Exhibit 10.1
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SECOND AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT
DATED AS OF SEPTEMBER 30, 2003
AMONG
QUEST DIAGNOSTICS RECEIVABLES INC., AS BORROWER,
QUEST DIAGNOSTICS INCORPORATED, AS INITIAL SERVICER,
BLUE RIDGE ASSET FUNDING CORPORATION,
LA FAYETTE ASSET SECURITIZATION LLC,
JUPITER SECURITIZATION CORPORATION,
CREDIT LYONNAIS NEW YORK BRANCH,
INDIVIDUALLY AND AS LA FAYETTE AGENT,
BANK ONE, NA,
INDIVIDUALLY AND AS JUPITER AGENT,
AND
WACHOVIA BANK, NATIONAL ASSOCIATION,
INDIVIDUALLY, AS BLUE RIDGE AGENT AND AS ADMINISTRATIVE AGENT
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TABLE OF CONTENTS
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ARTICLE I - THE CREDIT............................................................................................2
Section 1.1 The Facility.................................................................................2
Section 1.2 Funding Mechanics; Liquidity Fundings........................................................3
Section 1.3 Interest Rates...............................................................................4
Section 1.4 Payment Dates; Absence of Notes to Evidence Loans............................................5
Section 1.5 Prepayments..................................................................................5
Section 1.6 Reductions in Aggregate Commitment...........................................................6
Section 1.7 Requests for Increases in Aggregate Commitment...............................................6
Section 1.8 Extension of the Scheduled Termination Date..................................................7
Section 1.9 Distribution of Certain Notices; Notification of Interest Rates..............................8
ARTICLE II - BORROWING AND PAYMENT MECHANICS; CERTAIN COMPUTATIONS................................................8
Section 2.1 Method of Borrowing..........................................................................8
Section 2.2 Selection of CP Tranche Periods and Interest Periods.........................................8
Section 2.3 Computation of Concentration Limits and Unpaid Net Balance...................................9
Section 2.4 Maximum Interest Rate.......................................................................10
Section 2.5 Payments and Computations, Etc..............................................................10
(a) Payments...................................................................................10
(b) Late Payments..............................................................................10
(c) Method of Computation......................................................................10
(d) Avoidance or Rescission of Payments........................................................10
Section 2.6 Non-Receipt of Funds by the Co-Agents.......................................................10
ARTICLE III - SETTLEMENTS........................................................................................11
Section 3.1 Reporting...................................................................................11
(a) Monthly Reports............................................................................11
(b) Weekly Reports; Right to Request Cash Collateral Payment...................................11
(c) Interest; Other Amounts Due................................................................11
Section 3.2 Turnover of Collections.....................................................................11
Section 3.3 Non-Distribution of Servicer's Fee..........................................................13
Section 3.4 Deemed Collections..........................................................................13
ARTICLE IV - FEES AND YIELD PROTECTION...........................................................................14
Section 4.1 Fees........................................................................................14
Section 4.2 Yield Protection............................................................................14
Section 4.3 Funding Losses..............................................................................16
ARTICLE V - CONDITIONS OF ADVANCES...............................................................................17
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Section 5.1 Conditions Precedent to Restructuring Effectiveness.........................................17
Section 5.2 Conditions Precedent to All Advances........................................................18
ARTICLE VI - REPRESENTATIONS AND WARRANTIES......................................................................19
Section 6.1 Representations and Warranties of Loan Parties..............................................19
(a) Ownership of the Borrower..................................................................19
(b) Existence; Due Qualification; Permits......................................................19
(c) Action.....................................................................................19
(d) Absence of Default.........................................................................19
(e) Noncontravention...........................................................................20
(f) No Proceedings.............................................................................20
(g) Taxes......................................................................................21
(h) Government Approvals.......................................................................21
(i) Financial Statements and Absence of Certain Material Adverse Changes.......................21
(j) Nature of Receivables......................................................................22
(k) Margin Regulations.........................................................................22
(l) Quality of Title...........................................................................22
(m) Accurate Reports...........................................................................23
(n) Jurisdiction of Organization; Offices......................................................23
(o) Collection Accounts........................................................................23
(p) Eligible Receivables.......................................................................24
(q) ERISA......................................................................................24
(r) Names......................................................................................24
(s) Credit and Collection Policy...............................................................24
(t) Payments to Applicable Originator..........................................................24
(u) Investment Company Act; Public Utility Holding Company Act; Other Restrictions.............25
(v) Borrowing Base; Solvency...................................................................25
(z) Specified Government Receivables...........................................................25
ARTICLE VII - GENERAL COVENANTS OF LOAN PARTIES..................................................................25
Section 7.1 Affirmative Covenants of Loan Parties.......................................................25
(a) Compliance With Laws, Etc..................................................................25
(b) Preservation of Existence..................................................................25
(c) Audits.....................................................................................25
(d) Keeping of Records and Books of Account....................................................26
(e) Performance and Compliance with Receivables, Invoices and Contracts........................26
(f) Jurisdiction of Organization; Location of Records..........................................26
(g) Credit and Collection Policies.............................................................26
(h) Sale Agreement.............................................................................26
(i) Collections................................................................................26
(j) Further Assurances.........................................................................27
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Section 7.2 Reporting Requirements of Loan Parties......................................................27
(a) Quarterly Financial Statements.............................................................27
(b) Annual Financial Statements................................................................28
(c) Reports to SEC and Exchanges...............................................................28
(d) ERISA......................................................................................28
(e) Events of Default, etc.....................................................................28
(f) Litigation.................................................................................28
(g) Reviews of Receivables.....................................................................28
(h) Change in Business or Credit and Collection Policy.........................................28
(i) Downgrade..................................................................................28
(j) Other......................................................................................29
Section 7.3 Negative Covenants of Loan Parties..........................................................29
(a) Sales, Liens, Etc..........................................................................29
(b) Extension or Amendment of Receivables......................................................29
(c) Change in Business or Credit and Collection Policy.........................................29
(d) Change in Payment Instructions to Obligors.................................................29
(e) Deposits to Accounts.......................................................................29
(f) Changes to Other Documents.................................................................30
(g) Restricted Payments by the Borrower........................................................30
(h) Borrower Indebtedness......................................................................30
(i) Prohibition on Additional Negative Pledges.................................................30
(j) Name Change, Offices, Records and Books of Accounts........................................30
(k) Mergers, Consolidations and Acquisitions...................................................30
(l) Disposition of Receivables and Related Assets..............................................31
(m) Borrowing Base.............................................................................31
Section 7.4 Separate Existence of the Borrower..........................................................31
ARTICLE VIII - ADMINISTRATION AND COLLECTION.....................................................................33
Section 8.1 Designation of Servicer.....................................................................33
(a) Quest Diagnostics as Initial Servicer......................................................33
(b) Successor Notice; Servicer Transfer Events.................................................33
(c) Subcontracts...............................................................................34
(d) Expense Indemnity after a Servicer Transfer Event..........................................34
Section 8.2 Duties of Servicer..........................................................................34
(a) Appointment; Duties in General.............................................................34
(b) Segregation of Collections.................................................................34
(c) Modification of Receivables................................................................35
(d) Documents and Records......................................................................35
(e) Certain Duties to the Borrower.............................................................35
(f) Termination................................................................................35
(g) Power of Attorney..........................................................................35
Section 8.3 Rights of the Administrative Agent..........................................................35
(a) Notice to Obligors.........................................................................35
(b) Notice to Lockbox Banks....................................................................35
(c) Rights on Servicer Transfer Event..........................................................36
Section 8.4 Responsibilities of Loan Parties............................................................36
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(a) Contracts..................................................................................36
(b) Limitation of Liability....................................................................36
Section 8.5 Further Action Evidencing the Security Interest.............................................37
(a) Further Assurances.........................................................................37
(b) Additional Financing Statements; Continuation Statements;
Performance by Administrative Agent...................................................37
Section 8.6 Application of Collections..................................................................37
ARTICLE IX - SECURITY INTEREST...................................................................................37
Section 9.1 Grant of Security Interest..................................................................38
Section 9.2 Termination after Final Payout Date.........................................................38
Section 9.3 Limitation on Rights to Collateral Proceeds.................................................38
ARTICLE X - EVENTS OF DEFAULT....................................................................................38
Section 10.1 Events of Default..........................................................................38
Section 10.2 Remedies...................................................................................41
(a) Optional Acceleration......................................................................41
(b) Automatic Acceleration.....................................................................41
(c) Additional Remedies........................................................................41
ARTICLE XI - THE AGENTS..........................................................................................41
Section 11.1 Appointment................................................................................41
Section 11.2 Delegation of Duties.......................................................................42
Section 11.3 Exculpatory Provisions.....................................................................42
Section 11.4 Reliance by Agents.........................................................................43
Section 11.5 Notice of Events of Default................................................................43
Section 11.6 Non-Reliance on Agents and Other Lenders...................................................43
Section 11.7 Indemnification of Agents..................................................................44
Section 11.8 Agents in their Individual Capacities......................................................44
Section 11.9 [Reserved].................................................................................44
Section 11.10 Conflict Waivers..........................................................................44
Section 11.11 UCC Filings...............................................................................45
ARTICLE XII - ASSIGNMENTS AND PARTICIPATIONS.....................................................................45
Section 12.1 Restrictions on Assignments, etc...........................................................45
Section 12.2 Rights of Assignees and Participants.......................................................46
Section 12.3 Terms and Evidence of Assignment...........................................................47
ARTICLE XIII - INDEMNIFICATION...................................................................................47
Section 13.1 Indemnities by the Borrower................................................................47
(a) General Indemnity..........................................................................47
(b) Contest of Tax Claim; After-Tax Basis......................................................49
(c) Contribution...............................................................................49
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Section 13.2 Indemnities by Servicer....................................................................50
ARTICLE XIV - MISCELLANEOUS......................................................................................50
Section 14.1 Amendments, Etc............................................................................50
Section 14.2 Notices, Etc...............................................................................51
Section 14.3 No Waiver; Remedies........................................................................51
Section 14.4 Binding Effect; Survival...................................................................51
Section 14.5 Costs, Expenses and Stamp Taxes............................................................52
Section 14.6 No Proceedings.............................................................................52
Section 14.7 Confidentiality of Borrower Information....................................................53
Section 14.8 Confidentiality of Program Information.....................................................54
(a) Confidential Information...................................................................54
(b) Availability of Confidential Information...................................................54
(c) Legal Compulsion to Disclose...............................................................54
(d) Not a Tax Shelter..........................................................................55
(e) Survival...................................................................................55
Section 14.9 Captions and Cross References..............................................................55
Section 14.10 Integration...............................................................................55
Section 14.11 Governing Law.............................................................................55
Section 14.12 Waiver Of Jury Trial......................................................................55
Section 14.13 Consent To Jurisdiction; Waiver Of Immunities.............................................56
Section 14.14 Business Associate Agreement; Health Care Data Privacy and Security Requirements..........56
(a) Definitions................................................................................56
(b) Privacy....................................................................................56
(c) Security...................................................................................57
(d) Benefit....................................................................................57
(e) Mitigation.................................................................................57
(f) Amendment..................................................................................58
(g) Survival...................................................................................58
(h) Interpretation.............................................................................58
(i) Several Liability of Business Associates...................................................58
Section 14.15 Execution in Counterparts.................................................................58
Section 14.16 No Recourse Against Other Parties.........................................................58
Exhibits and Schedules
ANNEX A: DEFINITIONS..................................................................63
EXHIBIT A: FORM OF COLLECTION ACCOUNT AGREEMENT.........................................92
EXHIBIT 2.1: FORM OF BORROWING REQUEST....................................................96
EXHIBIT 2.1: FORM OF BORROWING REQUEST....................................................96
EXHIBIT 3.1(a): FORM OF MONTHLY REPORT.......................................................99
EXHIBIT 3.1(b): FORM OF WEEKLY REPORT.......................................................103
EXHIBIT 5.1(h): SUBSTANCE OF CORPORATE/UCC OPINIONS.........................................104
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SCHEDULE 6.1(n): FEDERAL TAXPAYER ID NUMBER, CHIEF
EXECUTIVE OFFICE, PRINCIPAL PLACE(S) OF BUSINESS AND
OTHER RECORDS LOCATION(S)................................................106
SCHEDULE 6.1(o): LOCKBOXES AND ASSOCIATED ACCOUNTS...........................................107
SCHEDULE 14.2: NOTICE ADDRESSES AND WIRE TRANSFER INFORMATION..............................115
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SECOND AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT
THIS SECOND AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT is
entered into as of September 30, 2003, by and among:
(1) QUEST DIAGNOSTICS RECEIVABLES INC., a Delaware corporation
(together with its successors and permitted assigns, the "Borrower"),
(2) QUEST DIAGNOSTICS INCORPORATED, a Delaware corporation (together
with its successors, "Quest Diagnostics"), as initial servicer hereunder
(in such capacity, together with any successor servicer or sub-servicer
appointed pursuant to Section 8.1, the "Servicer"),
(3) BLUE RIDGE ASSET FUNDING CORPORATION, a Delaware corporation
(together with its successors, "Blue Ridge"), WACHOVIA BANK, NATIONAL
ASSOCIATION, in its capacity as a Liquidity Bank to Blue Ridge (together
with its successors, "Wachovia" and together with Blue Ridge, the "Blue
Ridge Group"),
(4) LA FAYETTE ASSET SECURITIZATION LLC, a Delaware limited liability
company (together with its successors, "La Fayette"), and Credit Lyonnais
New York Branch, in its capacity as a Liquidity Bank to La Fayette
(together with its successors, "CLNY" and together with La Fayette, the "La
Fayette Group"),
(5) JUPITER SECURITIZATION CORPORATION, a Delaware corporation
(together with its successors, "Jupiter" and, together with Blue Ridge and
La Fayette, the "Conduits"), and BANK ONE, NA, in its capacity as a
Liquidity Bank to Jupiter (together with its successors, "Bank One" and
together with Jupiter, the "Jupiter Group"),
(6) WACHOVIA BANK, NATIONAL ASSOCIATION, in its capacity as agent for
the Blue Ridge Group (together with its successors in such capacity, the
"Blue Ridge Agent" or a "Co-Agent"), Credit Lyonnais New York Branch, in
its capacity as agent for the La Fayette Group (together with its
successors in such capacity, the "La Fayette Agent" or a "Co-Agent"), and
BANK ONE, NA, in its capacity as agent for the Jupiter Group (together with
its successors in such capacity, the "Jupiter Agent" or a "Co-Agent"), and
(7) WACHOVIA BANK, NATIONAL ASSOCIATION, as administrative agent for
the Blue Ridge Group, the La Fayette Group, the Jupiter Group and the
Co-Agents (in such capacity, together with any successors thereto in such
capacity, the "Administrative Agent" and together with each of the
Co-Agents, the "Agents"),
with respect to that certain Amended and Restated Credit and Security Agreement
dated as of September 28, 2001 by and among the Borrower, Quest Diagnostics as
Servicer, Blue Ridge,
Wachovia, La Fayette, CLNY, the Blue Ridge Agent, the La Fayette Agent and the
Administrative Agent, as amended from time to time prior to the date hereof (the
"Existing Agreement").
Unless otherwise indicated, capitalized terms used in this Agreement
are defined in Annex A.
W I T N E S S E T H :
WHEREAS, the Borrower is a wholly-owned direct subsidiary of Quest
Diagnostics;
WHEREAS, Quest Diagnostics and certain of its Subsidiaries as
Originators and the Borrower have entered into the Sale Agreement pursuant
to which each of the Originators has (i) sold and/or contributed, and
hereafter will sell to the Borrower, all of such Originator's right, title
and interest in and to its private accounts receivable and certain related
rights and (ii) pledged to the Borrower and its assigns certain
non-assignable contracts related thereto;
WHEREAS, the Borrower, the Blue Ridge Group and the La Fayette Group
are party to the Existing Agreement pursuant to which each of Blue Ridge
and La Fayette has been making revolving loans to the Borrower from time to
time secured by the Collateral, and Quest Diagnostics is acting as the
initial Servicer for the Collateral; and
WHEREAS, the Jupiter Group also wishes to make revolving loans to the
Borrower from time to time secured by the Collateral and accordingly, the
parties have agreed to amend and restate the Existing Agreement to add the
members of the Jupiter Group as Lenders.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree that the Existing
Agreement is hereby amended and restated in its entirety as set forth herein:
ARTICLE I
THE CREDIT
Section 1.1 The Facility. On the terms and subject to the conditions
set forth in this Agreement, the Borrower (or the Servicer on the Borrower's
behalf) may from time to time during the Revolving Period request Advances by
delivering a Borrowing Request to the Co-Agents in accordance with Section 2.1.
Upon receipt of a copy of each Borrowing Request from the Borrower or Servicer,
each of the Co-Agents shall determine whether its Conduit will fund a Loan in an
amount equal to the portion of the requested Advance specified in such Borrowing
Request, and
(a) in the event that Blue Ridge elects not to make any such Loan to
the Borrower, the Blue Ridge Agent shall promptly notify the Borrower and,
unless the Borrower cancels its Borrowing Request, each of the Liquidity
Banks of Blue Ridge severally agrees to make its Ratable Share of such Loan
to the Borrower, on the terms and subject to the conditions hereof,
provided that at no time may the aggregate principal amount of Blue Ridge's
and its Liquidity Banks' Loans at any one time
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outstanding exceed the lesser of (i) the aggregate amount of the Blue Ridge
Liquidity Banks' Commitments, and (ii) Blue Ridge's Percentage of the
Borrowing Base (such lesser amount, the "Blue Ridge Allocation Limit");
(b) in the event that La Fayette elects not to make any such Loan to
the Borrower, the La Fayette Agent shall promptly notify the Borrower and,
unless the Borrower cancels its Borrowing Request, each of the Liquidity
Banks of La Fayette severally agrees to make its Ratable Share of such Loan
to the Borrower, on the terms and subject to the conditions hereof,
provided that at no time may the aggregate principal amount of La Fayette's
and its Liquidity Banks' Loans at any one time outstanding exceed the
lesser of (i) the aggregate amount of the La Fayette Liquidity Banks'
Commitments, and (ii) La Fayette's Percentage of the Borrowing Base (such
lesser amount, the "La Fayette Allocation Limit"); and
(c) in the event that Jupiter elects not to make any such Loan to the
Borrower, the Jupiter Agent shall promptly notify the Borrower and, unless
the Borrower cancels its Borrowing Request, each of the Liquidity Banks of
Jupiter severally agrees to make its Ratable Share of such Loan to the
Borrower, on the terms and subject to the conditions hereof, provided that
at no time may the aggregate principal amount of Jupiter's and its
Liquidity Banks' Loans at any one time outstanding exceed the lesser of (i)
the aggregate amount of the Jupiter Liquidity Banks' Commitments, and (ii)
Jupiter's Percentage of the Borrowing Base (such lesser amount, the
"Jupiter Allocation Limit");
Each Loan shall be in the minimum amount of $1,000,000 or a larger integral
multiple of $500,000. In no event may the aggregate principal amount of the
Advances hereunder exceed the lesser of (x) the Aggregate Commitment, or (y) the
Borrowing Base. Each Liquidity Bank's Commitment under this Agreement shall
terminate on the earlier to occur of such Liquidity Bank's Scheduled Termination
Date and the Termination Date. Each of the Loans, and all other Obligations of
the Borrower, shall be secured by the Collateral as provided in Article IX.
Section 1.2 Funding Mechanics; Liquidity Fundings.
(a) Each Advance hereunder shall consist of Loans made by (i) La
Fayette and/or its Liquidity Banks, and/or (ii) Blue Ridge and/or its Liquidity
Banks, and/or (iii) Jupiter and/or its Liquidity Banks, and which (except for
any Advance which does not increase the aggregate principal amount of the Loans
outstanding) shall be made in such proportions by each Group such that, after
giving effect thereto, the aggregate outstanding principal balance of the Loans
outstanding from each Group shall be in proportion to such Group's Percentage of
the aggregate outstanding principal balance of all Advances then outstanding
hereunder. Any Advance which does not increase the aggregate principal amount
outstanding may be funded solely by one or more of the members of a single
Group.
(b) Each Lender funding any Loan (or portion thereof) shall wire
transfer the principal amount thereof to its applicable Co-Agent in immediately
available funds not later than 12:00 noon (New York City time) on the applicable
Borrowing Date and, subject to its receipt of such Loan proceeds, such Co-Agent
shall wire transfer such funds to the account specified by the Borrower in its
Borrowing Request not later than 2:00 p.m. (New York City time) on such
Borrowing Date.
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(c) While it is the intent of each of the Conduits to fund its
respective Loans through the issuance of Commercial Paper Notes, the parties
acknowledge that if any of the Conduits is unable, or determines that it is
undesirable, to issue Commercial Paper Notes to fund all or any portion of its
Loans at a CP Rate, or is unable to repay such Commercial Paper Notes upon the
maturity thereof, such Conduit may sell all or any portion of its Loans (or
interests therein) to its Liquidity Banks at any time pursuant to its Liquidity
Agreement to finance or refinance the necessary portion of its Loans through a
Liquidity Funding to the extent available. The Liquidity Fundings may be
Alternate Base Rate Loans or Eurodollar Loans, or a combination thereof,
selected by the Borrower in accordance with Article II. In addition, the parties
acknowledge that Commercial Paper Notes are issued at a discount and at varying
discount rates; accordingly, it may not be possible for all CP Rate Loans to be
made in amounts precisely equal to the amounts specified in a Borrowing Request.
Regardless of whether a Liquidity Funding constitutes an assignment of a Loan or
the sale of one or more participations therein, each Liquidity Bank
participating in a Liquidity Funding shall have the rights of a "Lender"
hereunder with the same force and effect as if it had directly made a Loan to
the Borrower in the amount of its Liquidity Funding.
(d) Nothing herein shall be deemed to commit any Lender to make CP Rate
Loans.
Section 1.3 Interest Rates.
(a) Each CP Rate Loan shall bear interest on the outstanding principal
amount thereof from and including the first day of the CP Tranche Period
applicable thereto selected in accordance with Article II of this Agreement to
(but not including) the last day of such CP Tranche Period at the applicable CP
Rate. On the 5th Business Day immediately preceding each Settlement Date, each
of Jupiter and Blue Ridge shall calculate the aggregate amount of CP Costs for
the applicable Accrual Period and shall notify the Borrower of its aggregate
amount of such CP Costs which shall be payable on such Settlement Date.
(b) Each Eurodollar Loan shall bear interest on the outstanding
principal amount thereof from and including the first day of the Interest Period
applicable thereto selected in accordance with Article II of this Agreement to
(but not including) the last day of such Interest Period at a rate per annum
equal to the sum of (i) the applicable Eurodollar Rate (Reserve Adjusted) for
such Interest Period plus (ii) the Applicable Percentage per annum.
(c) Each Alternate Base Rate Loan shall bear interest on the
outstanding principal amount thereof, for each day from and including the date
such Loan is made to but excluding the date it is paid at a rate per annum equal
to the Alternate Base Rate for such day. Changes in the rate of interest on
Alternate Base Rate Loans will take effect simultaneously with each change in
the Alternate Base Rate.
(d) Notwithstanding anything to the contrary contained in Sections
1.3(a), (b) or (c), upon the occurrence of an Event of Default, and during the
continuance thereof, all Obligations shall bear interest, payable upon demand,
at the Default Rate.
(e) Interest shall be payable for the day a Loan is made but not for
the day of any payment on the amount paid if payment is received prior to noon
(local time) at the place of payment. If any payment of principal of or interest
on a Loan shall become due on a day which is not a Business
4
Day, such payment shall be made on the next succeeding Business Day and, in the
case of a principal payment, such extension of time shall be included in
computing interest in connection with such payment.
Section 1.4 Payment Dates; Absence of Notes to Evidence Loans.
(a) The Borrower promises to pay the principal of each CP Rate Loan on
the last day of its CP Tranche Period.
(b) The Borrower promises to pay the principal of each Eurodollar Loan
on the last day of its Interest Period.
(c) The Borrower promises to pay the principal of each Alternate Base
Rate Loan on or before the earliest to occur of (i) the Termination Date, (ii)
the applicable Liquidity Bank's Scheduled Termination Date, and (iii) the
refinancing of such Loan with a CP Rate Loan or a Eurodollar Rate Loan.
(d) The Borrower promises to pay all accrued and unpaid interest on
each Loan on its applicable Interest Payment Date.
(e) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time hereunder. Upon request of the Borrower, such Lender's Co-Agent or the
Administrative Agent, such Lender will confirm the outstanding principal
balances of its Loans and the amount of any accrued and unpaid interest thereon.
The entries maintained in the accounts maintained pursuant to this Section shall
be prima facie evidence of the existence and amounts of the Obligations therein
recorded; provided, however, that the failure of any Lender to maintain such
accounts or any error therein shall not in any manner affect the obligation of
the Borrower to repay the Obligations in accordance with their terms.
Section 1.5 Prepayments. Subject, in the case of CP Rate Loans and
Eurodollar Loans, to the funding indemnification provisions of Section 4.3:
(a) The Borrower may from time to time voluntarily prepay, without
penalty or premium, all outstanding Advances, or, in a minimum aggregate amount
of $2,000,000 (or a larger integral multiple of $1,000,000), any portion of the
outstanding Advances by written notice to the Co-Agents (each, a "Prepayment
Notice") given within the Required Notice Period; provided that each such
prepayment of principal is accompanied by a payment of all accrued and unpaid
interest on the amount prepaid, together with all amounts (if any) due under
Section 4.3, and except as provided in Sections 1.8(c) and Section 14.1(c) and
in the definitions of "Approved Amendment" and "Termination Date," is made
between the Groups in such proportions so that after giving effect thereto, the
aggregate outstanding principal balance of the Loans outstanding from each Group
shall be in proportion to such Group's Percentage of the aggregate outstanding
principal balance of all Advances then outstanding hereunder.
(b) If, on any Business Day, the aggregate outstanding principal amount
of the Loans from the Blue Ridge Group exceeds the Blue Ridge Allocation Limit,
or the aggregate principal amount
5
of the Loans outstanding from Blue Ridge exceeds the Blue Ridge Liquidity Banks'
Liquidity Commitments divided by 102%, the Borrower shall prepay such Loans by
wire transfer to the Blue Ridge Agent received not later than 12:00 noon (New
York City time) on the first Business Day thereafter of an amount sufficient to
eliminate such excess, together with accrued and unpaid interest on the amount
prepaid.
(c) If, on any Business Day, the aggregate outstanding principal amount
of the Loans from the La Fayette Group exceeds the La Fayette Allocation Limit,
or the aggregate principal amount of the Loans outstanding from La Fayette
exceeds the La Fayette Liquidity Banks' aggregate Liquidity Commitments divided
by 102%, the Borrower shall prepay such Loans by wire transfer to the La Fayette
Agent received not later than 12:00 noon (New York City time) on the first
Business Day thereafter of an amount sufficient to eliminate such excess,
together with accrued and unpaid interest on the amount prepaid.
(d) If, on any Business Day, the aggregate outstanding principal amount
of the Loans from the Jupiter Group exceeds the Jupiter Allocation Limit, or the
aggregate principal amount of the Loans outstanding from Jupiter exceeds the
Jupiter Liquidity Banks' aggregate Liquidity Commitments divided by 102%, the
Borrower shall prepay such Loans by wire transfer to the Jupiter Agent received
not later than 12:00 noon (New York City time) on the first Business Day
thereafter of an amount sufficient to eliminate such excess, together with
accrued and unpaid interest on the amount prepaid.
(e) Upon receipt of any wire transfer pursuant to Section 1.5(a), (b),
(c) or (d), the applicable Co-Agent shall wire transfer to each of its
Constituent Lenders their respective shares thereof not later than 1:00 p.m.
(New York City time) on the date when received. Any prepayment required pursuant
to Section 1.5(b), (c) or (d) shall be applied first, to the ratable reduction
of the applicable Group's Alternate Base Rate Loans outstanding, second, to the
ratable reduction of the applicable Group's Eurodollar Loans outstanding, and
lastly, to the reduction of the applicable Group's CP Rate Loans selected by the
Borrower (or the Servicer, on the Borrower's behalf).
Section 1.6 Reductions in Aggregate Commitment. The Borrower may
permanently reduce the Aggregate Commitment in whole, or ratably between the
Groups in part, in a minimum amount of $10,000,000 (or a larger integral
multiple of $1,000,000), upon at least fifteen (15) Business Days' written
notice to the Co-Agents (each, a "Commitment Reduction Notice"), which notice
shall specify the aggregate amount of any such reduction and the Blue Ridge
Liquidity Banks', the La Fayette Liquidity Banks' and the Jupiter Liquidity
Banks' respective Percentages thereof, provided, however, that (a) the amount of
the Aggregate Commitment may not be reduced below the aggregate principal amount
of the outstanding Advances, and (b) the amount of the Aggregate Commitment may
not be reduced below $100,000,000 unless the Aggregate Commitment is terminated
in full. All accrued and unpaid fees shall be payable on the effective date of
any termination of the Aggregate Commitment. Each Commitment Reduction Notice
shall be irrevocable once delivered to the Co-Agents.
Section 1.7 Requests for Increases in Aggregate Commitment. The
Borrower may from time to time request increases in the Aggregate Commitment in
a minimum amount of $10,000,000 (or a larger integral multiple of $1,000,000),
upon at least 30 days' prior written notice to the Co-Agents, which notice shall
specify the aggregate amount of and proposed effective date for any such
requested increase as well as each Group's Percentage of the requested increase
(each, a "Commitment Increase
6
Request"). If each Co-Agent agrees to the requested increase by notifying the
Borrower in writing of their concurrence, such increase shall be made to the
Commitments of the Blue Ridge Liquidity Banks, the La Fayette Liquidity Banks
and the Jupiter Liquidity Banks, ratably in accordance with their respective
Percentages and Ratable Shares as of the effective date specified in the
Commitment Increase Request. If any Co-Agent declines such request, the other
Co-Agents may elect to increase the Commitments of their Constituent Liquidity
Banks by all or any portion of the entire amount requested, in which case the
Percentages shall be adjusted to reflect such increase on the effective date
specified in the Commitment Increase Request. If no Co-Agent agrees to such
increase, the amount of the Aggregate Commitment shall remain unchanged.
Section 1.8 Extension of the Scheduled Termination Date.
(a) Provided that no Unmatured Default or Event of Default exists and
is continuing, the Borrower may request one or more Liquidity Bank(s) to extend
its Scheduled Termination Date by submitting a request for an extension (each,
an "Extension Request") to the Co-Agents no more than 210 days prior to each
such Liquidity Bank's respective Scheduled Termination Date then in effect (it
being understood that no such request may be made with respect to CLNY's
Scheduled Termination Date more than 90 days prior to such Liquidity Bank's
existing Scheduled Termination Date). Each Extension Request must specify the
new Scheduled Termination Date requested by the Borrower for such Liquidity
Bank(s) and the date (which must be at least 30 days after the Extension Request
is delivered to the Co-Agents and, in the case of CLNY, not more than 60 days
prior to their respective existing Scheduled Termination Dates) as of which the
applicable Liquidity Bank(s) must respond to the Extension Request (the
"Response Date"). The new Scheduled Termination Date for each applicable
Liquidity Bank shall be no more than 364 days after its existing Scheduled
Termination Date, including such existing Scheduled Termination Date as one of
the days in the calculation of the days elapsed, and the extension of the
Scheduled Termination Date shall not become effective until the existing
Scheduled Termination Date.
(b) Promptly upon receipt of an Extension Request, the Blue Ridge Agent
shall notify the Blue Ridge Group of the contents thereof and shall request each
applicable Blue Ridge Liquidity Bank to approve such Extension Request, the La
Fayette Agent shall notify the La Fayette Group of the contents thereof and
shall request each applicable La Fayette Liquidity Bank to approve such
Extension Request, and the Jupiter Agent shall notify the Jupiter Group of the
contents thereof and shall request each applicable Jupiter Liquidity Bank to
approve such Extension Request. Each applicable Liquidity Bank approving such
Extension Request shall deliver its written approval to its Co-Agent no later
than the Response Date, whereupon such Co-Agent shall notify the other Co-Agents
and the Borrower within one Business Day thereafter as to which (if any) of such
Co-Agent's applicable Constituent Liquidity Banks have approved such Extension
Request subject to their receipt of their applicable Extension Fee.
(c) If any applicable Liquidity Bank does not approve the Extension
Request, its Co-Agent shall promptly notify its Conduit, the other Co-Agents and
the Borrower of such fact, and the Borrower shall have the right to (i) require
such Non-Approving Lender to assign all, but not less than all, of its
Commitment and outstanding Obligations by entering into written assignments with
one or more Eligible Assignees not later than the 5th Business Day prior to such
Non-Approving Lender's existing Scheduled Termination Date, or (ii) to pay in
full of all Obligations (if any) owing to such Non-Approving Lender and
terminate its Commitment no later than such Non-Approving Lender's
7
existing Scheduled Termination Date. Each assignment pursuant to clause (i)
above to an Eligible Assignee (which may include a Constituent of the other
Co-Agent) shall become effective on the existing Scheduled Termination Date and,
subject to receipt of payment in full on such existing Scheduled Termination
Date for all Obligations, if any, owing to such Non-Approving Lender, such
Non-Approving Lender shall make each such requested assignment; provided that
any expenses or other amounts which would be owing to such Non-Approving Lender
pursuant to any indemnification provision hereof shall be payable by the
Borrower as if the Borrower had prepaid the Loans of the assigning Lenders
rather than such assigning Lenders having assigned their respective interests
hereunder. If no assignment of a Non-Approving Lender's Commitment to an
Eligible Assignee is executed by the 5th Business Day prior to its existing
Scheduled Termination Date, the Scheduled Termination Date for all Lenders shall
remain unchanged. If all applicable Liquidity Banks approve an Extension Request
by the Response Date, the Scheduled Termination Date specified in such Extension
Request shall become effective on such Response Date as to the approving
Liquidity Banks provided they each receive payment of their respective Extension
Fees, and each of the Co-Agents shall promptly notify the Borrower and the other
Co-Agent of the applicable Liquidity Banks' new Scheduled Termination Date.
Section 1.9 Distribution of Certain Notices; Notification of Interest
Rates. Promptly after receipt thereof, the Blue Ridge Agent will notify the Blue
Ridge Group, the La Fayette Agent will notify the La Fayette Group, and the
Jupiter Agent will notify the Jupiter Group, of the contents of each Monthly
Report, Weekly Report, Borrowing Request, Extension Request, Commitment
Reduction Notice, Prepayment Notice, Commitment Increase Request or notice of
default received by it from the Borrower or the Servicer hereunder. In addition,
each of the Co-Agents shall promptly notify its Constituent Lenders and the
Borrower of each determination of and change in Interest Rates.
ARTICLE II
BORROWING AND PAYMENT MECHANICS; CERTAIN COMPUTATIONS
Section 2.1 Method of Borrowing. The Borrower (or the Servicer, on the
Borrower's behalf) shall give the Co-Agents irrevocable notice in the form of
Exhibit 2.1 hereto (each, a "Borrowing Request") not later than 12:00 noon (New
York City time) at least two (2) Business Days before the Borrowing Date of each
Advance. On each Borrowing Date, each applicable Lender shall make available its
Loan or Loans in immediately available funds to its Co-Agent by wire transfer of
such amount received not later than 1:00 p.m. (New York City time). Subject to
its receipt of such wire transfers, each Co-Agent will wire transfer the funds
so received from its Constituent Lenders to the Borrower at the account
specified in its Borrowing Request not later than 2:00 p.m. (New York City time)
on the applicable Borrowing Date. Unless each of the Co-Agents in its sole
discretion shall otherwise agree, not more than one (1) Borrowing Date shall
occur in any calendar week.
Section 2.2 Selection of CP Tranche Periods and Interest Periods.
(a) Except upon the occurrence and during the continuance of an Event
of Default, the Borrower (or the Servicer, on the Borrower's behalf) in its
Borrowing Request may request CP Tranche Periods from time to time to apply to
La Fayette's CP Rate Loans; provided, however, that (i) at any time while La
Fayette has CP Rate Loans outstanding, at least one CP Tranche Period of La
Fayette shall mature on each Settlement Date and (ii) no CP Tranche Period of La
Fayette may extend beyond the latest Scheduled Termination Date of any La
Fayette Liquidity Bank. In addition to the foregoing,
8
except upon the occurrence and during the continuance of an Event of Default,
the Borrower (or the Servicer, on the Borrower's behalf) in its Borrowing
Request may request Interest Periods from time to time to apply to the
Eurodollar Loans; provided, however, that (x) at any time while any Lender has
Eurodollar Loans outstanding, at least one Interest Period of such Lender shall
mature on each Settlement Date and (y) no Interest Period of any Lender which
began prior to its Scheduled Termination Date shall extend beyond such Scheduled
Termination Date.
(b) While the La Fayette Agent will use reasonable efforts to
accommodate the Borrower's or the Servicer's requests for CP Tranche Periods
except during the continuance of an Event of Default, the La Fayette Agent shall
have the right to subdivide any requested CP Rate Loan into one or more CP Rate
Loans of different CP Tranche Periods, or, if the requested period is not
feasible, to suggest an alternative CP Tranche Period. While each of the
Co-Agents will use reasonable efforts to accommodate the Borrower's or the
Servicer's requests for Interest Periods for Eurodollar Loans except during the
continuance of an Event of Default, each of the Co-Agents shall have the right
to subdivide any requested Eurodollar Loan into one or more Eurodollar Loans
with different Interest Periods, or, if the requested period is not feasible, to
suggest an alternative Interest Period. Notwithstanding the foregoing, not less
than $1,000,000 of principal may be allocated to any CP Tranche Period or
Interest Period of any Lender, and no Alternate Base Rate Loan may have a
principal amount of less than $1,000,000.
(c) The Borrower (or the Servicer, on the Borrower's behalf) may not
request an Interest Period for a Eurodollar Loan unless it shall have given each
of the applicable Co-Agent(s) written notice of its desire therefor not later
than 12:00 noon (New York City time) at least three (3) Business Days prior to
the first day of the desired Interest Period. Accordingly, all Liquidity
Fundings shall initially be Alternate Base Rate Loans.
(d) Unless each Co-Agent shall have received written notice by 12:00
noon (New York City time) on the Required Day prior to the last day of a CP
Tranche Period that the Borrower intends to reduce the aggregate principal
amount of the CP Rate Loans outstanding, each of the Co-Agents and the Conduits
shall be entitled to assume that the Borrower desires to refinance the principal
and interest of each maturing CP Rate Loan on the last day of its CP Tranche
Period with new CP Rate Loans having substantially similar CP Tranche Periods;
provided, however, that the Borrower shall remain liable to pay in cash any
portion of the principal or interest on the maturing CP Rate Loan when due to
the extent that the applicable Conduit cannot issue Commercial Paper Notes or
avail itself of a Liquidity Funding, in either case, in the precise amount
necessary to refinance the maturing CP Rate Loan and the accrued and unpaid
interest thereon.
(e) Unless the Co-Agents shall have received written notice by 12:00
noon (New York City time) on the third (3rd) Business Day prior to the last day
of an Interest Period that the Borrower intends to reduce the aggregate
principal amount of the Eurodollar Loans outstanding from the Liquidity Banks,
each of the Liquidity Banks shall be entitled to assume that the Borrower
desires to refinance its maturing Eurodollar Loans on the last day of such
Interest Period with Alternate Base Rate Loans.
Section 2.3 Computation of Concentration Limits and Unpaid Net Balance.
The Obligor Concentration Limits and the aggregate Unpaid Net Balance of
Receivables of each Obligor and its
9
Affiliated Obligors (if any) shall be calculated as if each such Obligor and its
Affiliated Obligors were one Obligor.
Section 2.4 Maximum Interest Rate. No provision of this Agreement shall
require the payment or permit the collection of interest in excess of the
maximum permitted by applicable law.
Section 2.5 Payments and Computations, Etc.
(a) Payments. All amounts to be paid or deposited by the Borrower or
the Servicer (on the Borrower's behalf) to any of the Agents or Lenders (other
than amounts payable under Section 4.2) shall be paid by wire transfer of
immediately available funds received not later than 1:00 p.m. (New York City
time) on the day when due in lawful money of the United States of America to the
applicable Co-Agent at its address specified in Schedule 14.2, and, to the
extent such payment is for the account of any Lender, the applicable Co-Agent
shall promptly disburse such funds to the appropriate Lender(s) in its Group.
(b) Late Payments. To the extent permitted by law, upon demand, the
Borrower or the Servicer (on the Borrower's behalf), as applicable, shall pay to
the applicable Co-Agent for the account of each Person in its Group to whom
payment of any Obligation is due, interest on all amounts not paid or deposited
by 1:00 p.m. (New York City time) on the date when due (without taking into
account any applicable grace period) at the Default Rate.
(c) Method of Computation. All computations of interest at the
Alternate Base Rate or the Default Rate shall be made on the basis of a year of
365 (or, when appropriate, 366) days for the actual number of days (including
the first day but excluding the last day) elapsed. All other computations of
interest, and all computations of Servicer's Fee, any per annum fees payable
under Section 4.1 and any other per annum fees payable by the Borrower to the
Lenders, the Servicer or any of the Agents under the Loan Documents shall be
made on the basis of a year of 360 days for the actual number of days (including
the first day but excluding the last day) elapsed.
(d) Avoidance or Rescission of Payments. To the maximum extent
permitted by applicable law, no payment of any Obligation shall be considered to
have been paid if at any time such payment is rescinded or must be returned for
any reason.
Section 2.6 Non-Receipt of Funds by the Co Agents. Unless a Lender
notifies its Co-Agent prior to the date and time on which it is scheduled to
fund a Loan that it does not intend to fund, such Co-Agent may assume that such
funding will be made and may, but shall not be obligated to, make the amount of
such Loan available to the intended recipient in reliance upon such assumption.
If such Lender has not in fact funded its Loan proceeds to the applicable
Co-Agent, the recipient of such payment shall, on demand by such Co-Agent, repay
to such Co-Agent the amount so made available together with interest thereon in
respect of each day during the period commencing on the date such amount was so
made available by such Co-Agent until the date such Co-Agent recovers such
amount at a rate per annum equal to the Federal Funds Rate for such day.
10
ARTICLE III
SETTLEMENTS
Section 3.1 Reporting.
(a) Monthly Reports. Not later than the Monthly Reporting Date in each
calendar month hereafter, the Servicer shall deliver to each of the Co-Agents, a
Monthly Report accompanied by an electronic file in a form reasonably
satisfactory to each of the Co-Agents; provided, however, that if an Unmatured
Default or an Event of Default shall exist and be continuing, each of the
Co-Agents may request that a computation of the Borrowing Base also be made on a
date that is not a Monthly Reporting Date and, so long as such request is not
made on or within 5 Business Days prior to the last day of any calendar month,
the Servicer agrees to provide such computation within 3 Business Days after
such request.
(b) Weekly Reports; Right to Request Cash Collateral Payment. Not later
than each Weekly Reporting Date, the Servicer shall deliver to each of the
Co-Agents, a Weekly Report of the dollar amount of cash collections and the
number of requisitions, in each case, for the second preceding week (the "Report
Week"). If the dollar amount of cash Collections or the number of requisitions
for the Report Week is less than 50% of the arithmetic average of the
corresponding figures for the four immediately preceding Report Weeks, upon
request of any of the Co-Agents, the Servicer shall provide a written
computation of the Cash Collateral Payment within 3 Business Days after such
request.
(c) Interest; Other Amounts Due. At or before 12:00 noon (New York City
time) on the Business Day before each Settlement Date, each of the Co-Agents
shall notify the Borrower and the Servicer of (i) the aggregate principal
balance of all Loans that are then outstanding from its Constituents, and (ii)
the aggregate amount of all principal, interest and fees that will be due and
payable by the Borrower to such Co-Agent for the account of such Co-Agent or its
Constituents on such Settlement Date.
Section 3.2 Turnover of Collections. Without limiting any Agent's or
Lender's recourse to the Borrower for payment of any and all Obligations:
(a) If any Monthly Report reveals that a mandatory prepayment is
required under Section 1.5(b) or (c), not later than the 12:00 noon (New
York City time) on the next succeeding Settlement Date, the Servicer shall
turn over to each applicable Co-Agent, for distribution to its
Constituents, a portion of the Collections equal to the amount of such
required mandatory prepayment;
(b) If, on any Settlement Date, any Loans are to be voluntarily prepaid
in accordance with Section 1.5(a), or if the aggregate principal amount of
the Advances outstanding is to be reduced, the Servicer shall turn over to
each of the Co-Agents, for distribution to its Constituents, a portion of
the Collections equal to the Groups' respective Percentages of the
aggregate amount of such voluntary prepayment or reduction; and
(c) In addition to, but without duplication of, the foregoing, on (i)
each Settlement Date and (ii) each other date on which any principal of or
interest on any of
11
the Loans becomes due (whether by acceleration or otherwise) and, in the
case of principal, has not been reborrowed pursuant to Section 1.1, the
Servicer shall turn over to each of the Co-Agents, for distribution to
their respective Constituents, the Groups' respective Percentages of a
portion of the Collections equal to the aggregate amount of all other
Obligations that are due and owing on such date. If the Collections and
proceeds of new Loans are insufficient to make all payments required under
clauses (a), (b) and (c) and to pay the Servicer's Fees and, if applicable,
all expenses due and owing to any replacement Servicer under Section 8.1(d)
(all of the foregoing, collectively, the "Required Amounts") and the
Borrower has made any Demand Advances, the Borrower shall make demand upon
Quest Diagnostics for payment of the Demand Advances in an amount equal to
the lesser of the Required Amounts or the aggregate outstanding principal
balance of such Demand Advances (plus any accrued and unpaid interest
thereon) and, upon receipt of any such amounts, the Borrower shall pay them
to each of the Co-Agents, ratably in accordance with their respective
Groups' Percentages, for distribution in accordance with this Section 3.2.
(d) If the aggregate amount of Collections and payments on Demand
Advances received by the Co-Agents on any Settlement Date are insufficient
to pay all Required Amounts, the aggregate amount received shall be applied
to the items specified in the subclauses below, in the order of priority of
such subclauses:
(i) to any accrued and unpaid interest on the Loans that is then
due and owing, including any previously accrued interest which was not paid
on its applicable due date;
(ii) if the Servicer is not the Borrower or an Affiliate thereof,
to any accrued and unpaid Servicer's Fee that is then due and owing to such
Servicer, together with any invoiced expenses of the Servicer due and owing
pursuant to Section 8.1(d);
(iii) to the Facility Fee and the Usage Fee accrued during such
Settlement Period, plus any previously accrued Facility Fee and Usage Fee
not paid on a prior Settlement Date;
(iv) to the payment of the principal of any Loans that are then
due and owing;
(v) to other Obligations that are then due and owing;
(vi) if the Servicer is the Borrower, Quest Diagnostics or one of
their respective Affiliates, to the accrued and unpaid Servicer's Fee; and
(vii) the balance, if any, to the Borrower.
(e) If the Servicer is ever required to deliver a computation of the
Cash Collateral Payment pursuant to Section 3.1(b), not later than one (1)
Business Day after delivery of such computation, the Borrower shall pay to
the applicable Co-Agent an amount equal to its Group's Percentage of the
Cash Collateral Payment to be invested in Permitted
12
Investments selected by such Co-Agent but held as Collateral for the
Obligations until the next Settlement Date pending distribution in
accordance with Section 3.2(d). If the Borrower lacks sufficient funds to
make any such Cash Collateral Payment, in whole or in part, the Borrower
shall make immediate demand upon Quest Diagnostics for payment of any
Demand Advances that are then outstanding, and, upon receipt of any such
shortfall amount, the Borrower shall pay each Group's Percentage of such
shortfall amount to the applicable Co-Agent for deposit into a cash
collateral account to be invested in Permitted Investments selected by the
applicable Co-Agent but held as Collateral for the Obligations until the
next Settlement Date pending distribution in accordance with Section
3.2(d).
(f) In addition to, but without duplication of, the foregoing, on (i)
each Settlement Date and (ii) each other date on which any principal of or
interest on any of the Loans becomes due (whether by acceleration pursuant
to Section 10.2(a) or 10.2(b) or otherwise), the Servicer shall turn over
to each of the Co-Agents, for distribution to the Lenders, a portion of the
Collections equal to the aggregate amount of all Obligations that are due
and owing on such date.
Section 3.3 Non-Distribution of Servicer's Fee. Each of the Agents and
the other Secured Parties hereby consents to the retention by the Servicer of a
portion of the Collections equal to the Servicer's Fee (and, if applicable, any
invoiced expenses of such Servicer that are due and owing pursuant to Section
8.1(d)) so long as the Collections received by the Servicer are sufficient to
pay all amounts pursuant to Section 3.2 of a higher priority as specified in
such Section.
Section 3.4 Deemed Collections. If as of the last day of any Settlement
Period:
(a) the outstanding aggregate balance of the Net Receivables as
reflected in the preceding Monthly Report (net of any positive adjustments) has
been reduced for any of the following reasons:
(i) as a result of any rejected services, any cash discount or any
other adjustment by the applicable Originator or any Affiliate thereof
(regardless of whether the same is treated by such Originator or Affiliate
as a write-off), or as a result of any surcharge or other governmental or
regulatory action, or
(ii) as a result of any setoff or breach of the underlying agreement in
respect of any claim by the Obligor thereof (whether such claim arises out
of the same or a related or an unrelated transaction), or
(iii) on account of the obligation of the applicable Originator or any
Affiliate thereof to pay to the related Obligor any rebate or refund, or
(iv) the Unpaid Net Balance of any Receivable is less than the amount
included in calculating the Net Pool Balance for purposes of any Monthly
Report (for any reason other than such Receivable becoming a Defaulted
Receivable), or
13
(b) any of the representations or warranties of the Borrower set forth
in Section 6.1(j), (l) or (p) was not true when made with respect to any
Receivable, or any of the representations or warranties of the Borrower set
forth in Section 6.1(l) is no longer true with respect to any Receivable,
then, in such event, the Borrower shall be deemed to have received a Collection
in an amount equal to (A) the amount of such reduction, cancellation or
overstatement, in the case of the preceding clauses (a)(i), (a)(ii), (a)(iii)
and (a)(iv), and (B) in the full amount of the Unpaid Net Balance of such
Receivable in the case of the preceding clause (b).
ARTICLE IV
FEES AND YIELD PROTECTION
Section 4.1 Fees. Quest Diagnostics or the Borrower, as applicable,
shall pay to each of the Agents and the Lenders certain fees from time to time
in amounts and payable on such dates as are set forth in the Fee Letters.
Section 4.2 Yield Protection.
(a) If any Regulatory Change occurring after the date hereof:
(i) shall subject an Affected Party to any Tax, duty or other charge
with respect to its Obligations or, as applicable, its Commitment or its
Liquidity Commitment, or shall change the basis of taxation of payments to
the Affected Party of any Obligations, owed to or funded in whole or in
part by it or any other amounts due under this Agreement in respect of its
Obligations or, as applicable, its Commitment or its Liquidity Commitment
except for (A) Taxes based on, or measured by, net income or net profits,
or changes in the rate of Tax on or determined by reference to the overall
net income or net profits, of such Affected Party imposed by the United
States of America, by the jurisdiction in which such Affected Party's
principal executive office and/or its applicable lending office is located
and, if such Affected Party's principal executive office or its applicable
lending office is not in the United States of America, by the jurisdiction
where such Affected Party's principal office or applicable lending office
is located, (B) franchise Taxes, Taxes on, or in the nature of, doing
business Taxes or capital Taxes, or (C) withholding Taxes required for
payments made to any foreign entity (other than withholding Taxes imposed
by the United States as a result of a change in law after the date hereof
and before such foreign entity issues its Commitment or Liquidity
Commitment or becomes an assignee of a Lender hereunder), unless such
foreign entity fails to deliver to each of the Co-Agents and the Borrower
an accurate IRS Form W-8BEN or W-8ECI (or the applicable successor form),
as applicable; or
(ii) shall impose, modify or deem applicable any reserve that was not
included in the computation of the applicable Interest Rate, or any special
deposit or similar requirement against assets of any Affected Party,
deposits or obligations with or for the account of any Affected Party or
with or for the account of any affiliate (or entity deemed by the Federal
Reserve Board to be an affiliate) of any Affected Party, or credit extended
by any Affected Party; or
14
(iii) shall affect the amount of capital required or expected to be
maintained by any Affected Party; or
(iv) shall impose any other condition affecting any Obligation owned or
funded in whole or in part by any Affected Party, or its rights or
obligations, if any, to make Loans or Liquidity Fundings; or
(v) shall change the rate for, or the manner in which the Federal
Deposit Insurance Corporation (or a successor thereto) assesses deposit
insurance premiums or similar charges;
and the result of any of the foregoing is or would be:
(x) to increase the cost to or to impose a cost on (I) an Affected
Party funding or making or maintaining any Loan, any Liquidity Funding, or
any commitment of such Affected Party with respect to any of the foregoing,
or (II) any of the Agents for continuing its or the Borrower's relationship
with any Affected Party, in each case, in an amount deemed to be material
by such Affected Party,
(y) to reduce the amount of any sum received or receivable by an
Affected Party under this Agreement or under the Liquidity Agreement, or
(z) to reduce the rate of return on such Affected Party's capital as a
consequence of its Commitment, its Liquidity Commitment or the Loans made
by it to a level below that which such Affected Party could have achieved
but for the occurrence of such circumstances,
then, within thirty days after demand by such Affected Party (which demand shall
be made not more than 90 days after the date on which the Affected Party becomes
aware of such Regulatory Change and shall be accompanied by a certificate
setting forth, in reasonable detail, the basis of such demand and the
methodology for calculating, and the calculation of, the amounts claimed by the
Affected Party), the Borrower shall pay directly to such Affected Party such
additional amount or amounts as will compensate such Affected Party for such
actual additional cost, actual increased cost or actual reduction.
(b) Each Affected Party will promptly notify the Borrower, the
Administrative Agent and the applicable Co-Agent of any event of which it has
knowledge (including any future event that, in the judgment of such Affected
Party, is reasonably certain to occur) which will entitle such Affected Party to
compensation pursuant to this Section 4.2; provided, however, no failure to give
or delay in giving such notification shall adversely affect the rights of any
Affected Party to such compensation unless such notification is given more than
90 days after the Affected Party becomes aware of such Regulatory Change.
(c) In determining any amount provided for or referred to in this
Section 4.2, an Affected Party may use any reasonable averaging and attribution
methods (consistent with its ordinary business practices) that it (in its
reasonable discretion) shall deem applicable. Any Affected Party when making a
claim under this Section 4.2 shall submit to the Borrower the above-referenced
certificate as to such actual increased cost or actual reduced return (including
calculation thereof in reasonable
15
detail), which statement shall, in the absence of demonstrable error, be
conclusive and binding upon the Borrower.
(d) Each of the Lenders agrees, and to require each Affected Party to
agree that, with reasonable promptness after an officer of such Lender or such
Affected Party responsible for administering the Transaction Documents becomes
aware that it has become an Affected Party under this Section 4.2, is entitled
to receive payments under this Section 4.2, or is or has become subject to U.S.
withholding Taxes payable by any Loan Party in respect of its investment
hereunder, it will, to the extent not inconsistent with any internal policy of
such Person or any applicable legal or regulatory restriction, (i) use all
reasonable efforts to make, fund or maintain its commitment or investment
hereunder through another branch or office of such Affected Party, or (ii) take
such other reasonable measures, if, as a result thereof, the circumstances which
would cause such Person to be an Affected Party under this Section 4.2 would
cease to exist, or the additional amounts which would otherwise be required to
be paid to such Person pursuant to this Section 4.2 would be reduced, or such
withholding Taxes would be reduced, and if the making, funding or maintaining of
such commitment or investment through such other office or in accordance with
such other measures, as the case may be, would not otherwise adversely affect
such commitment or investment or the interests of such Person; provided that
such Person will not be obligated to utilize such other lending office pursuant
to this Section 4.2 unless the Borrower agrees to pay all incremental expenses
incurred by such Person as a result of utilizing such other office as described
in clause (i) above.
(e) If any Liquidity Bank (other than a Co-Agent) makes a claim for
compensation under this Section 4.2, the Borrower may propose an Eligible
Assignee to the applicable Co-Agent who is willing to accept an assignment of
such Liquidity Bank's Commitment, Liquidity Commitment and outstanding Loans,
together with each of its other rights and obligations under the Transaction
Documents; provided that any expenses or other amounts which would be owing to
such Liquidity Bank pursuant to any indemnification provision hereof (including,
if applicable, Section 4.3) shall be payable by the Borrower as if the Borrower
had prepaid the Loans of the assigning Lenders rather than such assigning
Lenders having assigned their respective interests hereunder. If such proposed
Eligible Assignee is acceptable to the applicable Co-Agent (who shall not
unreasonably withhold or delay its approval), the claiming Liquidity Bank will
be obligated to assign all of its rights and obligations to such proposed
Eligible Assignee within ten (10) Business Days after such Co-Agent gives its
consent to such proposed Eligible Assignee.
Section 4.3 Funding Losses. In the event that any Lender shall actually
incur any actual loss or expense (including any actual loss or expense incurred
by reason of the liquidation or reemployment of deposits or other funds acquired
by such Lender to make or maintain any Loan or Liquidity Funding) as a result of
(i) any payment of principal with respect to such Lender's Loan or Liquidity
Funding being made on any day other than the scheduled last day of an applicable
CP Tranche Period or Interest Period with respect thereto, including, without
limitation, because of a prepayment required by Section 1.5(b) or (c) (it being
understood that the foregoing shall not apply to any Alternate Base Rate Loans),
or (ii) any Loan not being made in accordance with a request therefor under
Section 2.1, then, upon written notice from the applicable Co-Agent to the
Administrative Agent, the Borrower and the Servicer, the Borrower shall pay to
the Servicer, and the Servicer shall pay to the applicable Co-Agent for the
account of such Lender, the amount of such actual loss or expense; provided,
however, that in the case of each of Blue Ridge and Jupiter, nothing in this
Section 4.3 shall duplicate any amount paid to it as Broken Funding Costs. Such
written notice (which shall include the
16
methodology for calculating, and the calculation of, the amount of such actual
loss or expense, in reasonable detail) shall, in the absence of demonstrable
error, be conclusive and binding upon the Borrower and the Servicer.
ARTICLE V
CONDITIONS OF ADVANCES
Section 5.1 Conditions Precedent to Restructuring Effectiveness.
Effectiveness of this Agreement shall be subject to the conditions precedent
that on such date: (a) each of the statements contained in Sections 5.2(a), (b)
and (c) shall be true, and (b) the Administrative Agent shall have received not
less than two (2) originals (except in the case of item (xi) below) of each of
the following documents dated the date hereof:
(i) This Agreement, duly executed by the parties hereto;
(ii) A certificate of the Secretary or Assistant Secretary of each Loan
Party certifying (A) the names and true signatures of the officers authorized on
its behalf to sign this Agreement and the other Transaction Documents to be
delivered by it hereunder (on which certificate the Agents and the Lenders may
conclusively rely until such time as the Administrative Agent shall receive from
such Loan Party a revised certificate meeting the requirements of this
subsection (ii)), (B) (x) an attached copy of the Organic Documents of such Loan
Party, or (y) that there has been no change in the Organic Documents of such
Loan Party since the date of the Existing Agreement, and (C) an attached copy of
resolutions of such Loan Party's board of directors authorizing its execution
and delivery of this Agreement;
(iii) Either (A) a reliance letter from Shearman & Sterling authorizing
each member of the Jupiter Group to rely on Shearman & Sterling's bankruptcy
opinion dated July 21, 2000 delivered in connection with the Sale Agreement as
though such opinion were dated the date hereof, or (B) new opinions dated the
date hereof addressed to each of the Agents and the Lenders addressing (1) the
existence of a "true sale" or "true contribution" of the Receivables from each
of the Originators to the Borrower under the Sale Agreement, and (2) the
inapplicability of the doctrine of substantive consolidation to the Borrower and
each of the Originators in connection with any bankruptcy proceeding involving
any of the Originators or the Borrower;
(iv) One or more favorable opinions of counsel or reliance letters to
Loan Parties covering the matters set forth in of Exhibit 5.1(h);
(v) Copies in form suitable for filing of any and all financing
statement amendments necessary to ensure that the Borrower continues to have a
perfected ownership interest or perfected first priority security interest in
the Receivables and Related Assets conveyed to it under the Sale Agreement and
the Administrative Agent, for the benefit of the Secured Parties, continues to
have a perfected first priority security interest in the Collateral hereunder;
(vii) A Monthly Report, prepared as of the Cut-Off Date of August 31,
2003;
(viii) The Jupiter Liquidity Agreement, in form and substance
satisfactory to the Jupiter Agent, duly executed by the parties thereto, and an
amendment to the Blue Ridge Liquidity Agreement,
17
in form and substance satisfactory to the Blue Ridge Agent, duly executed by the
parties thereto, reducing the Liquidity Commitments thereunder by $51,000,000;
(ix) The Jupiter Fee Letter, together with payment of any and all fees
due on or prior to the date hereof, the La Fayette Fee Letter and the Blue Ridge
Fee Letter; and
(x) A certificate of an Authorized Officer of each of the Loan Parties
certifying that as of the date of the initial Advance, no Event of Default or
Unmatured Event of Default exists and is continuing.
Section 5.2 Conditions Precedent to All Advances. Each Advance
(including the initial Advance under this Agreement) shall be subject to the
further conditions precedent that on the applicable Borrowing Date, each of the
following statements shall be true (and the Borrower, by accepting the amount of
such Advances or by receiving the proceeds of any Loan comprising such Advance,
and each other Loan Party, upon such acceptance or receipt by the Borrower,
shall be deemed to have certified that):
(a) the representations and warranties contained in Section 6.1 are
correct in all respects on and as of the date of such Advance as though
made on and as of such day and shall be deemed to have been made on such
day,
(b) no event has occurred and is continuing, or would result from such
Advance, that constitutes an Event of Default or Unmatured Default,
(c) the Termination Date shall not have occurred,
(d) if such Advance is to be funded, in whole or in part, by any
Conduit's Liquidity Banks, such Conduit shall have Liquidity Banks in its
Group whose Scheduled Termination Dates have not occurred with sufficient
undrawn Commitments in an aggregate amount sufficient to fund the requisite
portion of such Advance, and
(e) each of the Co-Agents shall have received (with such receipt to be
determined in accordance with Section 14.2 of this Agreement) a timely
Borrowing Request in accordance with Section 2.1;
provided, however, the absence of the occurrence and continuance of an Unmatured
Default shall not be a condition precedent to any Advance which does not
increase the aggregate principal amount of all Advances outstanding over the
aggregate outstanding principal balance of the Advances as of the opening of
business on such day.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Section 6.1 Representations and Warranties of Loan Parties. Each Loan
Party, as to itself, represents and warrants to the Agents and the Lenders as
follows:
(a) Ownership of the Borrower. Quest Diagnostics owns, directly or
indirectly, all the issued and outstanding Equity Interests of the Borrower, and
all of such Equity Interests are fully paid and non-assessable and are free and
clear of any Liens.
(b) Existence; Due Qualification; Permits. Each of the Loan Parties:
(i) is a corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization; (ii) has all requisite
corporate power and authority necessary to own its Property and carry on its
business as now being conducted; (iii) is qualified to do business and is in
good standing in all jurisdictions in which the nature of the business conducted
by it makes such qualification necessary; and (iv) is in compliance with all
Requirements of Law, except in the case of clauses (i), (ii), (iii) and (iv)
where the failure thereof individually or in the aggregate could not reasonably
be expected to have a Material Adverse Effect. The Loan Parties hold all
governmental permits, licenses, authorizations, consents and approvals necessary
for the Loan Parties to own, lease, and operate their respective Properties and
to operate their respective businesses as now being conducted (collectively, the
"Permits"), except for Permits the failure of which to obtain would not have a
Material Adverse Effect. None of the Permits has been modified in any way that
is reasonably likely to have a Material Adverse Effect. All Permits are in full
force and effect except where the failure to be in full force and effect would
not have a Material Adverse Effect.
(c) Action. Each Loan Party has all necessary corporate or other entity
power, authority and legal right to execute, deliver and perform its obligations
under each Transaction Document to which it is a party and to consummate the
transactions herein and therein contemplated; the execution, delivery and
performance by each Loan Party of each Transaction Document to which it is a
party and the consummation of the transactions herein and therein contemplated
have been duly authorized by all necessary corporate or other entity action on
its part; and this Agreement has been duly and validly executed and delivered by
each Loan Party and constitutes, and each of the other Transaction Documents to
which it is a party when executed and delivered by such Loan Party will
constitute, its legal, valid and binding obligation, enforceable against each
Loan Party in accordance with its terms, except as such enforceability may be
limited by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws of general applicability from time to time in effect
affecting the enforcement of creditors' rights and remedies and (ii) the
application of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(d) Absence of Default. No Unmatured Default or Event of Default has
occurred and is continuing.
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(e) Noncontravention.
(i) None of the execution, delivery and performance by any Loan Party
of any Transaction Document to which it is a party nor the consummation of the
transactions herein and therein contemplated will (A) conflict with or result in
a breach of, or require any consent (which has not been obtained and is in full
force and effect) under, any Organic Document of any Loan Party or any
applicable Requirement of Law or any order, writ, injunction or decree of any
Governmental Authority binding on any Loan Party, or any term or provision of
any Contractual Obligation of any Loan Party or (B) constitute (with due notice
or lapse of time or both) a default under any such Contractual Obligation, or
(C) result in the creation or imposition of any Lien (except for the Liens
created pursuant to the Transaction Documents) upon any Property of any Loan
Party pursuant to the terms of any such Contractual Obligation, except with
respect to each of the foregoing which could not reasonably be expected to have
a Material Adverse Effect and which would not subject any Lender to any material
risk of damages or liability to third parties.
(ii) No Loan Party is in default under any material contract or
agreement to which it is a party or by which it is bound, nor, to such Loan
Party's knowledge, does any condition exist that, with notice or lapse of time
or both, would constitute such default, excluding in any case such defaults that
are not reasonably likely to have a Material Adverse Effect.
(f) No Proceedings. Except as described in Quest Diagnostics' Form 10-K
for the fiscal year ended December 31, 2002 and all filings made with the SEC
under the Exchange Act by any Loan Party subsequent thereto prior to the date of
this Agreement (copies of which have been provided to each of the Co-Agents):
(i) There is no Proceeding (other than any qui tam Proceeding, to which
this Section is limited to the best of each Loan Party's knowledge) pending
against, or, to the knowledge of either Loan Party, threatened in writing
against or affecting, any Loan Party or any of its respective Properties
before any Governmental Authority that, if determined or resolved adversely
to such Loan Party, could reasonably be expected to have a Material Adverse
Effect.
(ii) There is (A) no unfair labor practice complaint pending against
any Loan Party or, to the best knowledge of each Loan Party, threatened
against such Loan Party, before the National Labor Relations Board or any
other Governmental Authority, and no grievance or arbitration proceeding
arising out of or under any collective bargaining agreement is so pending
against such Loan Party or, to the best knowledge of such Loan Party after
due inquiry, threatened against such Loan Party, (B) no strike, labor
dispute, slowdown or stoppage pending against such Loan Party or, to the
best knowledge of Borrower, after due inquiry, threatened against such Loan
Party and (C) to the best knowledge of Borrower after due inquiry, no union
representation question existing with respect to the employees of such Loan
Party and, to the best knowledge of such Loan Party, no union organizing
activities are taking place, except such as would not, with respect to any
matter specified in clause (A), (B) or (C) above, individually or in the
aggregate, have a Material Adverse Effect.
20
(g) Taxes.
(i) Except as would not have a Material Adverse Effect: (A) all tax
returns, statements, reports and forms (including estimated Tax or
information returns) (collectively, the "Tax Returns") required to be filed
with any taxing authority by, or with respect to, each Loan Party have been
timely filed in accordance with all applicable laws; (B) each Loan Party
has timely paid or made adequate provision for payment of all Taxes shown
as due and payable on Tax Returns that have been so filed, and, as of the
time of filing, each Tax Return was accurate and complete and correctly
reflected the facts regarding income, business, assets, operations,
activities and the status of each Loan Party (other than Taxes which are
being contested in good faith and for which adequate reserves are reflected
on the financial statements delivered hereunder); and (C) each Loan Party
has made adequate provision for all Taxes payable by such Loan Party for
which no Tax Return has yet been filed.
(ii) Except as set forth in Quest Diagnostics' Annual Report on Form
10-K for the year ended December 31, 2002: (A) as of the date hereof no
Loan Party is a member of an affiliated group of corporations within the
meaning of Section 1504 of the Code other than an affiliated group of
corporations of which Quest Diagnostics is the common parent; and (B) there
are no material tax sharing or tax indemnification agreements under which
Borrower is required to indemnify another party for a material amount of
Taxes.
(h) Government Approvals. No authorizations, approvals or consents of,
and no filings or registrations with, any Governmental Authority or any
securities exchange are necessary for the execution, delivery or performance by
any Loan Party of the Transaction Documents to which it is a party or for the
legality, validity or enforceability hereof or thereof or for the consummation
of the transactions herein and therein contemplated, except for filings and
recordings in respect of the Liens created pursuant to the Transaction Documents
(all of which have been duly made) and except for consents, authorizations and
filings that have been obtained or made and are in full force and effect or the
failure of which to obtain would not have a Material Adverse Effect.
(i) Financial Statements and Absence of Certain Material Adverse
Changes.
(i) The information, reports, financial statements, exhibits and
schedules furnished in writing by either of the Loan Parties to each of the
Co-Agents or Lenders in connection with the negotiation, preparation or
delivery of the Transaction Documents, including Quest Diagnostics' Annual
Report on Form 10-K for the year ended December 31, 2002, but in each case
excluding all projections, whether prior to or after the date of this
Agreement, when taken as a whole, do not, as of the date such information
was furnished, contain any untrue statement of material fact or omit to
state a material fact necessary in order to make the statements herein or
therein, in light of the circumstances under which they were made, not
materially misleading. The projections and pro forma financial information,
if any, furnished at any time by any Loan Party to any Lender pursuant to
this Agreement have been prepared in good faith based on assumptions
believed by Quest Diagnostics to be reasonable at the time made, it being
recognized by the Lenders that such financial information as it relates to
future events is
21
not to be viewed as fact and that actual results during the period or
periods covered by such financial information may differ from the projected
results set forth therein by a material amount and no Loan Party, however,
makes any representation as to the ability of any Loan Party to achieve the
results set forth in any such projections. Each Loan Party understands that
all such statements, representations and warranties shall be deemed to have
been relied upon by the Lenders as a material inducement to make each
extension of credit hereunder.
(ii) From December 31, 2002 through and including the date of the
initial Advance, there has been no material adverse change in Quest
Diagnostics' consolidated financial condition, business or operations.
Since the date of the initial Advance, there has been no material adverse
change in Quest Diagnostics' consolidated financial condition, business or
operations that has had, or would reasonably be expected to have, a
material adverse effect upon its ability to perform its obligations, as an
Originator or as Servicer, under the Transaction Documents when and as
required, and no material adverse effect on the collectibility of any
material portion of the Receivables.
(iii) Since the date of the initial Advance, no event has occurred
which would have a Material Adverse Effect.
(j) Nature of Receivables. Each Receivable constitutes an Account or a
Payment Intangible.
(k) Margin Regulations. The use of all funds obtained by such Loan
Party under this Agreement or any other Transaction Document will not conflict
with or contravene any of Regulation T, U or X.
(l) Title to Receivables and Quality of Title.
(i) Each Receivable has been acquired by the Borrower from an
Originator in accordance with the terms of the Sale Agreement, and the
Borrower has thereby irrevocably obtained all legal and equitable title to
such Receivable and its Related Assets (other than any Related Asset
constituting a Non-Assignable Contract, in which case the Borrower has
obtained a valid and perfected first priority perfected security interest
in the rights to receive payments thereunder), and the Borrower has the
legal right to sell and encumber, such Receivable and the Related Assets.
Without limiting the foregoing, there have been duly delivered to each of
the Co-Agents in form suitable for filing all financing statements and
financing statements amendments or other similar instruments or documents
necessary under the UCC of all appropriate jurisdictions to perfect the
Borrower's ownership interest in such Receivable.
(ii) This Agreement creates a valid security interest in the Collateral
in favor of the Administrative Agent, for the benefit of the Secured
Parties, and, upon filing of the financing statements and amendments
described in clause (i), together with UCC termination statements delivered
under the Receivables Sale Agreement, such security interest will be a
first priority perfected security interest.
22
(iii) No financing statement or other instrument similar in effect
covering any portion of the Collateral is on file in any recording office
except such as may be filed (A) in favor of an Originator in accordance
with the Contracts, (B) in favor of the Borrower and its assigns in
connection with the Sale Agreement, (C) in favor of the Administrative
Agent in accordance with this Agreement, (D) in connection with any Lien
arising solely as the result of any action taken by the Administrative
Agent or one of the Secured Parties, or (E) which shall have been
terminated or amended pursuant to UCC financing statements delivered to the
Administrative Agent hereunder in form suitable for filing in all
applicable jurisdictions.
(m) Accurate Reports. No Monthly Report, Weekly Report or computation
of Cash Collateral Payment (in each case, if prepared by such Loan Party, or to
the extent information therein was supplied by such Loan Party), no other
information, exhibit, schedule or information concerning the Collateral
furnished or to be furnished verbally or in writing before or after the date of
this Agreement, by or on behalf of such Loan Party to each of the Co-Agents or
Lenders pursuant to this Agreement was or will be inaccurate in any material
respect as of the date it was or will be dated or (except as otherwise disclosed
to each of the Co-Agents or the Lenders at such time) as of the date so
furnished, or contained or (in the case of information or other materials to be
furnished in the future) will contain any material misstatement of fact or
omitted or (in the case of information or other materials to be furnished in the
future) will omit to state a material fact or any fact necessary to make the
statements contained therein not materially misleading in light of the
circumstances made or presented.
(n) Jurisdiction of Organization; Offices. Each Loan Party's
jurisdiction of organization is correctly set forth after its name in the
preamble to this Agreement. The principal places of business and chief executive
office of the Borrower is located at the addresses set forth on Schedule 6.1(n),
and the offices where the Servicer and the Borrower keep all their Records and
material Contracts are located at the addresses specified in Schedule 6.1(n) (or
at such other locations, notified to each of the Co-Agents in accordance with
Section 7.1(f), in jurisdictions where all action required by Section 8.5 has
been taken and completed).
(o) Lockboxes and Collection Accounts.
(i) One of the Loan Parties or the applicable Originator has instructed
all Obligors of all Receivables to pay all Collections thereon either (A)
by mail addressed to a Lockbox or (B) by wire transfer or other electronic
funds transfer directly to a Collection Account in the name of the
applicable Originator, as sub-servicer, or in the name of the Borrower.
Items received in the Lockboxes are deposited for collection each Business
Day into a Collection Account in the name of the applicable Originator or
the Borrower, and all collected and available funds from time to time in
each Collection Account in the name of any Originator are swept each day to
a Collection Account in the name of the Borrower. Each of the Lockboxes and
Collections Accounts is in full force and effect and, except for the
Collection Account at China Trust Bank, is subject to a Collection Account
Agreement that is in full force and effect.
(ii) The Borrower has not granted any Person other than the
Administrative Agent, dominion and control over any Collection Account or
any Lockbox, or the right
23
to take dominion and control of any of the foregoing at a future time or
upon the occurrence of a future event.
(iii) Except as otherwise provided in Section 7.3(d), each Collection
Account Agreement, and the name and address of each Collection Bank
(together with the account numbers of all Collection Accounts maintained
with it and the address of each Lockbox maintained with it) are set forth
on Schedule 6.1(o).
(p) Eligible Receivables. Each Receivable included as an Eligible
Receivable in the Net Pool Balance in connection with any computation or
recomputation of the Borrowing Base is an Eligible Receivable on such date.
(q) ERISA. No ERISA Event has occurred or is reasonably expected to
occur which could have a Material Adverse Effect. The present value of all
accumulated benefit obligations of all underfunded Pension Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards No.
87) did not, as of the date of the most recent financial statements reflecting
such amounts, exceed by more than $20.0 million the fair market value of the
assets of all such underfunded Pension Plans. Each ERISA Entity is in compliance
in all material respects with the presently applicable provisions of ERISA and
the Code with respect to each Employee Benefit Plan. Using actuarial assumptions
and computation methods consistent with subpart 1 of subtitle E of Title IV of
ERISA, the aggregate liabilities of any of each ERISA Entity to all
Multiemployer Plans in the event of a complete withdrawal therefrom, as of the
close of the most recent fiscal year of each such Multiemployer Plan, would not
result in a Material Adverse Effect. All Foreign Plans are in substantial
compliance with all Requirements of Law (other than to the extent such failure
to comply would not reasonably be expected to have a Material Adverse Effect).
(r) Names. Since its incorporation, the Borrower has not used any legal
names, trade names or assumed names other than the name in which it has executed
this Agreement.
(s) Credit and Collection Policy. With respect to the Receivables
originated by each of the Originators, each of the applicable Originator, the
Borrower and the Servicer has complied in all material respects with the
applicable Credit and Collection Policy, and no change has been made to such
Credit and Collection Policy since the date of this Agreement which would be
reasonably likely to materially and adversely affect the collectibility of the
Receivables or decrease the credit quality of any newly created Receivables
except for such changes as to which each of the Co-Agents has received the
notice required under Section 7.2(j) and has given its prior written consent
thereto (which consent shall not be unreasonably withheld or delayed).
(t) Payments to Applicable Originator. With respect to each Receivable
sold or contributed to the Borrower by any Originator under the Sale Agreement,
the Borrower has given reasonably equivalent value to such Originator in
consideration for such Receivable and the Related Assets with respect thereto
and no such transfer is or may be voidable under any section of the Bankruptcy
Reform Act of 1978 (11 U.S.C. 'SS''SS'101 et seq.), as amended.
24
(u) Investment Company Act; Public Utility Holding Company Act; Other
Restrictions. No Loan Party is an "investment company", or a company
"controlled" by an "investment company", within the meaning of the United States
Investment Company Act of 1940, as amended. No Loan Party is a "holding
company", or an "affiliate" of a "holding company" or a "subsidiary company" of
a "holding company", within the meaning of the United States Public Utility
Holding Company Act of 1935, as amended. No Loan Party is subject to regulation
under any law or regulation which limits its ability to incur Indebtedness,
other than Regulation X of the Board of Governors of the Federal Reserve System.
(v) Borrowing Base; Solvency. The Borrowing Base is at all times at
least equal to the aggregate outstanding principal balance of the Advances. As
of each Borrowing Date, after giving effect to any Loans to be borrowed on such
date, the Borrower is and will be Solvent.
(z) Specified Government Receivables. . All Specified Government
Receivables are recorded in the Originators' billing and accounting systems
solely as Client-Billed Receivables.
ARTICLE VII
GENERAL COVENANTS OF LOAN PARTIES
Section 7.1 Affirmative Covenants of Loan Parties. From the date hereof
until the Final Payout Date, unless each of the Co-Agents shall otherwise
consent in writing:
(a) Compliance With Laws, Etc. Each Loan Party will comply with all
applicable laws, rules, regulations and orders, including those with respect to
the Receivables and related Contracts and Invoices, except, in each of the
foregoing cases, where the failure to so comply would not individually or in the
aggregate have a Material Adverse Effect.
(b) Preservation of Existence. Each Loan Party will preserve and
maintain its existence, rights, franchises and privileges in the jurisdiction of
its incorporation, and qualify and remain qualified in good standing as a
foreign corporation in each jurisdiction where the failure to preserve and
maintain such existence, rights, franchises, privileges and qualification would
have a Material Adverse Effect.
(c) Audits. Each Loan Party will, subject to compliance with applicable
law: (i) at any time and from time to time upon not less than ten (10) Business
Days' notice (unless an Unmatured Default or Event of Default has occurred and
is continuing, in which case, not more than one (1) Business Day's notice shall
be required) during regular business hours, permit each of the Agents or any of
its agents or representatives: (A) to examine and make copies of and abstracts
from all Records, Contracts and Invoices in the possession or under the control
of such Loan Party, and (B) to visit the offices and properties of such Loan
Party for the purpose of examining such Records, Contracts and Invoices and to
discuss matters relating to Receivables or such Loan Party's performance
hereunder with any of the officers or employees of such Loan Party having
knowledge of such matters; and (ii) without limiting the provisions of clause
(i) above, from time to time, at the expense of such Loan Party, permit
certified public accountants or auditors acceptable to each of the Co-Agents to
conduct a review of such Loan Party's Contracts, Invoices and Records (each, a
"Review"); provided, however, that (x) so long as no Event of Default has
occurred and is continuing, the Loan Parties shall only be responsible for the
costs and expenses of one (1) such Review under this Section or under Section
7.2(i)
25
in any one calendar year unless the first such Review in such calendar year
resulted in negative findings (in which case the Loan Parties shall be
responsible for the costs and expenses of two (2) such Reviews in such calendar
year) and (y) so long as no Event of Default has occurred and is continuing and
no material adverse change in the Servicer's consolidated financial condition
has occurred, the Agents would anticipate that only one (1) Review per calendar
year will be conducted. Notwithstanding the foregoing, if (1) any Loan Party
requests the approval of a new Eligible Originator who is a Material Proposed
Addition or (2) any Material Acquisition is consummated, the Loan Parties shall
be responsible for the costs and expenses of one additional Review per proposed
Material Proposed Addition or per Material Acquisition in the calendar year in
which such Material Proposed Addition is expected to occur or such Material
Acquisition is expected to be consummated if such additional Review is requested
by any of the Co-Agents.
(d) Keeping of Records and Books of Account. The Servicer will maintain
and implement administrative and operating procedures (including, without
limitation, an ability to recreate essential Records evidencing the Receivables
in the event of the destruction of the originals thereof), and keep and
maintain, all Contracts, Records and other information necessary or reasonably
advisable for the collection of all Receivables (including, without limitation,
Records adequate to permit the identification as of any Business Day when
required of outstanding Unpaid Net Balances by Obligor and related debit and
credit details of the Receivables). Each of the Borrower and the Servicer shall
post all Demand Advances to its respective books in accordance with GAAP on or
before each Settlement Date.
(e) Performance and Compliance with Receivables, Invoices and
Contracts. Each Loan Party will, at its expense, timely and fully perform and
comply with all provisions, covenants and other promises, if any, required to be
observed by it under the Contracts and/or Invoices related to the Receivables
except for such failures to fully perform and comply as would not, individually
or in the aggregate, have a Material Adverse Effect.
(f) Jurisdiction of Organization; Location of Records. Each Loan Party
will keep its jurisdiction of organization, chief place of business and (at any
time while the location of its chief executive office remains germane to
perfection of any of the security interests or ownership interests purported to
be conveyed pursuant to the Transaction Documents) its chief executive office,
and the offices where it keeps its Records and material Contracts (and, to the
extent that any of the foregoing constitute instruments, chattel paper or
negotiable documents, all originals thereof), at the address(es) of the Servicer
and the Borrower referred to in Section 6.1(n) or, upon 15 days' prior written
notice to the Administrative Agent, at such other locations in jurisdictions
where all action required by Section 8.5 shall have been taken and completed.
(g) Credit and Collection Policies. Each Loan Party will comply in all
material respects with its Credit and Collection Policy in regard to the
Receivables and the related Contracts and Invoices.
(h) Sale Agreement. The Borrower will perform and comply in all
material respects with all of its covenants and agreements set forth in the Sale
Agreement, and will enforce the performance by each Originator of its respective
obligations thereunder.
(i) Collections.
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(i) In accordance with Section 6.1(o)(i), each of the Loan Parties
will instruct all Obligors to make all payments on Receivables directly to
a Lockbox or Collection Account in the name of the applicable Originator
(as sub-servicer for the Borrower and the Secured Parties), the Borrower or
the Administrative Agent or its designee, which (except for the Collection
Account at China Trust Bank) is subject to a Collection Account Agreement
and, if such Collection Account is in the name of an Originator, it is
swept on a daily basis into a Collection Account in the name of the
Borrower (or the Administrative Agent or its designee) which is subject to
a Collection Account Agreement. The Borrower will cause each of the
Collection Accounts that is currently in the name of an Originator to be
transferred to it and into its own name within a reasonable period of time
after the initial Advance hereunder.
(ii) If, notwithstanding the foregoing clause (i) above, any
Collections are paid directly to any Loan Party, such Loan Party shall
deposit the same (with any necessary indorsements) to a Collection Account
within one (1) Business Day after receipt thereof.
(iii) Upon demand of any of the Agents, the Borrower or the Servicer
shall establish a segregated account at Wachovia Bank, National Association
which is subject to a perfected security interest in favor of the
Administrative Agent, for the benefit of the Secured Parties (the
"Collateral Account"), into which all deposits from time to time in the
Collection Accounts, and all other Collections, are concentrated pending
application in accordance with the terms of this Agreement to the
Obligations.
(j) Further Assurances. Each of the Loan Parties shall take all
necessary action to establish and maintain (i) in favor of the Borrower, a valid
and perfected ownership interest in the Receivables and Related Assets (other
than the Non-Assignable Contracts) and a valid and perfected first priority
security interest in the rights to receive payments under the Non-Assignable
Contracts, and (ii) in favor of the Administrative Agent for the benefit of the
Secured Parties, a valid and perfected first priority security interest in the
Collateral, including, without limitation, taking such action to perfect,
protect or more fully evidence the security interests of the Administrative
Agent as the Administrative Agent may reasonably request.
Section 7.2 Reporting Requirements of Loan Parties. From the date
hereof until the Final Payout Date, unless each of the Co-Agents shall otherwise
consent in writing:
(a) Quarterly Financial Statements. (i) Quest Diagnostics will furnish
to each of the Co-Agents as soon as available and in any event within 60 days
after the end of each of the first three quarters of each of its fiscal years,
copies of its report on SEC Form 10-Q as of the close of such fiscal quarter,
and (ii) beginning with the fiscal quarter commencing on July 1, 2003, the
Borrower will furnish to each of the Co-Agents as soon as available and in any
event within 60 days after the end of each of the first three quarters of each
of its fiscal years an unaudited balance sheet and income statement of the
Borrower as of the close of such fiscal quarter, prepared in accordance with
GAAP and certified in a manner reasonably acceptable to each of the Co-Agents by
the Borrower's chief executive officer, chief financial officer or treasurer (or
an officer acting in a similar capacity to any of the foregoing);
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(b) Annual Financial Statements. Quest Diagnostics will furnish to each
of the Co-Agents, as soon as available and in any event within 120 days after
the end of each fiscal year of Quest Diagnostics, copies of its annual report on
SEC Form 10-K for such year, and the Borrower will furnish to each of the
Co-Agents as soon as available and in any event within 120 days after the end of
each fiscal year of the Borrower, an unaudited balance sheet and income
statement of the Borrower as of the close of such fiscal year, prepared in
accordance with GAAP and certified in a manner reasonably acceptable to each of
the Co-Agents by the Borrower's chief executive officer, chief financial officer
or treasurer (or an officer acting in a similar capacity to any of the
foregoing);
(c) Reports to SEC and Exchanges. In addition to the reports required
by subsections (a) and (b) next above, promptly upon filing any report on SEC
Form 8-K with the SEC, Quest Diagnostics shall deliver copies thereof to each of
the Co-Agents;
(d) ERISA. Promptly after the filing or receiving thereof, each Loan
Party will furnish to each of the Co-Agents copies of all reports and notices
with respect to any Reportable Event which any Loan Party files under ERISA with
the Internal Revenue Service, the PBGC or the U.S. Department of Labor or which
such Loan Party receives from the PBGC;
(e) Events of Default, etc. As soon as possible and in any event within
five (5) Business Days after any Authorized Officer of either Loan Party obtains
knowledge of the occurrence of any Event of Default or any Unmatured Default,
each Loan Party will furnish to each of the Co-Agents a written statement of an
Authorized Officer of such Loan Party setting forth details of such event and
the action that such Loan Party will take with respect thereto;
(f) Litigation. As soon as possible and in any event within ten
Business Days after any Authorized Officer of either Loan Party obtains
knowledge thereof, such Loan Party will furnish to each of the Co-Agents notice
of (i) any litigation, investigation or proceeding which may exist at any time
which would reasonably be expected to have a Material Adverse Effect and (ii)
any development in previously disclosed litigation which development would
reasonably be expected to have a Material Adverse Effect;
(g) Reviews of Receivables. As soon as available and in any event
within 30 days after each Review referenced in Section 7.1(c), the Borrower will
deliver to each of the Co-Agents a written report on the results of such Review
prepared by accountants or auditors selected as specified therein and reasonably
acceptable to each of the Co-Agents, substantially in the form of the report
delivered for the prior Review, and covering such other matters as any of the
Agents may reasonably request in order to protect the interests of the
Administrative Agent, for the benefit of the Secured Parties, under or as
contemplated by this Agreement;
(h) Change in Business or Credit and Collection Policy. Each Loan Party
will furnish to each of the Co-Agents prompt written notice of any material
change in the character of such Loan Party's business prior to the occurrence of
such change, and each Loan Party will provide each of the Co-Agents with not
less than 15 Business Days' prior written notice of any material change in the
Credit and Collection Policy (together with a copy of such proposed change); and
(i) Downgrade. Promptly after receipt of notice of any downgrade of any
Indebtedness of Quest Diagnostics by Xxxxx'x or S&P, Quest Diagnostics shall
furnish to each of the Co-Agents a
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notice of such downgrade setting forth the Indebtedness affected and the nature
of such change in rating.
(j) Other. Promptly, from time to time, each Loan Party will furnish to
each of the Agents such other information, documents, Records or reports
respecting the Receivables or the condition or operations, financial or
otherwise, of such Loan Party as any of the Agents may from time to time
reasonably request in order to protect the interests of the Administrative
Agent, for the benefit of the Secured Parties, under or as contemplated by this
Agreement.
Section 7.3 Negative Covenants of Loan Parties. From the date hereof
until the Final Payout Date, without the prior written consent of each of the
Co-Agents:
(a) Sales, Liens, Etc. (i) The Borrower will not, except as otherwise
provided herein and in the other Transaction Documents, sell, assign (by
operation of law or otherwise) or otherwise dispose of, or create or suffer to
exist any Lien upon or with respect to, any Collateral, or any account to which
any Collections are sent, or any right to receive income or proceeds from or in
respect of any of the foregoing (except, prior to the execution of Collection
Account Agreements, set-off rights of any bank at which any such account is
maintained), and (ii) the Servicer will not assert any interest in the
Receivables, except as the Servicer.
(b) Extension or Amendment of Receivables. No Loan Party will, except
as otherwise permitted in Section 8.2(c), extend, amend or otherwise modify the
terms of any Receivable, or amend, modify or waive any term or condition of any
Contract or Invoice related thereto in any way that adversely affects the
collectibility of the Receivables originated by any Originator (taken as a
whole), or any material part thereof, or the rights of the Borrower or the
Administrative Agent (for the benefit of the Secured Parties) therein.
(c) Change in Business or Credit and Collection Policy. No Loan Party
will make or permit to be made any change in the character of its business or
Credit and Collection Policy, which change would, in either case, impair the
collectibility of any significant portion of the Receivables or otherwise
materially and adversely affect the interests or remedies of Lender under this
Agreement or any other Transaction Document.
(d) Change in Payment Instructions to Obligors. No Loan Party will add
or terminate any bank as a Collection Bank from those listed in Schedule 6.1(o)
or, after the Collateral Account has been established pursuant to Section
7.1(i), make any change in its instructions to Obligors regarding payments to be
made to any Collection Account or Lockbox (except for a change in instructions
solely for the purpose of directing Obligors to make such payments to another
existing Collection Account or Lockbox, as applicable, and where such change is
immaterial and does not adversely affect the interests of the Administrative
Agent, on behalf of the Secured Parties, in any respect), unless (i) the
Co-Agents shall have received prior written notice of such addition, termination
or change and (ii) the Administrative Agent shall have received duly executed
copies of appropriate Collection Account Agreements, in a form reasonably
acceptable to the Administrative Agent with each new Collection Bank.
(e) Deposits to Accounts. Each Loan Party will establish reasonable
procedures designed to ensure that no Loan Party will deposit or authorize the
deposit to any Collection Account of
29
any cash or cash proceeds other than Collections of Receivables and of certain
of the Excluded JV Receivables.
(f) Changes to Other Documents. The Borrower will not enter into any
amendment or modification of, or supplement to, the Borrower's Organic
Documents. Neither the Borrower nor Quest Diagnostics will permit or enter into
any amendment to or modification of, or supplement to, the Sale Agreement or the
Subordinated Notes, except that they may enter into Joinder Agreements to add
Eligible Originators as sellers thereunder.
(g) Restricted Payments by the Borrower. The Borrower will not:
(i) Purchase or redeem any shares of the capital stock of the Borrower,
declare or pay any dividends thereon (other than stock dividends), make any
distribution to stockholders or set aside any funds for any such purpose,
unless, in each of the foregoing cases: (A) such purchase, redemption,
payment or distribution is made on, or immediately following, a Settlement
Date after payment of all Obligations due and owing on such Settlement
Date, and (B) after giving effect to such purchase, redemption, payment or
distribution, the Borrower's net worth (determined in accordance with GAAP)
will at all times be at least 3% of the greater of the Aggregate Commitment
or the aggregate outstanding principal amount of the Advances; or
(ii) Make any payment of principal or interest on the Subordinated
Notes if any Event of Default exists or would result therefrom or if such
payment would result in the Borrower's having insufficient cash on hand to
pay all Obligations that will be due and owing on the next succeeding
Settlement Date.
(h) Borrower Indebtedness. The Borrower will not incur or permit to
exist any Indebtedness or liability on account of deposits except: (A) as
provided in the Transaction Documents and (B) other current accounts payable
arising in the ordinary course of business and not overdue in any material
respect.
(i) Prohibition on Additional Negative Pledges. No Loan Party will
enter into or assume any agreement (other than this Agreement and the other
Transaction Documents) prohibiting the creation or assumption of any Lien upon
the Receivables or Related Assets, whether now owned or hereafter acquired,
except as contemplated by the Transaction Documents, or otherwise prohibiting or
restricting any transaction contemplated hereby or by the other Transaction
Documents, and no Loan Party will enter into or assume any agreement creating
any Lien upon the Subordinated Notes.
(j) Name Change, Offices, Records and Books of Accounts. The Borrower
will not change its name, identity or structure (within the meaning of Article 9
of any applicable enactment of the UCC) or relocate its chief executive office
or any office where Records are kept unless it shall have: (i) given the
Co-Agents at least 15 days' prior notice thereof and (ii) prior to effectiveness
of such change, delivered to the Administrative Agent all financing statements,
instruments and other documents requested by the Administrative Agent in
connection with such change or relocation.
(k) Mergers, Consolidations and Acquisitions. The Borrower will not
merge into or consolidate with any other Person, or permit any other Person to
merge into or consolidate with it, or purchase, lease or otherwise acquire (in
one transaction or a series of transactions) all or substantially
30
all of the assets of any other Person (whether directly by purchase, lease or
other acquisition of all or substantially all of the assets of such Person or
indirectly by purchase or other acquisition of all or substantially all of the
capital stock of such other Person) other than the acquisition of the
Receivables and Related Assets pursuant to the Sale Agreement.
(l) Disposition of Receivables and Related Assets. Except pursuant to
this Agreement, the Borrower will not sell, lease, transfer, assign, pledge or
otherwise dispose of or encumber (in one transaction or in a series of
transactions) any Receivables and Related Assets.
(m) Borrowing Base. The Borrower will not request any Advance if, after
giving effect thereto, the aggregate outstanding principal balance of the Loans
would exceed the Borrowing Base.
Section 7.4 Separate Existence of the Borrower. Each Loan Party hereby
acknowledges that Lenders and the Agents are entering into the transactions
contemplated hereby in reliance upon the Borrower's identity as a legal entity
separate from the Servicer and its other Affiliates. Therefore, each Loan Party
shall take all steps specifically required by this Agreement or reasonably
required by any of the Agents to continue the Borrower's identity as a separate
legal entity and to make it apparent to third Persons that the Borrower is an
entity with assets and liabilities distinct from those of its Affiliates, and is
not a division of Quest Diagnostics or any other Person. Without limiting the
foregoing, each Loan Party will take such actions as shall be required in order
that:
(a) The Borrower will be a limited purpose corporation whose primary
activities are restricted in its Certificate of Incorporation to purchasing
or otherwise acquiring from any of the Originators, owning, holding,
granting security interests in the Collateral, entering into agreements for
the financing and servicing of the Receivables, and conducting such other
activities as it deems necessary or appropriate to carry out its primary
activities;
(b) Not less than one member of the Borrower's Board of Directors (the
"Independent Director") shall be an individual who is not, and never has
been, a direct, indirect or beneficial stockholder, officer, director,
employee, affiliate, associate, material supplier or material customer of
Quest Diagnostics or any of its Affiliates (other than an Affiliate
organized with a limited purpose charter for the purpose of acquiring
receivables or other financial assets or intangible property). The
certificate of incorporation of the Borrower shall provide that (i) at
least one member of the Borrower's Board of Directors shall be an
Independent Director, (ii) the Borrower's Board of Directors shall not
approve, or take any other action to cause the filing of, a voluntary
bankruptcy petition with respect to the Borrower unless the Independent
Director shall approve the taking of such action in writing prior to the
taking of such action and (iii) the provisions requiring an independent
director and the provision described in clauses (i) and (ii) of this
paragraph (b) cannot be amended without the prior written consent of the
Independent Director;
(c) The Independent Director shall not at any time serve as a trustee
in bankruptcy for the Borrower or any Affiliate thereof;
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(d) Any director, employee, consultant or agent of the Borrower will be
compensated from the Borrower's funds for services provided to the
Borrower. The Borrower will not engage any agents other than its attorneys,
auditors and other professionals and a servicer and any other agent
contemplated by the Transaction Documents for the Collateral, which
servicer will be fully compensated for its services by payment of the
Servicer's Fee, and certain organizational expenses in connection with the
formation of the Borrower;
(e) The Borrower will contract with the Servicer to perform for the
Borrower all operations required on a daily basis to service the
Collateral. The Borrower will pay the Servicer the Servicer's Fee pursuant
hereto. The Borrower will not incur any material indirect or overhead
expenses for items shared with Quest Diagnostics (or any other Affiliate
thereof) which are not reflected in the Servicer's Fee. To the extent, if
any, that the Borrower (or any other Affiliate thereof) shares items of
expenses not reflected in the Servicer's Fee, for legal, auditing and other
professional services and directors' fees, such expenses will be allocated
to the extent practical on the basis of actual use or the value of services
rendered, and otherwise on a basis reasonably related to the actual use or
the value of services rendered, it being understood that Quest Diagnostics
shall pay all expenses relating to the preparation, negotiation, execution
and delivery of the Transaction Documents, including, without limitation,
legal, rating agency and other fees;
(f) The Borrower's operating expenses will not be paid by any other
Loan Party or other Affiliate of the Borrower;
(g) The Borrower will have its own stationery;
(h) The books of account, financial reports and records of the Borrower
will be maintained separately from those of Quest Diagnostics and each
other Affiliate of the Borrower;
(i) Any financial statements of any Loan Party or Affiliate thereof
which are consolidated to include the Borrower will contain detailed notes
clearly stating that (A) all of the Borrower's assets are owned by the
Borrower, and (B) the Borrower is a separate legal entity with its own
separate creditors that will be entitled to be satisfied out of the
Borrower's assets prior to any value in the Borrower becoming available to
the Borrower's equity holders; and the accounting records and the published
financial statements of each of the Originators will clearly show that, for
accounting purposes, the Receivables and Related Assets have been sold by
such Originator to the Borrower;
(j) The Borrower's assets will be maintained in a manner that
facilitates their identification and segregation from those of the Servicer
and the other Affiliates;
(k) Each Affiliate of the Borrower will strictly observe organizational
formalities in its dealings with the Borrower, and, except as permitted
pursuant to this Agreement with respect to Collections, funds or other
assets of the Borrower will not be commingled with those of any of its
Affiliates;
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(l) No Affiliate of the Borrower will maintain joint bank accounts with
the Borrower or other depository accounts with the Borrower to which any
such Affiliate (other than in the Borrower's or such Affiliate's existing
or future capacity as the Servicer hereunder or under the Sale Agreement)
has independent access, provided that prior to demand by any of the Agents
pursuant to Section 7.1(i) to establish a segregated Collateral Account,
Collections may be deposited into general accounts of Quest Diagnostics,
subject to the obligations of the Servicer hereunder;
(m) Each Affiliate of the Borrower will maintain arm's length
relationships with the Borrower, and each Affiliate of the Borrower that
renders or otherwise furnishes services or merchandise to the Borrower will
be compensated by the Borrower at market rates for such services or
merchandise;
(n) No Affiliate of the Borrower will be, nor will it hold itself out
to be, responsible for the debts of the Borrower or the decisions or
actions in respect of the daily business and affairs of the Borrower. Quest
Diagnostics and the Borrower will immediately correct any known
misrepresentation with respect to the foregoing and they will not operate
or purport to operate as an integrated single economic unit with respect to
each other or in their dealing with any other entity;
(o) The Borrower will keep correct and complete books and records of
account and minutes of the meetings and other proceedings of its
stockholder and board of directors, as applicable, and the resolutions,
agreements and other instruments of the Borrower will be continuously
maintained as official records by the Borrower; and
(p) The Borrower will conduct its business solely in its own legal name
and in a manner separate from the Originators so as not to mislead others
with whom they are dealing.
ARTICLE VIII
ADMINISTRATION AND COLLECTION
Section 8.1 Designation of Servicer.
(a) Quest Diagnostics as Initial Servicer. The servicing, administering
and collection of the Receivables shall be conducted by the Person designated as
Servicer hereunder from time to time in accordance with this Section 8.1. Until
the Administrative Agent gives to Quest Diagnostics a Successor Notice (as
defined in Section 8.1(b)), Quest Diagnostics is hereby designated as, and
hereby agrees to perform the duties and obligations of, Servicer pursuant to the
terms hereof.
(b) Successor Notice; Servicer Transfer Events. Upon Quest Diagnostics'
receipt of a notice from the Administrative Agent following a Servicer Transfer
Event of the designation of a new Servicer (a "Successor Notice"), Quest
Diagnostics agrees that it will terminate its activities as Servicer hereunder
in a manner that will facilitate the transition of the performance of such
activities to the new Servicer, and, after agreeing in writing to be bound by
the terms of this Agreement (including, without limitation, the provisions of
Section 14.14), the Administrative Agent's designee shall assume each and all of
Quest Diagnostics' obligations to service and administer such Receivables, on
the terms and subject to the conditions herein set forth, and Quest Diagnostics
shall use its reasonable best efforts
33
to assist the Administrative Agent's designee in assuming such obligations.
Without limiting the foregoing, Quest Diagnostics agrees, at its expense, to
take all actions necessary to provide the new Servicer with access to all
computer software necessary to generate reports useful in collecting or billing
Receivables, solely for use in collecting and billing Receivables. If Quest
Diagnostics disputes the occurrence of a Servicer Transfer Event, Quest
Diagnostics may take appropriate action to resolve such dispute; provided that
Quest Diagnostics must terminate its activities hereunder as Servicer and allow
the newly designated Servicer to perform such activities on the date specified
by the Administrative Agent as described above, notwithstanding the commencement
or continuation of any proceeding to resolve the aforementioned dispute, if the
Administrative Agent reasonably determines, in good faith, that such termination
is necessary or advisable to protect the Secured Parties' interests hereunder.
(c) Subcontracts. So long as Quest Diagnostics (or any of its existing
or hereafter arising Affiliates approved by the Co-Agents at the request of
Quest Diagnostics or the Borrower subject to satisfaction of the Rating Agency
Condition) is acting as the Servicer, it may subcontract with any other
Originator or other direct or indirect Subsidiary of Quest Diagnostics, for
servicing, administering or collecting all or any portion of the Receivables,
provided, however, that no such subcontract shall relieve Quest Diagnostics (or
such approved affiliated substitute Servicer, if such approval is not
conditioned upon Quest Diagnostics' issuance of a performance guaranty with
respect to such affiliated substitute Servicer) of its primary liability for
performance of its duties as Servicer pursuant to the terms hereof and any such
sub-servicing arrangement may be terminated at the request of any of the Agents
at any time after a Successor Notice has been given. In addition to the
foregoing, with the prior written consent of the Co-Agents (which consent shall
not be unreasonably withheld or delayed), any Servicer may subcontract with
other Persons for servicing, administering or collecting all or any portion of
the Receivables, provided, however, that no such subcontract shall relieve such
Servicer of its primary liability for performance of its duties as Servicer
pursuant to the terms hereof and any such sub-servicing arrangement may be
terminated at the request of any of the Agents at any time that the Co-Agents
reasonably determine that such sub-servicer is not performing adequately.
(d) Expense Indemnity after a Servicer Transfer Event. In addition to,
and not in lieu of the Servicer's Fee, if Quest Diagnostics or one of its
Affiliates is replaced as Servicer following a Servicer Transfer Event, the
Borrower shall reimburse the Servicer within 10 Business Days after receipt of a
written invoice, any and all reasonable costs and expenses of the Servicer
incurred in connection with its servicing of the Receivables for the benefit of
the Secured Parties.
Section 8.2 Duties of Servicer.
(a) Appointment; Duties in General. Each of the Borrower, the Lenders
and the Agents hereby appoints as its agent, the Servicer, as from time to time
designated pursuant to Section 8.1, to enforce its rights and interests in and
under the Collateral. The Servicer shall take or cause to be taken all such
actions as may be necessary or advisable to collect each Receivable from time to
time, all in accordance with applicable laws, rules and regulations, with
reasonable care and diligence, and in accordance with the Credit and Collection
Policy.
(b) Segregation of Collections. The Servicer shall not be required
(unless otherwise requested by any of the Agents) to segregate the funds
constituting Collections prior to the remittance thereof in accordance with
Article III. If instructed by any of the Agents, the Servicer shall segregate
34
Collections and deposit them into the Collateral Account not later than the
first Business Day following receipt by the Servicer of such Collections in
immediately available funds.
(c) Modification of Receivables. Quest Diagnostics, while it is the
Servicer, may, in accordance with the Credit and Collection Policy, so long as
no Event of Default shall have occurred and be continuing, extend the maturity
or adjust the Unpaid Net Balance of any Receivable as Quest Diagnostics may
reasonably determine to be appropriate to maximize Collections of the
Receivables taken as a whole in a manner consistent with the Credit and
Collection Policy (although no such extension or adjustment shall alter the
status of such Receivable as a Defaulted Receivable or a Delinquent Receivable
or, in the case of an adjustment, limit the rights of the Agents or the Lenders
under Section 3.4).
(d) Contracts and Records. Each Loan Party shall deliver to the
Servicer, and the Servicer shall, or shall direct the Originators as
sub-servicers to, hold in trust for the Borrower and the Secured Parties, all
Contracts and Records.
(e) Certain Duties to the Borrower. The Servicer shall, as soon as
practicable following receipt, turn over to the Borrower (i) that portion of the
Collections which are not required to be turned over to each of the Co-Agents,
less the Servicer's Fee and all reasonable and appropriate out-of-pocket costs
and expenses of the Servicer of servicing, collecting and administering the
Receivables to the extent not covered by the Servicer's Fee received by it, and
(ii) the Collections of any receivable which is not a Receivable. The Servicer,
if other than Quest Diagnostics or any other Loan Party or Affiliate thereof,
shall, as soon as practicable upon demand, deliver to the Borrower all Contracts
and other Records in its possession that evidence or relate to receivables of
the Borrower other than Receivables, and copies of all Contracts and other
Records in its possession that evidence or relate to Receivables, Obligors or
Related Assets.
(f) Termination. The Servicer's authorization under this Agreement
shall terminate upon the Final Payout Date.
(g) Power of Attorney. The Borrower hereby grants to the Servicer an
irrevocable power of attorney, with full power of substitution, coupled with an
interest, to take in the name of the Borrower all steps which are necessary or
advisable to endorse, negotiate or otherwise realize on any writing or other
right of any kind held or transmitted by the Borrower or transmitted or received
by Lender in connection with any Receivable.
Section 8.3 Rights of the Agents.
(a) Notice to Obligors. At any time when an Event of Default has
occurred and is continuing, any of the Agents may notify the Obligors of
Receivables, or any of them, of the Borrower's ownership of the Receivables, and
the Administrative Agent's security interest, for the benefit of the Secured
Parties, in the Collateral.
(b) Notice to Collection Banks. At any time, the Administrative Agent
is hereby authorized to give notice to the Collection Banks, as provided in the
Collection Account Agreements, of the transfer to the Administrative Agent of
dominion and control over the Lockboxes and the Collection Accounts, and the
Administrative Agent hereby agrees to give such notice upon request of any of
the Co-Agents. The Borrower and the Servicer hereby transfer to the
Administrative Agent,
35
effective when the Administrative Agent shall give notice to the Collection
Banks as provided in the Collection Account Agreements, the exclusive dominion
and control over the Lockboxes and the Collection Accounts, and shall take any
further action that the Administrative Agent may reasonably request to effect
such transfer.
(c) Rights on Servicer Transfer Event. At any time following the
designation of a Servicer other than Quest Diagnostics (or one of its approved
Affiliates) pursuant to Section 8.1:
(i) Any of the Agents may direct the Obligors of Receivables, or any of
them, to pay all amounts payable under any Receivable directly to the
Administrative Agent or its designee.
(ii) Any Loan Party shall, at any Agent's request and at such Loan
Party's expense, give notice of the Administrative Agent's security
interest in the Collateral to each Obligor of Receivables and direct that
payments be made directly to the Administrative Agent or its designee.
(iii) Each Loan Party shall, at any Agent's request: (A) assemble and
make available all of the Contracts and Records which are necessary or
reasonably desirable to collect the Collateral, and make the same available
to the successor Servicer at such place or places as the Administrative
Agent may reasonably request, and (B) segregate all cash, checks and other
instruments received by it from time to time constituting Collections in a
manner acceptable to the Agents and promptly upon receipt, remit all such
cash, checks and instruments, duly endorsed or with duly executed
instruments of transfer, to the successor Servicer.
(iv) Each of the Loan Parties, the Co-Agents and the Lenders hereby
authorizes the Administrative Agent and grants to the Administrative Agent
an irrevocable power of attorney (which shall terminate on the Final Payout
Date), to take any and all steps in such Person's name and on behalf of
such Person which are necessary or desirable, in the determination of the
Administrative Agent, to collect all amounts due under any and all
Receivables, including, without limitation, endorsing any Loan Party's name
on checks and other instruments representing Collections and enforcing such
Receivables and the related Contracts and Invoices.
Section 8.4 Responsibilities of Loan Parties. Anything herein to the
contrary notwithstanding:
(a) Contracts. Each Originator shall remain responsible for performing
all of its obligations (if any) under each Non-Assignable Contract, and each
Loan Party shall remain responsible for performing all of its obligations (if
any) under all other Contracts, to the same extent as if the ownership interest
or security interests in such Contracts had not been granted under the
Transactions Documents, and the exercise by the Administrative Agent or its
designee of its rights hereunder shall not relieve any such Person from such
obligations.
(b) Limitation of Liability. The Secured Parties shall not have any
obligation or liability with respect to any Receivables, Invoices or Contracts,
nor shall any of them be obligated to perform any of the obligations of any Loan
Party or any Originator thereunder.
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Section 8.5 Further Action Evidencing the Security Interest.
(a) Further Assurances. Each Loan Party agrees that from time to time,
at its expense, it will promptly execute and deliver all further instruments and
documents, and take all further action that the Administrative Agent or its
designee may reasonably request in order to perfect, protect or more fully
evidence the Administrative Agent's security interest, on behalf of the Secured
Parties, in the Collateral, or to enable the Administrative Agent or its
designee to exercise or enforce any of the Secured Parties' respective rights
hereunder or under any Transaction Document in respect thereof. Without limiting
the generality of the foregoing, each Loan Party will:
(i) upon the request of the Administrative Agent, execute and file such
financing or continuation statements, or amendments thereto or assignments
thereof, and such other instruments or notices, as may be necessary or
appropriate, in accordance with the terms of this Agreement; and
(ii) upon the request of the Administrative Agent after the occurrence
and during the continuance of an Event of Default, xxxx conspicuously each
Contract or Invoice with a legend, acceptable to the Administrative Agent,
evidencing its security interest therein pursuant to this Agreement.
(b) Additional Financing Statements; Continuation Statements;
Performance by Administrative Agent. Each Loan Party hereby authorizes the
Administrative Agent or its designee to file one or more financing or
continuation statements, and amendments thereto and assignments thereof,
relative to all or any of the Collateral now existing or hereafter arising in
the name of any Loan Party with, or to the fullest extent permitted by
applicable law, without the signature of such Loan Party (provided that the
Administrative Agent shall provide prompt written notice to such Loan Party
after filing any such record without the signature of such Loan Party). If any
Loan Party fails to promptly execute and deliver to the Administrative Agent any
financing statement or continuation statement or amendment thereto or assignment
thereof requested by the Administrative Agent and requiring a signature of such
Loan Party, such Loan Party hereby authorizes the Administrative Agent to
execute such statement on behalf of such Loan Party to the fullest extent
permitted by applicable law. If any Loan Party fails to perform any of its
agreements or obligations under this Agreement, the Administrative Agent or its
designee may (but shall not be required to) itself perform, or cause performance
of, such agreement or obligation, and the reasonable expenses of the
Administrative Agent or its designee incurred in connection therewith shall be
payable by Loan Parties as provided in Section 14.5.
Section 8.6 Application of Collections. Except as otherwise specified
by such Obligor or required by the underlying Contract or law, any payment by an
Obligor in respect of any indebtedness owed by it to an Originator or to the
Borrower shall be applied first, as a Collection of any Receivable or
Receivables then outstanding of such Obligor in the order of the age of such
Receivables, starting with the oldest of such Receivables (unless another
reasonable basis for allocation of such payments to the Receivables of such
Obligor exists), and second, to any other indebtedness of such Obligor.
ARTICLE IX
SECURITY INTEREST
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Section 9.1 Grant of Security Interest. To secure the due and punctual
payment of the Obligations, whether now or hereafter existing, due or to become
due, direct or indirect, or absolute or contingent, including, without
limitation, all Indemnified Amounts, in each case pro rata according to the
respective amounts thereof, the Borrower hereby pledges to the Administrative
Agent, for the benefit of the Secured Parties, and hereby grants to the
Administrative Agent, for the benefit of the Secured Parties, a security
interest in, all of the Borrower's right, title and interest now or hereafter
existing in, to and under (a) all the Receivables and Related Assets, (b) the
Sale Agreement, (c) the Demand Advances, and (d) all proceeds of any of the
foregoing (collectively, the "Collateral").
Section 9.2 Termination after Final Payout Date. Each of the Secured
Parties hereby authorizes the Administrative Agent, and the Administrative Agent
hereby agrees, promptly after the Final Payout Date to execute and deliver to
the Borrower such UCC-3 termination statements as may be necessary to terminate
the Administrative Agent's security interest in and Lien upon the Collateral,
all at the Borrower's expense. Upon the Final Payout Date, all right, title and
interest of the Administrative Agent and the other Secured Parties in and to the
Collateral shall terminate.
Section 9.3 Limitation on Rights to Collateral Proceeds. Nothing in
this Agreement shall entitle the Secured Parties to receive or retain proceeds
of the Collateral in excess of the aggregate amount of the Obligations owing to
such Secured Party (or to any Indemnified Party claiming through such Secured
Party).
ARTICLE X
EVENTS OF DEFAULT
Section 10.1 Events of Default. The occurrence of any of the following
events shall constitute an "Event of Default" hereunder:
(a) The Servicer or the Borrower shall fail to make (i) when and as
required to be made by it herein, any payment, prepayment or deposit of any
amount of principal of any Loan, or (ii) within three (3) days after the
same becomes due, any payment of any amount of interest, fees or other
Obligations payable hereunder or under any other Transaction Document;
provided that any interest, fees or other amounts which are not paid on the
due date shall bear interest at the Default Rate after such due date.
(b) Any representation or warranty made or deemed to be made by any
Loan Party (or any of its officers) under this Agreement or any other
Transaction Document or in any Monthly Report, Weekly Report, computation
of Cash Collateral Payment or other information or report delivered
pursuant hereto shall prove to have been false or incorrect in any material
adverse respect when made, provided that the materiality threshold in this
subsection shall not be applicable with respect to any representation or
warranty which itself contains a materiality threshold.
(c) Any Loan Party fails to perform or observe any other term or
covenant contained in this Agreement or any other Transaction Document, and
such default shall continue unremedied for a period of 5 days (in the case
of nonperformance or nonobservance by the Servicer) or 10 days (in the case
of nonperformance or nonobservance by the Borrower) after the earlier to
occur of (i) the date upon which
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written notice thereof is given to such Loan Party by the Administrative
Agent and (ii) the date the applicable Loan Party becomes aware thereof.
(d) (i) The Borrower shall (A) fail to pay any principal or interest,
regardless of amount, due in respect of any Indebtedness of which the
aggregate unpaid principal amount is in excess of $10,700, when and as the
same shall become due and payable (after expiration of any applicable grace
period) or (B) fail to observe or perform any other term, covenant,
condition or agreement (after expiration of any applicable grace period)
contained in any agreement or instrument evidencing or governing any such
Indebtedness if the effect of any failure referred to in this clause (B) is
to cause, or permit the holder or holders of such Indebtedness or a trustee
on its or their behalf (with or without the giving of notice, the lapse of
time or both) to cause, such Indebtedness to become due prior to its stated
maturity; or (ii) any of the Originators (A) shall fail to pay any
principal or interest, regardless of amount, due in respect of any
Indebtedness of which the aggregate unpaid principal amount is in excess of
$50,000,000, when and as the same shall become due and payable (after
expiration of any applicable grace period) or (B) shall fail to observe or
perform any other term, covenant, condition or agreement (after expiration
of any applicable grace period) contained in any agreement or instrument
evidencing or governing any Indebtedness in excess of $50,000,000 in
aggregate principal amount of the Originators if, as a result of such
failure, the holder or holders of the Indebtedness outstanding thereunder
(or an agent or a trustee on their behalf) cause the holder or holders of
such Indebtedness or an agent or a trustee on its or their behalf to cause
such Indebtedness to become due prior to its stated maturity.
(e) An Event of Bankruptcy shall have occurred and remain continuing
with respect to the Borrower or the Servicer.
(f) The four-calendar month rolling average Contraction Ratio at any
Cut-Off Date exceeds 9.00%.
(g) The three-calendar month rolling average Default Ratio at any
Cut-Off Date exceeds 20.00%.
(h) The three-calendar month rolling average Delinquency Ratio at any
Cut-Off Date exceeds 6.65%.
(i) On any Settlement Date, after giving effect to the payments made
under Article II or Article III, the aggregate outstanding principal
balances of the Advances exceed the Allocation Limit.
(j) A Change in Control shall occur.
(k) The Internal Revenue Service shall file notice of a lien pursuant
to Section 6323 of the Internal Revenue Code with regard to any of the
Receivables or Related Assets and such lien shall not have been released
within seven (7) days, or the PBGC shall, or shall indicate its intention
to, file notice of a lien pursuant to Section 4068 of ERISA with regard to
any of the Receivables or Related Assets.
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(l) The Administrative Agent, on behalf of the Secured Parties, for any
reason, does not have a valid, perfected first priority security interest
in the Receivables and the Related Assets.
(m) (i) A final judgment or judgments for the payment of money in
excess of $10,700 in the aggregate (exclusive of judgment amounts to the
extent covered by insurance or indemnity payments) shall be rendered by one
or more courts, administrative tribunals or other bodies having
jurisdiction against the Borrower and the same shall not be discharged (or
provision which results in a stay of execution shall not be made for such
discharge), vacated or bonded pending appeal, or a stay of execution
thereof shall not be procured, within 60 days from the date of entry
thereof and the Borrower shall not, within said period of 60 days, or such
longer period during which execution of the same shall have been stayed,
appeal therefrom and cause the execution thereof to be stayed during such
appeal; or (ii) a final judgment or judgments for the payment of money in
excess of $50.0 million in the aggregate (exclusive of judgment amounts to
the extent covered by insurance or indemnity payments) shall be rendered by
one or more courts, administrative tribunals or other bodies having
jurisdiction against any Originator and the same shall not be discharged
(or provision which results in a stay of execution shall not be made for
such discharge), vacated or bonded pending appeal, or a stay of execution
thereof shall not be procured, within 60 days from the date of entry
thereof and such Originator shall not, within said period of 60 days, or
such longer period during which execution of the same shall have been
stayed, appeal therefrom and cause the execution thereof to be stayed
during such appeal.
(n) An ERISA Event or noncompliance with respect to Foreign Plans shall
have occurred that when taken together with all other ERISA Events and
noncompliance with respect to Foreign Plans that have occurred, is
reasonably likely to result in liability of any Originator or Loan Party in
an aggregate amount exceeding $50.0 million.
(o) Quest Diagnostics shall fail to comply with each of the covenants
set forth in Section 7.2(a) and (b) of the Credit Agreement as amended or
otherwise modified from time to time by one or more Approved Amendments,
regardless of whether the same remains in effect.
(p) The occurrence of the Sale Termination Date under and as defined in
the Sale Agreement.
(q) Any other event occurs that (i) could reasonably be expected to
have a Material Adverse Effect of the type described in clause (d) of the
definition thereof, or (ii) has had a Material Adverse Effect of the type
described in any clause of the definition thereof.
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Section 10.2 Remedies.
(a) Optional Acceleration. Upon the occurrence of an Event of Default
(other than an Event of Default described in Section 10.1(e) with respect to the
Borrower), the Administrative Agent may by notice to the Borrower, declare the
Termination Date to have occurred and the Obligations to be immediately due and
payable, whereupon the Aggregate Commitment shall terminate and all Obligations
shall become immediately due and payable.
(b) Automatic Acceleration. Upon the occurrence of an Event of Default
described in Section 10.1(e) with respect to the Borrower, the Termination Date
shall automatically occur and the Obligations shall be immediately due and
payable.
(c) Additional Remedies. Upon the Termination Date pursuant to this
Section 10.2, the Aggregate Commitment will terminate, no Loans or Advances
thereafter will be made, and the Administrative Agent, on behalf of the Secured
Parties, shall have, in addition to all other rights and remedies under this
Agreement or otherwise, all other rights and remedies provided to a secured
party upon default under the UCC of each applicable jurisdiction and other
applicable laws, which rights shall be cumulative.
ARTICLE XI
THE AGENTS
Section 11.1 Appointment.
(a) Each member of the Blue Ridge Group hereby irrevocably designates
and appoints Wachovia Bank, National Association as Blue Ridge Agent hereunder
and under the other Transaction Documents to which the Blue Ridge Agent is a
party, and authorizes the Blue Ridge Agent to take such action on its behalf
under the provisions of the Transaction Documents and to exercise such powers
and perform such duties as are expressly delegated to the Blue Ridge Agent by
the terms of the Transaction Documents, together with such other powers as are
reasonably incidental thereto. Each member of the La Fayette Group hereby
irrevocably designates and appoints CLNY as La Fayette Agent hereunder and under
the other Transaction Documents to which the La Fayette Agent is a party , and
authorizes the La Fayette Agent to take such action on its behalf under the
provisions of the Transaction Documents and to exercise such powers and perform
such duties as are expressly delegated to the La Fayette Agent by the terms of
the Transaction Documents, together with such other powers as are reasonably
incidental thereto. Each member of the Jupiter Group hereby irrevocably
designates and appoints Bank One, NA as Jupiter Agent hereunder and under the
other Transaction Documents to which the Jupiter Agent is a party, and
authorizes the Jupiter Agent to take such action on its behalf under the
provisions of the Transaction Documents and to exercise such powers and perform
such duties as are expressly delegated to the Jupiter Agent by the terms of the
Transaction Documents, together with such other powers as are reasonably
incidental thereto. Each of the Lenders and the Co-Agents hereby irrevocably
designates and appoints Wachovia Bank, National Association as Administrative
Agent hereunder and under the Transaction Documents to which the Administrative
Agent is a party, and authorizes the Administrative Agent to take such action on
its behalf under the provisions of the Transaction Documents and to exercise
such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of the Transaction Documents, together with
such other powers as are reasonably incidental thereto. Notwithstanding any
provision to the
41
contrary elsewhere in this Agreement, none of the Agents shall have any duties
or responsibilities, except those expressly set forth in the Transaction
Documents to which it is a party, or any fiduciary relationship with any Lender,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities on the part of such Agent shall be read into any Transaction
Document or otherwise exist against such Agent.
(b) The provisions of this Article XI are solely for the benefit of the
Agents and the Lenders, and neither of the Loan Parties shall have any rights as
a third-party beneficiary or otherwise under any of the provisions of this
Article XI, except that this Article XI shall not affect any obligations which
any of the Agents or Lenders may have to either of the Loan Parties under the
other provisions of this Agreement.
(c) In performing its functions and duties hereunder, (i) the Blue
Ridge Agent shall act solely as the agent of the members of the Blue Ridge Group
and does not assume nor shall be deemed to have assumed any obligation or
relationship of trust or agency with or for either of the Loan Parties or any of
their respective successors and assigns, (ii) the La Fayette Agent shall act
solely as the agent of the members of the La Fayette Group and does not assume
nor shall be deemed to have assumed any obligation or relationship of trust or
agency with or for either of the Loan Parties or any of their respective
successors and assigns, (iii) the Jupiter Agent shall act solely as the agent of
the members of the Jupiter Group and does not assume nor shall be deemed to have
assumed any obligation or relationship of trust or agency with or for either of
the Loan Parties or any of their respective successors and assigns, and (iv) the
Administrative Agent shall act solely as the agent of the Secured Parties and
does not assume nor shall be deemed to have assumed any obligation or
relationship of trust or agency with or for either of the Loan Parties or any of
their respective successors and assigns.
Section 11.2 Delegation of Duties. Each of the Agents may execute any
of its duties under the Transaction Documents to which it is a party by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. None of the Agents shall be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
Section 11.3 Exculpatory Provisions. None of the Agents nor any of its
directors, officers, agents or employees shall be (i) liable for any action
lawfully taken or omitted to be taken by it or them or any Person described in
Section 11.2 under or in connection with this Agreement (except for its, their
or such Person's own bad faith, gross negligence or willful misconduct), or (ii)
responsible in any manner to any of the Lenders or other Agents for any
recitals, statements, representations or warranties made by the Borrower
contained in this Agreement or in any certificate, report, statement or other
document referred to or provided for in, or received under or in connection
with, this Agreement or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other document furnished
in connection herewith, or for any failure of either of the Loan Parties to
perform its respective obligations hereunder, or for the satisfaction of any
condition specified in Article V, except receipt of items required to be
delivered to such Agent. None of the Agents shall be under any obligation to any
other Agent or any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements or covenants contained in, or conditions
of, this Agreement, or to inspect the properties, books or records of the Loan
Parties. This Section 11.3 is intended solely to govern the relationship between
the Agents, on the one hand, and the Lenders and their respective Liquidity
Banks, on the other.
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Section 11.4 Reliance by Agents.
(a) Each of the Agents shall in all cases be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Loan Parties), independent accountants and
other experts selected by such Agent. Each of the Agents shall in all cases be
fully justified in failing or refusing to take any action under this Agreement
or any other document furnished in connection herewith unless it shall first
receive such advice or concurrence of such of its Lenders and Liquidity Banks,
as it shall determine to be appropriate under the relevant circumstances, or it
shall first be indemnified to its satisfaction by its Constituent Liquidity
Banks against any and all liability, cost and expense which may be incurred by
it by reason of taking or continuing to take any such action.
(b) Any action taken by any of the Agents in accordance with Section
11.4(a) shall be binding upon all of the Agents and the Lenders.
Section 11.5 Notice of Events of Default. None of the Agents shall be
deemed to have knowledge or notice of the occurrence of any Event of Default or
Unmatured Default unless such Agent has received notice from another Agent, a
Lender or a Loan Party referring to this Agreement, stating that an Event of
Default or Unmatured Default has occurred hereunder and describing such Event of
Default or Unmatured Default. In the event that any of the Agents receives such
a notice, it shall promptly give notice thereof to the Lenders and the other
Agents. The Administrative Agent shall take such action with respect to such
Event of Default or Unmatured Default as shall be directed by any of the
Co-Agents provided that the Administrative Agent is indemnified to its
satisfaction by such Co-Agent and its Constituent Liquidity Banks against any
and all liability, cost and expense which may be incurred by it by reason of
taking any such action.
Section 11.6 Non-Reliance on Other Agents and Lenders. Each of the
Lenders expressly acknowledges that none of the Agents, nor any of the Agents'
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representations or warranties to it and that no act by
any of the Agents hereafter taken, including, without limitation, any review of
the affairs of the Loan Parties, shall be deemed to constitute any
representation or warranty by such Agent. Each of the Lenders also represents
and warrants to the Agents and the other Lenders that it has, independently and
without reliance upon any such Person (or any of their Affiliates) and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
prospects, financial and other conditions and creditworthiness of the Loan
Parties and made its own decision to enter into this Agreement. Each of the
Lenders also represents that it will, independently and without reliance upon
the Agents or any other Liquidity Bank or Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement, and to make such investigation as it deems necessary to
inform itself as to the business, operations, property, prospects, financial and
other condition and creditworthiness of the Loan Parties. The Agents, the
Lenders and their respective Affiliates, shall have no duty or responsibility to
provide any party to this Agreement with any credit or other information
concerning the business, operations, property, prospects, financial and other
condition or creditworthiness of the Loan Parties which may
43
come into the possession of such Person or any of its respective officers,
directors, employees, agents, attorneys-in-fact or affiliates, except that each
of the Agents shall promptly distribute to the other Agents and the Lenders,
copies of financial and other information expressly provided to it by either of
the Loan Parties pursuant to this Agreement.
Section 11.7 Indemnification of Agents. Each Liquidity Bank agrees to
indemnify (a) its applicable Co-Agent, (b) the Administrative Agent, and (c) the
officers, directors, employees, representatives and agents of each of the
foregoing (to the extent not reimbursed by the Loan Parties and without limiting
the obligation of the Loan Parties to do so), ratably in accordance with their
respective Loans, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever (including, without limitation, the reasonable
fees and disbursements of counsel for such Co-Agent, the Administrative Agent or
such Person in connection with any investigative, administrative or judicial
proceeding commenced or threatened, whether or not such Co-Agent or the
Administrative Agent or such Person shall be designated a party thereto) that
may at any time be imposed on, incurred by or asserted against such Co-Agent,
the Administrative Agent or such Person as a result of, or arising out of, or in
any way related to or by reason of, any of the transactions contemplated
hereunder or the execution, delivery or performance of this Agreement or any
other document furnished in connection herewith (but excluding any such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the bad faith, gross
negligence or willful misconduct of such Co-Agent, the Administrative Agent or
such Person as finally determined by a court of competent jurisdiction).
Section 11.8 Agents in their Individual Capacities. Each of the Agents
in its individual capacity and its affiliates may make loans to, accept deposits
from and generally engage in any kind of business with the Loan Parties and
their Affiliates as though such Agent were not an Agent hereunder. With respect
to its Loans, if any, pursuant to this Agreement, each of the Agents shall have
the same rights and powers under this Agreement as any Lender and may exercise
the same as though it were not an Agent, and the terms "Lender" and "Lenders"
shall include each of the Agents in their individual capacities.
Section 11.9 [Reserved].
Section 11.10 Conflict Waivers.
(a) Wachovia acts, or may in the future act: (i) as administrative
agent for Blue Ridge, (ii) as issuing and paying agent for Blue Ridge's
Commercial Paper Notes, (iii) to provide credit or liquidity enhancement for the
timely payment for Blue Ridge's Commercial Paper Notes and (iv) to provide other
services from time to time for Blue Ridge (collectively, the "Wachovia Roles").
Without limiting the generality of Sections 11.1 and 11.8, each of the
Administrative Agent and the Lenders hereby acknowledges and consents to any and
all Wachovia Roles and agrees that in connection with any Wachovia Role,
Wachovia may take, or refrain from taking, any action which it, in its
discretion, deems appropriate, including, without limitation, in its role as
administrative agent for Blue Ridge, the giving of notice to the Liquidity Banks
of a mandatory purchase pursuant to the Blue Ridge Liquidity Agreement, and
hereby acknowledges that neither Wachovia nor any of its Affiliates has any
fiduciary duties hereunder to any Lender (other than Blue Ridge) arising out of
any Wachovia Roles.
44
(b) CLNY acts, or may in the future act: (i) as administrator of La
Fayette, (ii) as issuing and paying agent for La Fayette's Commercial Paper
Notes, (iii) to provide credit or liquidity enhancement for the timely payment
for La Fayette's Commercial Paper Notes and (iv) to provide other services from
time to time for La Fayette (collectively, the "CLNY Roles"). Without limiting
the generality of Sections 11.1 and 11.8, each of the Agents and the Lenders
hereby acknowledges and consents to any and all CLNY Roles and agrees that in
connection with any CLNY Role, CLNY may take, or refrain from taking, any action
which it, in its discretion, deems appropriate, including, without limitation,
in its role as administrator of La Fayette, the giving of notice to the
Liquidity Banks of a mandatory purchase pursuant to the La Fayette Liquidity
Agreement, and hereby acknowledges that neither CLNY nor any of its Affiliates
has any fiduciary duties hereunder to any Lender (other than La Fayette) arising
out of any CLNY Roles.
(c) Bank One acts, or may in the future act: (i) as administrative
agent for Jupiter, (ii) as issuing and paying agent for Jupiter's Commercial
Paper Notes, (iii) to provide credit or liquidity enhancement for the timely
payment for Jupiter's Commercial Paper Notes and (iv) to provide other services
from time to time for Jupiter (collectively, the "Bank One Roles"). Without
limiting the generality of Sections 11.1 and 11.8, each of the Administrative
Agent and the Lenders hereby acknowledges and consents to any and all Bank One
Roles and agrees that in connection with any Bank One Role, Bank One may take,
or refrain from taking, any action which it, in its discretion, deems
appropriate, including, without limitation, in its role as administrative agent
for Jupiter, the giving of notice to the Liquidity Banks of a mandatory purchase
pursuant to the Jupiter Liquidity Agreement, and hereby acknowledges that
neither Bank One nor any of its Affiliates has any fiduciary duties hereunder to
any Lender (other than Jupiter) arising out of any Bank One Roles.
Section 11.11 UCC Filings. Each of the Secured Parties hereby expressly
recognizes and agrees that the Administrative Agent may be listed as the
assignee or secured party of record on the various UCC filings required to be
made under the Transaction Documents in order to perfect their respective
interests in the Collateral, that such listing shall be for administrative
convenience only in creating a record or nominee holder to take certain actions
hereunder on behalf of the Secured Parties and that such listing will not affect
in any way the status of the Secured Parties as the true parties in interest
with respect to the Collateral. In addition, such listing shall impose no duties
on the Administrative Agent other than those expressly and specifically
undertaken in accordance with this Article XI.
ARTICLE XII
ASSIGNMENTS AND PARTICIPATIONS
Section 12.1 Restrictions on Assignments, etc.
(a) No Loan Party may assign its rights, or delegate its duties
hereunder or any interest herein without the prior written consent of each of
the Agents and satisfaction of the Rating Agency Condition; provided, however,
that the foregoing shall not be deemed to restrict Quest Diagnostics' right,
prior to delivery of a Successor Notice, to request the Agents' consent to the
appointment of an Affiliate as replacement Servicer (subject to satisfaction of
the Rating Agency Condition) or to delegate all or any portion of its duties as
Servicer to other Originators, as sub-servicers, so long as Quest Diagnostics
remains primarily liable for the performance or non-performance of such duties.
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(b) Each of the Conduits may, at any time, assign all or any portion of
any of its Loans, or sell participations therein, to its Constituent Liquidity
Banks (or to its Co-Agent for the ratable benefit of its Constituent Liquidity
Banks).
(c) In addition to, and not in limitation of, assignments and
participations described in Section 12.1(b):
(i) in the event that any of the Blue Ridge Liquidity Banks or the
Jupiter Liquidity Banks becomes a Downgraded Liquidity Bank, such
Downgraded Liquidity Bank shall give prompt written notice of its
Downgrading Event to the Blue Ridge Agent or the Jupiter Agent, as
applicable, and the Borrower. Within 5 Business Days after the Borrower's
receipt of such notice, the Borrower may propose an Eligible Assignee who
is willing to accept an assignment of, and to assume, such Downgraded
Liquidity Bank's rights and obligations under this Agreement and under the
Liquidity Agreement. In the event that the Borrower fails to propose such
an Eligible Assignee within such 5 Business Day period, or such Eligible
Assignee does not execute and deliver assignment and assumption documents
reasonably acceptable to such Downgraded Liquidity Bank and the Blue Ridge
Agent or the Jupiter Agent, as applicable, and pays the Downgraded
Liquidity Bank's Obligations in full, in each case, not later than 5:00
p.m. (New York City time) on the 10th Business Day following the Borrower's
receipt of notice of such Downgrading Event, the Blue Ridge Agent or the
Jupiter Agent, as applicable, may identify an Eligible Assignee without the
Borrower's consent, and the Downgraded Liquidity Bank shall promptly assign
its rights and obligations to the Eligible Assignee designated by the Blue
Ridge Agent or the Jupiter Agent, as applicable, against payment in full of
its Obligations;
(ii) each of the Lenders may assign all or any portion of its Loans
and, if applicable, its Commitment and Liquidity Commitment, to any
Eligible Assignee with the prior written consent of (A) the Borrower and
(B) such Lender's applicable Co-Agent, which consents shall not be
unreasonably withheld or delayed.
(iii) each of the Lenders may, without the prior written consent of the
Borrower or any of the Agents, sell participations in all or any portion of
their respective rights and obligations in, to and under the Transaction
Documents and the Obligations in accordance with Sections 12.2 and 14.7.
Section 12.2 Rights of Assignees and Participants.
(a) Upon the assignment by a Lender in accordance with Section 12.1(b)
or (c), the Eligible Assignee(s) receiving such assignment shall have all of the
rights of such Lender with respect to the Transaction Documents and the
Obligations (or such portion thereof as has been assigned).
(b) In no event will the sale of any participation interest in any
Lender's or any Eligible Assignee's rights under the Transaction Documents or in
the Obligations relieve the seller of such participation interest of its
obligations, if any, hereunder or, if applicable, under the Liquidity Agreement
to which it is a party.
46
Section 12.3 Terms and Evidence of Assignment. Any assignment to any
Eligible Assignee(s) pursuant to Section 1.2(c), 12.1(b) or 12.1(c) shall be
upon such terms and conditions as the assigning Lender and the applicable
Co-Agent, on the one hand, and the Eligible Assignee, on the other, may mutually
agree, and shall be evidenced by such instrument(s) or document(s) as may be
satisfactory to such Lender, the applicable Co-Agent and the Eligible
Assignee(s). Any assignment made in accordance with the terms of this Article
XII shall relieve the assigning Lender of its obligations, if any, under this
Agreement (and, if applicable, the Liquidity Agreement to which it is a party)
to the extent assigned.
ARTICLE XIII
INDEMNIFICATION
Section 13.1 Indemnities by the Borrower.
(a) General Indemnity. Without limiting any other rights which any such
Person may have hereunder or under applicable law, the Borrower hereby agrees to
indemnify each of the Affected Parties, each of their respective Affiliates, and
all successors, transferees, participants and assigns and all officers,
directors, shareholders, controlling persons, employees and agents of any of the
foregoing (each, an "Indemnified Party"), forthwith on demand, from and against
any and all damages, losses, claims, liabilities and reasonable related
out-of-pocket costs and expenses, including reasonable attorneys' fees and
disbursements (all of the foregoing being collectively referred to as
"Indemnified Amounts") awarded against or incurred by any of them arising out of
or relating to the Transaction Documents, the Obligations or the Collateral,
excluding, however: (i) Indemnified Amounts to the extent determined by a court
of competent jurisdiction to have resulted from bad faith, gross negligence or
willful misconduct on the part of such Indemnified Party or (ii) recourse
(except as otherwise specifically provided in this Agreement) for Indemnified
Amounts to the extent the same includes losses in respect of Receivables which
are uncollectible on account of the insolvency, bankruptcy or lack of
creditworthiness of the related Obligor; provided, however, that prior to the
occurrence of an Event of Default, the Indemnified Parties shall only be
entitled to seek indemnity for the reasonable fees and disbursements of a single
law firm as special counsel to all such Indemnified Parties (and, if required, a
single law firm as local counsel to all such Indemnified Parties in each
relevant jurisdiction where the law firm acting as special counsel is not
licensed to practice). Without limiting the foregoing, the Borrower shall
indemnify each Indemnified Party for Indemnified Amounts arising out of or
relating to:
(A) the creation of any Lien on, or transfer by any Loan Party
of any interest in, the Collateral other than as provided in the
Transaction Documents;
(B) any representation or warranty made by any Originator or
Loan Party (or any of its officers) under or in connection with any
Transaction Document, any Monthly Report, Weekly Report, computation of
Cash Collateral Payment or any other information or report delivered by
or on behalf of any Originator or Loan Party pursuant thereto, which
shall have been false, incorrect or misleading in any respect when made
or deemed made or delivered, as the case may be;
(C) the failure by any Loan Party to comply with any
applicable law, rule or regulation with respect to any Receivable or
the related Contract and/or Invoice,
47
including, without limitation, any state or local assignment of claims
act or similar legislation prohibiting or imposing notice and
acknowledgement requirements or other limitations or conditions on the
assignment of a Specified Government Receivable, or the nonconformity
of any Receivable or the related Contract and/or Invoice with any such
applicable law, rule or regulation;
(D) the failure to vest and maintain vested in the Borrower a
perfected ownership interest in all Collateral other than the
Non-Assignable Contracts, or a first-priority perfected security
interest in favor of the Borrower and the Administrative Agent as its
assignee, in the rights to receive payments under each of the
Non-Assignable Contracts; or the failure to vest and maintain vested in
the Administrative Agent, for the benefit of the Secured Parties, a
valid and perfected first priority security interest in the Collateral,
free and clear of any other Lien, other than a Lien arising solely as a
result of an act of one of the Secured Parties, now or at any time
thereafter;
(E) the failure to file, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of
any applicable jurisdiction or other applicable laws with respect to
any Collateral;
(F) any dispute, claim, offset or defense (other than
discharge in bankruptcy) of the Obligor to the payment of any
Receivable (including, without limitation, a defense based on such
Receivables or the related Contract and/or Invoice not being a legal,
valid and binding obligation of such Obligor enforceable against it in
accordance with its terms), or any other claim resulting from the sale
of the services related to such Receivable or the furnishing or failure
to furnish such services;
(G) any matter described in Section 3.4;
(H) any failure of any Loan Party, as the Borrower, the
Servicer or otherwise, to perform its duties or obligations in
accordance with the provisions of this Agreement or the other
Transaction Documents to which it is a party;
(I) any claim of breach by any Loan Party of any related
Contract and/or Invoice with respect to any Receivable;
(J) any Tax (but not including Taxes upon or measured by net
income or net profits or franchise Taxes in lieu of net income or net
profits Taxes), all interest and penalties thereon or with respect
thereto, and all out-of-pocket costs and expenses, including the
reasonable fees and expenses of counsel in defending against the same,
which may arise by reason of the Administrative Agent's security
interest in the Collateral;
(K) the commingling of Collections of Receivables at any time
with other funds;
(L) any investigation, litigation or proceeding related to or
arising from this Agreement or any other Transaction Document, the
transactions contemplated hereby or thereby, the use of the proceeds of
any Loan, the security interest in the Receivables and
48
Related Assets or any other investigation, litigation or proceeding
relating to the Borrower or any of the Originators in which any
Indemnified Party becomes involved as a result of any of the
transactions contemplated hereby or thereby (other than an
investigation, litigation or proceeding (1) relating to a dispute
solely amongst the Lenders (or certain Lenders) and the Administrative
Agent or (2) excluded by Section 13.1(a));
(M) any products or professional liability, personal injury or
damage suit, or other similar claim arising out of or in connection
with merchandise, insurance or services that are the subject of any
Contract, Invoice or any Receivable;
(N) any inability to litigate any claim against any Obligor in
respect of any Receivable as a result of such Obligor being immune from
civil and commercial law and suit on the grounds of sovereignty or
otherwise from any legal action, suit or proceeding;
(O) the occurrence of any Event of Default of the type
described in Section 10.1(e); or
(P) any loss incurred by any of the Secured Parties as a
result of the inclusion in the Borrowing Base of Receivables owing from
any single Obligor and its Affiliated Obligors which causes the
aggregate Unpaid Net Balance of all such Receivables to exceed the
applicable Obligor Concentration Limit.
(b) Contest of Tax Claim; After-Tax Basis. If any Indemnified Party
shall have notice of any attempt to impose or collect any Tax or governmental
fee or charge for which indemnification will be sought from any Loan Party under
Section 13.1(a)(J), such Indemnified Party shall give prompt and timely notice
of such attempt to the Borrower and the Borrower shall have the right, at its
expense, to participate in any proceedings resisting or objecting to the
imposition or collection of any such Tax, governmental fee or charge.
Indemnification hereunder shall be in an amount necessary to make the
Indemnified Party whole after taking into account any tax consequences when
actually realized by the Indemnified Party of the payment of any of the
aforesaid taxes or payments of amounts indemnified against hereunder (including
any deduction) and the receipt of the indemnity payment provided hereunder or of
any refund of any such tax previously indemnified hereunder, including the
effect of such tax, amount indemnified against, deduction or refund on the
amount of tax measured by net income or profits which is or was payable by the
Indemnified Party. For purposes of this Agreement, an Indemnified Party shall be
deemed to have "actually realized" tax consequences to the extent that, and at
such time as, the amount of Taxes payable (including Taxes payable on an
estimated basis) by such Indemnified Party is increased above or reduced below,
as the case may be, the amount of Taxes that such Indemnified Party would be
required to pay but for receipt or accrual of the indemnity payment or the
incurrence or payment of such indemnified amount, as the case may be.
(c) Contribution. If for any reason the indemnification provided above
in this Section 13.1 (and subject to the exceptions set forth therein) is
unavailable to an Indemnified Party or is insufficient to hold an Indemnified
Party harmless, then the Borrower shall contribute to the amount paid or payable
by such Indemnified Party as a result of such loss, claim, damage or liability
in such proportion as is appropriate to reflect not only the relative benefits
received by such Indemnified Party
49
on the one hand and the Borrower on the other hand but also the relative fault
of such Indemnified Party as well as any other relevant equitable
considerations.
Section 13.2 Indemnities by Servicer. Without limiting any
other rights which any Indemnified Party may have hereunder or under applicable
law, the Servicer hereby agrees to indemnify each of the Indemnified Parties
forthwith on demand, from and against any and all Indemnified Amounts awarded
against or incurred by any of them arising out of or relating to the Servicer's
performance of, or failure to perform, any of its obligations under or in
connection with any Transaction Document, or any representation or warranty made
by the Servicer (or any of its officers) under or in connection with any
Transaction Document, any Monthly Report, Weekly Report, computation of Cash
Collateral Payment or any other information or report delivered by or on behalf
of the Servicer, which shall have been false, incorrect or misleading in any
material respect when made or deemed made or delivered, as the case may be, or
the failure of the Servicer to comply with any applicable law, rule or
regulation with respect to any Receivable or the related Contract and Invoice.
Notwithstanding the foregoing, in no event shall any Indemnified Party be
awarded any Indemnified Amounts (a) to the extent determined by a court of
competent jurisdiction to have resulted from gross negligence or willful
misconduct on the part of such Indemnified Party or (b) as recourse for
Indemnified Amounts to the extent the same includes losses in respect of
Receivables which are uncollectible on account of the insolvency, bankruptcy or
lack of creditworthiness of the related Obligor.
If for any reason the indemnification provided above in this
Section 13.2 (and subject to the exceptions set forth therein) is unavailable to
an Indemnified Party or is insufficient to hold an Indemnified Party harmless,
then the Servicer shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, claim, damage or liability in such
proportion as is appropriate to reflect not only the relative benefits received
by such Indemnified Party on the one hand and the Servicer on the other hand but
also the relative fault of such Indemnified Party as well as any other relevant
equitable considerations.
ARTICLE XIV
MISCELLANEOUS
Section 14.1 Amendments, Etc. No amendment or waiver of any
provision of this Agreement nor consent to any departure by any Loan
Party therefrom shall in any event be effective unless the same shall
be in writing and signed by each of the Loan Parties and the Co-Agents,
and any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided,
however, that:
(a) before any of the Co-Agents enters into such an amendment
or grants such a waiver or consent that is deemed to be material by S&P
and/or Xxxxx'x, the Rating Agency Condition must be satisfied with
respect to each of the Conduits,
(b) without the prior written consent of all Liquidity Banks
in a Co-Agent's Group, such Co-Agent will not amend, modify or waive
any provision of this Agreement which would (i) reduce the amount of
any principal or interest that is payable on account of its Conduit's
Loans or delay any scheduled date for payment thereof; (ii) decrease
the Required Reserve, decrease the spread included in any Interest Rate
or
50
change the Servicer's Fee; (iii) modify this Section 14.1; or (iv)
modify any yield protection or indemnity provision which expressly
inures to the benefit of assignees or participants of such Co-Agent's
Conduit,
(c) if less than all of the Co-Agents decline to approve a
requested amendment and within 90 days after the Borrower's request for
approval of such amendment, and either (i) the Borrower prepays the
Obligations of the dissenting Co-Agent's (or Co-Agents') Group in full
or (ii) finds one or more Eligible Assignees to replace each such
Co-Agent's Group, then the requested amendment shall become effective
on the effective date of such prepayment or assignment as to the
remaining Lenders (and, if applicable, as to any replacement Lenders),
and
(d) if less than all of the Co-Agents decline to approve a
requested waiver and (i) the Borrower either (A) identifies one or more
Eligible Assignee(s) to accept immediate written assignments of such
Co-Agent's Group's Commitment(s) and outstanding Obligations, or (B)
immediately pays all Obligations owing to the members of such
Co-Agent's (or Co-Agents') Group(s) in full, and (ii) the
Administrative Agent has not already declared the Termination Date to
have occurred, such waiver shall become effective as to the remaining
Lenders on the effective date of such assignment or repayment.
Section 14.2 Notices, Etc. All notices and other
communications provided for hereunder shall, unless otherwise stated herein, be
in writing (including facsimile communication) and shall be personally delivered
or sent by express mail or courier or by certified mail, postage prepaid, or by
facsimile, to the intended party at the address or facsimile number of such
party set forth on Schedule 14.2 or at such other address or facsimile number as
shall be designated by such party in a written notice to the other parties
hereto. All such notices and communications shall be effective, (a) if
personally delivered or sent by express mail or courier or if sent by certified
mail, when received, and (b) if transmitted by facsimile, when sent, receipt
confirmed by telephone or electronic means.
Section 14.3 No Waiver; Remedies. No failure on the part of
the Administrative Agent or any of the other Secured Parties 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. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law. Without limiting the foregoing, each of the Administrative Agent and the
Lenders is hereby authorized by the Borrower at any time and from time to time,
to the fullest extent permitted by law, to set off and apply to payment of any
Obligations that are then due and owing any and all deposits (general or
special, time or demand provisional or final) at any time held and other
indebtedness at any time owing by such Person to or for the credit or the
account of the Borrower.
Section 14.4 Binding Effect; Survival. This Agreement shall be
binding upon and inure to the benefit of each the Loan Parties, the
Administrative Agent, the Lenders and their respective successors and assigns,
and the provisions of Section 4.2 and Article XIII shall inure to the benefit of
the Affected Parties and the Indemnified Parties, respectively, and their
respective successors and assigns; provided, however, nothing in the foregoing
shall be deemed to authorize any assignment not permitted by Section 12.1. This
Agreement shall create and constitute the continuing obligations of the
51
parties hereto in accordance with its terms, and shall remain in full force and
effect until the Final Payout Date. The rights and remedies with respect to any
breach of any representation and warranty made by the Borrower pursuant to
Article VI and the indemnification and payment provisions of Article XIII and
Sections 4.2, 14.5, 14.6, 14.7, 14.8 and 14.15 shall be continuing and shall
survive any termination of this Agreement.
Section 14.5 Costs, Expenses and Stamp Taxes. In addition to
their obligations under the other provisions of this Agreement, the Loan Parties
jointly and severally agree to pay:
(a) within 30 days after receipt of a written invoice
therefor: all reasonable out-of-pocket costs and expenses incurred by
the Administrative Agent, in connection with (i) the negotiation,
preparation, execution and delivery of this Agreement, the other
Transaction Documents or the Liquidity Agreement (subject to the
limitations set forth in the Fee Letters), or (ii) the administration
of the Transaction Documents prior to an Event of Default including,
without limitation, (A) the reasonable fees and expenses of a single
law firm acting as counsel to the Administrative Agent and the Lenders
incurred in connection with any of the foregoing, and (B) subject to
the limitations set forth in the Fee Letters and in Section 7.1(c), the
reasonable fees and expenses of independent accountants incurred in
connection with any review of any Loan Party's books and records either
prior to or after the execution and delivery hereof;
(b) within 30 days after receipt of a written invoice
therefor: all reasonable out-of-pocket costs and expenses (including,
without limitation, the reasonable fees and expenses of counsel and
independent accountants) incurred by each of the Lenders, the
Administrative Agent and the Liquidity Banks in connection with the
negotiation, preparation, execution and delivery of any amendment or
consent to, or waiver of, any provision of the Transaction Documents
which is requested or proposed by any Loan Party (whether or not
consummated), the administration of the Transaction Documents following
an Event of Default (or following a waiver of or consent to any Event
of Default), or the enforcement by any of the foregoing Persons of, or
any actual or claimed breach of, this Agreement or any of the other
Transaction Documents, including, without limitation, (i) the
reasonable fees and expenses of counsel to any of such Persons incurred
in connection with any of the foregoing or in advising such Persons as
to their respective rights and remedies under any of the Transaction
Documents in connection with any of the foregoing, and (ii) the
reasonable fees and expenses of independent accountants incurred in
connection with any review of any Loan Party's books and records or
valuation of the Receivables and Related Assets; and
(c) upon demand: all stamp and other similar or recording
taxes and fees payable or determined to be payable in connection with
the execution, delivery, filing and recording of this Agreement or the
other Transaction Documents (and Loan Parties, jointly and severally
agree to indemnify each Indemnified Party against any liabilities with
respect to or resulting from any delay in paying or omission to pay
such taxes and fees).
Section 14.6 No Proceedings. Each of the parties hereto hereby
agrees that it will not institute against the Borrower, Jupiter, La Fayette or
Blue Ridge, or join any Person in instituting
52
against the Borrower, Jupiter, La Fayette or Blue Ridge, any insolvency
proceeding (namely, any proceeding of the type referred to in the definition of
Event of Bankruptcy) so long as any Obligations (in the case of the Borrower) or
any Commercial Paper Notes or other senior Indebtedness issued by Jupiter, La
Fayette or Blue Ridge, as the case may be, shall be outstanding or there shall
not have elapsed one year plus one day since the last day on which any such
Obligations and Commercial Paper Notes or other senior Indebtedness shall have
been outstanding. The parties' obligations under this Section 14.6 shall survive
termination of this Agreement.
Section 14.7 Confidentiality of Borrower Information. Each of
the Agents and the Lenders agrees to keep confidential information obtained by
it pursuant to the Transaction Documents confidential in accordance with such
Agent's or Lender's customary practices and in accordance with applicable law
and agrees that it will only use such information in connection with the
transactions contemplated hereby and not disclose any of such information other
than (a) to such Agent's or Lender's employees, representatives, directors,
attorneys, auditors, agents, professional advisors, trustees or affiliates who
are advised of the confidential nature thereof or to any direct or indirect
contractual counterparty in swap agreements or such contractual counterparty's
professional advisor (so long as such contractual counterparty or professional
advisor to such contractual counterparty agrees to be bound by the provision of
this Section 14.7, such Agent or Lender being liable for any breach of
confidentiality by any Person described in this clause (a) and with respect to
disclosures to an Affiliate to the extent disclosed by such Agent or Lender to
such Affiliate), (b) to the extent such information presently is or hereafter
becomes available to such Agent or Lender on a non-confidential basis from a
Person not an Affiliate of such Agent or Lender not known to such Lender to be
violating a confidentiality obligation by such disclosure, (c) to the extent
disclosure is required by any Law, subpoena or judicial order or process
(provided that notice of such requirement or order shall be promptly furnished
to the applicable Loan Party unless such notice is legally prohibited) or
requested or required by bank, securities, insurance or investment company
regulations or auditors or any administrative body or commission to whose
jurisdiction such Agent or Lender may be subject, (d) to any rating agency to
the extent required in connection with any rating to be assigned to such Lender,
(e) to assignees or participants or prospective assignees or participants who
agree to be bound by the provisions of this Section 14.7, (f) to the extent
required in connection with any litigation between any Loan Party and any Lender
with respect to the Loans or any Transaction Document, (g) to any dealer or
placement agent for such party's Commercial Paper Notes, who (i) in the good
faith belief of such party, has a need to know such confidential information,
(ii) is informed by such party of the confidential nature of such information
and the terms of this Section 14.7 and (iii) has agreed in writing to be bound
by the provisions of this Section 14.7, (h) to any Liquidity Bank (whether or
not on the date of disclosure, such Liquidity Bank continues to be an Eligible
Assignee), to any other actual or potential permitted assignee or participant
permitted under Section 12.1 who has agreed to be bound by the provisions of
this Section 14.7, (i) to any rating agency that maintains a rating for such
party's Commercial Paper Notes or is considering the issuance of such a rating,
for the purposes of reviewing the credit of any Lender in connection with such
rating, (j) to any other party to this Agreement (and any independent attorneys
and auditors of such party), for the purposes contemplated hereby, (k) to any
entity that provides a surety bond or other credit enhancement to any Conduit,
(l) in connection with the enforcement of this Agreement or any other
Transaction Document, or (m) with the applicable Loan Party's prior written
consent. In addition, each of the Lenders and the Agents may disclose on a "no
name" basis to any actual or potential investor in Commercial Paper Notes
information regarding the nature of this Agreement, the basic terms hereof
(including without limitation the amount and nature of the Aggregate Commitment
and the Advances), the nature, amount and status of the Receivables, and
53
the current and/or historical ratios of losses to liquidations and/or
outstandings with respect to the Receivables. This Section 14.7 shall survive
termination of this Agreement.
Section 14.8 Confidentiality of Program Information.
(a) Confidential Information. Each party hereto acknowledges
that the Conduits and the Agents regard the structure of the transactions
contemplated by this Agreement to be proprietary, and each such party agrees
that:
(i) it will not disclose without the prior consent of each
Conduit or each Agent (other than to the directors, employees,
auditors, counsel or affiliates (collectively, "representatives") of
such party, each of whom shall be informed by such party of the
confidential nature of the Program Information (as defined below) and
of the terms of this Section 14.8): (A) any information regarding the
pricing in, or copies of, the Liquidity Agreement or the Fee Letters,
or (B) any information which is furnished by any Conduit or any Agent
to such party and which is designated by such Conduit or such Agent to
such party in writing or otherwise as confidential or not otherwise
available to the general public (the information referred to in clauses
(A) and (B) is collectively referred to as the "Program Information");
provided, however, that such party may disclose any such Program
Information (1) as may be required by any municipal, state, federal or
other regulatory body having or claiming to have jurisdiction over such
party, including, without limitation, the SEC, (2) in order to comply
with any law, order, regulation, regulatory request or ruling
applicable to such party, (3) subject to subsection (c) below, in the
event such party is legally compelled (by interrogatories, requests for
information or copies, subpoena, civil investigative demand or similar
process) to disclose any such Program Information, or (4) in financial
statements as required by GAAP;
(ii) it will use the Program Information solely for the
purposes of evaluating, administering and enforcing the transactions
contemplated by the Transaction Documents and making any necessary
business judgments with respect thereto; and
(iii) it will, upon demand, return (and cause each of its
representatives to return) to the applicable Co-Agent, all documents or
other written material received from any Conduit in connection with
(a)(i)(B) above and all copies thereof made by such party which contain
the Program Information.
(b) Availability of Confidential Information. This Section
14.8 shall be inoperative as to such portions of the Program Information which
are or become generally available to the public or such party on a
nonconfidential basis from a source other than the Administrative Agent or were
known to such party on a nonconfidential basis prior to its disclosure by the
Administrative Agent.
(c) Legal Compulsion to Disclose. In the event that any party
or anyone to whom such party or its representatives transmits the Program
Information is requested or becomes legally compelled (by interrogatories,
requests for information or documents, subpoena, civil investigative demand or
similar process) to disclose any of the Program Information, such party will
provide the Administrative Agent with prompt written notice so that the
Administrative Agent may seek a
54
protective order or other appropriate remedy and/or, if it so chooses, agree
that such party may disclose such Program Information pursuant to such request
or legal compulsion. In the event that such protective order or other remedy is
not obtained, or the Administrative Agent agrees that such Program Information
may be disclosed, such party will furnish only that portion of the Program
Information which (in such party's good faith judgment) is legally required to
be furnished and will exercise reasonable efforts to obtain reliable assurance
that confidential treatment will be accorded the Program Information.
(d) Not a Tax Shelter. Notwithstanding any other express or
implied agreement to the contrary, the parties hereto agree that each of them
and each of their employees, representatives, and other agents may disclose to
any and all Persons, without limitation of any kind, the tax treatment and tax
structure of the transaction and all materials of any kind (including opinions
or other tax analyses) that are provided to any of them relating to such tax
treatment and tax structure, except where confidentiality is reasonably
necessary to comply with U.S. federal or state securities laws. For purposes of
this paragraph, the terms "tax treatment" and "tax structure" have the meanings
specified in Treasury Regulation section 1.6011-4(c).
(e) Survival. This Section 14.8 shall survive termination of
this Agreement.
Section 14.9 Captions and Cross References. The various
captions (including, without limitation, the table of contents) in this
Agreement are provided solely for convenience of reference and shall not affect
the meaning or interpretation of any provision of this Agreement. Unless
otherwise indicated, references in this Agreement to any Section, Annex,
Schedule or Exhibit are to such Section of or Annex, Schedule or Exhibit to this
Agreement, as the case may be, and references in any Section, subsection, or
clause to any subsection, clause or subclause are to such subsection, clause or
subclause of such Section, subsection or clause.
Section 14.10 Integration. This Agreement and the other
Transaction Documents contain a final and complete integration of all prior
expressions by the parties hereto with respect to the subject matter hereof and
shall constitute the entire understanding among the parties hereto with respect
to the subject matter hereof, superseding all prior oral or written
understandings.
Section 14.11 Governing Law. EACH TRANSACTION DOCUMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF OTHER THAN
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW (EXCEPT IN THE CASE OF THE OTHER
TRANSACTION DOCUMENTS, TO THE EXTENT OTHERWISE EXPRESSLY STATED THEREIN) AND
EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE OWNERSHIP INTERESTS OR SECURITY
INTERESTS OF THE BORROWER OR THE ADMINISTRATIVE AGENT, ON BEHALF OF THE SECURED
PARTIES, IN ANY OF THE COLLATERAL IS GOVERNED BY THE LAWS OF A JURISDICTION
OTHER THAN THE STATE OF NEW YORK.
Section 14.12 Waiver Of Jury Trial. EACH PARTY HERETO HEREBY
EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY OTHER TRANSACTION
DOCUMENT OR UNDER ANY AMENDMENT, INSTRUMENT OR
55
DOCUMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH OR ARISING FROM ANY BANKING OR OTHER RELATIONSHIP EXISTING IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT AND AGREES THAT
ANY SUCH ACTION OR PROCEEDING SHALL NOT BE TRIED BEFORE A JURY.
Section 14.13 Consent To Jurisdiction; Waiver Of Immunities.
EACH PARTY HERETO HEREBY ACKNOWLEDGES AND AGREES THAT:
(a) IT IRREVOCABLY (i) SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION, FIRST, OF ANY UNITED STATES FEDERAL COURT, AND SECOND, IF
FEDERAL JURISDICTION IS NOT AVAILABLE, OF ANY NEW YORK STATE COURT, IN
EITHER CASE SITTING IN NEW YORK COUNTY, NEW YORK, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND (ii)
WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF
AN INCONVENIENT FORUM TO THE MAINTENANCE OF AN ACTION OR PROCEEDING IN
SUCH COURTS.
(b) TO THE EXTENT THAT IT HAS OR HEREAFTER MAY ACQUIRE ANY
IMMUNITY FROM THE JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID TO EXECUTION, EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, IT HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER OR IN CONNECTION WITH THIS AGREEMENT.
Section 14.14 Business Associate Agreement; Health Care Data
Privacy and Security Requirements.
(a) Definitions. "HIPAA" means the Health Insurance
Portability and Accountability Act of 1996. The terms "Privacy Regulations" and
"Security Regulations" refer to all of the regulations in effect from time to
time issued pursuant to HIPAA and applicable to (respectively) the privacy or
the security of Individually Identifiable Health Information (found at Title 45,
Code of Federal Regulations (CFR) Parts 160, 162, and 164). "Business Associate"
refers to each of the Agents, the Borrower and any successor Servicer to Quest
Diagnostics appointed by the Agents pursuant to this Agreement, severally and
not jointly. All other terms used, but not otherwise defined in this Section,
shall have the same meaning as those terms defined in the Title 45 of the Code
of Federal Regulations applicable to HIPAA or any successor statute.
(b) Privacy. In accordance with the purposes of this
Agreement, Quest Diagnostics will disclose to each Business Associate, and each
Business Associate will use, disclose, and/or create Protected Health
Information (hereinafter called "PHI") only on behalf of Quest Diagnostics for
the specific purposes set forth in this Agreement. Each Business Associate
agrees not to use or further disclose any PHI or Individually Identifiable
Health Information received from Quest Diagnostics or created by any Business
Associate other than as permitted by this Agreement or as required by
56
applicable law or regulations, including the Privacy Regulations and the
Security Regulations. Each Business Associate will only use or disclose the
Minimum Necessary PHI to accomplish the intended purpose of its uses or
disclosures. Each Business Associate will implement appropriate safeguards to
prevent the use or disclosure of an Individual's PHI other than as provided for
by this Agreement or in accordance with law and shall document its safeguards.
Each Business Associate will provide access to an Individual's PHI upon the
reasonable request of Quest Diagnostics, will make any amendments to an
Individual's PHI as directed by Quest Diagnostics, and will maintain a record of
disclosures of PHI as required for Quest Diagnostics to make an accounting to
the Individual as required by the Privacy Regulations. Each Business Associate
will promptly report to Quest Diagnostics any use or disclosure of an
Individual's PHI not provided for by this Agreement or any security incident (as
that term is defined in the Security Regulations) of which such Business
Associate becomes aware. In the event any Business Associate contracts with any
sub-contractors or agents and provides them with an Individual's PHI, such
Business Associate shall include provisions in its agreements whereby the
sub-contractor or agent agrees to the same privacy and security requirements and
restrictions and conditions that apply to such Business Associate with respect
to the Individual's PHI. Each Business Associate will, upon reasonable notice,
make its internal practices, books, and records relating to the use and
disclosure of an Individual's PHI available to the Secretary of Health and Human
Services and to Quest Diagnostics to the extent required for determining
compliance with this Section, the Privacy Regulations, and the Security
Regulations. Notwithstanding the foregoing, no legal privilege shall be deemed
waived by any Business Associate or Quest Diagnostics by virtue of this clause
(b) of this Section. Quest Diagnostics may terminate this Agreement without
penalty or recourse if it determines that any Business Associate has violated a
material term of this Section or applicable law that is not cured within thirty
(30) calendar days after delivery of the notice of violation to all of the
Business Associates or, in lieu of termination, Quest Diagnostics, in its sole
discretion, may report the breach to the Secretary. Upon termination of this
Agreement for any reason, each Business Associate and its sub-contractors or
agents agree to return or to destroy all PHI and retain no copies (and to
certify to such actions) unless otherwise agreed by Quest Diagnostics or such
return or disclosure is not reasonably feasible (in which case, at no additional
cost to Quest Diagnostics, each Business Associate will extend the protections
of this Section to the PHI that such Business Associate maintains and limit any
further uses and disclosures of the PHI to the purposes that make the return or
destruction of the PHI not feasible).
(c) Security. Each Business Associate shall adopt, implement
and maintain throughout the term of this Agreement security policies,
procedures, and practices, administrative, physical and technical safeguards,
and security mechanisms that reasonably and adequately protect the
confidentiality, integrity, and availability of the PHI that it creates,
receives, maintains, or transmits on behalf of Quest Diagnostics ("Business
Associate Safeguards"), and each Business Associate shall require its
sub-contractors or agents to adopt Business Associate Safeguards that are
equally appropriate and adequate. Quest Diagnostics may terminate this Agreement
at any time, without penalty, if it determines, in its sole discretion, that the
Business Associate Safeguards are unsatisfactory.
(d) Benefit. This Section is not intended to create any right
in or obligations to any Person that is not a party to this Agreement, including
Individuals.
(e) Mitigation. In addition to any rights of indemnification
contained in this Agreement, each Business Associate will take commercially
reasonable steps to mitigate any harm caused by its
57
breach of this Section and/or reimburse Quest Diagnostics for the cost of
commercially reasonable mitigation based upon, arising out of or attributable to
the acts or omissions of such Business Associate, its employees, officers,
directors, agents, or sub-contractors for uses or disclosures in violation of
this Section.
(f) Amendment. Each of the Business Associates and Quest
Diagnostics agree to amend this Section in such manner as is reasonably
necessary to comply with any amendment of (i) HIPAA or other applicable law,
(ii) the Privacy Regulations, the Security Regulations, or other applicable
regulations, or (iii) any applicable court decision or binding governmental
policy. If the parties are unable to agree on an amendment within 30 days of
notice from Quest Diagnostics to each Business Associate of the requirement to
amend this Section, Quest Diagnostics may, at its option, terminate this
Agreement upon written notice to the Business Associates.
(g) Survival. This Section and the confidentially, privacy,
security, and other requirements established herein shall survive termination of
this Agreement.
(h) Interpretation. Any ambiguity in this Section shall be
resolved in favor of a meaning that permits Quest Diagnostics to comply with the
Privacy Regulations and the Security Regulations.
(i) Several Liability of Business Associates. No Business
Associate shall have any liability to Quest Diagnostics or any third party of
any kind or nature, whether such liability is asserted on the basis of contract,
tort (including negligence or strict liability), or otherwise, arising from the
failure of any other Business Associate to fulfill its obligations under this
Section.
Section 14.15 Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by the different parties hereto in
separate 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.
Section 14.16 No Recourse Against Other Parties. The several
obligations of the Lenders under this Agreement are solely the corporate
obligations of such Lender. No recourse shall be had for the payment of any
amount owing by such Lender under this Agreement or for the payment by such
Lender of any fee in respect hereof or any other obligation or claim of or
against such Lender arising out of or based upon this Agreement, against any
employee, officer, director, incorporator or stockholder of such Lender. Each of
the Borrower, the Servicer and the Administrative Agent agrees that each of the
Conduits shall be liable for any claims that such party may have against such
Conduit only to the extent that such Conduit has excess funds and to the extent
such assets are insufficient to satisfy the obligations of such Conduit
hereunder, such Conduit shall have no liability with respect to any amount of
such obligations remaining unpaid and such unpaid amount shall not constitute a
claim against such Conduit. Any and all claims against any of the Conduits or
any of the Agents shall be subordinate to the claims against such Persons of the
holders of such Conduit's Commercial Paper Notes and its Liquidity Banks.
[Signature pages follow]
58
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
BORROWER:
QUEST DIAGNOSTICS RECEIVABLES INC.
By: __________________________________
Name:
Title:
SERVICER:
QUEST DIAGNOSTICS INCORPORATED
By: __________________________________
Name:
Title:
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ADMINISTRATIVE AGENT:
WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative
Agent and as Blue Ridge Agent
By: __________________________________
Name:
Title:
LENDERS:
BLUE RIDGE ASSET FUNDING CORPORATION
BY: WACHOVIA CAPITAL MARKETS, LLC, ITS ATTORNEY-IN-FACT
By: __________________________________
Name:
Title:
Initial Commitment: not applicable
WACHOVIA BANK, NATIONAL ASSOCIATION
By: __________________________________
Name:
Title:
Initial Commitment: $150,000,000
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LA FAYETTE ASSET SECURITIZATION LLC
By: _________________________________
Name: Xxxxxxx Xxxxx
Title: Vice President
Initial Commitment: not applicable
CREDIT LYONNAIS NEW YORK BRANCH
By: _________________________________
Name: Xxxxxxx Xxxxx
Title: Vice President
Initial Commitment: $50,000,000
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JUPITER SECURITIZATION CORPORATION
By: __________________________________
Name: Xxxxxx Xxxxxx
Title: Authorized Signer
Initial Commitment: not applicable
BANK ONE, NA
By: __________________________________
Name: Xxxxxx Xxxxxx
Title: Director, Capital Markets
Initial Commitment: $50,000,000
62
ANNEX A
DEFINITIONS
A. Certain Defined Terms. As used in this Agreement:
"Account" shall have the meaning specified in Article 9 of the
UCC.
"Accrual Period" means each calendar month, provided that the
initial Accrual Period hereunder means the period from (and including) the date
of the initial Loan hereunder to (and including) the last day of the calendar
month thereafter.
"Administrative Agent" has the meaning provided in the
preamble of this Agreement.
"Advance" means a borrowing hereunder consisting of the
aggregate amount of the several Loans made on the same Borrowing Date.
"Affected Party" means each of the Lenders, the Agents and the
Liquidity Banks.
"Affiliate" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. A Person shall be deemed to control another Person if
the controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, membership interests, by contract,
or otherwise.
"Affiliated Obligor" in relation to any Obligor means an
Obligor that is an Affiliate of such Obligor.
"Agents" means the Administrative Agent and the Co-Agents.
"Aggregate Commitment" means the aggregate of the Commitments
of the Liquidity Banks, as reduced or increased from time to time pursuant to
the terms hereof.
"Agreement" means this Credit and Security Agreement, as it
may be amended or modified and in effect from time to time.
"Allocation Limit" means the sum of the Blue Ridge Allocation
Limit, the La Fayette Allocation Limit and the Jupiter Allocation Limit.
"Alternate Base Rate" means for any day, the rate per annum
equal to the higher as of such day of (i) the Prime Rate, or (ii) one-half of
one percent (0.50%) above the Federal Funds Rate. For purposes of determining
the Alternate Base Rate for any day, changes in the Prime Rate or the Federal
Funds Rate shall be effective on the date of each such change.
"Alternate Base Rate Loan" means a Loan which bears interest
at the Alternate Base Rate or the Default Rate.
"Applicable Percentage" shall have the meaning provided in the
Credit Agreement (whether or not the Credit Agreement remains in effect).
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"Approved Amendment" means:
(a) until such time (if any) that Quest Diagnostics' long-term
senior unsecured debt rating from Xxxxx'x is raised above Ba1, and for
so long as Quest Diagnostics' long-term senior unsecured debt ratings
remain at BBB- or higher from S&P and at (but not below) Ba1 from
Moody's, any amendment to or waiver of the Credit Agreement to which
the requisite banks under the Credit Agreement consent,
(b) after the time (if any) that Quest Diagnostics' long-term
senior unsecured debt rating from Xxxxx'x is raised to Baa3 or higher,
and for so long as Quest Diagnostics' long-term senior unsecured debt
ratings remain at BBB- or higher from S&P and at Baa3 or higher from
Moody's, any amendment to or waiver of the Credit Agreement to which
the requisite banks under the Credit Agreement consent, and
(c) at any time while Quest Diagnostics' long-term senior
unsecured debt rating from either S&P or Moody's fails to meet the
applicable minimum level set forth in (a) or (b) above or any such
minimum rating is classified as being on "negative watch" or the
equivalent, any amendment to or waiver of the Credit Agreement approved
by the requisite banks under the Credit Agreement and to which either
(i) each of the Co-Agents (acting in its capacity as such under this
Agreement) gives its written consent on or within 30 days after receipt
of a copy of the proposed amendment or waiver, or (ii) one or two of
the Co-Agents but not all of the Co-Agents gives its written consent on
or within 30 days after receipt of a copy of the proposed amendment
(but not waiver) and the Obligations owing each dissenting Co-Agent's
Group are paid in full on or within 60 days after such 30th day.
"Article" means an article of this Agreement unless another
document is specifically referenced.
"Authorized Officer" means with respect to either Loan Party,
any of the following, acting singly: its chief executive officer, its president,
its vice president-finance, its treasurer or its secretary.
"Bank One" has the meaning provided in the preamble of this
Agreement.
"Bank One Roles" has the meaning provided in Section 11.10(c).
"Blue Ridge" has the meaning provided in the preamble of this
Agreement.
"Blue Ridge Agent" has the meaning provided in the preamble of
this Agreement.
"Blue Ridge Allocation Limit" has the meaning set forth in
Section 1.1(a).
"Blue Ridge Fee Letter" means that certain Amended and
Restated Blue Ridge Fee Letter dated as of September 30, 2003 by and among Quest
Diagnostics, the Borrower, Blue Ridge and Wachovia, as Blue Ridge Agent and
Administrative Agent.
"Blue Ridge Group" has the meaning provided in the preamble of
this Agreement.
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"Blue Ridge Liquidity Agreement" means the Third Amended and
Restated Liquidity Asset Purchase Agreement dated as of January 14, 2002 among
Blue Ridge, the Blue Ridge Agent, and the Liquidity Banks from time to time
party thereto, as the same may be amended, restated, supplemented, replaced or
otherwise modified from time to time.
"Blue Ridge Liquidity Bank" means any Liquidity Bank that
enters into this Agreement and the Blue Ridge Liquidity Agreement.
"Borrower" has the meaning provided in the preamble of this
Agreement.
"Borrowing Base" means, on any date of determination, the Net
Pool Balance as of the last day of the period covered by the most recent Monthly
Report, minus the Required Reserve as of the last day of the period covered by
the most recent Monthly Report.
"Borrowing Date" means a date on which an Advance is made
hereunder.
"Borrowing Request" is defined in Section 2.1.
"Broken Funding Costs" means, for any CP Rate Loan of Blue
Ridge or Jupiter which: (i) has its principal reduced without compliance by the
Borrower with the notice requirements hereunder or (ii) is not prepaid in the
amount specified in a Prepayment Notice on the date specified therein or (iii)
is assigned by Blue Ridge or Jupiter to its Liquidity Banks under its Liquidity
Agreement or terminated prior to the date on which it was originally scheduled
to end; an amount equal to the excess, if any, of (A) the CP Costs that would
have accrued during the remainder of the applicable commercial paper tranche
periods determined by the Blue Ridge Agent or the Jupiter Agent, as applicable,
to relate to such Loan subsequent to the date of such reduction, assignment or
termination (or in respect of clause (ii) above, the date such prepayment was
designated to occur pursuant to the applicable Prepayment Notice) of the
principal of such CP Rate Loan if such reduction, assignment or termination had
not occurred or such Prepayment Notice had not been delivered, over (B) the sum
of (x) to the extent all or a portion of such principal is allocated to another
CP Rate Loan, the amount of CP Costs actually accrued during the remainder of
such period on such principal for the new Loan, and (y) to the extent such
principal is not allocated to another CP Rate Loan, the income, if any, actually
received during the remainder of such period by the holder of such Loan from
investing the portion of such principal not so allocated. All Broken Funding
Costs shall be due and payable hereunder upon demand.
"Business Associate" has the meaning set forth in Section
14.14.
"Business Associate Safeguards" has the meaning set forth in
Section 14.14.
"Business Day" means any day on which banks are not authorized
or required to close in New York, New York, Atlanta, Georgia, Chicago, Illinois
or Teterboro, New Jersey, and The Depository Trust Company of New York is open
for business, and if the applicable Business Day relates to any computation or
payment to be made with respect to the Eurodollar Rate (Reserve Adjusted), any
day on which dealings in dollar deposits are carried on in the London interbank
market.
"Cash Collateral Payment" means, on any date of determination,
the dollar amount resulting from the product of (i) the arithmetic average of
the dollar amount of cash collections from the
65
4 immediately preceding Report Weeks and (ii) the result of dividing (a) the
then aggregate outstanding principal balance of the Advances by (b) the
aggregate Unpaid Net Balance of all Receivables, as reflected on the most recent
prior Monthly Report.
"Change in Control" means:
(a) the failure of Quest Diagnostics to own (directly or
through one or more wholly-owned Subsidiaries of Quest Diagnostics)
100% of the issued and outstanding Equity Interests (including all
Equity Rights) of the Borrower;
(b) the failure of Quest Diagnostics to own (directly or
through one or more wholly-owned Subsidiaries of Quest Diagnostics)
100%, on a fully-diluted basis, of the issued and outstanding Equity
Interests (including all Equity Rights) of each of the other
Originators; provided, however, that no Change in Control shall be
deemed to have occurred under this clause (b) if, in any calendar year,
Quest Diagnostics ceases to beneficially own (directly or through one
or more wholly-owned Subsidiaries of Quest Diagnostics) 100%, on a
fully diluted basis, of the issued and outstanding Equity Interests
(including all Equity Rights) of any Originator or Originators whose
Net Receivables as of the last day of the prior calendar year did not
represent more than 10% of the Net Receivables of all Originators as of
the last day of such prior calendar year; or
(c) (i) any Person or any group shall (A) beneficially own
(directly or indirectly) in the aggregate Equity Interests of Quest
Diagnostics having 35% or more of the aggregate voting power of all
Equity Interests of Quest Diagnostics at the time outstanding or (B)
have the right or power to appoint a majority of the board of directors
of Quest Diagnostics; or (ii) during any period of two consecutive
years, individuals who at the beginning of such period constituted the
board of directors of Quest Diagnostics (together with any new
directors whose election by such board of directors or whose nomination
for election by the shareholders of Quest Diagnostics was approved by a
vote of a majority of the directors of Quest Diagnostics then still in
office who were either directors at the beginning of such period or
whose election or nomination for election was previously so approved)
cease for any reason to constitute at least a majority of the board of
directors of Quest Diagnostics then in office.
For purposes of this definition, the terms "beneficially own" and "group" shall
have the respective meanings ascribed to them pursuant to Section 13(d) of the
Exchange Act, except that a Person or group shall be deemed to "beneficially
own" all securities that such Person or group has the right to acquire, whether
such right is exercisable immediately or only after the passage of time.
"Client-Billed Receivable" means a Receivable booked in the
"client-billed receivables" category of accounts receivable in the billing and
accounting process of the applicable Originator owing from a physician, hospital
or other institutional Obligor (including a Governmental Authority or affiliated
Obligor) which is billed monthly in arrears for the services provided with
pricing typically based on a negotiated fee schedule. For the avoidance of
doubt, no Client-Billed Receivable would be (a) a "Government Receivable" of the
type described in clause (i), (ii) or (iii) of the definition of such term, or
(b) owing from another payor type such as an individual "self-pay" patient or an
insurance company or managed care plan.
66
"Client-Billed Receivables for the Reserve Computation" means,
at any time, an amount determined by multiplying the Client-Billed Receivables
Percentage by Net Receivables.
"Client-Billed Receivables Percentage" means, at any time, the
percentage equal to (a) the Unpaid Net Balance of all Client-Billed Receivables,
divided by (b) the Unpaid Net Balance of all Receivables, in each of the
foregoing cases, determined as of the last day of the calendar month then most
recently ended.
"Clinical Laboratory Services" means clinical laboratory,
anatomic pathology or other diagnostics testing services (including, without
limitation, routine and esoteric clinical laboratory services (including
genetics testing), clinical laboratory services involved with clinical trials,
point-of-care testing, clinical laboratory services involving corporate
healthcare and services involved with managing hospital laboratories) and
information services involving the provision of data or information programs,
services or products which substantially consists of laboratory or other medical
data.
"CLNY" has the meaning provided in the preamble of this
Agreement.
"CLNY Roles" has the meaning set forth in Section 11.10(b).
"Co-Agents" has the meaning provided in the preamble of this
Agreement.
"Code" means the Internal Revenue Code of 1986, as the same
may be amended from time to time.
"Collateral" has the meaning set forth in Section 9.1.
"Collateral Account" has the meaning set forth in Section
7.1(i)(iv).
"Collection Account" means each concentration account,
depositary account, lockbox account or similar account into which proceeds of
Receivables are deposited.
"Collection Account Agreement" means an agreement in
substantially the form of Exhibit A hereto by and among a Collection Bank at
which a Lockbox or Collection Account is maintained, the applicable Originator
(if such Lockbox or Collection Account is in the name of an Originator), the
Borrower and the Administrative Agent.
"Collection Bank" means any of the banks holding one or more
Collection Accounts or Lockboxes.
"Collections" means, (a) with respect to any Receivable, all
funds which either (i) are received from or on behalf of the related Obligor in
payment of any amounts owed (including, without limitation, purchase prices,
finance charges, interest and all other charges) in respect of such Receivable,
or applied to such amounts owed by such Obligor (including, without limitation,
payments that the Borrower, any Originator or the Servicer receives from third
party payors and applies in the ordinary course of its business to amounts owed
in respect of such Receivable and net proceeds of sale or other disposition of
repossessed goods or other collateral or property of the Obligor or any other
party directly or indirectly liable for payment of such Receivable and available
to be applied thereon), or (ii) are Deemed Collections, and (b) with respect to
any Demand Advance, any payment of principal
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or interest in respect thereof and any Permitted Investments and the proceeds
thereof made with any such payment.
"Commercial Paper Notes" means the commercial paper promissory
notes, if any, issued by or on behalf of any of the Conduits to fund, in whole
or in part, any of its CP Rate Loans.
"Commitment" means, for each Liquidity Bank, its obligation to
make Loans not exceeding the amount set forth opposite its signature to the
Agreement, as such amount may be modified from time to time pursuant to the
terms hereof.
"Commitment Increase Request" has the meaning set forth in
Section 1.7.
"Commitment Reduction Notice" has the meaning set forth in
Section 1.6.
"Conduits" has the meaning provided in the preamble of this
Agreement.
"Constituent" means (a) as to the La Fayette Agent, any member
of the La Fayette Group from time to time party hereto, (b) as to the Jupiter
Agent, any member of the Jupiter Group from time to time party hereto, and (c)
as to the Blue Ridge Agent, any member of the Blue Ridge Group from time to time
party hereto, and when used as an adjective, "Constituent" shall have a
correlative meaning.
"Contract" means, with respect to any Receivable, any
requisition, purchase order, agreement, contract or other writing with respect
to the provision of services by an Originator to an Obligor other than (i) an
Invoice, and (ii) any confidential patient information including, without
limitation, test results.
"Contraction" means the dollar amount (if any) by which the
aggregate Unpaid Net Balance of Receivables as reflected in the ending balance
on a Monthly Report is reduced in the immediately subsequent Monthly Report for
any reason other than cash collections (it being understood that new Receivables
generated in the period covered by the subsequent Monthly Report shall not
reduce the amount computed pursuant to the foregoing).
"Contraction Ratio" means the percentage equal to a fraction,
the numerator of which is the total amount of Contraction during the most recent
Settlement Period, and the denominator of which is the amount of Net Revenues
generated by the Originators during the most recent Settlement Period.
"Contraction Reserve" means a percentage equal to the product
of (i) 5 and (ii) the 12-month high of the 4-month rolling average Contraction
Ratio during the most recent 12-month period.
"Contractual Disallowance" means an amount which represents
the amount by which a Receivable is, consistent with usage and practices in the
applicable Originator's industry, expected to be reduced prior to payment by the
Obligor thereon.
"Contractual Obligation" means, as to any Person, any
provision of any security issued by such Person or of any agreement,
undertaking, contract, indenture, mortgage, deed of or other
68
instrument, document or agreement to which such Person is a party or by which it
or any of its property is bound.
"CP Costs" means, for each day for Jupiter or Blue Ridge, the
sum of (i) discount or interest accrued on such Conduit's Pooled Commercial
Paper on such day, plus (ii) any and all accrued commissions in respect of its
placement agents and its Commercial Paper dealers, and issuing and paying agent
fees incurred, in respect of such Conduit's Pooled Commercial Paper for such
day, plus (iii) other costs associated with funding small or odd-lot amounts
with respect to all receivable purchase or financing facilities which are funded
by such Conduit's Pooled Commercial Paper for such day, minus (iv) any accrual
of income net of expenses received by or on behalf of such Conduit on such day
from investment of collections received under all receivable purchase or
financing facilities funded substantially with such Conduit's Pooled Commercial
Paper, minus (v) any payment received on such day net of expenses in respect of
such Conduit's Broken Funding Costs related to the prepayment of any investment
of Blue Ridge or Jupiter, as the case may be, pursuant to the terms of any
receivable purchase or financing facilities funded substantially with its Pooled
Commercial Paper. In addition to the foregoing costs, if the Borrower (or the
Servicer, on the Borrower's behalf) shall request any Advance during any period
of time determined by the Blue Ridge Agent or the Jupiter Agent in its sole
discretion to result in incrementally higher CP Costs applicable to Blue Ridge's
or Jupiter's, as the case may be, Loan included in such Advance, the principal
associated with any such Loan of Blue Ridge or Jupiter shall, during such
period, be deemed to be funded by Blue Ridge or Jupiter, as applicable, in a
special pool (which may include capital associated with other receivable
purchase or financing facilities) for purposes of determining such additional CP
Costs applicable only to such special pool and charged each day during such
period against such principal.
"CP Rate" means:
(a) with respect to Blue Ridge for any CP Tranche Period, the
per annum interest rate that, when applied to the outstanding principal
balance of Blue Ridge's CP Rate Loans for the actual number of days
elapsed in such CP Tranche Period, would result in an amount of accrued
interest equivalent to Blue Ridge's CP Costs for such CP Tranche
Period;
(b) with respect to Jupiter for any CP Tranche Period, the per
annum interest rate that, when applied to the outstanding principal
balance of Jupiter's CP Rate Loans for the actual number of days
elapsed in such CP Tranche Period, would result in an amount of accrued
interest equivalent to Jupiter's CP Costs for such CP Tranche Period;
and and
(c) with respect to La Fayette for any CP Tranche Period, the
per annum interest rate equivalent to the rate (or if more than one
rate, the weighted average of the rates) at which Commercial Paper
Notes of La Fayette having a term equal to such CP Tranche Period are
sold plus (to the extent not already deducted from the Principal Amount
of such Commercial Paper Notes) the amount of any placement agent or
commercial paper dealer fees incurred in connection with such sale and
other costs associated with funding small or odd-lot amounts.
"CP Rate Loan" means a Loan made by any of the Conduits which
bears interest at a CP Rate.
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"CP Tranche Period" means:
(a) with respect to Blue Ridge or Jupiter, an Accrual Period,
and
(b) with respect to La Fayette, a period of 7 to 90 days
commencing on a Business Day selected by the Borrower (or by the
Servicer, on the Borrower's behalf) and agreed to by the La Fayette
Agent pursuant to Section 2.2; provided, however, that if any such CP
Tranche Period would end on a day which is not a Business Day, such CP
Tranche Period shall end on the preceding Business Day.
"Credit Agreement" means that certain Credit Agreement dated
as of June 27, 2001 among Quest Diagnostics as borrower, certain of its
Subsidiaries as guarantors, various lenders from time to time party thereto, and
Bank of America, N.A., as administrative agent and as issuing lender, as in
effect on the date of this Agreement, or as thereafter modified from time to
time in one or more Approved Amendments.
"Credit and Collection Policy" means those credit and
collection policies and practices of the Originators relating to Contracts and
Receivables, copies or summaries of which are attached as Exhibit C to the Sale
Agreement, as the same may be modified from time to time without violating
Section 7.3(c) of this Agreement.
"Cut-Off Date" means November 30, 1999 and the last day of
each calendar month thereafter.
"Days Sales Outstanding" means, as of any day, an amount equal
to the product of (x) 91, multiplied by (y) the amount obtained by dividing (i)
the aggregate Unpaid Net Balance of Receivables as of the most recent Cut-Off
Date, by (ii) the aggregate Net Revenues generated by the Originators during the
three calendar months including and immediately preceding such Cut-Off Date.
"Deemed Collections" means Collections deemed received by the
Borrower under Section 3.4.
"Default Rate" means a rate per annum equal to the sum of (i)
the Alternate Base Rate plus (ii) 2.00%, changing when and as the Alternate Base
Rate changes.
"Default Ratio" means, as of any Cut-Off Date, the ratio
(expressed as a percentage) computed by dividing (x) the total amount of
Defaulted Receivables as of such Cut-Off Date, by (y) the aggregate Unpaid Net
Balance of all Receivables as of such Cut-Off Date.
"Defaulted Receivable" means a Receivable: (a) as to which any
payment, or part thereof, remains unpaid for more than 180 days from the
original invoice date in respect of such Receivable; (b) as to which an Event of
Bankruptcy has occurred and remains continuing with respect to the Obligor
thereof; or (c) which has been, or, consistent with the Credit and Collection
Policy would be, written off the Borrower's, any Originator's or the Servicer's
books as uncollectible due to the lack of creditworthiness of the applicable
Obligor(s).
"Delinquency Ratio" at any time means the ratio (expressed as
a percentage) computed as of the Cut-Off Date for the next preceding calendar
month by dividing (x) the aggregate Unpaid Net
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Balance of all Receivables that are Delinquent Receivables on such Cut-Off Date
by (y) the aggregate Unpaid Net Balance of Receivables on such Cut-Off Date.
"Delinquent Receivable" means a Receivable as to which any
payment, or part thereof, remains unpaid for 150 days or more from the original
invoice date in respect of such Receivable but which is not yet a Defaulted
Receivable.
"Demand Advance" means an advance made by the Borrower to
Quest Diagnostics on any day during the Revolving Period other than a Settlement
Date on which no Event of Default or Unmatured Default exists and is continuing,
which advance (a) is payable upon demand, (b) is not evidenced by an instrument,
chattel paper or a certificated security, (c) bears interest at a market rate
determined by the Borrower and the Servicer from time to time, (d) is not
subordinated to any other Indebtedness or obligation of Quest Diagnostics, and
(e) may not be offset by Quest Diagnostics against amounts due and owing from
the Borrower to Quest Diagnostics under its Subordinated Note.
"Dilution" means the amount of any reduction or cancellation
of the Unpaid Net Balance of a Receivable as described in Section 3.4(a) or (b).
"Disallowed Receivable" means a Receivable for which payment
is not expected to be received by the applicable Originator.
"Dollars" means dollars in lawful money of the United States
of America.
"Downgraded Liquidity Bank" means a Liquidity Bank of Blue
Ridge or Jupiter which becomes the subject of a Downgrading Event.
"Downgrading Event" with respect to any Person means the
lowering of the rating with regard to the short-term securities of such Person
to below (i) A-1 by S&P, or (ii) P-1 by Moody's.
"Eligible Assignee" means (a) any "bankruptcy remote" special
purpose entity which is administered by Wachovia, Bank One or CLNY (or any
Affiliate of Wachovia, Bank One or CLNY) that is in the business of acquiring or
financing receivables, securities and/or other financial assets and which issues
commercial paper notes that are rated at least A-1 by S&P and P-1 by Moody's,
(b) any Qualifying Liquidity Bank, or (c) in the case of Blue Ridge, any
Downgraded Liquidity Bank whose liquidity commitment has been fully drawn by the
Blue Ridge Agent and funded into a collateral account.
"Eligible Originator" means any of (a) Quest Diagnostics, (b)
Quest Diagnostics Incorporated a Michigan corporation, Quest Diagnostics
Incorporated, a Maryland corporation, Quest Diagnostics Incorporated, a
California corporation, Quest Diagnostics LLC, a Connecticut limited liability
company, Quest Diagnostics LLC, a Massachusetts limited liability company, Quest
Diagnostics of Pennsylvania Inc., a Delaware corporation, MetWest Inc., a
Delaware corporation, Quest Diagnostic Clinical Laboratories Inc., a Delaware
corporation, Quest Diagnostics LLC, an Illinois limited liability company, and
(c) each of the other direct or indirect, wholly-owned Subsidiaries of Quest
Diagnostics who (with the consent of the Co-Agents if such Subsidiary
constitutes a Material Proposed Addition) becomes a "seller" party to the Sale
Agreement by executing a Joinder Agreement and complying with the conditions set
forth in Article V of the Sale Agreement.
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"Eligible Receivable" means, at any time, a Receivable:
(a) which is a Receivable arising out of the provision or sale
of Clinical Laboratory Services by an Eligible Originator in the
ordinary course of its business that has been sold or contributed by
such Originator to the Borrower pursuant to the Sale Agreement in a
"true sale" or "true contribution" transaction;
(b) as to which the perfection of the Administrative Agent's
security interest, on behalf of the Secured Parties, is governed by the
laws of a jurisdiction where the Uniform Commercial Code-Secured
Transactions is in force, and which constitutes an "account" as defined
in the Uniform Commercial Code as in effect in such jurisdiction;
(c) the Obligor of which is resident of the United States or
any of its possessions or territories, and is not an Affiliate of any
Loan Party or Originator;
(d) which is not a Disallowed Receivable at such time;
(e) which is not a Defaulted Receivable or a Delinquent
Receivable at such time;
(f) with regard to which the representations and warranties of
the Borrower in Sections 6.1(j), (l) and (p) are true and correct;
(g) with regard to which the granting of a security interest
therein does not contravene or conflict with any law;
(h) which is denominated and payable only in Dollars in the
United States;
(i) which constitutes the legal, valid and binding obligation
of the Obligor of such Receivable enforceable against such Obligor in
accordance with its terms and is not subject to any actual or
reasonably expected Contraction, dispute, offset (except as provided
below), counterclaim or defense whatsoever; provided, however, that if
such actual or reasonably expected Contraction or such dispute, offset,
counterclaim or defense affects only a portion of the Unpaid Net
Balance of such Receivable, then such Receivable may be deemed an
Eligible Receivable to the extent of the portion of such Unpaid Net
Balance which is not so affected;
(j) which, together with any Contract related thereto, does
not contravene in any material respect any laws, rules or regulations
applicable thereto (including, without limitation, laws, rules and
regulations relating to usury, truth in lending, fair credit billing,
fair credit reporting, equal credit opportunity, fair debt collection
practices and privacy) and with respect to which no party to the
Contract related thereto is in violation of any such law, rule or
regulation in any material respect if such violation would impair the
collectibility of such Receivable;
(k) which satisfies in all material respects all applicable
requirements of the applicable Eligible Originator's Credit and
Collection Policy;
72
(l) which is due and payable within 60 days from the invoice
date of such Receivable;
(m) [intentionally omitted];
(n) the original term of which has not been extended (except
as permitted in Section 8.2(c));
(o) which has not been identified, either specifically or as a
member of a class, in a notice by any of the Agents, in the exercise of
its commercially reasonable credit judgment, as a Receivable that is
not acceptable, including, without limitation, because such Receivables
arises under a Contract that is not acceptable to such Agent; and
(p) if the applicable Eligible Originator acquired such
Receivable through a Material Acquisition requiring a Review, the
Administrative Agent has notified the Borrower in writing that (i) such
Receivable is (and other similarly-acquired Receivables are) acceptable
to the Agents based on the satisfactory outcome of such Review, and
(ii) that each Conduit's Rating Agency Condition has been satisfied.
"Employee Benefit Plan" means an employee benefit plan (as
defined in Section 3(3) of ERISA) that is maintained or contributed to by any
ERISA Entity or with respect to which Quest Diagnostics or a Subsidiary could
incur liability.
"Equity Interests" means, with respect to any Person, any and
all shares, interests, participations or other equivalents, including membership
interests (however designated, whether voting or non-voting), of capital of such
Person, including, if such Person is a partnership, partnership interests
(whether general or limited) and any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, such partnership, whether outstanding on the date
hereof or issued after the date of this Agreement.
"Equity Rights" means, with respect to any Person, any
outstanding subscriptions, options, warrants, commitments, preemptive rights or
agreements of any kind (including any stockholders' or voting trust agreements)
for the issuance, sale, registration or voting of, or outstanding securities
convertible into, any additional shares of Equity Interests of any class, or
partnership or other ownership interests of any type in, such Person.
"ERISA" means the United States Employee Retirement Income
Security Act of 1974, as amended.
"ERISA Entity" means any member of an ERISA Group.
"ERISA Event" means (a) any Reportable Event with respect to a
Pension Plan; (b) the existence with respect to any Pension Plan of an
"accumulated funding deficiency" (as defined in Section 412 of the Code or
Section 302 of ERISA), whether or not waived, the failure to make by its due
date a required installment under Section 412(m) of the Code with respect to any
Pension Plan or the failure to make any required contribution to a Multiemployer
Plan; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of
ERISA of an application for a waiver of the minimum funding standard with
respect to any Pension Plan; (d) the incurrence by any ERISA Entity of any
liability
73
under Title IV of ERISA with respect to the termination of any Pension Plan; (e)
the receipt by any ERISA Entity from the PBGC or a plan administrator of any
notice relating to an intention to terminate any Pension Plan or to appoint a
trustee to administer any Pension Plan, or the occurrence of any event or
condition which could constitute grounds under ERISA for the termination of, or
the appointment of a trustee to administer, any Pension Plan; (f) the incurrence
by any ERISA Entity of any liability with respect to the withdrawal or partial
withdrawal from any Pension Plan or Multiemployer Plan; (g) the receipt by an
ERISA Entity of any notice, or the receipt by any Multiemployer Plan from any
ERISA Entity of any notice, concerning the imposition of Withdrawal Liability or
a determination that a Multiemployer Plan is, or is expected to be, insolvent or
in reorganization, within the meaning of Title IV of ERISA; (h) the making of
any amendment to any Pension Plan which could result in the imposition of a lien
or the posting of a bond or other security; or (i) the occurrence of a nonexempt
prohibited transaction (within the meaning of Section 4975 of the Code or
Section 406 of ERISA) which could result in liability to any Loan Party.
"ERISA Group" means any Loan Party and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with such Loan Party, are
treated as a single employer under Section 414 of the Code.
"Eurodollar Loan" means a Loan which bears interest at the
applicable Eurodollar Rate.
"Eurodollar Rate" means, for any Interest Period, the rate per
annum determined on the basis of the offered rate for deposits in Dollars of
amounts equal or comparable to the principal amount of the related Liquidity
Funding offered for a term comparable to such Interest Period, which rates
appear on a Bloomberg L.P. terminal, displayed under the address "US0001M
[Index] Q [Go] effective as of 11:00 a.m., London time, two Business Days prior
to the first day of such Interest Period, provided that if no such offered rates
appear on such page, the Eurodollar Rate for such Interest Period will be the
arithmetic average (rounded upwards, if necessary, to the next higher 1/100th of
1%) of rates quoted by not less than two major banks in New York City, selected
by the Co-Agents, at approximately 10:00 a.m., New York City time, two Business
Days prior to the first day of such Interest Period, for deposits in Dollars
offered by leading European banks for a period comparable to such Interest
Period in an amount comparable to the principal amount of such Liquidity
Funding.
"Eurodollar Rate (Reserve Adjusted)" applicable to any
Interest Period means a rate per annum equal to the quotient obtained (rounded
upwards, if necessary, to the next higher 1/100th of 1%) by dividing (i) the
applicable Eurodollar Rate for such Interest Period by (ii) 1.00 minus the
Eurodollar Reserve Percentage.
"Eurodollar Reserve Percentage" means, with respect to any
Interest Period, the maximum reserve percentage, if any, applicable to a
Liquidity Bank under Regulation D during such Interest Period (or if more than
one percentage shall be applicable, the daily average of such percentages for
those days in such Interest Period during which any such percentage shall be
applicable) for determining such Liquidity Bank's reserve requirement (including
any marginal, supplemental or emergency reserves) with respect to liabilities or
assets having a term comparable to such Interest Period consisting or included
in the computation of "Eurocurrency Liabilities" pursuant to Regulation D.
Without limiting the effect of the foregoing, the Eurodollar Reserve Percentage
shall reflect any other reserves required to be maintained by such Liquidity
Bank by reason of any
74
Regulatory Change against (a) any category of liabilities which includes
deposits by reference to which the "London Interbank Offered Rate" or "LIBOR" is
to be determined or (b) any category of extensions of credit or other assets
which include LIBOR-based credits or assets.
"Event of Default" means an event described in Section 10.1.
"Event of Bankruptcy" shall be deemed to have occurred with
respect to a Person if either:
(a) a case or other proceeding shall be commenced, without the
application or consent of such Person, in any court, seeking the
liquidation, reorganization, debt arrangement, dissolution, winding up,
or composition or readjustment of debts of such Person, the appointment
of a trustee, receiver, custodian, liquidator, assignee, sequestrator
or the like for such Person or all or substantially all of its assets,
or any similar action with respect to such Person under any law
relating to bankruptcy, insolvency, reorganization, winding up or
composition or adjustment of debts, and such case or proceeding shall
continue undismissed, or unstayed and in effect, for a period of 60
consecutive days; or an order for relief in respect of such Person
shall be entered in an involuntary case under the federal bankruptcy
laws or other similar laws now or hereafter in effect; or
(b) such Person shall commence a voluntary case or other
proceeding under any applicable bankruptcy, insolvency, reorganization,
debt arrangement, dissolution or other similar law now or hereafter in
effect, or shall consent to the appointment of or taking possession by
a receiver, liquidator, assignee, trustee, custodian, sequestrator (or
other similar official) for, such Person or for any substantial part of
its property, or shall make any general assignment for the benefit of
creditors, or shall be adjudicated insolvent, or admit in writing its
inability to, pay its debts generally as they become due, or, if a
corporation or similar entity, its board of directors shall vote to
implement any of the foregoing.
"Excess Concentration Amount" means, as of any date, the sum
of the amounts by which the aggregate Unpaid Net Balance of Receivables of each
Obligor exceeds the Obligor Concentration Limit for such Obligor.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Excluded JV Receivable" means any account receivable (and
proceeds thereof) that Quest Diagnostics of Pennsylvania Inc. ("Quest
Pennsylvania") bills in its own name and collects through its own accounts
arising from services for which revenues belong to Quest Diagnostics Venture LLC
under that certain Sharing and General Allocation Agreement dated as of November
1, 1998 by and among Quest Diagnostics Venture LLC, a Pennsylvania limited
liability company, Quest Pennsylvania and UPMC Health System Diversified
Services, Inc., as amended or modified from time to time.
"Exhibit" refers to an exhibit to this Agreement, unless
another document is specifically referenced.
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"Extension Fee" means such amount as the Agents and the
Borrower may agree upon at the time of any Extension Request.
"Extension Request" has the meaning set forth in Section 1.8.
"Facility Fee" has the meaning set forth in the Fee Letters.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the next higher 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that (i) if the day for which such rate is to
be determined is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (ii) if such rate is not so
published for any day, the Federal Funds Rate for such day shall be the average
rate charged to the applicable Co-Agent on such day on such transactions, as
reasonably determined by such Co-Agent.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System, or any successor thereto or to the functions thereof.
"Fee Letters" means, collectively, the La Fayette Fee Letter,
the Jupiter Fee Letter and the Blue Ridge Fee Letter.
"Final Payout Date" means the date on or following the
Termination Date on which the Obligations have been paid in full.
"Foreign Plan" means any employee benefit plan, program,
policy, arrangement or agreement maintained or contributed to by, or entered
into with, Quest Diagnostics or any of its Subsidiaries with respect to
employees employed outside the United States.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such accounting profession, which are applicable to the
circumstances as of the date of determination.
"General Intangible" shall have the meaning specified in
Article 9 of the UCC.
"Government Receivable" means:
(i) any Receivable with respect to which the Obligor is the
United States (or an agency or intermediary thereof) obligated to pay,
pursuant to federal Medicare statutes and regulations, for services
rendered to eligible beneficiaries thereunder,
(ii) any Receivable arising under any state's Medicaid
statutes and regulations, for services rendered to eligible
beneficiaries thereunder,
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(iii) (A) any Receivable with respect to which the Obligor is
the United States (or an agency or fiscal intermediary thereof)
obligated to pay, pursuant to federal statutes and regulations
applicable to The Civilian Health and Medical Program of the Uniform
Services, for services rendered to eligible beneficiaries thereunder
and not in contravention of any statute or regulation applicable
thereto and (B) any Receivable with respect to which the Obligor is any
Person (other than a Governmental Authority) who enters into a contract
with the United States for the provision of health care services
rendered to eligible beneficiaries under The Civilian Health and
Medical Program of the Uniform Services,
(iv) any Receivable with respect to which the Obligor is the
United States (or an agency or fiscal intermediary thereof) obligated
to pay, pursuant to federal statutes and regulations applicable to The
Civilian Health and Medical Program of Veterans Affairs, for services
rendered to eligible beneficiaries thereunder and not in contravention
of any statute or regulation applicable thereto,
(v) any other Receivable as to which the Obligor is a
Governmental Authority,
(vi) any other Receivable as to which payment is required by
law to be made directly to the provider of the services giving rise
thereto or to an account under such provider's exclusive dominion and
control, or
(vii) any other Receivable requiring compliance with the
Federal Assignment of Claims Act or any similar state legislation.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Group" means the Blue Ridge Group, the Jupiter Group or the
La Fayette Group, as the case may be.
"Guarantee" of or by any Person means any obligation,
contingent or otherwise, of such Person guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, and including any
obligation of such Person, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or to
purchase (or to advance or supply funds for the purchase of) any security for
the payment of such Indebtedness, (b) to purchase property, securities or
services for the purpose of assuring the owner of such Indebtedness of the
payment of such Indebtedness or (c) to maintain working capital, equity capital
or other financial statement condition or liquidity of the primary obligor so as
to enable the primary obligor to pay such Indebtedness; provided however that
the term Guarantee shall not include endorsements for collection or deposit, in
either case, in the ordinary course of business.
"HIPAA" has the meaning set forth in Section 14.14.
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"Indebtedness" of any Person means, without duplication, (a)
all obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property or assets purchased by such Person, (e) all obligations of such Person
issued or assumed as the deferred purchase price of property or services (other
than trade payables incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, but limited, if such obligations are without
recourse to such Person, to the lesser of the principal amount of such
Indebtedness or the fair market value of such property, (g) all Guarantees by
such Person of Indebtedness of others, (h) all Capital Lease Obligations of such
Person, (i) all obligations of such Person in respect of interest rate
protection agreements, foreign currency exchange agreements or other interest or
exchange rate hedging arrangements (the amount of any such obligation to be the
amount that would be payable upon the acceleration, termination or liquidation
thereof) and (j) all obligations of such Person as an account party in respect
of letters of credit and bankers' acceptances. The Indebtedness of any Person
shall include the Indebtedness of any partnership in which such Person is a
general partner.
"Indemnified Amounts" has the meaning set forth in Section
13.1(a).
"Indemnified Party" has the meaning set forth in Section
13.1(a).
"Independent Director" has the meaning set forth in Section
7.4(b).
"Interest Payment Date" means:
(a) with respect to any CP Rate Loan of Blue Ridge or Jupiter,
each Settlement Date, and with respect to any CP Rate Loan of La
Fayette, the last day of its CP Tranche Period, the date on which any
such CP Rate Loan is prepaid, in whole or in part, and the Termination
Date;
(b) with respect to any Eurodollar Loan, the last day of its
Interest Period, the date on which any such Loan is prepaid, in whole
or in part, and the Termination Date;
(c) with respect to any Alternate Base Rate Loan, each
Settlement Date while such Loan remains outstanding, the date on which
any such Loan is prepaid, in whole or in part, the date on which the
applicable Liquidity Bank's Scheduled Termination Date occurs, and the
Termination Date; and
(d) with respect to any Loan while the Default Rate is
applicable thereto, upon demand or, in the absence of any such demand,
each Settlement Date while such Loan remains outstanding, the date on
which any such Loan is prepaid, in whole or in part, the Termination
Date, and if the applicable Loan was funded by a Liquidity Bank, the
date on which the applicable Liquidity Bank's Scheduled Termination
Date occurs.
"Interest Period" means, with respect to a Eurodollar Loan, a
period not to exceed three calendar months commencing on a Business Day selected
by the Borrower (or the Servicer on the
78
Borrower's behalf) pursuant to this Agreement and agreed to by the applicable
Co-Agent. Such Interest Period shall end on the day which corresponds
numerically to such date one, two, or three calendar months thereafter,
provided, however, that (i) if there is no such numerically corresponding day in
such next, second or third succeeding calendar month, such Interest Period shall
end on the last Business Day of such next, second or third succeeding calendar
month, and (ii) if an Interest Period would otherwise end on a day which is not
a Business Day, such Interest Period shall end on the next succeeding Business
Day unless said next succeeding Business Day falls in a new calendar month, then
such Interest Period shall end on the immediately preceding Business Day.
"Interest Rate" means a Eurodollar Rate (Reserve Adjusted), a
CP Rate, an Alternate Base Rate or the Default Rate.
"Interest Reserve" means, on any date of determination, 1.5
times the Alternate Base Rate multiplied by a fraction, the numerator of which
is the highest Days Sales Outstanding calculated for each of the most recent 12
calendar months and the denominator of which is 360.
"Invoice" means, with respect to any Receivable, any paper or
electronic xxxx, statement or invoice for services rendered by an Originator to
an Obligor.
"Joinder Agreement" has the meaning set forth in the Sale
Agreement.
"Jupiter" has the meaning provided in the preamble of this
Agreement.
"Jupiter Agent" has the meaning provided in the preamble of
this Agreement.
"Jupiter Allocation Limit" has the meaning set forth in
Section 1.1(c).
"Jupiter Fee Letter" means that certain Jupiter Fee Letter
dated as of September 30, 2003 by and among Quest Diagnostics, the Borrower,
Jupiter and the Jupiter Agent.
"Jupiter Group" has the meaning provided in the preamble of
this Agreement.
"Jupiter Liquidity Agreement" means the Liquidity Asset
Purchase Agreement dated as of September 30, 2003 among Jupiter, the Jupiter
Agent, and the Liquidity Banks from time to time party thereto, as the same may
be amended, restated, supplemented, replaced or otherwise modified from time to
time.
"Jupiter Liquidity Bank" means any Liquidity Bank that enters
into this Agreement and the Jupiter Liquidity Agreement.
"La Fayette" has the meaning provided in the preamble of this
Agreement.
"La Fayette Agent" has the meaning provided in the preamble of
this Agreement.
"La Fayette Allocation Limit" has the meaning set forth in
Section 1.1(b).
"La Fayette Fee Letter" means that certain La Fayette Fee
Letter dated as of September 30, 2003 by and among Quest Diagnostics, the
Borrower, La Fayette and CLNY, as La Fayette Agent.
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"La Fayette Group" has the meaning provided in the preamble of
this Agreement.
"La Fayette Liquidity Agreement" means the Liquidity Asset
Purchase Agreement dated as of July 24, 2002 among La Fayette, the La Fayette
Agent, and the Liquidity Banks from time to time party thereto, as the same may
be amended, restated, supplemented, replaced or otherwise modified from time to
time.
"La Fayette Liquidity Bank" means any Liquidity Bank that now
or hereafter enters into this Agreement and the La Fayette Liquidity Agreement.
"Laws" means, collectively, all common law and all
international, foreign, federal, state and local statutes, treaties, rules,
guidelines, regulations, ordinances, codes and administrative or judicial
precedents, including without limitation the interpretation thereof by any
Governmental Authority charged with the enforcement thereof.
"Lenders" means, collectively, Blue Ridge, the Blue Ridge
Liquidity Xxxxx, Xx Fayette, the La Fayette Liquidity Banks, Jupiter, the
Jupiter Liquidity Banks, and their respective successors and permitted assigns.
"Lien" means any security interest, lien, encumbrance, pledge,
assignment, title retention, similar claim, right or interest.
"Liquidity Agreements" means, collectively, the La Fayette
Liquidity Agreement, the Jupiter Liquidity Agreement and the Blue Ridge
Liquidity Agreement.
"Liquidity Bank" means (a) with respect to Blue Ridge,
Wachovia or any Eligible Assignee of Wachovia's Commitment and Liquidity
Commitment, (b) with respect to La Fayette, CLNY or any Eligible Assignee of
CLNY's Commitment and Liquidity Commitment, and (c) with respect to Jupiter,
Bank One or any Eligible Assignee of Bank One's Commitment and Liquidity
Commitment, in each of the foregoing cases, to which the Borrower has consented
if required under Section 12.1. A Liquidity Bank will become a "Lender"
hereunder at such time as it makes any Liquidity Funding.
"Liquidity Commitment" means, with respect to each Liquidity
Bank, its 364-day commitment to make Liquidity Fundings pursuant to the
Liquidity Agreement to which it is a party.
"Liquidity Funding" means (a) a purchase made by any Liquidity
Bank pursuant to its Liquidity Commitment of all or any portion of, or any
undivided interest in, a Loan of its applicable Conduit, or (b) any Loan made by
the applicable Liquidity Banks in lieu of a Conduit pursuant to Section 1.1.
"Loan" means any loan made by a Lender to the Borrower
pursuant to this Agreement. Each Loan shall either be a CP Rate Loan, an
Alternate Base Rate Loan or a Eurodollar Rate Loan, selected in accordance with
the terms of this Agreement.
"Loan Parties" means, collectively, (i) the Borrower, and (ii)
Quest Diagnostics so long as it is acting as the Servicer (or as a sub-servicer)
hereunder.
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"Lockbox" means any post office box maintained by an
Originator on behalf of the Borrower to which payments on certain Receivables
are mailed.
"Material Acquisition" means that any existing Originator
acquires the Unpaid Net Balance of Receivables of one or more other Persons who
are not existing Eligible Originators, whether by purchase, merger,
consolidation or otherwise, if (i) the aggregate Unpaid Net Balance of
receivables so acquired from any one such Person exceeds 10% of the Allocation
Limit in effect on the date of acquisition, merger or consolidation, or (ii) the
aggregate Unpaid Net Balance of receivables so acquired from all Persons in any
calendar year exceeds (or from all such Persons in any calendar year) exceeds
10% of the weighted average Allocation Limit in effect during such calendar
year.
"Material Adverse Effect" means an event, circumstance,
occurrence, or condition which has caused as of any date of determination any of
(a) a material adverse effect, or any condition or event that has resulted in a
material adverse effect, on the business, operations, financial condition or
assets of (i) the Originators taken as a whole (after taking into account
indemnification obligations by third parties that are Solvent to the extent that
such third party has not disputed (after notice of claim in accordance with the
applicable agreement therefor) liability to make such indemnification payment),
(ii) the Servicer, or (iii) the Borrower, (b) a material adverse effect on the
ability of the Originators, the Servicer or the Borrower to perform when and as
due any of their material obligations under any Transaction Document to which
they are parties, (c) a material adverse effect on the legality, binding effect
or enforceability of any Transaction Document or any of the material rights and
remedies of any of the Agents or Lenders thereunder or the legality, priority,
or enforceability of the Lien on a material portion of the Collateral, or (d) a
material adverse effect upon the validity, enforceability or collectibility of a
material portion of the Receivables.
"Material Proposed Addition" means a Person whom any Loan
Party proposes to add as a "seller" under the Sale Agreement if either (i) the
aggregate Unpaid Net Balance of such Person's receivables (on the proposal date)
exceeds 10% of the weighted average Allocation Limit in effect on the proposal
date, or (ii) the Unpaid Net Balance of such Person's receivables (on such
proposal date), when aggregated with the receivables of all other Persons added
as "sellers" under the Sale Agreement in the same calendar year (measured on the
respective dates such other Persons became "sellers" under the Sale Agreement)
exceeds 10% of the weighted average Allocation Limit in effect during such
calendar year.
"Missing Information Percentage" means (i) for the first 8
Settlement Periods following the date of the initial Advance, the percentage
equal to the ratio of (a) the total number of incomplete requisitions received
in any month by all Originators other than Quest Diagnostics Clinical
Laboratories, to (b) the total number of requisitions resulted in such month by
all Originators other than Quest Diagnostics Clinical Laboratories and (ii) for
all subsequent Settlement Periods, the percentage equal to the ratio of (a) the
total number of incomplete requisitions received in any month by the
Originators, to (b) the total number of requisitions resulted in such month by
the Originators. For this purpose, a requisition (whether in paper or electronic
format) is incomplete if at the time that the test results of a specimen are
reported, the Originator has not been provided sufficient information (whether
from the requisition or otherwise) to xxxx the appropriate part for the test or
other service being performed. As used herein, a "resulted" requisition is one
which is processed and on which its results have been reported.
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"Missing Information Trigger Event" means that the most recent
three-calendar month rolling average Missing Information Percentage at any
Cut-Off Date exceeds 7.00% (it being understood that if a private carrier or
government action imposes any change expected to have an adverse impact on the
information gathering process of the Originators, this percentage will not be
utilized in the calculation of a Missing Information Trigger Event for the 3
Settlement Periods immediately following such change); provided, however, that
regardless of the foregoing, the Borrower and the Co-Agents agree that they will
negotiate in good faith to re-define the "Missing Information Trigger Event"
prior to the 9th Settlement Period following the date of the initial Advance.
"Monthly Report" means a report in the form of Exhibit 3.1(a).
"Monthly Reporting Date" means the 20th day of each calendar
month; provided, however, that if any such day is not a Business Day, then the
Monthly Reporting Date shall occur on the next succeeding Business Day.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan within the
meaning of Section 4001(a)(3) of ERISA (a) to which any ERISA Entity is then
making or accruing an obligation to make contributions, (b) to which any ERISA
Entity has within the preceding five plan years made contributions, including
any Person which ceased to be an ERISA Entity during such five year period, or
(c) with respect to which any Loan Party could incur liability.
"Net Pool Balance" means, at any time, an amount equal to (i)
Net Receivables, minus (ii) Specified Government Ineligibles.
"Net Receivables" means, at any time, an amount equal to the
aggregate Unpaid Net Balance of all Receivables at such time, minus (i) the
aggregate Unpaid Net Balance of all Receivables that are not Eligible
Receivables at such time, minus (ii) Receivables (other than those covered by
any other clause of this definition) that are not yet Delinquent Receivables or
Defaulted Receivables which are owing from any Top 10 Obligor as to which more
than 50% of the aggregate Unpaid Net Balance of all Receivables owing from such
Top 10 Obligor are Defaulted Receivables, minus (iii) the Excess Concentration
Amount at such time, minus (iv) 5% of the aggregate Unpaid Net Balance of all
Receivables owing from Obligors who are not Top 10 Obligors.
"Net Revenues" means, for any calendar month of determination,
the gross amount of Receivables generated by the Originators from Clinical
Laboratory Services during such calendar month less the associated Contractual
Disallowances but before accruals for and write-offs of bad debts.
"Non-Approving Lender" means any Lender that does not approve
(a) an Extension Request, (b) a requested waiver to this Agreement or the Credit
Agreement, or (c) a requested amendment to this Agreement or the Credit
Agreement.
"Non-Assignable Contract" means a Contract that contains a
prohibition on assignment to, among other Persons, Affiliates of the Originator
party thereto.
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"Obligations" means all unpaid principal of and accrued and
unpaid interest on the Loans, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Borrower to the Lenders
(or any Lender), any of the Agents or any Indemnified Party arising under the
Transaction Documents.
"Obligor" means a Person obligated to make payments with
respect to a Receivable, including any guarantor thereof.
"Obligor Concentration Limit" means, at any time, in relation
to the aggregate Unpaid Net Balance of Receivables owed by any single Obligor
and its Affiliated Obligors (if any), the applicable concentration limit shall
(unless each Co-Agent from time to time upon the Borrower's request agrees to a
higher percentage of Eligible Receivables for a particular Obligor and its
Affiliates, which agreement may be conditioned upon an increase in the
percentage set forth in clause (A)(i) of the definition of "Required Reserve" or
upon satisfaction of the Rating Agency Condition) be determined as follows for
Obligors who have short term unsecured debt ratings currently assigned to them
by S&P and Moody's, the applicable concentration limit shall be determined
according to the following table; provided, however, that if such Obligor has a
split rating, the applicable rating will be the lower of the two:
-----------------------------------------------------------------------------------------------
Allowable % of Eligible
S&P Rating Xxxxx'x Rating Receivables
-----------------------------------------------------------------------------------------------
A-1+ P-1 10%
-----------------------------------------------------------------------------------------------
A-1 P-1 8%
-----------------------------------------------------------------------------------------------
A-2 P-2 6%
-----------------------------------------------------------------------------------------------
A-3 P-3 3%
-----------------------------------------------------------------------------------------------
Below A-3 or Not Rated Below P-3 or Not Rated 2%
-----------------------------------------------------------------------------------------------
and provided, further, that (a) unless and until any of the Agents gives the
Borrower 5 Business Days' notice to the contrary, the Obligor Concentration
Limit for Aetna U.S. Healthcare, Inc. and its Affiliated Obligors shall be 6% of
Eligible Receivables and (b) if the change in a particular Obligor's Obligor
Concentration Limit is accomplished by an increase in clause (A)(i) of the
definition of Required Reserve, S&P and Moody's will receive notice of the
increase and the resulting increase in clause (A)(i) of the Required Reserve.
"Organic Document" means, relative to any Person, its
certificate of incorporation, its by-laws, its partnership agreement, its
memorandum and articles of association, its limited liability company agreement
and/or operating agreement, share designations or similar organization documents
and all shareholder agreements, voting trusts and similar arrangements
applicable to any of its authorized Equity Interests.
"Originator" means Quest Diagnostics or any its direct or
indirect wholly-owned Subsidiaries who is or becomes a "seller" under the Sale
Agreement.
"Payment Intangible" means a general intangible under which
the account debtor's principal obligation is a monetary obligation.
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"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Pension Plan" means an employee pension benefit plan (other
than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to
the minimum funding standards under Section 412 of the Code or Section 302 of
ERISA and is maintained or contributed to by any ERISA Entity or with respect to
which any Loan Party could incur liability.
"Percentage" means, for each Group on any date of
determination, the ratio which the sum of the Commitments for all Liquidity
Banks in that Group bears to the Aggregate Commitment.
"Permitted Investments" means, on any date, any one or more of
the following types of investments provided that they mature on or prior to the
next Settlement Date:
(a) marketable obligations of the United States of America,
the full and timely payment of which are backed by the full faith and
credit of the United States of America and which have a maturity of not
more than 270 days from the date of acquisition;
(b) marketable obligations, the full and timely payment of
which are directly and fully guaranteed by the full faith and credit of
the United States of America and which have a maturity of not more than
270 days from the date of acquisition;
(c) bankers' acceptances and certificates of deposit and other
interest-bearing obligations (in each case having a maturity of not
more than 270 days from the date of acquisition) denominated in dollars
and issued by any bank with capital, surplus and undivided profits
aggregating at least $50,000,000, the short-term obligations of which
are rated at least A-1 by S&P and P-1 by Moody's;
(d) repurchase obligations with a term of not more than ten
days for underlying securities of the types described in clauses (a),
(b) and (c) above entered into with any bank of the type described in
clause (c) above;
(e) commercial paper rated at least A-1 by S&P and P-1 by
Moody's; and,
(f) demand deposits, time deposits or certificates of deposit
(having original maturities of no more than 365 days) of depository
institutions or trust companies incorporated under the laws of the
United States of America or any state thereof (or domestic branches of
any foreign bank) and subject to supervision and examination by federal
or state banking or depository institution authorities; provided,
however, that at the time such investment, or the commitment to make
such investment, is entered into, the short-term debt rating of such
depository institution or trust company shall be at least A-1 by S&P
and P-1 by Moody's.
"Person" means any natural person, corporation, firm, joint
venture, partnership, limited liability company, association, enterprise, trust
or other entity or organization, or any government or political subdivision or
any agency, department or instrumentality thereof.
"PHI" has the meaning set forth in Section 14.14.
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"Pooled Commercial Paper" means Commercial Paper Notes of Blue
Ridge or Jupiter subject to any particular pooling arrangement by Blue Ridge or
Jupiter, as the case may be, but excluding Commercial Paper Notes issued by Blue
Ridge or Jupiter, as applicable, for a tenor and in an amount specifically
requested by any Person in connection with any agreement effected by such
Conduit.
"Prepayment Notice" has the meaning set forth in Section
1.5(a).
"Proceedings" means, collectively, lawsuits, arbitrations,
mediations and Congressional or regulatory hearings.
"Prime Rate" means the rate of interest per annum publicly
announced from time to time by Wachovia as its "prime rate." (The "prime rate"
is a rate set by Wachovia based upon various factors including Wachovia's costs
and desired return, general economic conditions and other factors, and is used
as a reference point for pricing some loans, which may be priced at, above, or
below such announced rate.) Any change in the prime rate announced by Wachovia
shall take effect at the opening of business on the day specified in the public
announcement of such change.
"Principal Amount" means the actual net cash proceeds received
by a Conduit upon issuance by it of a Commercial Paper Note.
"Privacy Regulations" has the meaning set forth in Section
14.14.
"Program Information" has the meaning set forth in Section
14.8.
"Property" of a Person means any right, title or interest in
or to property or assets of any kind whatsoever, whether real, personal or mixed
and whether tangible or intangible and including Equity Interests or other
ownership interests of any Person.
"Qualifying Liquidity Bank" means a commercial bank having a
combined capital and surplus of at least $250,000,000 with a rating of its (or
its parent holding company's) short-term securities equal to or higher than (i)
A-1 by S&P and (ii) P-1 by Moody's.
"Quest Diagnostics" has the meaning set forth in the preamble
of this Agreement.
"Ratable Share" means with respect to any Liquidity Bank, the
ratio which its Commitment bears to the Aggregate Commitment.
"Rating Agency Condition" means that each of the Conduits has
received written notice from S&P and Moody's that an amendment, a change or a
waiver will not result in a withdrawal or downgrade of the then current ratings
on such Conduit's Commercial Paper Notes.
"Receivable" means any Account arising from the sale of
Clinical Laboratory Services by an Originator, including, without limitation,
the right to payment of any interest or finance charges and other amounts with
respect thereto, which is sold or contributed to the Borrower under the Sale
Agreement; provided, however, that the term "Receivable" shall not include (a)
any Excluded JV Receivable, or (b) any Government Receivable except a Specified
Government Receivable. Rights to payment arising from any one transaction,
including, without limitation, rights to payment represented
85
by an individual invoice, shall constitute a Receivable separate from a
Receivable consisting of the rights to payment arising from any other
transaction.
"Records" means, collectively, all Invoices and all other
documents, books, records and other information (including, without limitation,
computer programs, tapes, disks, punch cards, data processing software and
related property and rights) relating to any Receivable, Related Asset and/or
Obligor, other than (i) any Contract related thereto, and (ii) any confidential
patient information including, without limitation, test results.
"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor
thereto or other regulation or official interpretation of said Board of
Governors relating to reserve requirements applicable to member banks of the
Federal Reserve System.
"Regulation T, U or X" means Regulation T, U or X of the Board
of Governors of the Federal Reserve System as from time to time in effect and
any successor or other regulation or official interpretation of said Board of
Governors relating to the extension of credit for the purpose of purchasing or
carrying margin stocks.
"Regulatory Change" means any change after the date of this
Agreement in United States (federal, state or municipal) or foreign laws,
regulations (including Regulation D) or accounting principles or the adoption or
making after such date of any interpretations, directives or requests applying
to a class of banks (including the Liquidity Banks) of or under any United
States (federal, state or municipal) or foreign laws, regulations (whether or
not having the force of law) or accounting principles by any court, governmental
or monetary authority, or accounting board or authority (whether or not part of
government) charged with the establishment, interpretation or administration
thereof. For the avoidance of doubt, any interpretation of Accounting Research
Bulletin No. 51 by the Financial Accounting Standards Board shall constitute a
Regulatory Change.
"Related Assets" means (a) all rights to, but not any
obligations under, all Related Security, (b) all rights, interests and remedies
of the Borrower in, to and under the Sale Agreement, including, without
limitation, the security interest of the Borrower in the rights to receive
payments under the Non-Assignable Contracts, (c) all right, title and interest
of the Borrower in and to the Collateral Account (if any) and the balances and
instruments from time to time therein, (d) all right, title and interest of the
Borrower in and to all Lockboxes and Collection Accounts and all balances and
instruments from time to time therein, (e) all of the Borrower's rights to
demand and receive payment in respect of any Demand Advances, and (f) all
Collections in respect of, and other proceeds of, any Receivables or any of the
foregoing.
"Related Security" means, with respect to any Receivable, all
of the Borrower's right, title and interest in and to: (a) the goods (including
returned or repossessed goods), if any, the sale of which by an Originator gave
rise to any portion of such Receivable and all insurance contracts with respect
thereto; (b) all Records; (c) all security deposits and other security interests
or liens and property subject thereto from time to time purporting to secure
payment of such Receivable, whether pursuant to the Contract related to such
Receivable or otherwise; (d) all UCC financing statements covering any
collateral securing payment of such Receivable; and (e) all guarantees and other
86
agreements or arrangements of whatever character from time to time supporting or
securing payment of such Receivable whether pursuant to the Contract related to
such Receivable or otherwise.
"Reportable Event" means any of the events set forth in
Section 4043(c) of ERISA or the regulations thereunder, other than any such
event for which the 30-day notice requirement under ERISA has been waived in
regulations issued by the PBGC.
"Reporting Date" means a Weekly Reporting Date or a Monthly
Reporting Date.
"Required Amounts" has the meaning set forth in Section 3.2.
"Required Day" means, with respect to any event, the Business
Day preceding such event by the Required Notice Period.
"Required Notice Period" means the number of days required
notice set forth below applicable to the aggregate principal reduction indicated
below:
AGGREGATE REDUCTION REQUIRED NOTICE PERIOD
------------------- ----------------------
<25% of the Aggregate Commitment 2 Business Days
25%-50% of the Aggregate Commitment 5 Business Days
>50% of Aggregate Commitment 10 Business Days
"Required Reserve" means, on any day during a Settlement
Period, an amount equal to the product of (A) the greater of (i) 35% and (ii) at
all times while no Missing Information Trigger Event exists and is continuing,
the Contraction Reserve, and at all times while a Missing Information Trigger
Event exists and is continuing, the sum of the Contraction Reserve, the Interest
Reserve and the Servicing Reserve times (B) the Net Pool Balance on such day.
"Requirement of Law" means as to any Person, the Organic
Documents of such Person, and any Law or determination of an arbitrator or any
Governmental Authority, in each case applicable to or binding upon such Person
or any of its Property or to which such Person or any of its Property is
subject.
"Response Date" has the meaning set forth in Section 1.8.
"Review" has the meaning set forth in Section 7.1(c).
"Revolving Period" means, as to each Group, the period from
and after the date of its initial Advance under this Agreement to but excluding
the earlier to occur of (a) the Termination Date, and (b) the last Scheduled
Termination Date of any Liquidity Bank in such Group.
87
"S&P" means Standard and Poor's Ratings Services, a division
of The XxXxxx-Xxxx Companies, Inc.
"Sale Agreement" means the Amended and Restated Receivables
Sale Agreement dated as of September 30, 2003 between each of the Originators,
as a seller and/or contributor, and the Borrower, as purchaser and contributee,
as it may be amended, supplemented or otherwise modified in accordance with
Section 7.3(f).
"Schedule" refers to a specific schedule to this Agreement,
unless another document is specifically referenced.
"Scheduled Termination Date" means, as to each Liquidity Bank,
the earlier to occur of April 21, 2004 and the date on which its Liquidity
Commitment terminates in accordance with the Liquidity Agreement to which it is
a party, in either of the foregoing cases, unless extended by agreement of such
Liquidity Bank in accordance with Section 1.8.
"SEC" means the Securities and Exchange Commission.
"Section" means a numbered section of this Agreement, unless
another document is specifically referenced.
"Secured Parties" means the Indemnified Parties.
"Security Regulations" has the meaning set forth in Section
14.14.
"Servicer" has the meaning set forth in the preamble of this
Agreement.
"Servicer Transfer Event" means the occurrence of any Event of
Default.
"Servicer's Fee" accrued for any day in a Settlement Period
means:
(a) an amount equal to (x) 5.0% per annum (or, at any time
while Quest Diagnostics is the Servicer, such lesser percentage as may
be agreed between the Borrower and the Servicer on an arms' length
basis based on then prevailing market terms for similar services),
times (y) the aggregate Unpaid Net Balance of the Receivables at the
close of business on the first day of such Settlement Period, times (z)
1/360; or
(b) on and after the Servicer's reasonable request made at any
time when Quest Diagnostics shall no longer be the Servicer, an
alternative amount specified by the Servicer not exceeding (x) 110% of
the Servicer's costs and expenses of performing its obligations under
the Agreement during the Settlement Period when such day occurs,
divided by (y) the number of days in such Settlement Period.
"Servicing Reserve" means the product of 3.0% and a fraction,
the numerator of which is the highest Days Sales Outstanding calculated for each
of the most recent 12 calendar months and the denominator of which is 360.
88
"Settlement Date" means (a) the second Business Day after each
Monthly Reporting Date, (b) such other Business Days as the Co-Agents may
specify by written notice to the Lenders, the Borrower and the Servicer, and (c)
the Termination Date.
"Settlement Period" means: (a) the period from and including
the date of the initial Advance to but excluding the next Cut-Off Date; and (b)
thereafter, each period from and including a Cut-Off Date to the earlier to
occur of the next Cut-Off Date or the Final Payout Date.
"Solvent" and "Solvency" means, for any Person on a particular
date, that on such date (a) 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, (b) 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, (c) such Person does not intend to, and does not believe that it
will, incur debts and liabilities beyond such Person's ability to pay such debts
and liabilities as they mature and (d) such Person is not engaged in a business
or a transaction, and is not about to engage in a business or a transaction, for
which such Person's Property would constitute an unreasonably small capital.
"Specified Government Ineligibles" means, on any date of
determination, 27% times Client-Billed Receivables for the Reserve Computation
as of the last day of the calendar month then most recently ended.
"Specified Government Receivable" means a Government
Receivable as to which the Obligor is a state or local Governmental Authority
(other than a Receivable arising under any state's Medicaid statutes and
regulations for services rendered to eligible beneficiaries thereunder).
"Subordinated Loan" has the meaning set forth in the Sale
Agreement.
"Subordinated Note" has the meaning set forth in the Sale
Agreement.
"Subsidiary" means, with respect to any Person, any
corporation, partnership or other entity of which at least a majority of the
securities or other ownership interests having by the terms thereof ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions of such corporation, partnership or other entity
(irrespective of whether or not at the time securities or other ownership
interests of any other class or classes of such corporation, partnership or
other entity shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned or controlled by
such Person and/or one or more Subsidiaries of such Person.
"Successor Notice" has the meaning set forth in Section
8.1(b).
"Taxes" means any and all taxes, imposts, duties, charges,
fees, levies or other similar charges or assessments, including income, gross
receipts, excise, real or personal property, sales, withholding, social
security, retirement, unemployment, occupation, use, service, license, net
worth, payroll, franchise, and transfer and recording, imposed by the Internal
Revenue Service or any taxing authority (whether domestic or foreign, including
any federal, state, U.S. possession, county, local or foreign government or any
subdivision or taxing agency thereof), whether computed on a separate,
consolidated, unitary, combined or any other basis, including interest, fines,
penalties or additions to
89
tax attributable to or imposed on or with respect to any such taxes, charges,
fees, levies or other assessments.
"Termination Date" means the earliest to occur of: (a) the
last Scheduled Termination Date of any Liquidity Bank; (b) the date designated
by the Borrower as the "Termination Date" on not less than fifteen (15) Business
Days' notice to the Co-Agents, provided that on such date the Obligations have
been paid in full; (c) the date specified in Section 10.2(a) or (b) (including,
without limitation, any such specified date following any Co-Agent's failure to
approve a requested waiver hereunder); (d) the 90th day after the Co-Agents
receive a copy of any proposed amendment (but not waiver) to the Credit
Agreement which does not become an Approved Amendment within 30 days after such
date of receipt; and (e) the 90th day after any requested amendment to this
Agreement (as opposed to a requested waiver hereunder) is not approved by each
Co-Agent within 30 days after receipt of such request (unless such proposed
amendment is approved by at least one Co-Agent and the Obligations owing the
dissenting Co-Agent(s)'s Group(s) are paid in full on or within 60 days after
such 30th day).
"Top 10 Obligor" means any of the following and its Affiliates
considered as if it and its Affiliates were one and the same entity: (1) United
Healthcare, (2) Aetna / US Healthcare / Prudential, (3) Cigna, (4) Independence
Blue Cross / Amerihealth, (5) Private Health Care Systems (PHCS), (6) Beech
Street, (7) Humana, (8) Anthem Health, (9) Empire BCBS, and (10) BCBS Mass.
"Transaction Documents" means this Agreement, the Collection
Account Agreements, the Sale Agreement, the Fee Letters, the Subordinated Notes
and the other documents to be executed and delivered in connection herewith or
therewith.
"UCC" means the Uniform Commercial Code as from time to time
in effect in the applicable jurisdiction or jurisdictions.
"Unmatured Default" means an event which but for the lapse of
time or the giving of notice, or both, would constitute an Event of Default.
"Unpaid Net Balance" of any Receivable means at any time (a)
the unpaid amount thereof, but excluding all late payment charges, delinquency
charges and extension or collection fees, minus (b) Contractual Disallowances.
"Usage Fee" has the meaning set forth in each of the Fee
Letters.
"Wachovia" has the meaning set forth in the preamble of this
Agreement.
"Wachovia Roles" has the meaning set forth in Section
11.10(a).
"Weekly Report" means a report in the form of Exhibit 3.1(b).
"Weekly Reporting Date" means, with respect to any week in
which Weekly Reports are required to be delivered hereunder by not less than
five days' notice to the Servicer from any two (2) of the Co-Agents, the second
Monday following the end of each week following the last day of such notice
period; provided, however, that if any such Monday is not a Business Day, then
the Weekly Reporting Date shall be the next succeeding Business Day.
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The foregoing definitions shall be equally applicable to both
the singular and plural forms of the defined terms.
B. Other Terms. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP. All terms used in Article 9
of the UCC in the State of New York, and not specifically defined herein, are
used herein as defined in such Article 9.
C. Computation of Time Periods. Unless otherwise stated in
this Agreement, in the computation of a period of time from a specified date to
a later specified date, the word "from" means "from and including" and the words
"to" and "until" each mean "to but excluding".
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