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EXHIBIT 99.5
INTERCREDITOR AND SUBORDINATION AGREEMENT, dated as of June 12, 1998
(the "Agreement"), among U.S. BANK TRUST NATIONAL ASSOCIATION (f/k/a First Trust
National Association), as Trustee (together with its successors and assigns, the
"Trustee") under the Indenture (as defined below), and OAKTREE CAPITAL
MANAGEMENT, LLC (solely as agent and nominee for the entities set forth on Annex
I, each a "Fund" and collectively, the "Funds") (Oaktree Capital Management, LLC
acting in such capacity hereinafter referred to as, "Oaktree") and acknowledged
and agreed to by Physicians Clinical Laboratory, Inc. (together with its
successors and assigns, "PCL").
Reference is hereby made to that certain Indenture, dated as of
September 30, 1997, with respect to the issuance of Senior Secured Notes Due
2004 between PCL and the Trustee (as amended, modified or supplemented from time
to time in accordance with its terms, the "Indenture"). Terms not otherwise
defined herein shall have the meanings set forth in the Indenture.
Oaktree and PCL are entering into that certain Note Purchase Agreement,
dated as of June 12, 1998 with respect to the issuance of the 15% Senior Secured
Notes Due 2001 (as amended, modified or supplemented from time to time in
accordance with its terms, the "Purchase Agreement"). The obligations of PCL
under the Purchase Agreement and the 15% Senior Secured Notes Due 2001 the "Note
Obligations" are to be secured by a first priority Lien in the Collateral (other
than Daiwa Healthco-2 LLC's security interest in certain accounts of the
Company).
This Agreement is intended to set forth the subordination and
intercreditor obligations of the Trustee and Oaktree in connection with the Lien
of the Trustee in the Collateral, granted to the Trustee pursuant to the
Security Agreement between the Trustee and PCL, dated as of September 30, 1997
and the Pledge Agreement, dated as of September 30, 1997, between PCL and the
Trustee (the "Trustee Liens") and the Senior Liens (as defined below).
o. Subordination by the Trustee. The Trustee agrees that (a) the
Trustee Liens, without necessity of any further action by the Trustee, PCL or
Oaktree, are and shall be junior and subordinate to all Liens of Oaktree in the
Collateral (collectively, the "Senior Liens"), regardless of the time or order
of filing of financing statements or any failure of perfection of the Senior
Liens, and (b) pursuant to such subordination, the Trustee will not be permitted
to take (and the Trustee hereby agrees not to take) any action in respect of the
Collateral or retain or apply any proceeds of the Collateral unless and until
all amounts owing with respect to the Note Obligations have been paid in full.
Except as expressly set forth below, Oaktree shall be under no obligation to the
Trustee with respect to any enforcement action in respect of the Collateral or
any proceeds thereof, and the Trustee hereby acknowledges that it is not relying
upon Oaktree with respect to any such matters.
p. Stock Certificates. Concurrently herewith, the Trustee shall
deliver to the Oaktree certificate 001 issued by Bio-Cypher Funding Corp.
representing 100 shares of common stock, $.01 par value per share (the "Funding
Share"), delivered to the Trustee pursuant to the Pledge Agreement (as defined
in the Indenture). The Agent agrees that it shall hold the Funding Share as
collateral agent for the junior Lien of the Trustee in the Funding Share until
such time as the Company has paid in full all of its obligations under the
Purchase Agreement and the 15% Senior Secured Notes, upon which the Agent shall
deliver the Funding Share to the Trustee to be held in accordance with the terms
of the Indenture and the Collateral Documents or as required by applicable law.
Upon the occurrence of any Default or Event of Default under the Purchase
Agreement and the 15% Senior
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Secured Notes, Oaktree shall have the right, without notice to the Trustee, to
exercise any and all remedies available to it with respect to the Funding Share
without regard to the interests of the Trustee or the Noteholders (as defined in
the Indenture) and shall have no fiduciary, agency or other obligations to the
Trustee or the Noteholders.
q. Turnover Obligation of the Trustee. Until all of the Note
Obligations have been paid in full, except with the prior written consent of
Oaktree in each instance, the Trustee will not receive or accept in any manner
(including, without limitation, by set-off) any payments in respect of the
Indenture Obligations (as defined in the Indenture) directly from the
liquidation of any Collateral. In the event and to the extent that the Trustee
shall receive any payment in respect of the Indenture Obligations in violation
of the prior sentence, the Trustee shall be deemed to have received such
payments in trust for Oaktree and shall promptly turn the same over in the form
received (subject to endorsement if appropriate) to Oaktree for application to
the Note Obligations.
r. Additional Documentation. The Trustee will, from time, upon
request of Oaktree, and at PCL's sole cost and expense execute and deliver to
Oaktree any reasonable documentation and filing statements as may be reasonably
required by Oaktree in order to confirm or evidence the agreements set forth
herein.
s. No Contesting of Liens. (a) except as expressly provided herein,
this Agreement is not intended to affect, limit or in any way diminish the
Trustee Lien or the Senior Liens or the rights that each of Oaktree and the
Trustee possess or purport to possess with respect thereto, insofar as the
rights of third parties are concerned.
(b) The Trustee hereby agrees that it will not commence or continue
any default, foreclosure or liquidation proceedings or remedies, whether legal
or equitable, in respect of any of the Collateral or the Trustee Liens or
otherwise take any action of any kind or nature to collect or receive, or
enforce rights in, realize upon, seek adequate protection with regard to, object
to the sale or use or granting of Liens prior to the interest of Oaktree on,
take or gain possession of, give it preference against, or priority over, any of
the Collateral or the Senior Liens, until all Note Obligations owing to Oaktree
under the Purchase Agreement and the 15% Senior Secured Notes have been paid in
full.
t. No Third Party Beneficiaries. This Agreement is solely for the
benefit of Oaktree and the Trustee and may be relied upon and enforced solely by
Oaktree and the Trustee and their respective successors, assigns and
transferees. No other Person, including PCL, is intended as a third-party
beneficiary hereunder.
u. Choice of Law; Waiver of Jury Trial Jurisdiction and Venue. This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York (without giving effect to the conflict of laws principles
thereof). Each of the parties hereto hereby waives all rights to a trial by jury
in the event of any litigation with respect to any matter related to this
Agreement, and hereby irrevocably consents to the jurisdiction of the state and
federal courts located in New York County, New York City, New York in connection
with any action or proceeding arising out of or relating to this Agreement. In
any such litigation, each of the parties hereto waives personal service of any
summons, complaint or other process and agrees that service thereof may be made
by certified or registered mail directed to the provider at its address set
forth on the signature pages hereof.
v. Entire Agreement; Severability. (a) This Agreement embodies the
entire agreement and understanding of Oaktree and the Trustee concerning the
subject matter contained herein. This
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Agreement supersedes any and all prior agreements and understandings between the
parties, whether written or oral.
(b) If any provision of this Agreement shall be declared invalid or
unenforceable, the parties hereto agree that the remaining provisions of this
Agreement shall continue in full force and effect.
w. Amendments, etc. No amendment or waiver of any provision of this
Agreement or consent to any departure therefrom by a party hereto shall be
effective unless in a writing signed by each of the Trustee and Oaktree and then
such amendment, 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 each of either the Trustee or Oaktree 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 right hereunder preclude any other or further
exercise thereof or the exercise of any other right.
x. Notices, etc. All notices and other communications hereunder
shall, unless otherwise stated herein, be in writing (which may include
facsimile communication) and shall be faxed or delivered, to each party hereto,
at its address set forth under its name on the signature pages hereof or at such
other address as shall be designated by such party in a written notice to the
other parties hereto. Notices and communications by facsimile shall be effective
when sent (and shall be followed by hard copy sent by regular mail), and notices
and communications sent by other means shall be effective when received. Oaktree
hereby agrees, with respect to the Purchase Agreement and the 15% Senior Secured
Notes, and the Trustee hereby agrees, with respect to the Indenture, to utilize
all reasonable efforts to furnish the other party any notice of an event of
default, event of termination or acceleration with respect to the Purchase
Agreement and the 15% Senior Secured Notes or the Indenture, as applicable;
provided, that the failure to deliver such notice shall in no way limit or
otherwise prevent the rights and remedies of Oaktree or the Trustee, as
applicable, thereunder.
y. Agent Representation. The Agent has all necessary power and
authority to execute, deliver and perform its obligations under this Agreement
on behalf of the Funds.
z. Execution in Counterparts. This Agreement may be executed in
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
agreement.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Intercreditor and Subordination Agreement as of the date first above written.
U.S. BANK TRUST NATIONAL OAKTREE CAPITAL MANAGEMENT,
ASSOCIATION, as trustee LLC, solely as agent and nominee for the
Funds set forth on Annex I
By:______________________________ By:_____________________________________
Name: Name:
Title: Title:
By:_____________________________________
Name:
Title:
Address U.S. Bank Trust National Association Address: Oaktree Capital
U.S. Bank Trust Center Management, LLC
00 Xxxx 0xx Xxxxxx, 000 Xxxxxxxxx Xxxxxx
Xxxxx 000 Xxxxx 0000
Xx. Xxxx, XX 00000 Xxx Xxxx, XX 00000
Fax: (000) 000-0000 Attention:
Fax: (000) 000-0000
ACKNOWLEDGED AND AGREED:
PHYSICIANS CLINICAL
LABORATORY, INC.
By:__________________________________
Name:
Title:
Fax:
Address:
ANNEX I
Fund or Account Amount
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XXX. 00.0 - 0
0
XXX Xxxxxxxxxxxxx Xxxx, X.X. $27,124,070
Columbia/HCA Master Retirement
Trust (Separate Account I) $ 2,252,330
OCM Opportunities Fund II, L.P. $20,546,500
Columbia/HCA Master Retirement
Trust (Separate Account II) $ 316,100
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$50,239,000
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