<Page>
Exhibit 10.3
EXECUTION COPY
BRIDGE FACILITY CREDIT AGREEMENT
by and among
CVS CORPORATION,
THE LENDERS PARTY HERETO,
BANK OF AMERICA, N.A., CREDIT SUISSE FIRST BOSTON, and
WACHOVIA SECURITIES, INC.,
as Co-Syndication Agents,
and
THE BANK OF NEW YORK,
as Administrative Agent
----------
Dated as of June 11, 2004
----------
BNY CAPITAL MARKETS, INC.
as Lead Arranger and Book Runner
<Page>
TABLE OF CONTENTS
<Table>
<S> <C>
<C>
1. DEFINITIONS AND PRINCIPLES
OF CONSTRUCTION ..........................................1
1.1 Definitions
...................................................................1
1.2 Principles of Construction
...................................................14
2. AMOUNT AND TERMS OF LOANS
..........................................................14
2.1 Loans
........................................................................14
2.2 Notice of Borrowing Loans
....................................................15
2.3 [Intentionally Omitted]
......................................................15
2.4 Use of Proceeds
..............................................................15
2.5 Termination or Reduction of
Commitments ......................................16
2.6 Prepayments of Loans
.........................................................17
2.7 [Intentionally Omitted]
......................................................17
2.8 Notes
........................................................................17
3. PROCEEDS, PAYMENTS,
CONVERSIONS, INTEREST, YIELD PROTECTION AND FEES
...............17
3.1 Disbursement of the Proceeds
of the Loans ....................................17
3.2 Payments
.....................................................................18
3.3 Conversions; Other Matters
...................................................19
3.4 Interest Rates and Payment
Dates .............................................20
3.5 Indemnification for Loss
.....................................................21
3.6 Reimbursement for Costs,
Etc. ................................................22
3.7 Illegality of Funding
........................................................23
3.8 Option to Fund; Substituted
Interest Rate ....................................23
3.9 Certificates of Payment and
Reimbursement ....................................24
3.10
Taxes; Net Payments
..........................................................24
3.11
Facility Fees
................................................................25
3.12
[Intentionally
Omitted]
......................................................26
3.13
Replacement of Lender
........................................................26
4. REPRESENTATIONS AND
WARRANTIES
.....................................................26
4.1 Existence and Power
..........................................................26
4.2 Authority
....................................................................27
4.3 Binding Agreement
............................................................27
4.4 Litigation
...................................................................27
4.5 No Conflicting Agreements
....................................................27
4.6 Taxes
........................................................................28
4.7 Compliance with Applicable
Laws; Filings .....................................28
4.8 Governmental Regulations
.....................................................28
</Table>
ii
<Page>
<Table>
<S> <C>
<C>
4.9 Federal Reserve Regulations;
Use of Proceeds .................................29
4.10
No Misrepresentation
.........................................................29
4.11
Plans
........................................................................29
4.12
Environmental Matters
........................................................30
4.13
Financial Statements
.........................................................30
5. CONDITIONS OF LENDING -
FIRST LOANS ON THE FIRST BORROWING DATE ....................31
5.1 Evidence of Corporate Action
.................................................31
5.2 Notes
........................................................................31
5.3 Opinion of Counsel to the
Borrower ...........................................31
5.4 Rating
.......................................................................31
6. CONDITIONS OF LENDING - ALL
LOANS ..................................................31
6.1 Compliance
...................................................................32
6.2 Requests
.....................................................................32
6.3 Loan Closings
................................................................32
6.4 Eckerd Acquisition
...........................................................32
7. AFFIRMATIVE COVENANTS
..............................................................32
7.1 Legal Existence
..............................................................32
7.2 Taxes
........................................................................33
7.3 Insurance
....................................................................33
7.4 Performance of Obligations
...................................................33
7.5 Condition of Property
........................................................33
7.6 Observance of Legal
Requirements .............................................33
7.7 Financial Statements and
Other Information ...................................34
7.8 Records
......................................................................35
7.9 Authorizations
...............................................................35
8. NEGATIVE COVENANTS
.................................................................35
8.1 Subsidiary Indebtedness
......................................................35
8.2 Liens
........................................................................36
8.3 Dispositions
.................................................................36
8.4 Merger or Consolidation,
Etc. ................................................37
8.5 Acquisitions
.................................................................37
8.6 Restricted Payments
..........................................................37
8.7 Limitation on Upstream
Dividends by Subsidiaries .............................37
8.8 Limitation on Negative
Pledges ...............................................38
8.9 Ratio of Consolidated
Indebtedness to Total Capitalization ...................38
8.10
Eckerd Acquisition
...........................................................38
</Table>
iii
<Page>
<Table>
<S> <C>
<C>
9. DEFAULT
............................................................................39
9.1 Events of Default
............................................................39
9.2 Remedies
.....................................................................41
10. AGENT
..............................................................................42
10.1
Appointment
..................................................................42
10.2
Delegation of Duties
.........................................................42
10.3
Exculpatory Provisions
.......................................................42
10.4
Reliance by
Administrative Agent
.............................................43
10.5
Notice of Default
............................................................43
10.6
Non-Reliance
.................................................................43
10.7
[Intentionally
Omitted]
......................................................44
10.8
Administrative Agent
in Its Individual Capacity ..............................44
10.9
Successor
Administrative Agent
...............................................44
10.10
Co-Syndication Agents
................................................ .......45
11. OTHER PROVISIONS
...................................................................45
11.1
Amendments, Waivers,
Etc. ....................................................45
11.2
Notices
......................................................................46
11.3
No Waiver; Cumulative
Remedies ...............................................47
11.4
Survival of
Representations and Warranties
...................................47
11.5
Payment of Expenses
and Taxes; Indemnified Liabilities .......................47
11.6
Lending Offices
..............................................................48
11.7
Successors and Assigns
.......................................................48
11.8
Counterparts
.................................................................51
11.9
Set-off and Sharing of
Payments ..............................................52
11.10 Indemnity
....................................................................52
11.11 Governing
Law
................................................................54
11.12
Severability
.................................................................54
11.13
Integration
..................................................................54
11.14 Treatment
of Certain Information
.............................................54
11.15
Acknowledgments
..............................................................55
11.16 Consent to
Jurisdiction
......................................................55
11.17 Service of
Process
...........................................................55
11.18 No
Limitation on Service or Suit
.............................................56
11.19 WAIVER OF
TRIAL BY JURY
......................................................56
11.20 Effective
Date
...............................................................56
</Table>
iv
<Page>
EXHIBITS
Exhibit A
List of Commitments
Exhibit B
Form of Note
Exhibit C
Form of Borrowing Request
Exhibit D-1 Form of
Opinion of Counsel to the Borrower
Exhibit D-2 Form of
Opinion of Special Counsel to the Borrower
Exhibit E
Form of Assignment and Acceptance Agreement
v
<Page>
BRIDGE FACILITY CREDIT AGREEMENT, dated as of June 11, 2004, by
and
among CVS CORPORATION, a Delaware
corporation (the "BORROWER"), the Lenders
party hereto from time to time (each a
"LENDER" and, collectively, the
"LENDERS"), BANK OF AMERICA, N.A., CREDIT
SUISSE FIRST BOSTON, and WACHOVIA
SECURITIES, INC., as co-syndication agents
(in such capacity, each a
"CO-SYNDICATION AGENT") and THE BANK OF NEW
YORK ("BNY"), as administrative
agent for the Lenders (in such capacity,
the "ADMINISTRATIVE AGENT").
1. DEFINITIONS AND PRINCIPLES
OF CONSTRUCTION
1.1 Definitions
When used in any Loan Document (as defined below), each of the
following terms shall have the meaning
ascribed thereto unless the context
otherwise specifically requires:
"ABR ADVANCES":
the Loans (or any portions thereof) at such time as they
(or such portions) are made or are being
maintained at a rate of interest based
upon the Alternate Base Rate.
"ACCUMULATED
FUNDING DEFICIENCY": as defined in Section 302 of ERISA.
"ACQUISITION":
with respect to any Person, the purchase or other
acquisition by such Person, by any means
whatsoever (including by devise,
bequest, gift, through a dividend or
otherwise), of (a) stock of, or other
equity securities of, any other Person if,
immediately thereafter, such other
Person would be either a consolidated
subsidiary of such Person or otherwise
under the control of such Person, (b) any
business, going concern or division or
segment thereof, or (c) the Property of any
other Person other than in the
ordinary course of business, provided that
(i) no acquisition of substantially
all of the assets, or any division or
segment, of such other Person shall be
deemed to be in the ordinary course of
business and (ii) no redemption,
retirement, purchase or acquisition by any
Person of the stock or other equity
securities of such Person shall be deemed
to constitute an Acquisition.
"ADMINISTRATIVE
AGENT": as defined in the preamble.
"ADMINISTRATIVE
QUESTIONNAIRE": an Administrative Questionnaire in a form
supplied by the Administrative Agent.
"AFFECTED
ADVANCE": as defined in Section 3.8(b).
"AFFILIATE":
with respect to any Person at any time and from time to time,
any other Person (other than a wholly-owned
subsidiary of such Person) which, at
such time (a) controls such Person, (b) is
controlled by such Person or (c) is
under common control with such Person. The
term "control", as used in this
definition with respect to any Person,
means the power, whether direct or
indirect through one or more
intermediaries, to direct or cause the direction of
the management and policies of such Person,
whether through the ownership of
voting securities or other interests, by
contract or otherwise.
<Page>
"AGGREGATE
COMMITMENT AMOUNT": at any time, the sum of the Commitment
Amounts of the Lenders at such time under
this Agreement.
"AGGREGATE
CREDIT EXPOSURE": at any time, the sum at such time of the
aggregate Credit Exposure of the Lenders at
such time under this Agreement.
"AGREEMENT":
this Credit Agreement, as the same may be amended,
supplemented or otherwise modified from
time to time.
"ALTERNATE BASE
RATE": for any day, a rate per annum equal to the greater
of (a) the BNY Rate in effect on such day,
or (b) 0.50% plus the Federal Funds
Effective Rate (rounded, if necessary, to
the nearest l/100th of 1% or, if there
is no nearest 1/100 of 1%, then to the next
higher 1/100 of 1%) in effect on
such day.
"APPLICABLE
MARGIN": (i) with respect to the unpaid principal balance of
ABR Advances, the applicable percentage set
forth below in the column entitled
"ABR Advances", (ii) with respect to the
unpaid principal balance of Eurodollar
Advances, the applicable percentage set
forth below in the column entitled
"Eurodollar Advances" and (iii) with
respect to the Facility Fee, the applicable
percentage set forth below in the column
entitled "Facility Fee" in each case
opposite the applicable Pricing Level:
<Table>
<Caption>
ABR
Eurodollar
Facility
Pricing Level
Advances
Advances
Fee
---------------------------------------------------------------------------
<S>
<C>
<C>
<C>
Pricing Level I
0%
0.155%
0.045%
Pricing Level II
0%
0.195%
0.055%
Pricing Level III
0%
0.235%
0.065%
Pricing Level IV
0%
0.300%
0.075%
Pricing Level V
0%
0.350%
0.100%
Pricing Level VI
0%
0.425%
0.125%
Pricing Level VII
0%
0.500%
0.150%
</Table>
Decreases in the Applicable Margin
resulting from a change in Pricing Level
shall become effective upon the delivery by
the Borrower to the Administrative
Agent of a notice pursuant to Section
7.7(d). Increases in the Applicable Margin
resulting from a change in Pricing Level
shall become effective on the effective
date of any downgrade or withdrawal in the
rating by Moody's or S&P of the
senior unsecured long term debt rating of
the Borrower.
2
<Page>
"APPROVED FUND":
with respect to any Lender that is a fund that invests in
commercial loans, any other fund that
invests in commercial loans and is managed
or advised by the same investment advisor
as such Lender or by an Affiliate of
such investment advisor.
"ASSIGNMENT AND
ACCEPTANCE AGREEMENT": an assignment and acceptance
agreement executed by an assignor and an
assignee pursuant to which, subject to
the terms and conditions hereof and
thereof, the assignor assigns to the
assignee all or any portion of such
assignor's Loans, Notes and Commitment,
substantially in the form of Exhibit E.
"BENEFITED
LENDER": as defined in Section 11.9(b).
"BNY": as
defined in the preamble.
"BNY RATE": a
rate of interest per annum equal to the rate of interest
publicly announced in New York City by BNY
from time to time as its prime
commercial lending rate, such rate to be
adjusted automatically (without notice)
on the effective date of any change in such
publicly announced rate.
"BORROWER": as
defined in the preamble.
"BORROWING
DATE": any Domestic Business Day or Eurodollar Business Day, as
the case may be, on which the Lenders shall
make Loans pursuant to a Borrowing
Request.
"BORROWING
REQUEST": a request for Loans in the form of Exhibit C.
"CHANGE OF
CONTROL": any of the following:
(i) any Person or group
(as such term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934, as
amended), (a) shall have or acquire
beneficial ownership of securities having
30% or more of the ordinary voting
power of the Borrower or (b) shall possess,
directly or indirectly, the power to
direct or cause the direction of the
management and policies of the Borrower,
whether through the ownership of voting
securities, by contract or otherwise; or
(ii)
the Continuing
Directors shall cease for any reason to constitute a
majority of the board of directors of the
Borrower then in office.
"COMMITMENT": in
respect of any Lender, such Lender's undertaking to make
Loans, subject to the terms and conditions
hereof, in an aggregate outstanding
principal amount not to exceed the
Commitment Amount of such Lender.
"COMMITMENT
AMOUNT": at any time and with respect to any Lender, the amount
set forth adjacent to such Lender's name
under the heading "Commitment Amount"
in Exhibit A at such time or, in the event
that such Lender is not listed on
Exhibit A, the "Commitment Amount" which
such Lender shall have assumed from
another Lender in accordance with Section
11.7 on or prior to such time, as the
same may be adjusted from time to time
pursuant to Sections 2.5 and 11.7(c).
3
<Page>
"COMMITMENT
PERCENTAGE": at any time and with respect to any Lender, a
fraction the numerator of which is such
Lender's Commitment Amount at such time,
and the denominator of which is the
Aggregate Commitment Amount at such time.
"COMMITMENT
PERIOD": the period commencing on the Effective Date and ending
on the Commitment Termination Date, or on
such earlier date as all of the
Commitments shall have been terminated in
accordance with the terms hereof.
"COMMITMENT
TERMINATION DATE": the earlier of (i) the Business Day
immediately preceding the 180th day
following the day of closing of the Eckerd
Acquisition and (ii) the Expiration
Date.
"COMPENSATORY
INTEREST PAYMENT": as defined in Section 3.4(c).
"CONSOLIDATED":
the Borrower and the Subsidiaries on a consolidated basis
in accordance with GAAP.
"CONTINGENT
OBLIGATION": as to any Person (the "secondary obligor"), any
obligation of such secondary obligor (a)
guaranteeing or in effect guaranteeing
any return on any investment made by
another Person, or (b) guaranteeing or in
effect guaranteeing any Indebtedness,
lease, dividend or other obligation
("primary obligation") of any other Person
(the "primary obligor") in any
manner, whether directly or indirectly,
including any obligation of such
secondary obligor, 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 or equity capital of the
primary obligor or otherwise to maintain
the net worth or solvency of the
primary obligor, (iii) to purchase
Property, securities or services primarily
for the purpose of assuring the beneficiary
of any such primary obligation of
the ability of the primary obligor to make
payment of such primary obligation,
(iv) otherwise to assure or hold harmless
the beneficiary of such primary
obligation against loss in respect thereof,
and (v) in respect of the
Indebtedness of any partnership in which
such secondary obligor is a general
partner, except to the extent that such
Indebtedness of such partnership is
nonrecourse to such secondary obligor and
its separate Property, PROVIDED that
the term "Contingent Obligation" shall not
include the indorsement of
instruments for deposit or collection in
the ordinary course of business.
"CONTINUING
DIRECTOR": any member of the board of directors of the Borrower
who (i) is a member of that board of
directors on the Effective Date or (ii) was
nominated for election by the board of
directors a majority of whom were
directors on the Effective Date or whose
election or nomination for election was
previously approved by one or more of such
directors.
"CONTROL
PERSON": as defined in Section 3.6.
"CONVERT",
"CONVERSION" and "CONVERTED": each, a reference to a conversion
pursuant to Section 3.3 of one Type of Loan
into another Type of Loan.
"COSTS": as
defined in Section 3.6.
4
<Page>
"CO-SYNDICATION
AGENTS": as defined in the preamble.
"CREDIT
EXPOSURE": with respect to any Lender at any time, the
outstanding
principal balance of such Lender's Loans at
such time under this Agreement.
"CREDIT PARTIES"
means the Administrative Agent, the Co-Syndication Agents
and the Lenders.
"DEFAULT": any
of the events specified in Section 9.1, whether any
requirement for the giving of notice, the
lapse of time, or both, or any other
condition, has been satisfied.
"DISPOSITION":
with respect to any Person, any sale, assignment, transfer
or other disposition by such Person by any
means, of:
(a) the Stock of, or other
equity interests of, any other Person,
(b) any business,
operating entity, division or segment thereof, or
(c) any other Property of such
Person, other than (i) the sale of
inventory (other than in connection with
bulk transfers), (ii) the disposition
of equipment and (iii) the sale of cash
investments.
"DIVIDEND
RESTRICTIONS": as defined in Section 8.7.
"DOLLAR" OR "$":
lawful currency of the United States of America.
"DOMESTIC
BUSINESS DAY": any day (other than a Saturday, Sunday or legal
holiday in the State of New York) on which
banks are open for business in New
York City.
"ECKERD": Eckerd
Corporation, a Delaware corporation.
"ECKERD
ACQUISITION": the acquisition by the Borrower from Eckerd of
approximately 1260 drugstores located
mainly in the southern United States,
including Texas and Florida, as well as
Eckerd's mail order, specialty pharmacy
and pharmacy benefits management businesses
pursuant to the Eckerd Asset
Purchase Agreement.
"ECKERD ASSET
PURCHASE AGREEMENT": the Asset Purchase Agreement, dated as
of April 4, 2004, between the Borrower, CVS
Pharmacy, Inc. and J.C. Penney
Company, Inc. and certain of its
subsidiaries, including Eckerd (as amended,
supplemented or otherwise modified from
time to time in accordance with Section
8.10).
"EFFECTIVE
DATE": as defined in Section 11.20.
"ELIGIBLE
ASSIGNEE": (i) any commercial bank, investment bank, trust
company, banking association, financial
institution, mutual fund, pension fund
or any Approved Fund or (ii) any Lender or
any Affiliate or any Approved Fund of
such Lender.
5
<Page>
"ELIGIBLE SPC":
a special purpose corporation that (i) is organized under
the laws of the United States or any state
thereof, (ii) is engaged in making,
purchasing or otherwise investing in
commercial loans in the ordinary course of
its business and (iii) issues (or the
parent of which issues) commercial paper
rated at least A-1 or the equivalent
thereof by S&P or at least P-1 or the
equivalent thereof by Moody's.
"EMPLOYEE
BENEFIT PLAN": an employee benefit plan, within the meaning of
Section 3(3) of ERISA, maintained,
sponsored or contributed to by the Borrower,
any Subsidiary or any ERISA Affiliate.
"ENVIRONMENTAL
LAWS": all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions,
notices or binding agreements issued,
promulgated or entered into by any
Governmental Authority, relating in any way
to the environment, preservation or
reclamation of natural resources, the
management, release or threatened release
of any Hazardous Material or to health
and safety matters.
"ENVIRONMENTAL
LIABILITY": as to any Person, any liability, contingent or
otherwise (including any liability for
damages, costs of environmental
remediation, fines, penalties or
indemnities), of such Person directly or
indirectly resulting from or based upon (i)
violation of any Environmental Law,
(ii) the generation, use, handling,
transportation, storage, treatment or
disposal of any Hazardous Materials, (iii)
exposure to any Hazardous Materials,
(iv) the release or threatened release of
any Hazardous Materials into the
environment or (v) any contract, agreement
or other consensual arrangement
pursuant to which liability is assumed or
imposed with respect to any of the
foregoing.
"ERISA": the
Employee Retirement Income Security Act of 1974, as amended
from time to time, or any successor
thereto, and the rules and regulations
issued thereunder, as from time to time in
effect.
"ERISA
AFFILIATE": when used with respect to an Employee Benefit Plan,
ERISA, the PBGC or a provision of the
Internal Revenue Code pertaining to
employee benefit plans, any Person that is
a member of any group of
organizations within the meaning of
Sections 414(b) or (c) of the Internal
Revenue Code or, solely with respect to the
applicable provisions of the
Internal Revenue Code, Sections 414(m) or
(o) of the Internal Revenue Code, of
which the Borrower or any Subsidiary is a
member.
"ESOP GUARANTY":
the guaranty of the 8.52% ESOP Note maturing 2008 in the
aggregate unpaid principal amount, as of
January 3, 2004, of $163,200,000.
"EURODOLLAR
ADVANCE": a portion of the Loans selected by the Borrower to
bear interest during a Eurodollar Interest
Period selected by the Borrower at a
rate per annum based upon a Eurodollar Rate
determined with reference to such
Eurodollar Interest Period, all pursuant to
and in accordance with Section 2.2
or 3.3.
"EURODOLLAR
BUSINESS DAY": any Domestic Business Day, other than a Domestic
Business Day on which banks are not open
for dealings in Dollar deposits in the
interbank eurodollar market.
6
<Page>
"EURODOLLAR
INTEREST PERIOD": the period commencing on any Eurodollar
Business Day selected by the Borrower in
accordance with Section 2.1 or Section
3.3 and ending one, two or three months
thereafter, as selected by the Borrower
in accordance with either such Sections,
subject to the following:
(i) if any Eurodollar
Interest Period would otherwise end on a day which
is not a Eurodollar Business Day, such
Eurodollar Interest Period shall be
extended to the immediately succeeding
Eurodollar Business Day unless the result
of such extension would be to carry the end
of such Eurodollar Interest Period
into another calendar month, in which event
such Eurodollar Interest Period
shall end on the Eurodollar Business Day
immediately preceding such day; and
(ii)
if any
Eurodollar Interest Period shall begin on the last Eurodollar
Business Day of a calendar month (or on a
day for which there is no numerically
corresponding day in the calendar month at
the end of such Eurodollar Interest
Period), such Eurodollar Interest Period
shall end on the last Eurodollar
Business Day of such latter calendar
month.
"EURODOLLAR
RATE": with respect to each Eurodollar Advance and as
determined by the Administrative Agent, the
rate of interest per annum (rounded,
if necessary, to the nearest 1/100 of 1%
or, if there is no nearest 1/100 of 1%,
then to the next higher 1/100 of 1%) equal
to a fraction, the numerator of which
is the rate per annum quoted by BNY at
approximately 11:00 A.M. (or as soon
thereafter as practicable) two Eurodollar
Business Days prior to the first day
of such Eurodollar Interest Period to
leading banks in the interbank eurodollar
market as the rate at which BNY is offering
Dollar deposits in an amount
approximately equal to its portion of such
Eurodollar Advance and having a
period to maturity approximately equal to
the Eurodollar Interest Period
applicable to such Eurodollar Advance, and
the denominator of which is an amount
equal to 1.00 MINUS the aggregate of the
then stated maximum rates during such
Eurodollar Interest Period of all reserve
requirements (including marginal,
emergency, supplemental and special
reserves), expressed as a decimal,
established by the Board of Governors of
the Federal Reserve System and any
other banking authority to which BNY and
other major United States money center
banks are subject, in respect of
eurocurrency liabilities.
"EVENT OF
DEFAULT": any of the events specified in Section 9.1, PROVIDED
that any requirement for the giving of
notice, the lapse of time, or both, or
any other condition has been satisfied.
"EXPIRATION
DATE": the earliest of (i) 180 days following the date of
closing of the Eckerd Acquisition, (ii)
September 30, 2004 if for any reason the
Eckerd Acquisition shall not have closed on
or before September 30, 2004, and
(iii) the date on which the Loans shall
become due and payable, whether by
acceleration, notice of intention to prepay
(other than by notice of intention
of optional prepayment unless, concurrently
therewith, a notice of optional
termination of the Commitments shall have
been delivered) or otherwise.
"FACILITY FEE":
as defined in Section 3.11.
"FEDERAL FUNDS
EFFECTIVE RATE": 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
7
<Page>
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 Domestic
Business Day, for the next preceding
Domestic Business Day) by the Federal
Reserve Bank of New York, or, if such rate
is not so published for any day which
is a Domestic Business Day, the average
(rounded, if necessary, to the nearest
1/100 of 1% or, if there is no nearest
1/100 of 1%, then to the next higher
1/100 of 1%) of the quotations for such day
on such transactions received by the
Administrative Agent from three Federal
funds brokers of recognized standing
selected by the Administrative Agent.
"FEES": as
defined in Section 3.2(a).
"FINANCIAL
STATEMENTS": as defined in Section 4.13.
"FOREIGN
LENDER": any Lender that is organized under the laws of a
jurisdiction other than the United States
of America, any State thereof or the
District of Columbia.
"GAAP":
generally accepted accounting principles set forth in the
opinions
and pronouncements of the Accounting
Principles Board and the American Institute
of Certified Public Accountants and
statements and pronouncements of the
Financial Accounting Standards Board or
such other principles as may be approved
by a significant segment of the accounting
profession, which are applicable to
the circumstances as of the date of
determination, consistently applied.
"GOVERNMENTAL
AUTHORITY": any foreign, federal, state, municipal or other
government, or any department, commission,
board, bureau, agency, public
authority or instrumentality thereof, or
any court or arbitrator.
"GRANTING
LENDER": as defined in Section 11.7(h).
"HAZARDOUS
MATERIALS": all explosive or radioactive substances or wastes
and all hazardous or toxic substances,
wastes or other pollutants, including
petroleum or petroleum distillates,
asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other
substances or wastes of any nature
regulated pursuant to any Environmental Law.
"HIGHEST LAWFUL
RATE": as to any Lender, the maximum rate of interest, if
any, which at any time or from time to time
may be contracted for, taken,
charged or received on the Loans or the
Notes or which may be owing to such
Lender pursuant to this Agreement under the
laws applicable to such Lender and
this Agreement.
"INDEBTEDNESS":
as to any Person at a particular time, all items of such
Person which constitute, without
duplication, (a) indebtedness for borrowed
money or the deferred purchase price of
Property (other than trade payables and
accrued expenses incurred in the ordinary
course of business), (b) indebtedness
evidenced by notes, bonds, debentures or
similar instruments, (c) indebtedness
with respect to any conditional sale or
other title retention agreement, (d)
indebtedness arising under acceptance
facilities and the amount available to be
drawn under all letters of credit
(excluding for purposes of Sections 8.1 and
8.9 letters of credit obtained in the
ordinary course of business by the
Borrower or any Subsidiary) issued for the
account of such Person and, without
duplication, all drafts drawn thereunder to
the extent such Person shall not
have reimbursed the
8
<Page>
issuer in respect of the issuer's payment
of such drafts, (e) that portion of
any obligation of such Person, as lessee,
which in accordance with GAAP is
required to be capitalized on a balance
sheet of such Person, (f) all
indebtedness described in (a) - (e) above
secured by any Lien on any Property
owned by such Person even though such
Person shall not have assumed or otherwise
become liable for the payment thereof
(other than carriers', warehousemen's,
mechanics', repairmen's or other like
non-consensual Liens arising in the
ordinary course of business), and (g)
Contingent Obligations in respect of any
indebtedness described in items (a) - (f)
above, PROVIDED that, for purposes of
this definition, Indebtedness shall not
include Intercompany Debt and
obligations in respect of interest rate
caps, collars, exchanges, swaps or
other, similar agreements.
"INDEMNIFIED
LIABILITIES": as defined in Section 11.5.
"INDEMNIFIED
PERSON": as defined in Section 11.10.
"INTERCOMPANY
DEBT": (i) Indebtedness of the Borrower to one or more of the
Subsidiaries of the Borrower and (ii)
demand Indebtedness of one or more of the
Subsidiaries of the Borrower to the
Borrower or any one or more of the other
Subsidiaries of the Borrower.
"INTERCOMPANY
DISPOSITION": a Disposition by the Borrower or any of the
Subsidiaries of the Borrower to the
Borrower or to any of the other Subsidiaries
of the Borrower.
"INTEREST
PAYMENT DATE": (i) as to any ABR Advance, the last day of each
March, June, September and December,
commencing on the first of such days to
occur after such ABR Advance is made or any
Eurodollar Advance is converted to
an ABR Advance and (ii) as to any
Eurodollar Advance, the last day of such
Eurodollar Interest Period
"INTERNAL
REVENUE CODE": the Internal Revenue Code of 1986, as amended
from
time to time, or any successor thereto, and
the rules and regulations issued
thereunder, as from time to time in
effect.
"LENDER": as
defined in the preamble.
"LIEN": any
mortgage, pledge, hypothecation, assignment, lien, deposit
arrangement, charge, encumbrance or other
security arrangement or security
interest of any kind, or the interest of a
vendor or lessor under any
conditional sale agreement, capital lease
or other title retention agreement.
"LOAN" OR
"LOANS": as defined in Section 2.1.
"LOAN
DOCUMENTS": this Agreement and, upon the execution and delivery
thereof, the Notes, if any.
"MARGIN STOCK":
any "margin stock", as said term is defined in Regulation U
of the Board of Governors of the Federal
Reserve System, as the same may be
amended or supplemented from time to
time.
9
<Page>
"MATERIAL
ADVERSE": with respect to any change or effect, a material
adverse change in, or effect on, as the
case may be, (i) the financial
condition, operations, business, or
Property of the Borrower and the
Subsidiaries taken as a whole, (ii) the
ability of the Borrower to perform its
obligations under the Loan Documents, or
(iii) the ability of the Administrative
Agent or any Lender to enforce the Loan
Documents.
"MOODY'S":
Moody's Investors Service, Inc.
"MULTIEMPLOYER
PLAN": a Pension Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"NET PROCEEDS":
with respect to the issuance of any equity securities by
the Borrower in a registered public
offering or private placement or the
issuance of long term Indebtedness by the
Borrower or any of its Subsidiaries in
a registered public offering or a private
placement, (i) the cash proceeds
received in respect of such issuance,
including (a) any cash received in respect
of any non-cash proceeds, but only as and
when received and (b) any cash
subscription payment or other cash
consideration paid in connection therewith,
net of (ii) the sum of all reasonable fees
and out-of-pocket expenses paid by
the Borrower and the Subsidiaries to third
parties in connection with such
event.
"NET WORTH": at
any date of determination, the sum of all amounts which
would be included under shareholders'
equity on a Consolidated balance sheet of
the Borrower and the Subsidiaries
determined in accordance with GAAP as at such
date.
"NEW 364 DAY
CREDIT AGREEMENT": the 364 Day Credit Agreement, by and among
the Borrower, the lenders party thereto,
Bank of America, N.A., Credit Suisse
First Boston, and Wachovia Securities,
Inc., as co-syndication agents, SunTrust
Bank, as documentation agent, certain other
parties thereto and BNY, as
administrative agent thereunder, as
contemplated as of the date hereof.
"NEW FIVE YEAR
CREDIT AGREEMENT": the Five Year Credit Agreement, by and
among the Borrower, the lenders party
thereto, Bank of America, N.A., Credit
Suisse First Boston, and Wachovia
Securities, Inc., as co-syndication agents,
ABN AMRO Bank N.V., as documentation agent,
certain other parties thereto and
BNY, as administrative agent thereunder, as
contemplated as of the date hereof.
"NOTE": with
respect to each Lender that has requested one, a promissory
note evidencing such Lender's Loans payable
to the order of such Lender (or, if
required by such Lender, to such Lender and
its registered assigns),
substantially in the form of Exhibit B.
"PARTICIPANT":
as defined in Section 11.7(e).
"PBGC": the
Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA, or any
Governmental Authority succeeding to the
functions thereof.
"PENSION PLAN":
at any time, any Employee Benefit Plan (including a
Multiemployer Plan) subject to Section 302
of ERISA or Section 412 of the
Internal Revenue Code, the funding
10
<Page>
requirements of which are, or at any time
within the six years immediately
preceding the time in question, were in
whole or in part, the responsibility of
the Borrower, any Subsidiary or an ERISA
Affiliate.
"PERSON": any
individual, firm, partnership, limited liability company,
joint venture, corporation, association,
business trust, joint stock company,
unincorporated association, trust,
Governmental Authority or any other entity,
whether acting in an individual, fiduciary,
or other capacity, and for the
purpose of the definition of "ERISA
Affiliate", a trade or business.
"PRICING LEVEL":
Pricing Level I, Pricing Level II, Pricing Level III,
Pricing Level IV, Pricing Level V, Pricing
Level VI or Pricing Level VII, as the
case may be.
"PRICING LEVEL
I": any time when the senior unsecured long term debt rating
of the Borrower by (x) S&P is AA - or
higher or (y) Moody's is Aa3 or higher.
"PRICING LEVEL
II": any time when (i) the senior unsecured long term debt
rating of the Borrower by (x) S&P is A+
or higher or (y) Moody's is A1 or higher
and (ii) Pricing Level I does not
apply.
"PRICING LEVEL
III": any time when (i) the senior unsecured long term debt
rating of the Borrower by (x) S&P is A
or higher or (y) Moody's is A2 or higher
and (ii) neither Pricing Level I nor II
applies.
"PRICING LEVEL
IV": any time when (i) the senior unsecured long term debt
rating of the Borrower by (x) S&P is A
- or higher or (y) Moody's is A3 or
higher and (ii) none of Pricing Level I, II
or III applies.
"PRICING LEVEL
V": any time when (i) the senior unsecured long term debt
rating of the Borrower by (x) S&P is
BBB+ or higher or (y) Moody's is Baa1 or
higher and (ii) none of Pricing Level I,
II, III or IV applies.
"PRICING LEVEL
VI": any time when (i) the senior unsecured long term debt
rating of the Borrower by (x) S&P is
BBB or higher or (y) Moody's is Baa2 or
higher and (ii) none of Pricing Level I,
II, III, IV or V applies.
"PRICING LEVEL
VII": any time when none of Pricing Level I, II, III, IV, V
or VI applies.
Notwithstanding
each definition of Pricing Level set forth above, if at any
time the senior unsecured long term debt
ratings of the Borrower by S&P and
Moody's differ by more than one equivalent
rating level, then the applicable
Pricing Level shall be determined based
upon the lower such rating adjusted
upwards to the next higher rating
level.
"PRINCIPAL
OFFICE": from time to time, the principal office of BNY,
located
on the date hereof in New York, New
York.
11
<Page>
"PROHIBITED
TRANSACTION": a transaction that is prohibited under Section
4975 of the Internal Revenue Code or
Section 406 of ERISA and not exempt under
Section 4975 of the Internal Revenue Code
or Section 408 of ERISA.
"PROPERTY": in
respect of any Person, all types of real, personal or mixed
property and all types of tangible or
intangible property owned or leased by
such Person.
"REGULATORY
CHANGE": (a) the introduction or phasing in of any law, rule or
regulation after the date hereof, (b) the
issuance or promulgation after the
date hereof of any directive, guideline or
request from any central bank or
United States or foreign Governmental
Authority (whether or not having the force
of law), or (c) any change after the date
hereof in the interpretation of any
existing law, rule, regulation, directive,
guideline or request by any central
bank or United States or foreign
Governmental Authority charged with the
administration thereof, in each case
applicable to the transactions contemplated
by this Agreement.
"RELATED
PARTIES": with respect to any specified Person, such Person's
Affiliates and the respective directors,
officers, employees, agents and
advisors of such Person and such Person's
Affiliates.
"REPLACED
LENDER": as defined in Section 3.13.
"REPLACEMENT
LENDER": as defined in Section 3.13.
"REPORTABLE
EVENT": with respect to any Pension Plan, (a) any event set
forth in Sections 4043(c) (other than a
Reportable Event as to which the 30 day
notice requirement is waived by the PBGC
under applicable regulations), 4062(e)
or 4063(a) of ERISA, or the regulations
thereunder, (b) an event requiring the
Borrower, any Subsidiary or any ERISA
Affiliate to provide security to a Pension
Plan under Section 401(a)(29) of the
Internal Revenue Code, or (c) the failure
to make any payment required by Section
412(m) of the Internal Revenue Code.
"REQUIRED
LENDERS": at any time, Lenders having a Commitment Amount and
Credit Exposure equal to or more than 51%
of the Aggregate Commitment Amount and
Aggregate Credeit Exposure at such
time.
"RESTRICTED
PAYMENT": with respect to any Person, any of the following,
whether direct or indirect: (a) the
declaration or payment by such Person of any
dividend or distribution on any class of
Stock of such Person, other than a
dividend payable solely in shares of that
class of Stock to the holders of such
class, (b) the declaration or payment by
such Person of any distribution on any
other type or class of equity interest or
equity investment in such Person, and
(c) any redemption, retirement, purchase or
acquisition of, or sinking fund or
other similar payment in respect of, any
class of Stock of, or other type or
class of equity interest or equity
investment in, such Person.
"RESTRICTIVE
AGREEMENT": as defined in Section 8.7.
"S&P":
Standard & Poor's, a division of The McGraw-Hill Companies,
Inc.
12
<Page>
"SOLVENT": with
respect to any Person on a particular date, the condition
that on such date, (i) the fair value of
the Property of such Person is greater
than the total amount of liabilities,
including, without limitation, contingent
liabilities, of such Person, (ii) the
present fair salable value of the 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, (iii) such Person does not intend
to, and does not believe that it
will, incur debts or liabilities beyond
such Person's ability to pay as such
debts and liabilities mature, and (iv) such
Person is not engaged in business or
a transaction, and is not about to engage
in business or a transaction, for
which such Person's Property would
constitute an unreasonably small amount of
capital. For purposes of this definition,
the amount of any contingent liability
at any time shall be computed as the amount
that, in light of all the facts and
circumstances existing at such time,
represents the amount that can reasonably
be expected to become an actual or matured
liability after taking into account
probable payments by co-obligors.
"SPECIAL
COUNSEL": such counsel as the Administrative Agent may engage
from
time to time.
"SUBSIDIARY": at
any time and from time to time, any corporation,
association, partnership, limited liability
company, joint venture or other
business entity of which the Borrower
and/or any Subsidiary of the Borrower,
directly or indirectly at such time, either
(a) in respect of a corporation,
owns or controls more than 50% of the
outstanding stock having ordinary voting
power to elect a majority of the board of
directors or similar managing body,
irrespective of whether a class or classes
shall or might have voting power by
reason of the happening of any contingency,
or (b) in respect of an association,
partnership, limited liability company,
joint venture or other business entity,
is entitled to share in more than 50% of
the profits and losses, however
determined.
"TANGIBLE NET
WORTH": at any date of determination, Net Worth less all
assets of the Borrower and its Subsidiaries
included in such Net Worth,
determined on a Consolidated basis at such
date, that would be classified as
intangible assets in accordance with
GAAP.
"TERMINATION
EVENT": with respect to any Pension Plan, (a) a Reportable
Event, (b) the termination of a Pension
Plan under Section 4041(c) of ERISA, or
the filing of a notice of intent to
terminate a Pension Plan under Section
4041(c) of ERISA, or the treatment of a
Pension Plan amendment as a termination
under Section 4041(e) of ERISA (except an
amendment made after such Pension Plan
satisfies the requirement for a standard
termination under Section 4041(b) of
ERISA), (c) the institution of proceedings
by the PBGC to terminate a Pension
Plan under Section 4042 of ERISA, or (d)
the appointment of a trustee to
administer any Pension Plan under Section
4042 of ERISA.
"TOTAL
CAPITALIZATION": at any date, the sum of the Borrower's
Consolidated
Indebtedness and shareholders' equity on
such date, determined in accordance
with GAAP.
"TYPE": with
respect to any Loan, the characteristic of such Loan as an ABR
Advance or a Eurodollar Advance, each of
which constitutes a Type of Loan.
"UNQUALIFIED
AMOUNT": as defined in Section 3.4(c).
13
<Page>
"UPSTREAM
DIVIDENDS": as defined in Section 8.7.
1.2 PRINCIPLES OF
CONSTRUCTION
(a) All capitalized
terms defined in this Agreement shall have the
meanings given such capitalized terms
herein when used in the other Loan
Documents or in any certificate, opinion or
other document made or delivered
pursuant hereto or thereto, unless
otherwise expressly provided therein.
(b) Unless otherwise
expressly provided herein, the word "FISCAL"
when used herein shall refer to the
relevant fiscal period of the Borrower. As
used in the Loan Documents and in any
certificate, opinion or other document
made or delivered pursuant thereto,
accounting terms not defined in Section 1.1,
and accounting terms partly defined in
Section 1.1, to the extent not defined,
shall have the respective meanings given to
them under GAAP.
(c) The words
"HEREOF", "HEREIN", "HERETO" and "HEREUNDER" and
similar words when used in each Loan
Document shall refer to such Loan Document
as a whole and not to any particular
provision of such Loan Document, and
Section, schedule and exhibit references
contained therein shall refer to
Sections thereof or schedules or exhibits
thereto unless otherwise expressly
provided therein.
(d) All references
herein to a time of day shall mean the then
applicable time in New York, New York,
unless otherwise expressly provided
herein.
(e) Section headings
have been inserted in the Loan Documents for
convenience only and shall not be construed
to be a part thereof. Unless the
context otherwise requires, words in the
singular number include the plural, and
words in the plural include the
singular.
(f) Whenever in any
Loan Document or in any certificate or other
document made or delivered pursuant
thereto, the terms thereof require that a
Person sign or execute the same or refer to
the same as having been so signed or
executed, such terms shall mean that the
same shall be, or was, duly signed or
executed by (i) in respect of any Person
that is a corporation, any duly
authorized officer thereof, and (ii) in
respect of any other Person (other than
an individual), any analogous counterpart
thereof.
(g) The words
"INCLUDE" and "INCLUDING", when used in each Loan
Document, shall mean that the same shall be
included "without limitation",
unless otherwise specifically provided.
2. AMOUNT AND TERMS OF
LOANS
2.1 Loans
Subject to the terms and conditions hereof, each Lender
severally
(and not jointly) agrees to make loans
under this Agreement (each a "LOAN" and,
collectively with each other Loan of such
Lender and/or with each Loan of each
other Lender, the "LOANS") to the
Borrower
14
<Page>
from time to time during the Commitment
Period, during which period the Borrower
may borrow and prepay in accordance with
the provisions hereof. At the time of
the making of any Loans, the aggregate
principal amount of the Loans of all
Lenders to be made will not exceed the
Aggregate Commitment Amount at such time.
With respect to each Lender, at the time of
the making of any Loan, the
principal amount of such Lender's Loan
constituting a part of the Loans to be
made will not exceed the Commitment of such
Lender at such time. Loans which are
prepaid or repaid, in whole or in part, may
not be reborrowed. At the option of
the Borrower, indicated in a Borrowing
Request, Loans may be made as ABR
Advances or Eurodollar Advances. The
aggregate outstanding principal balance of
all Loans shall be due and payable on the
Expiration Date.
2.2 NOTICE OF BORROWING
LOANS
The Borrower agrees to notify the Administrative Agent, which
notification shall be irrevocable, no later
than (a) Noon on the proposed
Borrowing Date in the case of Loans to
consist of ABR Advances and (b) 10:00
A.M. at least two Eurodollar Business Days
prior to the proposed Borrowing Date
in the case of Loans to consist of
Eurodollar Advances. Each such notice shall
specify (i) the aggregate amount requested
to be borrowed under the Commitments,
(ii) the proposed Borrowing Date, (iii)
whether a borrowing of Loans is to be of
ABR Advances or Eurodollar Advances, and
the amount of each thereof and (iv) the
Eurodollar Interest Period for such
Eurodollar Advances. Each such notice shall
be promptly confirmed by delivery to the
Administrative Agent of a Borrowing
Request. Each Loan shall be in an aggregate
amount that is an integral multiple
of $1,000,000 and not less than
$25,000,000. Borrowings of more than one Type
may be outstanding at the same time. Each
Eurodollar Advance to be made on a
Borrowing Date, when aggregated with all
amounts to be Converted to Eurodollar
Advances on such date and having the same
Eurodollar Interest Period as such
Eurodollar Advance, shall equal no less
than $10,000,000, or an integral
multiple of $1,000,000 in excess thereof.
Each ABR Advance made on each
Borrowing Date shall equal no less than
$5,000,000 or an integral multiple of
$500,000 in excess thereof. The
Administrative Agent shall promptly notify each
Lender (by telephone or otherwise, such
notification to be confirmed by fax or
other writing) of each such Borrowing
Request. Subject to its receipt of each
such notice from the Administrative Agent
and subject to the terms and
conditions hereof, each Lender shall make
immediately available funds available
to the Administrative Agent at the address
therefor set forth in Section 11.2
not later than 1:00 P.M. (3:00 P.M. in the
event that such Loans constitute ABR
Advances requested on the proposed
Borrowing Date) on each Borrowing Date in an
amount equal to such Lender's Commitment
Percentage of the Loans requested by
the Borrower on such Borrowing Date.
2.3 [INTENTIONALLY
OMITTED]
2.4 USE OF PROCEEDS
The Borrower agrees that the proceeds of the Loans shall be
used
solely to finance in part the purchase
price of the Eckerd Acquisition or as a
backup for commercial paper issued by the
Borrower to finance in part the
purchase price of the Eckerd Acquisition,
in either case as a short term bridge
to the expected completion by the Borrower
of the issuance of long term
15
<Page>
Indebtedness and/or equity securities in
the aggregate amount of not less than
$1 billion to refinance in full the Loans
(it being understood that the Borrower
makes no representations or warranties as
to whether any such issuance will be
consummated). Notwithstanding anything to
the contrary contained in any Loan
Document, the Borrower further agrees that
no part of the proceeds of any Loan
will be used, directly or indirectly, and
whether immediately, incidentally or
ultimately (i) for a purpose which violates
any law, rule or regulation of any
Governmental Authority, including the
provisions of Regulations U or X of the
Board of Governors of the Federal Reserve
System, as amended or any provision of
this Agreement, including, without
limitation, the provisions of Section 4.9 and
(ii) to make a loan to any director or
executive officer of the Borrower or any
Subsidiary.
2.5 TERMINATION OR
REDUCTION OF COMMITMENTS
(a) VOLUNTARY
TERMINATION OR REDUCTIONS. At the Borrower's option
and upon at least three Domestic Business
Days' prior irrevocable notice to the
Administrative Agent, the Borrower may (i)
terminate the Commitments at any
time, or (ii) permanently reduce the
Aggregate Commitment Amount in part at any
time and from time to time, PROVIDED that
each such partial reduction shall be
in an amount equal to at least $10,000,000
or an integral multiple of $1,000,000
in excess thereof, and PROVIDED FURTHER
that a notice of termination of the
Commitments delivered by the Borrower may
state that such notice is conditioned
upon the effectiveness of other credit
facilities or the consummation of the
issuance of long term Indebtedness or
equity securities (such notice to specify
the proposed effective date), in which case
such notice may be revoked by the
Borrower (by notice to the Administrative
Agent on or prior to such specified
effective date) if such condition is not
satisfied and the Borrower shall
indemnify the Lenders in accordance with
Section 3.5.
(b) MANDATORY
REDUCTIONS. The Aggregate Commitment Amount shall be
automatically and permanently reduced by an
amount equal to (i) the aggregate
amount of Loans made on each Borrowing Date
and (ii) the Net Proceeds (if any)
remaining after each mandatory prepayment
made pursuant to Section 2.6(b). Each
reduction described in clause (i) shall be
effective on the applicable Borrowing
Date immediately after giving effect to the
applicable borrowing and each
reduction described in clause (ii) shall be
effective concurrently with the
earlier of any prepayment of the Loans
pursuant to Section 2.6(b) and the date
such prepayment is required to be made
pursuant to Section 2.6(b).
(c) IN GENERAL. Each
reduction of the Aggregate Commitment Amount
shall be made by reducing each Lender's
Commitment Amount by a sum equal to such
Lender's Commitment Percentage of the
amount of such reduction.
(d) TERMINATION. In
addition to any termination or reduction of the
Commitments as otherwise provided herein,
the Commitments shall be automatically
terminated and the Aggregate Commitment
Amount shall be reduced to zero on the
Commitment Termination Date.
16
<Page>
2.6 PREPAYMENTS OF
LOANS
(a) VOLUNTARY
PREPAYMENTS. The Borrower may prepay Loans, in whole
or in part, without premium or penalty, but
subject to Section 3.5 at any time
and from time to time, by notifying the
Administrative Agent, which notification
shall be irrevocable, at least two
Eurodollar Business Days, in the case of a
prepayment of Eurodollar Advances or one
Domestic Business Day, in the case of a
prepayment of ABR Advances, prior to the
proposed prepayment date specifying (i)
the Loans to be prepaid, (ii) the amount to
be prepaid, and (iii) the date of
prepayment. Upon receipt of each such
notice, the Administrative Agent shall
promptly notify each Lender thereof. Each
such notice given by the Borrower
pursuant to this Section shall be
irrevocable, PROVIDED that, if a notice of
prepayment is given in connection with a
conditional notice of termination of
the Commitments as contemplated by Section
2.5(a), then such notice of
prepayment may be revoked if such notice of
termination is revoked in accordance
with Section 2.5(a), and the Borrower shall
indemnify the Lenders in accordance
with Section 3.5. Each partial prepayment
under this Section shall be in a
minimum amount of $1,000,000 ($500,000 in
the case of ABR Advances) or an
integral multiple of $1,000,000 ($100,000
in the case of ABR Advances) in excess
thereof.
(b) MANDATORY
PREPAYMENTS. In the event and on each occasion that
any Net Proceeds are received by or on
behalf of the Borrower or any Subsidiary,
then, after such Net Proceeds are received
(but no later than one Business Day
thereafter), the Borrower shall prepay the
Loans in an aggregate amount equal to
such Net Proceeds.
(c) IN GENERAL.
Simultaneously with each prepayment hereunder, the
Borrower shall prepay all accrued interest
on the amount prepaid through the
date of prepayment and indemnify the
Lenders in accordance with Section 3.5.
2.7 [INTENTIONALLY
OMITTED]
2.8 NOTES
Any Lender may request that the Loans made by it be evidenced by
a
Note. In such event, the Borrower shall
prepare, execute and deliver to such
Lender a Note payable to the order of such
Person or, if requested by such
Person, such Person and its registered
assigns. Thereafter, all Loans evidenced
by such Note and interest thereon shall at
all times (including after assignment
pursuant to Section 11.7) be represented by
a Note in like form payable to the
order of the payee named therein and its
registered assigns.
3. PROCEEDS, PAYMENTS,
CONVERSIONS, INTEREST, YIELD PROTECTION AND FEES
3.1 DISBURSEMENT OF THE
PROCEEDS OF THE LOANS
The Administrative Agent shall disburse the proceeds of the Loans
at
its office specified in Section 11.2 by
crediting to the Borrower's general
deposit account with the Administrative
Agent the funds received from each
Lender. Unless the Administrative Agent
shall
17
<Page>
have received prior notice from a Lender
(by telephone or otherwise, such notice
to be confirmed by fax or other writing)
that such Lender will not make
available to the Administrative Agent such
Lender's Commitment Percentage of the
Loans to be made by it on a Borrowing Date,
the Administrative Agent may assume
that such Lender has made such amount
available to the Administrative Agent on
such Borrowing Date in accordance with this
Section, PROVIDED that such Lender
received notice thereof from the
Administrative Agent in accordance with the
terms hereof, and the Administrative Agent
may, in reliance upon such
assumption, make available to the Borrower
on such Borrowing Date a
corresponding amount. If and to the extent
such Lender shall not have so made
such amount available to the Administrative
Agent, such Lender and the Borrower
severally agree to pay to the
Administrative Agent, forthwith on demand, such
corresponding amount (to the extent not
previously paid by the other), together
with interest thereon for each day from the
date such amount is made available
to the Borrower until the date such amount
is paid to the Administrative Agent,
at a rate per annum equal to, in the case
of the Borrower, the applicable
interest rate set forth in Section 3.4(a)
and, in the case of such Lender, the
Federal Funds Effective Rate from the date
such payment is due until the third
day after such date and, thereafter, at the
Federal Funds Effective Rate PLUS
2%. Any such payment by the Borrower shall
be without prejudice to its rights
against such Lender. If such Lender shall
pay to the Administrative Agent such
corresponding amount, such amount so paid
shall constitute such Lender's Loan as
part of such Loans for purposes of this
Agreement, which Loan shall be deemed to
have been made by such Lender on the
Borrowing Date applicable to such Loans.
3.2 PAYMENTS
(a) Each payment,
including each prepayment, of principal and
interest on the Loans and of the Facility
Fee (together with all of the other
fees to be paid to the Administrative Agent
and the Lenders in connection with
the Loan Documents, the "FEES"), and of all
of the other amounts to be paid to
the Administrative Agent and the Lenders in
connection with the Loan Documents
shall be made by the Borrower to the
Administrative Agent at its office
specified in Section 11.2 without setoff,
deduction or counterclaim in funds
immediately available in New York by 3:00
P.M. on the due date for such payment.
The failure of the Borrower to make any
such payment by such time shall not
constitute a default hereunder, PROVIDED
that such payment is made on such due
date, but any such payment made after 3:00
P.M. on such due date shall be deemed
to have been made on the next Domestic
Business Day or Eurodollar Business Day,
as the case may be, for the purpose of
calculating interest on amounts
outstanding on the Loans. If the Borrower
has not made any such payment prior to
3:00 P.M., the Borrower hereby authorizes
the Administrative Agent to deduct the
amount of any such payment from such
account(s) as the Borrower may from time to
time designate in writing to the
Administrative Agent, upon which the
Administrative Agent shall apply the amount
of such deduction to such payment.
Promptly upon receipt thereof by the
Administrative Agent, each payment of
principal and interest on the Loans shall
be remitted by the Administrative
Agent in like funds as received to each
Lender (a) first, pro rata according to
the amount of interest which is then due
and payable to the Lenders, and (b)
second, pro rata according to the amount of
principal which is then due and
payable to the Lenders. Each payment of the
Fees payable to the Lenders shall be
promptly transmitted by the Administrative
Agent in like funds as received to
each Lender pro rata according to such
Lender's Commitment Amount and Credit
Exposure.
18
<Page>
(b) If any payment
hereunder or under the Loans shall be due and
payable on a day which is not a Domestic
Business Day or Eurodollar Business
Day, as the case may be, the due date
thereof (except as otherwise provided in
the definition of Eurodollar Interest
Period) shall be extended to the next
Domestic Business Day or Eurodollar
Business Day, as the case may be, and
(except with respect to payments in respect
of the Facility Fee) interest shall
be payable at the applicable rate specified
herein during such extension.
3.3 CONVERSIONS; OTHER
MATTERS
(a) The Borrower may
elect at any time and from time to time to
Convert one or more Eurodollar Advances to
an ABR Advance by giving the
Administrative Agent at least one Domestic
Business Day's prior irrevocable
notice of such election, specifying the
amount to be so Converted. In addition,
the Borrower may elect at any time and from
time to time to Convert an ABR
Advance to any one or more new Eurodollar
Advances or to Convert any one or more
existing Eurodollar Advances to any one or
more new Eurodollar Advances by
giving the Administrative Agent no later
than 10:00 a.m. at least two Eurodollar
Business Days' prior irrevocable notice, in
the case of a Conversion to
Eurodollar Advances, of such election,
specifying the amount to be so Converted
and the initial Eurodollar Interest Period
relating thereto, PROVIDED that any
Conversion of an ABR Advance to Eurodollar
Advances shall only be made on a
Eurodollar Business Day. The Administrative
Agent shall promptly provide the
Lenders with notice of each such election.
Each Conversion of Loans from one
Type to another shall be made pro rata
according to the outstanding principal
amount of the Loans of each Lender. ABR
Advances and Eurodollar Advances may be
Converted pursuant to this Section in whole
or in part, PROVIDED that the amount
to be Converted to each Eurodollar Advance,
when aggregated with any Eurodollar
Advance to be made on such date in
accordance with Section 2.1 and having the
same Eurodollar Interest Period as such
first Eurodollar Advance, shall equal no
less than $10,000,000 or an integral
multiple of $1,000,000 in excess thereof.
(b) Notwithstanding
anything in this Agreement to the contrary,
upon the occurrence and during the
continuance of a Default or an Event of
Default, the Borrower shall have no right
to elect to Convert any existing ABR
Advance to a new Eurodollar Advance or to
Convert any existing Eurodollar
Advance to a new Eurodollar Advance. In
such event, such ABR Advance shall be
automatically continued as an ABR Advance
or such Eurodollar Advance shall be
automatically Converted to an ABR Advance
on the last day of the Eurodollar
Interest Period applicable to such
Eurodollar Advance. The foregoing shall not
affect any other rights or remedies that
the Administrative Agent or any Lender
may have under this Agreement or any other
Loan Document.
(c) Each Conversion
shall be effected by each Lender by applying
the proceeds of each new ABR Advance or
Eurodollar Advance, as the case may be,
to the existing Advance (or portion
thereof) being Converted (it being
understood that such Conversion shall not
constitute a borrowing for purposes of
Sections 4, 5 or 6).
(d) Notwithstanding
any other provision of any Loan Document:
19
<Page>
(i) if the
Borrower shall have failed to elect a Eurodollar
Advance under Section 2.2 or this Section
3.3, as the case may be, in connection
with any borrowing of new Loans or
expiration of an Eurodollar Interest Period
with respect to any existing Eurodollar
Advance, the amount of the Loans subject
to such borrowing or such existing
Eurodollar Advance shall thereafter be an ABR
Advance until such time, if any, as the
Borrower shall elect a new Eurodollar
Advance pursuant to this Section 3.3,
(ii) the
Borrower shall not be permitted to select a
Eurodollar Advance the Eurodollar Interest
Period in respect of which ends later
than the Expiration Date, and
(iii) the Borrower
shall not be permitted to have more than 15
Eurodollar Advances outstanding at any one
time, it being understood and agreed
that each borrowing of Eurodollar Advances
pursuant to a single Borrowing
Request shall constitute the making of one
Eurodollar Advance for the purpose of
calculating such limitation.
3.4 INTEREST RATES AND
PAYMENT DATES
(a) PRIOR TO MATURITY.
Except as otherwise provided in Sections
3.4(b) and 3.4(c), the Loans shall bear
interest on the unpaid principal balance
thereof at the applicable interest rate or
rates per annum set forth below:
<Table>
<Caption>
LOANS
RATE
--------------------------------------
-----------------------------------------------
<S>
<C>
Loans constituting ABR Advances
Alternate Base Rate applicable thereto PLUS the
Applicable Margin.
Loans constituting Eurodollar Advances
Eurodollar Rate
applicable thereto PLUS the
Applicable Margin.
</Table>
(b) AFTER MATURITY,
LATE PAYMENT RATE. After maturity, whether by
acceleration, notice of intention to prepay
or otherwise, the outstanding
principal balance of the Loans shall bear
interest at the Alternate Base Rate
PLUS 2% per annum until paid (whether
before or after the entry of any judgment
thereon). Any payment of principal,
interest or any Fees not paid on the date
when due and payable shall bear interest at
the Alternate Base Rate PLUS 2% per
annum from the due date thereof until the
date such payment is made (whether
before or after the entry of any judgment
thereon).
(c) HIGHEST LAWFUL
RATE. Notwithstanding anything to the contrary
contained in this Agreement, at no time
shall the interest rate payable to any
Lender on any of its Loans, together with
the Fees and all other amounts payable
hereunder to such Lender to the extent the
same constitute or are deemed to
constitute interest, exceed the Highest
Lawful Rate. If in respect of any period
during the term of this Agreement, any
amount paid to any Lender hereunder, to
the extent the same shall (but for the
provisions of this Section 3.4)
constitute or be deemed to constitute
interest, would exceed the maximum amount
of interest permitted by the Highest Lawful
Rate during such period (such amount
being hereinafter referred to as an
20
<Page>
"UNQUALIFIED AMOUNT"), then (i) such
Unqualified Amount shall be applied or
shall be deemed to have been applied as a
prepayment of the Loans of such
Lender, and (ii) if, in any subsequent
period during the term of this Agreement,
all amounts payable hereunder to such
Lender in respect of such period which
constitute or shall be deemed to constitute
interest shall be less than the
maximum amount of interest permitted by the
Highest Lawful Rate during such
period, then the Borrower shall pay to such
Lender in respect of such period an
amount (each a "COMPENSATORY INTEREST
PAYMENT") equal to the lesser of (x) a sum
which, when added to all such amounts,
would equal the maximum amount of
interest permitted by the Highest Lawful
Rate during such period, and (y) an
amount equal to the aggregate sum of all
Unqualified Amounts LESS all other
Compensatory Interest Payments.
(d) GENERAL. Interest
shall be payable in arrears on each Interest
Payment Date, on the Expiration Date and,
to the extent provided in Section
2.6(c), upon each prepayment of the Loans.
Any change in the interest rate on
the Loans resulting from an increase or a
decrease in the Alternate Base Rate or
any reserve requirement shall become
effective as of the opening of business on
the day on which such change shall become
effective. The Administrative Agent
shall, as soon as practicable, notify the
Borrower and the Lenders of the
effective date and the amount of each
change in the BNY Rate, but any failure to
so notify shall not in any manner affect
the obligation of the Borrower to pay
interest on the Loans in the amounts and on
the dates set forth herein. Each
determination by the Administrative Agent
of the Alternate Base Rate and the
Eurodollar Rate pursuant to this Agreement
shall be conclusive and binding on
the Borrower absent manifest error. The
Borrower acknowledges that to the extent
interest payable on the Loans is based on
the Alternate Base Rate, such rate is
only one of the bases for computing
interest on loans made by the Lenders, and
by basing interest payable on ABR Advances
on the Alternate Base Rate, the
Lenders have not committed to charge, and
the Borrower has not in any way
bargained for, interest based on a lower or
the lowest rate at which the Lenders
may now or in the future make extensions of
credit to other Persons. All
interest (other than interest calculated
with reference to the BNY Rate) shall
be calculated on the basis of a 360-day
year for the actual number of days
elapsed, and all interest determined with
reference to the BNY Rate shall be
calculated on the basis of a 365/366-day
year for the actual number of days
elapsed.
3.5 INDEMNIFICATION FOR
LOSS
Notwithstanding anything contained herein to the contrary, if:
(i)
the Borrower shall fail to borrow a
Eurodollar Advance or if the Borrower shall
fail to Convert a Eurodollar Advance after
it shall have given notice to do so
in which it shall have requested a
Eurodollar Advance pursuant to Section 2.2 or
3.3, as the case may be, (ii) a Eurodollar
Advance shall be terminated for any
reason prior to the last day of the
Eurodollar Interest Period applicable
thereto, (iii) any repayment or prepayment
of the principal amount of a
Eurodollar Advance is made for any reason
on a date which is prior to the last
day of the Eurodollar Interest Period
applicable thereto, or (iv) the Borrower
shall have revoked a notice of prepayment
or notice of termination of the
Commitments that was conditioned upon the
effectiveness of other credit
facilities or the consummation of the
issuance of long term Indebtedness or
equity securities pursuant to Section 2.5
or 2.6, the Borrower agrees to
indemnify each Lender against, and to pay
on demand directly to such Lender the
amount (calculated by such Lender using any
method chosen by such Lender
21
<Page>
which is customarily used by such Lender
for such purpose) equal to any loss or
expense suffered by such Lender as a result
of such failure to borrow or
Convert, or such termination, repayment,
prepayment or revocation, including any
loss, cost or expense suffered by such
Lender in liquidating or employing
deposits acquired to fund or maintain the
funding of such Eurodollar Advance or
redeploying funds prepaid or repaid, in
amounts which correspond to such
Eurodollar Advance and any reasonable
internal processing charge customarily
charged by such Lender in connection
therewith.
3.6 REIMBURSEMENT FOR
COSTS, ETC.
If at any time or from time to time there shall occur a
Regulatory
Change and any Lender shall have reasonably
determined that such Regulatory
Change (i) shall have had or will
thereafter have the effect of reducing (A) the
rate of return on such Lender's capital or
the capital of any Person directly or
indirectly owning or controlling such
Lender (each a "CONTROL PERSON"), or (B)
the asset value (for capital purposes) to
such Lender or such Control Person, as
applicable, of the Loans, or any
participation therein, in any case to a level
below that which such Lender or such
Control Person could have achieved or would
thereafter be able to achieve but for such
Regulatory Change (after taking into
account such Lender's or such Control
Person's policies regarding capital), (ii)
will impose, modify or deem applicable any
reserve, asset, special deposit or
special assessment requirements on deposits
obtained in the interbank eurodollar
market in connection with the Loan
Documents (excluding, with respect to any
Eurodollar Advance, any such requirement
which is included in the determination
of the rate applicable thereto), (iii) will
subject such Lender or such Control
Person, as applicable, to any tax
(documentary, stamp or otherwise) with respect
to this Agreement or any Note, or (iv) will
change the basis of taxation of
payments to such Lender or such Control
Person, as applicable, of principal,
interest or fees payable under the Loan
Documents (except, in the case of
clauses (iii) and (iv) above, for any tax
or changes in the rate of tax on such
Lender's or such Control Person's net
income) then, in each such case, within
ten days after demand by such Lender, the
Borrower shall pay to such Lender or
such Control Person, as the case may be,
such additional amount or amounts as
shall be sufficient to compensate such
Lender or such Control Person, as the
case may be, for any such reduction,
reserve or other requirement, tax, loss,
cost or expense (excluding general
administrative and overhead costs)
(collectively, "COSTS") attributable to
such Lender's or such Control Person's
compliance during the term hereof with such
Regulatory Change. Each Lender may
make multiple requests for compensation
under this Section.
Notwithstanding the foregoing, the Borrower will not be required
to
compensate any Lender for any Costs under
this Section 3.6 arising prior to 45
days preceding the date of demand, unless
the applicable Regulatory Change
giving rise to such Costs is imposed
retroactively. In the case of
retroactivity, such notice shall be
provided to the Borrower not later than 45
days from the date that such Lender learned
of such Regulatory Change. The
Borrower's obligation to compensate such
Lender shall be contingent upon the
provision of such timely notice (but any
failure by such Lender to provide such
timely notice shall not affect the
Borrower's obligations with respect to (i)
Costs incurred from the date as of which
such Regulatory Change became effective
to the date that is 45 days after the date
such Lender reasonably should have
learned of such Regulatory Change and (ii)
Costs incurred following the
provision of such notice).
22
<Page>
3.7 ILLEGALITY OF
FUNDING
Notwithstanding any other provision hereof, if any Lender shall
reasonably determine that any law,
regulation, treaty or directive, or any
change therein or in the interpretation or
application thereof, shall make it
unlawful for such Lender to make or
maintain any Eurodollar Advance as
contemplated by this Agreement, such Lender
shall promptly notify the Borrower
and the Administrative Agent thereof, and
(a) the commitment of such Lender to
make such Eurodollar Advances or Convert
ABR Advances to such Eurodollar
Advances shall forthwith be suspended, (b)
such Lender shall fund its portion of
each requested Eurodollar Advance as an ABR
Advance and (c) such Lender's Loans
then outstanding as such Eurodollar
Advances, if any, shall be Converted
automatically to an ABR Advance on the last
day of the then current Eurodollar
Interest Period applicable thereto or at
such earlier time as may be required.
If the commitment of any Lender with
respect to Eurodollar Advances is suspended
pursuant to this Section and such Lender
shall have obtained actual knowledge
that it is once again legal for such Lender
to make or maintain Eurodollar
Advances, such Lender shall promptly notify
the Administrative Agent and the
Borrower thereof and, upon receipt of such
notice by each of the Administrative
Agent and the Borrower, such Lender's
commitment to make or maintain Eurodollar
Advances shall be reinstated. If the
commitment of any Lender with respect to
Eurodollar Advances is suspended pursuant
to this Section, such suspension shall
not otherwise affect such Lender's
Commitment.
3.8 OPTION TO FUND;
SUBSTITUTED INTEREST RATE
(a) Each Lender has
indicated that, if the Borrower requests a
Eurodollar Advance, such Lender may wish to
purchase one or more deposits in
order to fund or maintain its funding of
its portion of such Eurodollar Advance
during the Eurodollar Interest Period with
respect thereto; it being understood
that the provisions of this Agreement
relating to such funding are included only
for the purpose of determining the rate of
interest to be paid in respect of
such Eurodollar Advance and any amounts
owing under Sections 3.5 and 3.6. Each
Lender shall be entitled to fund and
maintain its funding of all or any part of
each Eurodollar Advance in any manner it
sees fit, but all such determinations
hereunder shall be made as if such Lender
had actually funded and maintained its
portion of each Eurodollar Advance during
the applicable Eurodollar Interest
Period through the purchase of deposits in
an amount equal to the amount of its
portion of such Eurodollar Advance and
having a maturity corresponding to such
Eurodollar Interest Period. Each Lender may
fund its Loans from or for the
account of any branch or office of such
Lender as such Lender may choose from
time to time, subject to Section 3.10.
(b) In the event that
(i) the Administrative Agent shall have
determined in good faith (which
determination shall be conclusive and binding
upon the Borrower) that by reason of
circumstances affecting the interbank
eurodollar market either adequate and
reasonable means do not exist for
ascertaining the Eurodollar Rate applicable
pursuant to Section 2.2 or Section
3.3, or (ii) the Required Lenders shall
have notified the Administrative Agent
that they have in good faith determined
(which determination shall be conclusive
and binding on the Borrower) that the
applicable Eurodollar Rate will not
adequately and fairly reflect the cost to
such Lenders of maintaining or funding
loans bearing interest based on such
Eurodollar Rate with respect to any portion
of the Loans that the Borrower has
requested be made as Eurodollar Advances or
any Eurodollar Advance that will result
from the requested conversion of any
23
<Page>
portion of the Loans into Eurodollar
Advances (each, an "AFFECTED ADVANCE"), the
Administrative Agent shall promptly notify
the Borrower and the Lenders (by
telephone or otherwise, to be promptly
confirmed in writing) of such
determination on or, to the extent
practicable, prior to the requested Borrowing
Date or conversion date for such Affected
Advances. If the Administrative Agent
shall give such notice, (A) any Affected
Advances shall be made as ABR Advances,
(B) the Loans (or any portion thereof) that
were to have been Converted to
Affected Advances shall be Converted to or
continued as ABR Advances, and (C)
any outstanding Affected Advances shall be
Converted, on the last day of the
then current Eurodollar Interest Period
with respect thereto, to ABR Advances.
Until any notice under clauses (i) or (ii),
as the case may be, of this Section
3.8(b) has been withdrawn by the
Administrative Agent (by notice to the
Borrower) promptly upon either (x) the
Administrative Agent having determined
that such circumstances affecting the
relevant market no longer exist and that
adequate and reasonable means do exist for
determining the Eurodollar Rate
pursuant to Section 2.2 or Section 3.3, or
(y) the Administrative Agent having
been notified by such Required Lenders that
circumstances no longer render the
Loans (or any portion thereof) Affected
Advances, no further Eurodollar Advances
shall be required to be made by the Lenders
nor shall the Borrower have the
right to Convert all or any portion of the
Loans to Eurodollar Advances.
3.9 CERTIFICATES OF
PAYMENT AND REIMBURSEMENT
Each Lender agrees, in connection with any request by it for
payment
or reimbursement pursuant to Section 3.5 or
3.6, to provide the Borrower with a
certificate, signed by an officer of such
Lender, setting forth a description in
reasonable detail of any such payment or
reimbursement. Each determination by
each Lender of such payment or
reimbursement shall be conclusive absent manifest
error.
3.10
TAXES; NET
PAYMENTS
(a) All payments made
by the Borrower under the Loan Documents
shall be made free and clear of, and
without reduction for or on account of, any
taxes required by law to be withheld from
any amounts payable under the Loan
Documents. In the event that the Borrower
is prohibited by law from making such
payments free of deductions or
withholdings, then the Borrower shall pay such
additional amounts to the Administrative
Agent, for the benefit of the Lenders,
as may be necessary in order that the
actual amounts received by the Lenders in
respect of interest and any other amounts
payable under the Loan Docume
