time to time (the "REGISTER").
The entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Borrower, the Administrative Agent and the Lender
Parties shall treat each Person whose name is recorded in the Register as a
Lender Party hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower, any of the Agents or any of the Lender
Parties at any reasonable time and from time to time during normal business
hours and upon reasonable prior notice.

                  (f)      Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender or Issuing Bank and an assignee, together with
any Note or Notes subject to such assignment, the Administrative Agent shall, if
such Assignment and Acceptance has been completed and is in substantially the
form of Exhibit C hereto, (i) accept such Assignment and Acceptance, (ii) record
the information contained therein in the Register and (iii) give prompt notice
thereof to the Borrower. In the case of any assignment by a Lender, within five
Business Days after its receipt of such notice, the Borrower, at its own
expense, shall execute and deliver to the Administrative Agent in exchange for
the surrendered Note or Notes a new Note or Notes from the Borrower payable to
or to the order of such

                                       99
<PAGE>   104

Eligible Assignee in an amount equal to the Commitment assumed by it under each
Facility pursuant to such Assignment and Acceptance and, if the assigning Lender
has retained a Commitment under such Facility, a new Note or Notes from the
Borrower payable to or to the order of the assigning Lender in an amount equal
to the Commitment retained by it under such Facility. Each of the new Note or
Notes shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of Exhibit A-1 or Exhibit A-2 hereto, as appropriate.

                  (g)      Each of the Lender parties may sell participations to
one or more Persons (other than any of the Loan Parties or any of their
respective Affiliates) in or to all or a portion of its rights, obligations or
rights and obligations under this Agreement (including, without limitation, all
or a portion of its Commitment or Commitments, the Advances owing to it and the
Note or Notes, if any, held by it); provided, however, that:

                           (i)      such Lender Party's obligations under this
         Agreement (including, without limitation, its Commitments) shall remain
         unchanged;

                           (ii)     such Lender Party shall remain solely
         responsible to the other parties hereto for the performance of such
         obligations;

                           (iii)    such Lender Party shall remain the holder
         of any such Note for all purposes of this Agreement;

                           (iv)     the Borrower, the Administrative Agent and
         the other Lender Parties shall continue to deal solely and directly
         with such Lender Party in connection with such Lender Party's rights
         and obligations under and in respect of this Agreement and the other
         Loan Documents; and

                           (v)      no participant under any such participation
         shall have any right to approve any amendment or waiver of any
         provision of any Loan Document, or any consent to any departure by any
         Loan Party therefrom, except to the extent that such amendment, waiver
         or consent would reduce the principal of, or stated rate of interest
         on, the Notes or any fees or other amounts payable hereunder (other
         than the amount of any interest payable under Section 2.07(b)), in each
         case to the extent subject to such participation, postpone any date
         scheduled for any payment of principal pursuant to Section 2.04 of, or
         interest pursuant to Section 2.07(a) on, the Notes other than any date
         fixed for any payment of fees or other amounts payable under Section
         2.08 or any Obligations payable under the Subsidiaries Guaranty, in
         each case to the extent subject to such participation, or release all
         or substantially all of the Collateral.

                  (h)      Any of the Lender Parties may, in connection with any
assignment or participation or proposed assignment or participation pursuant to
this Section 8.07, disclose to the assignee or participant or proposed assignee
or participant, any information relating to the Borrower or any of its
Subsidiaries or to any aspect of the Transaction, furnished to such Lender Party
by or on behalf of the Borrower or any of its Subsidiaries; provided, however,
that, prior to any such disclosure, the assignee or participant or proposed
assignee or participant shall agree to preserve the confidentiality of any
Confidential Information received by it from such Lender Party on substantially
the same terms as those set forth in Section 8.09.

                  (i)      Notwithstanding any other provision set forth in this
Agreement, any Lender Party may at any time create a security interest in all or
any portion of its rights under this Agreement (including, without limitation,
the Advances owing to it and the Note or Notes held by it) in favor of any
Federal Reserve Bank in accordance with Regulation A of the Board of Governors
of the Federal Reserve System and any Operating Circular issued by such Federal
Reserve Bank. No such assignment shall release the assigning Lender from its
obligations hereunder.

                                      100
<PAGE>   105

                  (j)      Notwithstanding anything to the contrary contained
herein, any Lender that is a fund that invests in bank loans may create a
security interest in all or any portion of the Advances owing to it and the Note
or Notes held by it to the trustee for holders of obligations owed, or
securities issued, by such fund as security for such obligations or securities,
provided, that unless and until such trustee actually becomes a Lender in
compliance with the other provisions of this Section 8.07, (i) no such pledge
shall release the pledging Lender from any of its obligations under the Loan
Documents and (ii) such trustee shall not be entitled to exercise any of the
rights of a Lender under the Loan Documents even though such trustee may have
acquired ownership rights with respect to the pledged interest through
foreclosure or otherwise.

                  (k)      Notwithstanding anything to the contrary contained
herein, any Lender Party (a "GRANTING LENDER") may grant to a special purpose
funding vehicle identified as such in writing from time to time by the Granting
Lender to the Administrative Agent and the Borrower (an "SPC") the option to
provide all or any part of any Advance that such Granting Lender would otherwise
be obligated to make pursuant to this Agreement, provided that (i) nothing
herein shall constitute a commitment by any SPC to fund any Advance, and (ii) if
an SPC elects not to exercise such option or otherwise fails to make all or any
part of such Advance, the Granting Lender shall be obligated to make such
Advance pursuant to the terms hereof. The making of an Advance by an SPC
hereunder shall utilize the Commitment of the Granting Lender to the same
extent, and as if, such Advance were made by such Granting Lender. Each party
hereto hereby agrees that (i) no SPC shall be liable for any indemnity or
similar payment obligation under this Agreement for which a Lender Party would
be liable, (ii) no SPC shall be entitled to the benefits of Sections 2.10 and
2.12 (or any other increased costs protection provision) and (iii) the Granting
Bank shall for all purposes, including, without limitation, the approval of any
amendment or waiver of any provision of any Loan Document, remain the Lender
Party of record hereunder. In furtherance of the foregoing, each party hereto
hereby agrees (which agreement shall survive the termination of this Agreement)
that, prior to the date that is one year and one day after the payment in full
of all outstanding commercial paper or other senior debt of any SPC, it will not
institute against, or join any other Person in instituting against, such SPC any
bankruptcy, reorganization, arrangement, insolvency, or liquidation proceeding
under the laws of the United States or any State thereof. Notwithstanding
anything to the contrary contained in this Agreement, any SPC may (i) with
notice to, but without prior consent of, the Borrower and the Administrative
Agent and without paying any processing fee therefor, assign all or any portion
of its interest in any Advance to the Granting Lender and (ii) disclose on a
confidential basis any non-public information relating to its funding of
Advances to any rating agency, commercial paper dealer or provider of any surety
or guarantee or credit or liquidity enhancement to such SPC. This subsection (k)
may not be amended without the prior written consent of each Granting Lender,
all or any part of whose Advances are being funded by the SPC at the time of
such amendment.

                  SECTION 8.08.  No Liability of the Issuing Bank. The Borrower
assumes all risks of the acts or omissions of any beneficiary or transferee of
any Letter of Credit with respect to its use of such Letter of Credit. Neither
the Issuing Bank nor any of its officers or directors shall be liable or
responsible for:

                  (a)      the use that may be made of any Letter of Credit or
any acts or omissions of any beneficiary or transferee in connection therewith;

                  (b)      the validity, sufficiency or genuineness of
documents, or of any endorsement thereon, even if such documents should prove to
be in any or all respects invalid, insufficient, fraudulent or forged;

                  (c)      payment by the Issuing Bank against presentation of
documents that do not comply with the terms of a Letter of Credit, including
failure of any documents to bear any reference or adequate reference to the
Letter of Credit; or

                                      101
<PAGE>   106

                  (d)      any other circumstances whatsoever in making or
failing to make payment under any Letter of Credit;

except that the Borrower shall have a claim against the Issuing Bank, and the
Issuing Bank shall be liable to the Borrower, to the extent of any direct, but
not consequential, damages suffered by the Borrower that the Borrower proves
were caused by (i) the Issuing Bank's willful misconduct or gross negligence as
determined in a final, nonappealable judgment by a court of competent
jurisdiction in determining whether documents presented under any Letter of
Credit comply with the terms of the Letter of Credit or (ii) the Issuing Bank's
willful failure to make lawful payment under a Letter of Credit after the
presentation to it of a draft and certificates strictly complying with the terms
and conditions of the Letter of Credit. In furtherance and not in limitation of
the foregoing, the Issuing Bank may accept documents that appear on their face
to be in order, without responsibility for further investigation, regardless of
any notice or information to the contrary.

                  SECTION 8.09.  Confidentiality. Neither any Agent nor any
Lender Party shall disclose any Confidential Information to any Person without
the consent of the Borrower, other than (a) to such Agent's or such Lender
Party's Affiliates and their officers, directors, trustees, employees, agents
and advisors, to other Lender Parties and to actual or prospective Eligible
Assignees and participants, and then in each case only on a confidential basis,
(b) as required by any law, rule or regulation or judicial process, (c) as
requested or required by any state, federal or foreign authority or examiner
(including the National Association of Insurance Commissioners or any similar
organization or quasi-regulatory authority) regulating such Lender Party, (d) to
any rating agency when required by it, provided that, prior to any such
disclosure, such rating agency shall undertake to preserve the confidentiality
of any Confidential Information relating to the Loan Parties received by it from
such Lender Party in accordance with such rating agency's internal procedures
generally applicable to information of the same type, (e) in connection with any
litigation or proceeding to which such Agent or such Lender Party or any of its
Affiliates may be a party, provided that such Agent, Lender Party or Affiliate
will (unless prohibited by law) use its reasonable best efforts to provide the
Borrower with sufficient notice thereof prior to any such disclosure to permit
the Borrower the opportunity to obtain a protective order with respect thereto,
or (f) in connection with the exercise of any remedy under this Agreement or any
other Loan Document.

                  SECTION 8.10.  Execution in Counterparts. This Agreement may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.

                  SECTION 8.11.  Governing Law; Jurisdiction, Etc.

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

                  (b)      Each of the parties hereto hereby irrevocably and
unconditionally submits, for itself and its property and assets, to the
nonexclusive jurisdiction of any New York State court or any federal court of
the United States of America sitting in New York City, New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any of the other Loan Documents to which it is a
party, or for recognition or enforcement of any judgment in respect thereof, 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 any such New York State court or, to the fullest extent permitted
under applicable law, in any such federal court. Each of the parties hereto
hereby irrevocably consents to the service of copies of any summons and
complaint and any other process which may be served in any such action or
proceeding by certified mail, return receipt requested, or by delivering a copy
of such process to such party, at its address specified in Section 8.02, or by
any other method permitted under applicable law. Each of the parties hereto
hereby agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other

                                      102
<PAGE>   107

jurisdictions by suit on the judgment or in any other manner provided by
applicable law. Nothing in this Agreement shall affect any right that any of the
parties hereto may otherwise have to bring any action or proceeding relating to
this Agreement or any of the other Loan Documents in the courts of any
jurisdiction.

                  (c)      Each of the parties hereto irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection that 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 or
any of the other Loan Documents to which it is a party in any New York State or
federal court. 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.

                                      103
<PAGE>   108

                  SECTION 8.12.  WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
AGENTS AND THE LENDER PARTIES IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE
ADVANCES, THE LETTERS OF CREDIT OR THE ACTIONS OF ANY AGENT OR ANY LENDER PARTY
IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.

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

                                             THE BORROWER

                                             CAREMARK RX, INC.

                                             By: Peter J. Clemens, IV
                                                 -------------------------
                                             Name: Peter J. Clemens, IV
                                             Title: Senior Vice President
                                                     & Treasurer

                                      104
<PAGE>   109
                                       THE ADMINISTRATIVE AGENT

                                       BANK OF AMERICA, N.A.

                                       By /s/ William D. Duke
                                         ----------------------------------
                                       Name:  William D. Duke
                                       Title: Principal

                                       THE LEAD ARRANGER

                                       BANC OF AMERICA SECURITIES LLC

                                       By /s/ Pamela R. Levy
                                         ----------------------------------
                                       Name:  Pamela R. Levy
                                       Title: Managing Director

                                       THE SYNDICATION AGENT

                                       JPMORGAN
                                       A division of Chase Securities Inc.

                                       By /s/ Andrew T. Brode
                                         ----------------------------------
                                       Name:  Andrew T. Brode
                                       Title: VP

                                       THE DOCUMENTATION AGENT

                                       FIRST UNION NATIONAL BANK

                                       By /s/ Michael D. Monte
                                         ----------------------------------
                                       Name:  Michael D. Monte
                                       Title: Managing Director

                                       THE INITIAL LENDERS

                                       BANK OF AMERICA, N.A. as a Lender,
                                       the Swing Line Bank and the Issuing Bank

                                       By /s/ William D. Duke
                                         ----------------------------------
                                       Name:  William D. Duke
                                       Title: Principal

                                       BANK OF AMERICA, N.A., as a Term
                                       Loan Facility Lender

                                       By /s/ Edward Harmon
                                         ----------------------------------
                                       Name:  Edward Harmon
                                       Title: Vice President

                                       FIRST UNION NATIONAL BANK

                                       By /s/ Michael D. Monte
                                         ----------------------------------
                                       Name:  Michael D. Monte
                                       Title: Managing Director

                                       SCOTIABANC INC.

                                       By /s/ Dana Maloney
                                         ----------------------------------
                                       Name:  Dana Maloney
                                       Title: Relationship Manager

                                       THE CHASE MANHATTAN BANK

                                       By /S/ Dawn Lee Lum
                                         ----------------------------------
                                       Name: Dawn Lee Lum
                                       Title: Vice President

                                       FLEET NATIONAL BANK

                                       By /s/ Carol Castle
                                         ----------------------------------
                                       Name:  Carol Castle
                                       Title: Director

                                       CREDIT LYONNAIS
                                       NEW YORK BRANCH

                                       By /s/ Charles Heidsieck
                                         ----------------------------------
                                       Name:  Charles Heidsieck
                                       Title: Senior Vice President

                                       BANK ONE, NA

                                       By /s/ Vincent K. Kelly
                                         ----------------------------------
                                       Name:  Vincent K. Kelly
                                       Title: Managing Director

                                       UBS AG, STAMFORD BRANCH

                                       By /s/ Daniel W. Ladd III
                                         ----------------------------------
                                       Name:  Daniel W. Ladd III
                                       Title: Executive Director

                                       By /s/ Wilfred V. Saint
                                         ----------------------------------
                                       Name:  Wilfred V. Saint
                                       Title: Associate Director
                                              Banking Products
                                              Services, US<PAGE>   1

                                                                   EXHIBIT 10.67

                          PLEDGE AND SECURITY AGREEMENT

                  PLEDGE AND SECURITY AGREEMENT dated as of March 15, 2001 (this
"Agreement") made by CAREMARK RX, INC., a Delaware corporation (the "COMPANY"),
the SUBSIDIARIES of the Company listed on the signature pages hereof (the
"SUBSIDIARIES") and the ADDITIONAL GRANTORS (as defined in Section 19) (the
Company, the Subsidiaries and the Additional Grantors being, collectively, the
"GRANTORS"), to LASALLE BANK NATIONAL ASSOCIATION, as trustee ("TRUSTEE") for
holders of the Secured Obligations (as defined below) under the Trust Agreement
(as defined below).

                  PRELIMINARY STATEMENTS.

                  (1)      The Company entered into a $1,000,000,000 Amended and
Restated Credit Agreement dated as of June 9, 1998, as amended (the "EXISTING
CREDIT AGREEMENT") with the financial institutions party thereto as lenders,
swing line banks and issuing banks, Credit Lyonnais New York Branch, The First
National Bank of Chicago and Morgan Guaranty Trust Company of New York, as
syndication agents, Banc of America Securities LLC (formerly known as
NationsBanc Montgomery Securities LLC), as arranger and Bank of America, N.A.
(formerly known as NationsBank, N.A.) as administrative agent.

                  (2)      The Company has issued $450,000,000 of its 7 3/8%
Senior Notes due 2006 (the "SENIOR PUBLIC NOTES") pursuant to an Indenture dated
as of October 8, 1996 (as supplemented from time to time, the "INDENTURE") among
the Company, as issuer and U.S. Bank National Association, as successor trustee
for the holders of the Senior Public Notes.

                  (3)      To replace the Existing Credit Agreement, the Company
concurrently herewith is entering into a Credit Agreement dated as of March 15,
2001 (as hereafter amended, restated, supplemented or otherwise modified from
time to time, the "CREDIT AGREEMENT" and, together with the Indenture, the "DEBT
INSTRUMENTS") with the financial institutions party thereto from time to time as
lenders, swing line banks, and issuing banks and as agents thereunder, including
Bank of America, N.A., as administrative agent (the "ADMINISTRATIVE AGENT")
(such lenders, swing line banks, issuing banks and agents, collectively, the
"PRIVATE LENDERS" and in connection therewith, the Subsidiaries have entered
into a Guarantee dated the date hereof (as hereafter restated, amended,
supplemented or otherwise modified from time to time the, "GUARANTEE") pursuant
to which the Subsidiaries guaranteed the obligations of the Company under the
Credit Agreement.

                  (4)      The Company, the Subsidiaries and the Trustee have
entered into a Trust Agreement dated as of the date hereof (as hereafter
restated, amended, supplemented or otherwise modified from time to time the,
"TRUST AGREEMENT").

                  (5)      The Company from time to time may enter into interest
rate hedge agreements (the "HEDGE AGREEMENTS") with financial institutions (the
"HEDGE BANKS") party to the Credit Agreement to the extent permitted therein,
and the obligations of the Company thereunder will be guaranteed by the
Subsidiaries pursuant to the Guarantee.

<PAGE>   2

                  (6)      Pursuant to the Credit Agreement and the Indenture,
the Grantors are entering into this Agreement in order to grant to the Trustee,
for the equal and ratable benefit of the Private Lenders, the holders of the
Senior Public Notes and the Hedge Banks (the "SECURED PARTIES"), a security
interest in the personal property and fixtures of the Grantors as provided
herein now owned or hereafter acquired to secure, subject to the terms and
conditions of this Agreement and the Trust Agreement, the payment of all of the
Company's obligations owing under the Credit Agreement and the documents
delivered in connection therewith, the Subsidiaries' and Additional Grantors'
obligations owing under the Guarantee and the payment of all of the Company's
obligations owing under the Senior Public Notes.

                  (7)      Pursuant to the Trust Agreement, the Grantors have
opened a trust account (the "TRUST ACCOUNT"), which may consist from time to
time of one or more sub-accounts (as provided in the Trust Agreement) with the
Trustee at its office at Chicago, Illinois, Account No. 60-8373-00-7, in the
name of "CAREMARK RX, INC. TRUST ACCOUNT" and a L/C Cash Collateral Account (the
"L/C CASH COLLATERAL ACCOUNT") with the Trustee at its office at Chicago,
Illinois, Account No. 60-8373-01-5, in the name of "Caremark Rx, Inc. Cash
Collateral Account," but in each case under the sole control and dominion of the
Trustee and subject to the terms of this Agreement.

                  (8)      Unless otherwise defined in this Agreement or in the
Trust Agreement, terms defined in Article 8 or 9 of the Uniform Commercial Code
in effect in the State of New York ("N.Y. UNIFORM COMMERCIAL CODE") are used
herein as so defined.

                  NOW, THEREFORE, in consideration of the premises and in order
to fulfill their obligations under the Debt Instruments, each Grantor hereby
agrees with the Trustee for the equal and ratable benefit of the Secured Parties
as follows:

                  Section 1.        Grant of Security.

                  Each Grantor hereby assigns and pledges to the Trustee for its
benefit and the equal and ratable benefit of the Secured Parties, and hereby
grants to the Trustee for its benefit and the equal and ratable benefit of the
Secured Parties a security interest in, such Grantor's right, title and interest
in and to the following, in each case, as to each type of property described
below, whether now owned (except in respect of Pledged Debt as provided for
below) or hereafter acquired by such Grantor, wherever located, and whether now
or hereafter existing or arising (collectively, the "COLLATERAL"):

                  (a)      all equipment in all of its forms, all fixtures
         (except to the extent that a grant of a security interest in any such
         fixtures located on leased premises would not be permitted by the
         respective lease) and all parts thereof and all accessions thereto (any
         and all such equipment, fixtures, parts and accessions being the
         "EQUIPMENT");

                  (b)      all inventory in all of its forms, and including,
         without limitation (i) raw materials and work in process therefor,
         finished goods thereof and materials used or consumed in the
         manufacture, production, preparation or shipping thereof, (ii) goods in
         which such Grantor has an interest in mass or a joint or other interest
         or right of any kind (including, without limitation, goods in which

                                       2
<PAGE>   3

         such Grantor has an interest or right as consignee) and (iii) goods
         that are returned to or repossessed or stopped in transit by such
         Grantor, and all accessions thereto and products thereof and documents
         therefor (any and all such inventory, accessions, products and
         documents being the "INVENTORY");

                  (c)      all accounts, chattel paper, instruments, deposit
         accounts, general intangibles, contract rights and other obligations of
         any kind, whether or not arising out of or in connection with the sale
         or lease of goods or the rendering of services and whether or not
         earned by performance, and all rights now or hereafter existing in and
         to all security agreements, leases and other contracts securing or
         otherwise relating to any such accounts, chattel paper, instruments,
         deposit accounts, general intangibles, contract rights or obligations
         (any and all such accounts, chattel paper, instruments, deposit
         accounts, general intangibles, contract rights and obligations, to the
         extent not referred to in clause (d), (e) or (f) below, being the
         "RECEIVABLES", and any and all such security agreements, leases and
         other contracts being the "RELATED CONTRACTS");

                  (d)      the following (the "SECURITY COLLATERAL"):

                           (i)      the shares set forth opposite such Grantor's
                  name on and as otherwise described in Part I of Schedule I
                  hereto (the "INITIAL PLEDGED SHARES") and the certificates, if
                  any, representing the Initial Pledged Shares, and all
                  dividends, cash, instruments and other property from time to
                  time received, receivable or otherwise distributed in respect
                  of or in exchange for any or all of the Initial Pledged
                  Shares;

                           (ii)     all additional shares of stock from time to
                  time acquired by such Grantor in any manner (such shares,
                  together with the Initial Pledged Shares, being the "PLEDGED
                  SHARES"), and the certificates, if any, representing such
                  additional shares, and all dividends, cash, instruments and
                  other property from time to time received, receivable or
                  otherwise distributed in respect of or in exchange for any or
                  all of such shares;

                           (iii)    all indebtedness from time to time hereafter
                  incurred by a single obligor, maker or payee and payable to
                  such Grantor in a principal amount in excess of $1,000,000
                  (such indebtedness being the "PLEDGED DEBT") and the
                  instruments, if any, evidencing such indebtedness, and all
                  interest, cash, instruments and other property from time to
                  time received, receivable or otherwise distributed in respect
                  of or in exchange for any or all of such indebtedness;

                           (iv)     all other investment property (including any
                  notes or securities issued by any entity) in which such
                  Grantor has now, or acquires from time to time hereafter, any
                  right, title or interest in any manner, and the certificates
                  or instruments, if any, representing or evidencing such
                  investment property, and all dividends, interest,
                  distributions, value, cash, instruments and other property
                  from time to time received, receivable or otherwise
                  distributed in respect of or in exchange for any or all of
                  such investment property, and all letter of credit rights;

                                       3
<PAGE>   4

                  (e)      the following (collectively, the "ACCOUNT
         COLLATERAL"):

                           (i)      the Trust Account and the L/C Cash
                  Collateral Account, all funds held therein and all
                  certificates and instruments, if any, from time to time
                  representing or evidencing the Trust Account;

                           (ii)     all Collateral Investments (as hereinafter
                  defined) from time to time and all certificates and
                  instruments, if any, from time to time representing or
                  evidencing the Collateral Investments;

                           (iii)    all notes, certificates of deposit, deposit
                  accounts, checks and other instruments from time to time
                  hereafter delivered to or otherwise possessed by the Trustee
                  for or on behalf of the Grantor in substitution for or in
                  addition to any or all of the then existing Account
                  Collateral; and

                           (iv)     all interest, dividends, cash, instruments
                  and other property from time to time received, receivable or
                  otherwise distributed in respect of or in exchange for any or
                  all of the then existing Account Collateral; and

                           (v)      all deposit accounts of such Grantor from
                  time to time, all funds held therein and all certificates and
                  instruments, if any, from time to time representing or
                  evidencing such deposit accounts.

                  (f)      the following (collectively, the "INTELLECTUAL
         PROPERTY COLLATERAL"):

                           (i)      all United States, international and foreign
                  patents, patent applications and statutory invention
                  registrations, including, without limitation, the patents and
                  patent applications set forth in Schedule IV hereto (as such
                  Schedule IV may be supplemented from time to time by
                  supplements to this Agreement, each such supplement being in
                  substantially the form of Exhibit C hereto (an "IP SECURITY
                  AGREEMENT SUPPLEMENT"), executed and delivered by such Grantor
                  to the Trustee from time to time), together with all reissues,
                  divisions, continuations, continuations-in-part, extensions
                  and reexaminations thereof, all inventions therein, all rights
                  therein provided by international treaties or conventions and
                  all improvements thereto, and all other rights of any kind
                  whatsoever of such Grantor accruing thereunder or pertaining
                  thereto (the "PATENTS");

                           (ii)     all trademarks (including, without
                  limitation, service marks), certification marks, collective
                  marks, trade dress, logos, domain names, product
                  configurations, trade names, business names, corporate names
                  and other source identifiers, whether or not registered,
                  whether currently in use or not, including, without
                  limitation, all common law rights and registrations and
                  applications for registration thereof, including, without
                  limitation, the trademark registrations and trademark
                  applications set forth in Schedule IV hereto (as such Schedule
                  IV may be supplemented from time to time by IP Security
                  Agreement Supplements executed and delivered by such Grantor
                  to the Trustee from time to time), and all other marks
                  registered in the U.S. Patent and Trademark Office or in any
                  office or

                                       4
<PAGE>   5

                  agency of any State or Territory of the United States or any
                  foreign country (but excluding any United States intent-to-use
                  trademark application prior to the filing and acceptance of a
                  Statement of Use or an Amendment to allege use in connection
                  therewith to the extent that a valid security interest may not
                  be taken in such an intent-to-use trademark application under
                  applicable law), and all rights therein provided by
                  international treaties or conventions, all reissues,
                  extensions and renewals of any of the foregoing, together in
                  each case with the goodwill of the business connected
                  therewith and symbolized thereby, and all rights corresponding
                  thereto throughout the world and all other rights of any kind
                  whatsoever of such Grantor accruing thereunder or pertaining
                  thereto (the "TRADEMARKS");

                           (iii)    all copyrights, copyright applications,
                  copyright registrations and like protections in each work of
                  authorship, whether statutory or common law, whether published
                  or unpublished, any renewals or extensions thereof, all
                  copyrights of works based on, incorporated in, derived from,
                  or relating to works covered by such copyrights, including,
                  without limitation, the copyright registrations and copyright
                  applications set forth in Schedule IV hereto (as such Schedule
                  IV may be supplemented from time to time by IP Security
                  Agreement Supplements executed and delivered by such Grantor
                  to the Trustee from time to time), together with all rights
                  corresponding thereto throughout the world and all other
                  rights of any kind whatsoever of such Grantor accruing
                  thereunder or pertaining thereto (the "COPYRIGHTS");

                           (iv)     all confidential and proprietary
                  information, including, without limitation, know-how, trade
                  secrets, manufacturing and production processes and
                  techniques, inventions, research and development information,
                  technical data, financial, marketing and business data,
                  pricing and cost information, business and marketing plans and
                  customer and supplier lists and information (the "TRADE
                  SECRETS");

                           (v)      all computer software programs and databases
                  (including, without limitation, source code, object code and
                  all related applications and data files), firmware, and
                  documentation and materials relating thereto, and all rights
                  with respect to the foregoing, together with any and all
                  options, warranties, service contracts, program services, test
                  rights, maintenance rights, improvement rights, renewal rights
                  and indemnifications and any substitutions, replacements,
                  additions or model conversions of any of the foregoing, but
                  excluding any of the foregoing that is the subject of an
                  agreement incurred in the ordinary course of business
                  containing customary terms which prohibit the assignment
                  thereof or the granting of a security interest therein (such
                  non-excluded property, the "COMPUTER SOFTWARE");

                           (vi)     all license agreements, permits,
                  authorizations and franchises, whether with respect to the
                  Patents, Trademarks, Copyrights, Trade Secrets or Computer
                  Software, or with respect to the patents, trademarks,
                  copyrights, trade secrets, computer software or other
                  proprietary right of any other Person,

                                       5
<PAGE>   6

                  including, without limitation, the license agreements set
                  forth in Schedule IV (excluding shrink wrap, click wrap and
                  license agreements governing licenses of commercial off the
                  shelf software, shareware, or freeware, as such Schedule IV
                  may be supplemented from time to time by IP Security Agreement
                  Supplements executed and delivered by such Grantor to the
                  Trustee from time to time or otherwise), and all income,
                  royalties and other payments now or hereafter due and/or
                  payable with respect thereto, subject, in each case, to the
                  terms of such license agreements, permits, authorizations and
                  franchises, but excluding any of the foregoing that is the
                  subject of an agreement incurred in the ordinary course of
                  business containing customary terms which prohibit such
                  Grantor from assigning its rights thereto or granting a
                  security interest therein, (such non-excluded property, the
                  "LICENSES"); and

                           (vii)    any and all claims for damages for past,
                  present and future infringement, misappropriation or breach
                  with respect to the Patents, Trademarks, Copyrights, Trade
                  Secrets, Computer Software or Licenses, with the right, but
                  not the obligation, to sue for and collect, or otherwise
                  recover, such damages; and

                  (g)      all proceeds of any and all of the Collateral
         (including, without limitation, proceeds that constitute property of
         the types described in clauses (a) through (f) of this Section 1 and
         this clause (g)) and, to the extent not otherwise included, all (i)
         payments under insurance (whether or not the Trustee is the loss payee
         thereof), or any indemnity, warranty or guaranty, payable by reason of
         loss or damage to or otherwise with respect to any of the foregoing
         Collateral and (ii) cash;

provided, however, that none of the collateral described and none of the terms
defined in clauses (a) - (g) above shall include any rights, assets or property
assigned, sold or transferred, or in which a security interest is granted, by
Caremark Inc. in connection with a Caremark Receivables Securitization as
defined in the Credit Agreement.

                  Section 2.        Security for Obligations.

                  This Agreement secures, in the case of the Company, the
payment of all obligations of the Company now or hereafter existing under the
Debt Instruments and under any Hedge Agreement with a Hedge Bank permitted under
the Credit Agreement, and, in the case of each other Grantor, the payment of all
obligations of the Company now or hereafter existing under the Indenture and the
payment of all obligations of such Grantor now or hereafter existing under the
Guarantee, whether direct or indirect, absolute or contingent, and whether for
principal, reimbursement obligations, interest, fees, premiums, penalties,
indemnifications, contract causes of action, costs, expenses or otherwise (all
such obligations being the "SECURED OBLIGATIONS").

                  Section 3.        Grantors Remain Liable.

                  Anything herein to the contrary notwithstanding, (a) each
Grantor shall remain liable under the contracts and agreements included in such
Grantor's Collateral to the extent set forth therein to perform all of its
duties and obligations thereunder to the same extent as if this

                                       6
<PAGE>   7

Agreement had not been executed, (b) the exercise by the Trustee of any of the
rights hereunder shall not release any Grantor from any of its duties or
obligations under the contracts and agreements included in the Collateral and
(c) no Secured Party shall have any obligation or liability under the contracts
and agreements included in the Collateral by reason of this Agreement or any
other Debt Instrument, nor shall any Secured Party be obligated to perform any
of the obligations or duties of any Grantor thereunder or to take any action to
collect or enforce any claim for payment.

                  Section 4.        Delivery and Control of Security Collateral.

                  (a)      All certificates or instruments representing or
         evidencing Security Collateral or Account Collateral shall be delivered
         to and held by or on behalf of the Trustee pursuant hereto and shall be
         in suitable form for transfer by delivery, or shall be accompanied by
         duly executed instruments of transfer or assignment in blank, all in
         form and substance satisfactory to the Trustee. For the better
         perfection of the Trustee's rights in and to the Security Collateral
         and the Account Collateral, each Grantor shall forthwith, upon the
         pledge of any Security Collateral or Account Collateral hereunder
         (other than deposit accounts), cause such Security Collateral or
         Account Collateral to be registered in the name of the Trustee or such
         of its nominees as the Trustee shall direct, subject only to the
         revocable rights specified in Section 14(a). In addition, the Trustee
         shall have the right at any time to exchange certificates or
         instruments representing or evidencing Security Collateral or Account
         Collateral for certificates or instruments of smaller or larger
         denominations.

                  (b)      With respect to any Security Collateral that
         constitutes a security and is not represented or evidenced by a
         certificate or an instrument, each Grantor, at the request of the
         Trustee, shall cause the issuer thereof either (i) to register the
         Trustee as the registered owner of such security or (ii) to agree in
         writing with such Grantor and the Trustee that such issuer will comply
         with instructions with respect to such security originated by the
         Trustee without further consent of such Grantor, such agreement to be
         in form and substance satisfactory to the Trustee.

                  (c)      With respect to any Security Collateral that
         constitutes a security entitlement, each Grantor, at the request of the
         Trustee, shall cause the securities intermediary with respect to such
         security entitlement either (i) to identify in its records the Trustee
         as having such security entitlement against such securities
         intermediary or (ii) to agree in writing with such Grantor and the
         Trustee that such securities intermediary will comply with entitlement
         orders (that is, notifications communicated to such securities
         intermediary directing transfer or redemption of the financial asset to
         which such Grantor has a security entitlement) originated by the
         Trustee without further consent of such Grantor, such agreement to be
         in form and substance satisfactory to the Trustee.

                  (d)      With respect to any Security Collateral that
         constitutes a securities account, each Grantor, at the request of the
         Trustee, will, in the case of a securities account, comply with
         subsection (c) of this Section 4 with respect to all security
         entitlements carried in such securities account.

                                       7
<PAGE>   8

                  Section 5.        Maintaining the Trust Account.

                  Until the release of the collateral granted herein as provided
in Section 6.1 of the Trust Agreement:

                  (a)      The Grantors will maintain the Trust Account with the
         Trustee.

                  (b)      It shall be a term and condition of the Trust
         Account, notwithstanding any term or condition to the contrary in any
         other agreement relating to the Trust Account (except the Trust
         Agreement), and except as otherwise provided by the provisions of
         Section 17, that no amount (including interest or dividends on
         Collateral Investments) shall be paid or released to or for the account
         of, or withdrawn by or for the account of, any Grantor or any other
         Person from the Trust Account.

The Trust Account shall be subject to such applicable laws and such applicable
regulations of the Board of Governors of the Federal Reserve System and of any
other appropriate banking or governmental authority, as may now or hereafter be
in effect.

                  Section 6.        Maintaining the L/C Cash Collateral Account.

                  Until the release of the collateral granted herein as provided
in Section 6.1 of the Trust Agreement:

                  (a)      The Company will maintain the L/C Cash Collateral
         Account with the Trustee.

                  (b)      It shall be a term and condition of the L/C Cash
         Collateral Account, notwithstanding any term or condition to the
         contrary in any other agreement relating to the L/C Cash Collateral
         Account (except the Trust Agreement), and except as otherwise provided
         by the provisions of Section 17, that no amount (including interest or
         dividends on Collateral Investments) shall be paid or released to or
         for the account of, or withdrawn by or for the account of, any Grantor
         or any other Person from the L/C Cash Collateral Account.

The L/C Cash Collateral Account shall be subject to such applicable laws and
such applicable regulations of the Board of Governors of the Federal Reserve
System and of any other appropriate banking or governmental authority, as may
now or hereafter be in effect.

                  Section 7.        Investing of Amounts in the Trust Account
and the L/C Cash Collateral Account.

                  The Trustee will, subject to the provisions of Section 17
hereof, from time to time invest amounts on deposit in the Trust Account and the
L/C Cash Collateral Account as permitted by Section 3.3 of the Trust Agreement
(such investments being the "COLLATERAL INVESTMENTS"). Interest and proceeds
thereof that are not invested or reinvested in Collateral Investments as
provided above shall be deposited and held in the Trust Account or L/C Cash
Collateral Account, as the case may be.

                                       8
<PAGE>   9

                  Section 8.        Representations and Warranties.

                  Each Grantor represents and warrants as follows:

                  (a)      All of the Equipment and Inventory of such Grantor
         are located at the places specified therefor in Schedule II hereto. The
         jurisdiction of formation of such Grantor is as set forth in Schedule
         III hereto. The chief executive office of such Grantor is located at
         the address specified therefor in Schedule III hereto. Such Grantor's
         federal tax identification number is set forth opposite such Grantor's
         name in Schedule III hereto. All Security Collateral consisting of
         certificated securities and instruments have been delivered to the
         Trustee. None of the Receivables is evidenced by a promissory note or
         other instrument under the Credit Agreement is required to be delivered
         to the Trustee and that has not been delivered to the Trustee.

                  (b)      Such Grantor is the legal and beneficial owner of the
         Collateral of such Grantor free and clear of any Lien, claim, option or
         right of others, except for the security interest created under this
         Agreement and Permitted Liens (as defined in the Credit Agreement). No
         effective financing statement or other instrument similar in effect
         covering all or any part of such Collateral or listing such Grantor or
         any trade name of such Grantor as debtor is on file in any recording
         office, except such as may have been filed in favor of the Trustee
         relating to this Agreement. Such Grantor has no trade names.

                  (c)      Such Grantor has exclusive possession and control of
         the Equipment and Inventory.

                  (d)      The Pledged Shares pledged by such Grantor hereunder
         have been duly authorized and validly issued and are fully paid and
         non-assessable.

                  (e)      The Initial Pledged Shares constitute the percentage
         of the issued and outstanding shares of stock of the issuers thereof
         indicated on Schedule I hereto as of the date hereof.

                  (f)      All of the investment property owned by such Grantor
         as of the date hereof is listed on Schedule I hereto.

                  (g)      (1) The possession by the Trustee of the certificates
         representing the Pledged Shares, together with undated stock powers
         executed in blank, and of the instruments representing Pledged Debt
         duly indorsed or accompanied by duly executed instruments of transfer
         or assignment, creates a valid and perfected first priority security
         interest in such Pledged Shares and Pledged Debt, respectively, and (2)
         the pledge of the Security Collateral pursuant to this Agreement, the
         pledge and assignment of the Account Collateral pursuant hereto, and
         the filing of financing statements in respect of the Collateral in
         favor of the Trustee with the appropriate filing offices of the
         appropriate jurisdictions, create a valid and perfected first priority
         security interest in the Collateral to the extent such security
         interest can be perfected only by the filling of a financing statement,
         in each case securing the payment of the Secured Obligations.

                                       9
<PAGE>   10

                  (h)      No authorization or approval or other action by, and
         no notice to or filing with, any United States, federal, state or local
         governmental authority or regulatory body is required for (i) the grant
         by such Grantor of the assignment, pledge and security interest granted
         hereunder or for the execution, delivery or performance of this
         Agreement by such Grantor, (ii) the perfection or maintenance of the
         assignment, pledge and security interest created hereunder (including
         the first priority nature of such assignment, pledge or security
         interest), except for the filing of financing and continuation
         statements under the Uniform Commercial Code, which financing
         statements have been or will be duly filed, the recordation of the
         Intellectual Property Security Agreements referred to in Section 13(f)
         with the U.S. Patent and Trademark Office and the U.S. Copyright
         Office, which Agreements have been or will be duly recorded and the
         actions described in Section 4 with respect to Security Collateral,
         which actions will be taken and the filing or recording of fixture
         filings, or (iii) for the exercise by the Trustee of its voting or
         other rights provided for in this Agreement or the remedies in respect
         of the Collateral pursuant to this Agreement, except as may be required
         in connection with the disposition of any portion of the Security
         Collateral by laws affecting the offering and sale of securities
         generally.

                  (i)      The Inventory that has been produced or distributed
         by such Grantor has been produced in compliance with all requirements
         of applicable law, including, without limitation, the Fair Labor
         Standards Act.

                  (j)      As to itself and its Intellectual Property
         Collateral:

                           (i)      To such Grantor's knowledge, the rights of
                  such Grantor in or to the Intellectual Property Collateral do
                  not conflict with, misappropriate or infringe upon the
                  intellectual property rights of any third party, and no claim
                  has been asserted that the use of such Intellectual Property
                  Collateral does or may infringe upon the intellectual property
                  rights of any third party.

                           (ii)     Such Grantor is the exclusive owner of the
                  entire and unencumbered right, title and interest in and to
                  the Intellectual Property Collateral and is entitled to use
                  all such Intellectual Property Collateral without limitation,
                  subject only to the license terms of the Licenses.

                           (iii)    The Intellectual Property Collateral set
                  forth on Schedule IV hereto includes all of the patents,
                  patent applications, trademark registrations and applications,
                  copyright registrations and applications and Licenses owned by
                  such Grantor.

                           (iv)     The Intellectual Property Collateral is
                  subsisting and has not been adjudged invalid or unenforceable,
                  in whole or part, and to the best of such Grantor's knowledge,
                  is valid and enforceable. Such Grantor is not aware of any
                  uses of any item of Intellectual Property Collateral that
                  could be expected to lead to such item becoming invalid or
                  unenforceable.

                                       10
<PAGE>   11

                           (v)      To such Grantor's knowledge, such Grantor
                  has made or performed all filings, recordings and other acts
                  and has paid all required fees and taxes to maintain and
                  protect its interest in each and every item of Intellectual
                  Property Collateral in full force and effect in the United
                  States, and to protect and maintain its interest therein
                  including, without limitation, recordations of any of its
                  interests in the Patents and Trademarks with the U.S. Patent
                  and Trademark Office and recordation of any of its interests
                  in the Copyrights with the U.S. Copyright Office. Such Grantor
                  has used proper statutory notice in connection with its use in
                  the United States of each patent, trademark and copyright of
                  the Intellectual Property Collateral.

                           (vi)     Except as set forth on Schedule IV hereto,
                  no action, suit, investigation, litigation or proceeding is
                  pending or, to the knowledge of such Grantor, overtly
                  threatened against such Grantor (i) based upon or challenging
                  or seeking to deny or restrict the use of any of the
                  Intellectual Property Collateral, or (ii) alleging that any
                  services provided by, processes used by, or products
                  manufactured or sold by, such Grantor infringe upon or
                  misappropriate any patent, trademark, copyright or any other
                  proprietary right of any third party. To the best of such
                  Grantor's knowledge except as set forth on Schedule IV hereto,
                  no Person is engaging in any activity that infringes upon or
                  misappropriates the Intellectual Property Collateral or upon
                  the rights of such Grantor therein. Except as set forth on
                  Schedule IV hereto, such Grantor has not granted any license,
                  release, covenant not to sue, non-assertion assurance, or
                  other right to any Person with respect to any part of the
                  Intellectual Property Collateral other than in the ordinary
                  course of business. The consummation of the transactions
                  contemplated by the Transaction Documents will not result in
                  the termination or impairment of any of the Intellectual
                  Property Collateral.

                           (vii)    To such Grantor's knowledge, with respect to
                  each License: (A) such License will not cease to be valid and
                  binding and in full force as a result of the rights and
                  interest granted herein, nor will the grant of such rights and
                  interest constitute a breach or default under such License or
                  otherwise give the licensor or licensee a right to terminate
                  such License; (B) such Grantor has not received any notice of
                  termination or cancellation under such License; (C) such
                  Grantor has not received any notice of a breach or default
                  under such License, which breach or default has not been
                  cured; and (D) such Grantor has enforced quality control over
                  the licenses of its Trademarks under the applicable Licenses.

                           (viii)   To the best of such Grantor's acknowledge,
                  none of the Trade Secrets of such Grantor has been used,
                  divulged, disclosed or appropriated to the detriment of such
                  Grantor for the benefit of any other Person other than such
                  Grantor and its Affiliates (as defined in the Credit
                  Agreement) and (B) no employee, independent contractor or
                  agent of such Grantor is in default or breach of any term of
                  any employment agreement, non-disclosure agreement, assignment
                  of inventions agreement or similar agreement or contract
                  relating in any way to the protection, ownership, development,
                  use or transfer of such Grantor's Intellectual Property
                  Collateral.

                                       11
<PAGE>   12

                  Section 9.        Further Assurances.

                  (a)      Each Grantor agrees that from time to time, at the
         expense of the each Grantor, each Grantor will promptly execute and
         deliver all further instruments and documents, and take all further
         action, that may be necessary or desirable, or that the Trustee, the
         Administrative Agent or the Public Trustee may reasonably request, in
         order to perfect and protect any pledge, assignment or security
         interest granted or purported to be granted hereby or to enable the
         Trustee to exercise and enforce its rights and remedies hereunder with
         respect to any Collateral, including the filing of any Uniform
         Commercial Code or fixture financing statements; provided, however,
         that no Grantor shall be required to file or record any fixture
         financing statement where such filing or recording would result in a
         filing or recording tax or fee (other than nominal fees). Without
         limiting the generality of the foregoing, each Grantor will: (i) if any
         Collateral shall be evidenced by a promissory note or other instrument,
         deliver and pledge to the Trustee hereunder such note or instrument
         duly indorsed or accompanied by duly executed instruments of transfer
         or assignment, all in form and substance satisfactory to the Trustee;
         and (ii) execute and file such financing or continuation statements, or
         amendments thereto, and such other instruments or notices, as may be
         necessary or desirable, or as the Trustee may request, in order to
         perfect and preserve the pledge, assignment and security interest
         granted or purported to be granted hereby.

                  (b)      Each Grantor hereby authorizes the Trustee to file
         one or more financing or continuation statements, and amendments
         thereto, relating to all or any part of the Collateral without the
         signature of each Grantor where permitted by law. A photocopy or other
         reproduction of this Agreement or any financing statement covering the
         Collateral or any part thereof shall be sufficient as a financing
         statement where permitted by law.

                  (c)      Each Grantor will furnish to the Trustee from time to
         time statements and schedules further identifying and describing the
         Collateral and such other reports in connection with the Collateral as
         the Trustee may reasonably request, all in reasonable detail.

                  (d)      Each Grantor shall provide the Trustee not less than
         30 days' written notice prior to the effective date of the transfer of
         such Grantor's jurisdiction of formation so that all action required by
         this Section 9 shall have been taken prior thereto (and upon the taking
         of such action in such jurisdiction, Schedule III shall be
         automatically amended as appropriate).

                  Section 10.       As to Equipment and Inventory. Each Grantor
will keep the Equipment and Inventory of such Grantor (other than Inventory sold
in the ordinary course of business) at the places therefor specified in Section
8(a) or, upon 30 days' prior written notice to the Trustee, at such other places
in a jurisdiction where all action required by Section 9 shall have been taken
with respect to such Equipment and Inventory (and, upon the taking of such
action in such jurisdiction, Schedule II hereto shall be automatically amended
to include such other places).

                  Section 11.       Insurance.

                                       12
<PAGE>   13

                  (a)      Each Grantor will, at its own expense, maintain
         insurance with respect to the Equipment and Inventory of such Grantor
         in such amounts, against such risks, in such form and with such
         insurers, as shall be required under the Indenture and the Credit
         Agreement. Except during the continuance of an Actionable Default, each
         policy of each Grantor for liability insurance and property damage
         insurance shall provide for all losses to be paid on behalf of such
         Grantor or to be paid directly to such Grantor, respectively. Each such
         policy shall in addition (i) name such Grantor and the Trustee as
         insured parties thereunder (without any representation or warranty by
         or obligation upon the Trustee) as their interests may appear, (ii)
         contain the agreement by the insurer that any loss thereunder shall be
         payable to the Trustee notwithstanding any action, inaction or breach
         of representation or warranty by such Grantor, (iii) provide that there
         shall be no recourse against the Trustee for payment of premiums or
         other amounts with respect thereto and (iv) provide that at least 10
         days' prior written notice of cancellation or of lapse shall be given
         to the Trustee by the insurer. Each Grantor will, if so requested by
         the Trustee, deliver to the Trustee original or duplicate policies of
         such insurance and, as often as the Trustee may reasonably request, a
         report of a reputable insurance broker with respect to such insurance.

                  (b)      Reimbursement under any liability insurance
         maintained by any Grantor pursuant to this Section 11 may be paid
         directly to the Person who shall have incurred liability covered by
         such insurance. In case of any loss involving damage to Equipment or
         Inventory when subsection (c) of this Section 11 is not applicable, the
         applicable Grantor will make or cause to be made the necessary repairs
         to or replacements of such Equipment or Inventory, and any proceeds of
         insurance properly received by or released to such Grantor shall be
         used by such Grantor, except as otherwise required hereunder or by the
         Credit Agreement, to pay or as reimbursement for the costs of such
         repairs or replacements.

                  (c)      So long as no Actionable Default shall have occurred
         and be continuing, all insurance payments received by the Trustee in
         connection with any loss, damage or destruction of any Inventory or
         Equipment will be released by the Trustee to the applicable Grantor and
         to the extent required under the Credit Agreement or the Indenture,
         such Grantor shall use such insurance payments for the repair,
         replacement or restoration thereof. Upon the occurrence and during the
         continuance of any Actionable Default, all insurance payments in
         respect of such Equipment or Inventory shall be paid to the Trustee and
         shall, in the Trustee's sole discretion, (i) be released to the
         applicable Grantor to be applied as set forth in the first sentence of
         this subsection (c) or (ii) be held as additional Collateral hereunder
         or applied as specified in Section 17(b).

                  Section 12.       Place of Perfection; Records; Collection of
Receivables.

                  (a)      Each Grantor will keep its chief executive office,
         the office where it keeps its records concerning the Collateral and
         Related Contracts to which such Grantor is a party and all originals of
         all chattel paper that evidence Receivables of such Grantor, at the
         location therefor specified in Section 8(a) or, upon 30 days' prior
         written notice to the Trustee, the Administrative Agent and the Public
         Trustee at such other locations in a jurisdiction where all actions
         required by Section 9 shall have been taken with respect to

                                       13
<PAGE>   14

         the Collateral of such Grantor (and, upon the taking of such action in
         such jurisdiction, Schedule III hereto shall be automatically amended
         to include such other location). Each Grantor will hold and preserve
         its records relating to the Collateral, the Related Contracts and
         chattel paper and will permit representatives of the Trustee, the
         Administrative Agent and the Public Trustee at any time during normal
         business hours to inspect and make abstracts from such records and
         other documents.

                  (b)      Except as otherwise provided in this subsection (b),
         each Grantor will continue to collect, at its own expense, all amounts
         due or to become due such Grantor under the Receivables and the Related
         Contracts. In connection with such collections, such Grantor may take
         (and, at the direction of the Trustee, the Administrative Agent or the
         Public Trustee upon the occurrence and during the continuance of an
         Actionable Default, will take) such action as such Grantor or the
         Trustee may deem necessary or advisable to enforce collection of the
         Receivables and the Related Contracts; provided, however, that the
         Trustee shall have the right, upon the occurrence and during the
         continuance of an Actionable Default and upon written notice to such
         Grantor of its intention to do so, to notify the obligors under any
         Receivables or Related Contracts of the assignment of such Receivables
         or Related Contracts to the Trustee and to direct such obligors to make
         payment of all amounts due or to become due to such Grantor thereunder
         directly to the Trustee and, upon such notification and at the expense
         of such Grantor, to enforce collection of any such Receivables or
         Related Contracts, and to adjust, settle or compromise the amount or
         payment thereof, in the same manner and to the same extent as such
         Grantor might have done. After receipt by any Grantor of the notice
         from the Trustee referred to in the proviso to the preceding sentence,
         (i) all amounts and proceeds (including instruments) received by such
         Grantor in respect of the Receivables and the Related Contracts of such
         Grantor shall be received in trust for the benefit of the Trustee
         hereunder, shall be segregated from other funds of such Grantor and
         shall be forthwith paid over to the Trustee in the same form as so
         received (with any necessary indorsement) to be deposited in the Trust
         Account and either (A) released to such Grantor on such terms as
         provided in the Trust Agreement so long as no Actionable Default shall
         have occurred and be continuing or (B) if any Actionable Default shall
         have occurred and be continuing, applied as provided in Section 17(b),
         (ii) such Grantor will not adjust, settle or compromise the amount or
         payment of any Receivable, release wholly or partly any obligor
         thereof, or allow any credit or discount thereon and (iii) such Grantor
         will not permit or consent to the subordination of its right to payment
         under any of the Receivables or the Related Contracts to any other
         indebtedness or obligations of the obligor thereof.

                  Section 13.       As to Intellectual Property Collateral.

                  (a)      With respect to each item of its Intellectual
         Property Collateral, each Grantor agrees to take, at its expense, all
         necessary steps, including, without limitation, in the U.S. Patent and
         Trademark Office, the U.S. Copyright Office and any other governmental
         authority, to (i) maintain the validity and enforceability of each such
         item of Intellectual Property Collateral and maintain each such item of
         Intellectual Property Collateral in full force and effect, and (ii)
         pursue the registration and maintenance of each patent, trademark, or
         copyright registration or application, now or hereafter included in

                                       14
<PAGE>   15

         the Intellectual Property Collateral of such Grantor, including,
         without limitation, the payment of required fees and taxes, the filing
         of responses to office actions issued by the U.S. Patent and Trademark
         Office, the U.S. Copyright Office or other governmental authorities,
         the filing of applications for renewal or extension, the filing of
         affidavits under Sections 8 and 15 of the U.S. Trademark Act, the
         filing of divisional, continuation, continuation-in-part, reissue and
         renewal applications or extensions, the payment of maintenance fees and
         the participation in interference, reexamination, opposition,
         cancellation, infringement and misappropriation proceedings, except in
         each case to the extent such Grantor has determined that such action is
         not appropriate or cost effective in light of costs associated with
         such action or the value of the related Intellectual Property
         Collateral. No Grantor shall, without the written consent of the
         Trustee, discontinue use of or otherwise abandon any Intellectual
         Property Collateral, or abandon any right to file an application for
         letters patent, trademark, or copyright, unless such Grantor shall have
         previously determined that such use or the pursuit or maintenance of
         such Intellectual Property Collateral is no longer desirable in the
         conduct of such Grantor's business and that the loss thereof would not
         be reasonably likely to have a Material Adverse Effect.

                  (b)      Each Grantor shall take all steps which it or the
         Trustee, Administrative Agent or Public Trustee deems reasonable and
         appropriate under the circumstances and in the case of any of the
         Trustee, Administrative Agent or Public Trustee, which it reasonably
         requests to preserve and protect each item of its Intellectual Property
         Collateral, including, without limitation, maintaining the quality of
         any and all products or services used or provided in connection with
         any of the Trademarks, consistent with the quality of the products and
         services as of the date hereof, and taking all reasonable steps to
         ensure that all licensed users of any of the Trademarks use such
         consistent standards of quality.

                  (c)      With respect to its Intellectual Property Collateral,
         each Grantor agrees to execute an agreement, in substantially the form
         set forth in Exhibit B hereto (an "INTELLECTUAL PROPERTY SECURITY
         AGREEMENT"), for recording the security interest granted hereunder to
         the Trustee in such Intellectual Property Collateral with the U.S.
         Patent and Trademark Office, the U.S. Copyright Office and any other
         governmental authorities necessary to perfect the security interest
         hereunder in such Intellectual Property Collateral.

                  (d)      Each Grantor agrees that, should it obtain an
         ownership interest in any item of the type set forth in Section 1(g)
         which is not on the date hereof a part of the Intellectual Property
         Collateral consisting of United States registered patents, trademarks
         and copyrights (the "AFTER-ACQUIRED INTELLECTUAL PROPERTY"), (i) the
         provisions of Section 1 shall automatically apply thereto, (ii) any
         such After-Acquired Intellectual Property and, in the case of
         trademarks, the goodwill of the business connected therewith or
         symbolized thereby, shall automatically become part of the Intellectual
         Property Collateral subject to the terms and conditions of this
         Agreement with respect thereto, (iii) such Grantor shall give written
         notice to the Trustee in accordance herewith of any such After-Acquired
         Intellectual Property within 30 days following the calendar quarter in
         which such ownership interest was obtained and (iv) such Grantor shall
         execute and deliver to the Trustee an IP Security Agreement Supplement
         in substantially the form of

                                       15
<PAGE>   16

         Exhibit C hereto covering such After-Acquired Intellectual Property as
         "Additional Collateral" thereunder and as defined therein, and shall
         record such IP Security Agreement Supplement with the U.S. Patent and
         Trademark Office, the U.S. Copyright Office and any other United States
         Federal governmental authorities necessary to perfect the security
         interest hereunder in such After-Acquired Intellectual Property.

                  Section 14.       Voting Rights; Dividends; Etc.

                  (a)      So long as no Actionable Default shall have occurred
         and be continuing:

                           (i)      each Grantor shall be entitled to exercise
                  any and all voting and other consensual rights pertaining to
                  the Security Collateral or any part thereof for any purpose
                  not inconsistent with the terms of this Agreement or the other
                  Debt Instruments.

                           (ii)     each Grantor shall be entitled to receive
                  and retain any and all dividends, interest and other
                  distributions paid in respect of the Security Collateral;
                  provided, however, that any and all

                           (A)      dividends, interest and other distributions
                  paid or payable other than in cash in respect of, and
                  instruments and other property received, receivable or
                  otherwise distributed in respect of, or in exchange for, any
                  Security Collateral,

                           (B)      dividends and other distributions paid or
                  payable in cash in respect of any Security Collateral in
                  connection with a partial or total liquidation or dissolution,
                  and

                           (C)      cash paid, payable or otherwise distributed
                  in exchange for any Security Collateral

         shall be, and shall be forthwith delivered to the Trustee to hold as,
         Security Collateral and shall, if received by each Grantor, be received
         in trust for the benefit of the Trustee, be segregated from the other
         property or funds of each Grantor and be forthwith delivered to the
         Trustee as Security Collateral in the same form as so received (with
         any necessary indorsement).

                           (iii)    The Trustee shall execute and deliver (or
                  cause to be executed and delivered) to each Grantor all such
                  proxies and other instruments as each Grantor may reasonably
                  request for the purpose of enabling each Grantor to exercise
                  the voting and other rights that it is entitled to exercise
                  pursuant to paragraph (i) above and to receive the dividends
                  or interest payments that it is authorized to receive and
                  retain pursuant to paragraph (ii) above.

                  (b)      Upon the occurrence and during the continuance of an
         Actionable Default:

                           (i)      All rights of each Grantor (x) to exercise
                  or refrain from exercising the voting and other consensual
                  rights that it would otherwise be entitled to exercise
                  pursuant to Section 14(a)(i) shall, upon notice to each
                  Grantor

                                       16
<PAGE>   17

                  by the Trustee, cease and (y) to receive the dividends and
                  other distributions that it would otherwise be authorized to
                  receive and retain pursuant to Section 14(a)(ii) shall
                  automatically cease, and all such rights shall thereupon
                  become vested in the Trustee, which shall thereupon have the
                  sole right to exercise or refrain from exercising such voting
                  and other consensual rights and to receive and hold as
                  Security Collateral such dividends and other distributions.

                           (ii)     All dividends and other distributions that
                  are received by each Grantor contrary to the provisions of
                  paragraph (i) of this Section 14(b) shall be received in trust
                  for the benefit of the Trustee, shall be segregated from other
                  funds of each Grantor and shall be forthwith paid over to the
                  Trustee as Security Collateral in the same form as so received
                  (with any necessary indorsement).

                  Section 15.       Transfers and Other Liens; Additional
Shares.

                  (a)      Each Grantor agrees that it will not (i) sell, assign
         (by operation of law or otherwise) or otherwise dispose of, or grant
         any option with respect to, any of the Collateral, other than sales,
         assignments and other dispositions of Collateral, and options relating
         to Collateral, permitted under the terms of the Debt Instruments, or
         (ii) create or suffer to exist any Lien upon or with respect to any of
         the Collateral of such Grantor except for the pledge, assignment and
         security interest created under this Agreement and Permitted Liens (as
         defined in the Credit Agreement).

                  (b)      Each Grantor agrees that it will (i) cause each
         issuer of the Pledged Shares pledged by such Grantor not to issue any
         stock or other securities in addition to or in substitution for the
         Pledged Shares issued by such issuer, except to such Grantor, and (ii)
         pledge hereunder, immediately upon its acquisition (directly or
         indirectly) thereof, any and all additional shares of stock or other
         securities.

                  Section 16.       Trustee May Perform.

                  If any Grantor fails to perform any agreement contained
herein, the Trustee may, as the Trustee deems necessary to protect the security
interest granted hereunder in the Collateral or to protect the value thereof,
but without any obligation to do so (and upon the occurrence and during the
continuation of an Actionable Default without notice), itself perform, or cause
performance of, such agreement, and the reasonable expenses of the Trustee
incurred in connection therewith shall be payable by such Grantor as provided in
the Trust Agreement.

                                       17
<PAGE>   18

                  (a)      The Trustee's Duties.

                  Without limiting the protections provided the Trustee under
Section 5 of the Trust Agreement (which are hereby incorporated herein by
reference), the powers conferred on the Trustee hereunder are solely to protect
its interest in the Collateral and shall not impose any duty upon it to exercise
any such powers. Except for the safe custody of any Collateral in its possession
and the accounting for moneys actually received by it hereunder, the Trustee
shall have no duty as to any Collateral, as to ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relative to any Collateral, whether or not any Secured Party has or is
deemed to have knowledge of such matters, or as to the taking of any necessary
steps to preserve rights against any parties or any other rights pertaining to
any Collateral. The Trustee shall be deemed to have exercised reasonable care in
the custody and preservation of any Collateral in its possession if such
Collateral is accorded treatment substantially equal to that which it accords
its own property.

                  Section 17.       Remedies.

                  If any Actionable Default shall have occurred and be
continuing:

                  (a)      The Trustee may exercise in respect of the
         Collateral, in addition to other rights and remedies provided for
         herein or otherwise available to it, all the rights and remedies of a
         secured party upon default under the N.Y. Uniform Commercial Code
         (whether or not the N.Y. Uniform Commercial Code applies to the
         affected Collateral) and also may (i) require each Grantor to, and each
         Grantor hereby agrees that it will at its expense and upon request of
         the Trustee forthwith, assemble all or part of the Collateral as
         directed by the Trustee and make it available to the Trustee at a place
         to be designated by the Trustee that is reasonably convenient to both
         parties, (ii) without notice except as specified below, sell the
         Collateral or any part thereof in one or more parcels at public or
         private sale, at any of the Trustee's offices or elsewhere, for cash,
         on credit or for future delivery, and upon such other terms as the
         Trustee may deem commercially reasonable, (iii) occupy any premises
         owned or leased by any of the Grantors where the Collateral or any part
         thereof is assembled or located for a reasonable period in order to
         effectuate its rights and remedies hereunder or under law, without
         obligation to such Grantor in respect of such occupation; and (iv)
         exercise any and all rights and remedies of any of the Grantors under
         or in connection with the Agreements, the Receivables and the Related
         Contracts or otherwise in respect of the Collateral, including, without
         limitation, any and all rights of such Grantor to demand or otherwise
         require payment of any amount under, or performance of any provision
         of, the Agreements, the Receivables and the Related Contracts. Each
         Grantor agrees that, to the extent notice of sale shall be required by
         law, at least ten days' notice to each Grantor of the time and place of
         any public sale or of the time after which any private sale is to be
         made shall constitute reasonable notification. The Trustee shall not be
         obligated to make any sale of Collateral regardless of notice of sale
         having been given. The Trustee may adjourn any public or private sale
         from time to time by announcement at the time and place fixed therefor,
         and such sale may, without further notice, be made at the time and
         place to which it was so adjourned.

                                       18
<PAGE>   19

                  (b)      All cash proceeds received by the Trustee in respect
         of any sale of, collection from, or other realization upon all or any
         part of the Collateral shall be deposited into the Trust Account and
         may, in the discretion of the Trustee, be held by the Trustee as
         collateral for, and/or then or at any time thereafter applied in whole
         or in part by the Trustee against the Secured Obligations as provided
         in Section 3.4 of the Trust Agreement.

                  (c)      The Trustee may exercise any and all rights and
         remedies of  each Grantor in respect of the Collateral.

                  (d)      All payments received by each Grantor in respect of
         the Collateral shall be received in trust for the benefit of the
         Trustee, shall be segregated from other funds of each Grantor and shall
         be forthwith paid over to the Trustee in the same form as so received
         (with any necessary indorsement).

                  (e)      The Trustee may, without notice to each Grantor
         except as required by law and at any time or from time to time, charge,
         set-off and otherwise apply all or any part of the Secured Obligations
         against the Trust Account, the L/C Cash Collateral Account or any part
         thereof.

                  Section 18.       Registration Rights.

                  If the Trustee shall determine to exercise its right to sell
all or any of the Security Collateral pursuant to Section 17, the Company agrees
that, upon request of the Trustee, the Company will, at its own expense:

                  (a)      execute and deliver, and cause Caremark, Inc. and the
         directors and officers of such issuer to execute and deliver, all such
         instruments and documents, and do or cause to be done all such other
         acts and things, as may be necessary or, in the opinion of the Trustee,
         advisable to register the shares thereof pledged hereunder under the
         provisions of the Securities Act of 1933, as from time to time amended
         (the "SECURITIES ACT"), to cause the registration statement relating
         thereto to become effective and to remain effective for such period as
         prospectuses are required by law to be furnished and to make all
         amendments and supplements thereto and to the related prospectus that,
         in the opinion of the Trustee, are necessary or advisable, all in
         conformity with the requirements of the Securities Act and the rules
         and regulations of the Securities and Exchange Commission applicable
         thereto;

                  (b)      use its best efforts to qualify such shares under the
         state securities or "Blue Sky" laws and to obtain all necessary
         governmental approvals for the sale of such shares, as requested by the
         Trustee;

                  (c)      cause such issuer to make available, as soon as
         practicable, an earnings statement that will satisfy the provisions of
         Section 11(a) of the Securities Act;

                  (d)      provide the Trustee with such other information and
         projections as may be necessary or, in the opinion of the Trustee,
         advisable to enable the Trustee to effect the sale of such shares; and

                                       19
<PAGE>   20

                  (e)      do or cause to be done all such other acts and things
         as may be necessary to make such sale of such shares or any part
         thereof valid and binding and in compliance with applicable law.

                  The Trustee is authorized, in connection with any sale of such
shares pursuant to Section 17, to deliver or otherwise disclose to any
prospective purchaser of such shares (i) any registration statement or
prospectus, and all supplements and amendments thereto, prepared pursuant to
clause (a) above, (ii) any information and projections provided to it pursuant
to clause (d) above and (iii) any other information in its possession relating
to such shares.

                  Section 19.       Amendments; Waivers; Additional Grantors;
Etc.

                  (a)      No amendment or waiver of any provision of this
         Agreement, and no consent to any departure by any Grantor herefrom,
         shall in any event be effective unless the same shall be in writing and
         signed by the Trustee with the written consent of the Administrative
         Agent and the Public Trustee, and then such waiver or consent shall be
         effective only in the specific instance and for the specific purpose
         for which given. No failure on the part of the Trustee or any other
         Secured Party to exercise, and no delay in exercising any right
         hereunder, shall operate as a waiver thereof; nor shall any single or
         partial exercise of any such right preclude any other or further
         exercise thereof or the exercise of any other right.

                  (b)      Upon the execution and delivery by any Person of a
         security agreement supplement in substantially the form of Exhibit A
         hereto (each a "SECURITY AGREEMENT SUPPLEMENT"), (i) such Person shall
         be referred to as an "Additional GRANTOR" and shall be and become a
         Grantor hereunder and each reference in this Agreement to "Grantor"
         shall also mean and be a reference to such Additional Grantor, and (ii)
         the supplemental schedules I, II, III, and IV attached to each Security
         Agreement Supplement shall be incorporated into and become a part of
         and supplement Schedules I, II, III, and IV, respectively, hereto, and
         the Trustee may attach such supplemental schedules to such Schedules;
         and each reference to such Schedules shall mean and be a reference to
         such Schedules as supplemented pursuant to each Security Agreement
         Supplement.

                  Section 20.       Notices; Etc.

                  All notices and other communications provided for hereunder
shall be in writing (including telecopier communication) and mailed, telecopied,
or delivered to, in the case of a Grantor or the Trustee, addressed to it at its
address specified in the Trust Agreement and, in the case of each Additional
Grantor, addressed to it at its address set forth opposite such Additional
Grantor's name on the signature page to the Security Agreement Supplement
pursuant to which it became a party hereto; or, as to any party, at such other
address as shall be designated by such party in a written notice to the other
parties. All such notices and other communications shall, when mailed or
telecopied, be effective when deposited in the mails or telecopied,
respectively, addressed as aforesaid; provided, however, that any notices and
other communications to the Trustee shall not be effective until received by the
Trustee. Delivery by telecopier of an executed counterpart of any amendment or
waiver of any provision of this Agreement or of any

                                       20
<PAGE>   21

Security Agreement Supplement or Schedule hereto shall be effective as delivery
of an original executed counterpart thereof.

                  Section 21.       Continuing Security Interest.

                  This Agreement shall create a continuing security interest in
the Collateral and shall (a) remain in full force and effect until the release
of all Collateral as provided in Section 6.1 of the Trust Agreement, (b) be
binding upon each Grantor, its successors and assigns and (c) inure, together
with the rights and remedies of the Trustee hereunder, to the benefit of the
Trustee, the Secured Parties and their respective successors, transferees and
assigns.

                  Section 22.       Execution in Counterparts.

                  This Agreement may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Agreement by telecopier shall
be effective as delivery of an original executed counterpart of this Agreement.

                  Section 23.       Governing Law.

                  This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.

                  IN WITNESS WHEREOF, each Grantor has caused this Agreement to
be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.

                                        CAREMARK RX, INC.

                                        By: /s/ Peter J. Clemens
                                          --------------------------------------
                                        Title:  SVP & Treasurer

Address for Notices:                    CAREMARK INTERNATIONAL INC.
-------------------
3000 Galleria Tower
Suite 1000                              By: /s/ Peter J. Clemens
                                                Peter J. Clemens
Birmingham, AL  35244                   Title: VP
Telecopier No. (205) 733-9780
Attention:  Peter J. Clemens IV

                                        CAREMARK INC.

                                        By: /s/ Peter J. Clemens
                                                Peter J. Clemens
                                        Title:  VP

                                       21

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