Exhibit 10.28
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CREDIT AND SECURITY AGREEMENT
DATED AS OF JULY 21, 2000
AMONG
QUEST DIAGNOSTICS RECEIVABLES INC., AS BORROWER,
QUEST DIAGNOSTICS INCORPORATED, AS INITIAL SERVICER,
EACH OF THE LENDERS FROM TIME TO TIME PARTY HERETO,
AND
WACHOVIA BANK, N.A.,
AS ADMINISTRATIVE AGENT
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TABLE OF CONTENTS
PAGE
ARTICLE I - THE CREDIT............................................................................................7
SECTION 1.1 THE FACILITY......................................................................................7
SECTION 1.2 RATABLE LOANS; FUNDING MECHANICS; LIQUIDITY FUNDINGS..............................................7
SECTION 1.3 INTEREST RATES....................................................................................8
SECTION 1.4 PAYMENT DATES; NOTELESS AGREEMENT.................................................................9
SECTION 1.5 PREPAYMENTS.......................................................................................9
SECTION 1.6 REDUCTIONS IN AGGREGATE COMMITMENT...............................................................10
SECTION 1.7 REQUESTS FOR INCREASES IN AGGREGATE COMMITMENT...................................................10
SECTION 1.8 EXTENSION OF THE SCHEDULED TERMINATION DATE......................................................11
SECTION 1.9 DISTRIBUTION OF CERTAIN NOTICES; NOTIFICATION OF INTEREST RATES..................................12
ARTICLE II - BORROWING AND PAYMENT MECHANICS; CERTAIN COMPUTATIONS...............................................12
SECTION 2.1 METHOD OF BORROWING..............................................................................12
SECTION 2.2 SELECTION OF CP TRANCHE PERIODS AND INTEREST PERIODS.............................................12
SECTION 2.3 COMPUTATION OF CONCENTRATION LIMITS AND UNPAID NET BALANCE.......................................13
SECTION 2.4 MAXIMUM INTEREST RATE............................................................................13
SECTION 2.5 PAYMENTS AND COMPUTATIONS, ETC...................................................................13
(a) PAYMENTS...............................................................................................13
(b) LATE PAYMENTS..........................................................................................13
(c) METHOD OF COMPUTATION..................................................................................14
(d) AVOIDANCE OR RECISSION OF PAYMENTS.....................................................................14
SECTION 2.6 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT.................................................14
ARTICLE III - SETTLEMENTS........................................................................................14
SECTION 3.1 REPORTING........................................................................................14
(a) MONTHLY REPORTS........................................................................................14
(b) WEEKLY REPORTS; RIGHT TO REQUEST CASH COLLATERAL PAYMENT COMPUTATION...................................14
(c) INTEREST; OTHER AMOUNTS DUE............................................................................15
SECTION 3.2 TURNOVER OF COLLECTIONS..........................................................................15
SECTION 3.3 NON-DISTRIBUTION OF SERVICER'S FEE...............................................................16
SECTION 3.4 DEEMED COLLECTIONS...............................................................................16
ARTICLE IV - FEES AND YIELD PROTECTION...........................................................................17
SECTION 4.1 FEES .......................................................................................17
SECTION 4.2 YIELD PROTECTION.................................................................................17
SECTION 4.3 FUNDING LOSSES...................................................................................20
ARTICLE V - CONDITIONS OF ADVANCES...............................................................................20
SECTION 5.1 CONDITIONS PRECEDENT TO INITIAL ADVANCE..........................................................22
SECTION 5.2 CONDITIONS PRECEDENT TO ALL ADVANCES.............................................................23
ARTICLE VI - REPRESENTATIONS AND WARRANTIES......................................................................23
SECTION 6.1 REPRESENTATIONS AND WARRANTIES OF LOAN PARTIES...................................................23
(a) OWNERSHIP OF THE BORROWER..............................................................................23
(b) EXISTENCE; DUE QUALIFICATION; PERMITS..................................................................23
(c) ACTION.................................................................................................23
(d) ABSENCE OF DEFAULT.....................................................................................24
(e) NONCONTRAVENTION.......................................................................................24
(f) NO PROCEEDINGS.........................................................................................24
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(g) TAXES..................................................................................................25
(h) GOVERNMENT APPROVALS...................................................................................25
(i) FINANCIAL STATEMENTS AND ABSENCE OF CERTAIN MATERIAL ADVERSE CHANGES...................................25
(j) NATURE OF RECEIVABLES..................................................................................26
(k) MARGIN REGULATIONS.....................................................................................26
(l) QUALITY OF TITLE.......................................................................................27
(m) ACCURATE REPORTS.......................................................................................27
(n) OFFICES................................................................................................27
(o) COLLECTION ACCOUNTS....................................................................................28
(p) ELIGIBLE RECEIVABLES...................................................................................28
(q) ERISA..................................................................................................28
(r) NAMES..................................................................................................29
(s) CREDIT AND COLLECTION POLICY...........................................................................29
(t) PAYMENTS TO APPLICABLE ORIGINATOR......................................................................29
(u) INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY ACT; OTHER RESTRICTIONS.........................29
(v) BORROWING BASE; SOLVENCY...............................................................................29
ARTICLE VII - GENERAL COVENANTS OF LOAN PARTIES..................................................................29
SECTION 7.1 AFFIRMATIVE COVENANTS OF LOAN PARTIES............................................................30
(a) COMPLIANCE WITH LAWS, ETC..............................................................................30
(b) PRESERVATION OF EXISTENCE..............................................................................30
(c) AUDITS.................................................................................................30
(d) KEEPING OF RECORDS AND BOOKS OF ACCOUNT................................................................30
(e) PERFORMANCE AND COMPLIANCE WITH RECEIVABLES, INVOICES AND CONTRACTS....................................30
(f) LOCATION OF RECORDS....................................................................................30
(g) CREDIT AND COLLECTION POLICIES.........................................................................31
(h) SALE AGREEMENT.........................................................................................31
(i) COLLECTIONS............................................................................................31
(j) FURTHER ASSURANCES.....................................................................................32
SECTION 7.2 REPORTING REQUIREMENTS OF LOAN PARTIES...........................................................32
(a) QUARTERLY FINANCIAL STATEMENTS.........................................................................32
(b) ANNUAL FINANCIAL STATEMENTS............................................................................32
(c) REPORTS TO SEC AND EXCHANGES...........................................................................32
(d) ERISA..................................................................................................32
(e) EVENTS OF DEFAULT, ETC.................................................................................32
(f) LITIGATION.............................................................................................33
(g) REVIEWS OF RECEIVABLES.................................................................................33
(h) CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY.....................................................33
(i) DOWNGRADE..............................................................................................33
(j) OTHER..................................................................................................33
SECTION 7.3 NEGATIVE COVENANTS OF LOAN PARTIES...............................................................33
(a) SALES, LIENS, ETC......................................................................................33
(b) EXTENSION OR AMENDMENT OF RECEIVABLES..................................................................34
(c) CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY.....................................................34
(d) CHANGE IN PAYMENT INSTRUCTIONS TO OBLIGORS.............................................................34
(e) DEPOSITS TO ACCOUNTS...................................................................................34
(f) CHANGES TO OTHER DOCUMENTS.............................................................................34
(g) RESTRICTED PAYMENTS BY THE BORROWER....................................................................34
(h) BORROWER INDEBTEDNESS..................................................................................35
(i) PROHIBITION ON ADDITIONAL NEGATIVE PLEDGES.............................................................35
(j) NAME CHANGE, OFFICES, RECORDS AND BOOKS OF ACCOUNTS....................................................35
(k) MERGERS, CONSOLIDATIONS AND ACQUISITIONS...............................................................35
(l) DISPOSITION OF RECEIVABLES AND RELATED ASSETS..........................................................35
(m) BORROWING BASE.........................................................................................36
SECTION 7.4 SEPARATE EXISTENCE OF THE BORROWER...............................................................36
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ARTICLE VIII - ADMINISTRATION AND COLLECTION.....................................................................38
SECTION 8.1 DESIGNATION OF SERVICER..........................................................................38
(a) QUEST DIAGNOSTICS AS INITIAL SERVICER..................................................................38
(b) SUCCESSOR NOTICE; SERVICER TRANSFER EVENTS.............................................................38
(c) SUBCONTRACTS...........................................................................................39
(d) EXPENSE INDEMNITY AFTER A SERVICER TRANSFER EVENT......................................................39
SECTION 8.2 DUTIES OF SERVICER...............................................................................40
(a) APPOINTMENT; DUTIES IN GENERAL.........................................................................40
(b) SEGREGATION OF COLLECTIONS.............................................................................40
(c) MODIFICATION OF RECEIVABLES............................................................................40
(d) DOCUMENTS AND RECORDS..................................................................................40
(e) CERTAIN DUTIES TO THE BORROWER.........................................................................40
(f) TERMINATION............................................................................................40
(g) POWER OF ATTORNEY......................................................................................41
SECTION 8.3 RIGHTS OF THE ADMINISTRATIVE AGENT...............................................................41
(a) NOTICE TO OBLIGORS.....................................................................................41
(b) NOTICE TO LOCKBOX BANKS................................................................................41
(c) RIGHTS ON SERVICER TRANSFER EVENT......................................................................41
SECTION 8.4 RESPONSIBILITIES OF LOAN PARTIES.................................................................42
(a) CONTRACTS..............................................................................................42
(b) LIMITATION OF LIABILITY................................................................................42
SECTION 8.5 FURTHER ACTION EVIDENCING THE SECURITY INTEREST..................................................42
(a) FURTHER ASSURANCES.....................................................................................42
(b) ADDITIONAL FINANCING STATEMENTS; CONTINUATION STATEMENTS; PERFORMANCE BY ADMINISTRATIVE AGENT..........42
SECTION 8.6 APPLICATION OF COLLECTIONS.......................................................................43
ARTICLE IX - SECURITY INTEREST...................................................................................43
SECTION 9.1 GRANT OF SECURITY INTEREST.......................................................................43
SECTION 9.2 TERMINATION AFTER FINAL PAYOUT DATE..............................................................43
SECTION 9.3 LIMITATION ON RIGHTS TO COLLATERAL PROCEEDS......................................................43
ARTICLE X - EVENTS OF DEFAULT....................................................................................44
SECTION 10.1 EVENTS OF DEFAULT...............................................................................44
SECTION 10.2 REMEDIES .......................................................................................46
(a) OPTIONAL ACCELERATION..................................................................................46
(b) AUTOMATIC ACCELERATION.................................................................................46
(c) ADDITIONAL REMEDIES....................................................................................47
ARTICLE XI - THE ADMINISTRATIVE AGENT............................................................................47
SECTION 11.1 APPOINTMENT.....................................................................................47
SECTION 11.2 DELEGATION OF DUTIES............................................................................47
SECTION 11.3 EXCULPATORY PROVISIONS..........................................................................47
SECTION 11.4 RELIANCE BY ADMINISTRATIVE AGENT................................................................47
SECTION 11.5 NOTICE OF EVENTS OF DEFAULT.....................................................................48
SECTION 11.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS..........................................48
SECTION 11.7 INDEMNIFICATION OF ADMINISTRATIVE AGENT.........................................................49
SECTION 11.8 ADMINISTRATIVE AGENT IN THEIR INDIVIDUAL CAPACITIES.............................................49
SECTION 11.9 SUCCESSOR ADMINISTRATIVE AGENT..................................................................50
SECTION 11.10 CONFLICT WAIVERS...............................................................................50
SECTION 11.11 UCC FILINGS....................................................................................50
ARTICLE XII - ASSIGNMENTS AND PARTICIPATIONS.....................................................................51
SECTION 12.1 RESTRICTIONS ON ASSIGNMENTS, ETC................................................................51
SECTION 12.2 RIGHTS OF ASSIGNEES AND PARTICIPANTS............................................................52
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SECTION 12.3 TERMS AND EVIDENCE OF ASSIGNMENT................................................................52
ARTICLE XIII - INDEMNIFICATION...................................................................................52
SECTION 13.1 INDEMNITIES BY THE BORROWER.....................................................................52
(a) GENERAL INDEMNITY......................................................................................52
(b) CONTEST OF TAX CLAIM; AFTER-TAX BASIS..................................................................54
(c) CONTRIBUTION...........................................................................................55
SECTION 13.2INDEMNITIES BY SERVICER..........................................................................55
ARTICLE XIV - MISCELLANEOUS......................................................................................56
SECTION 14.1 AMENDMENTS, ETC.................................................................................56
SECTION 14.2 NOTICES, ETC....................................................................................56
SECTION 14.3 NO WAIVER; REMEDIES.............................................................................56
SECTION 14.4 BINDING EFFECT; SURVIVAL........................................................................57
SECTION 14.5 COSTS, EXPENSES AND STAMP TAXES.................................................................57
SECTION 14.6 NO PROCEEDINGS..................................................................................58
SECTION 14.7 CONFIDENTIALITY OF BORROWER INFORMATION.........................................................59
SECTION 14.8 CONFIDENTIALITY OF PROGRAM INFORMATION..........................................................59
(a) CONFIDENTIAL INFORMATION...............................................................................60
(b) AVAILABILITY OF CONFIDENTIAL INFORMATION...............................................................60
(c) LEGAL COMPULSION TO DISCLOSE...........................................................................60
(d) SURVIVAL...............................................................................................60
SECTION 14.9 CAPTIONS AND CROSS REFERENCES...................................................................60
SECTION 14.10 INTEGRATION....................................................................................61
SECTION 14.11 GOVERNING LAW..................................................................................61
SECTION 14.12 WAIVER OF JURY TRIAL...........................................................................61
SECTION 14.13 CONSENT TO JURISDICTION; WAIVER OF IMMUNITIES..................................................61
SECTION 14.14 EXECUTION IN COUNTERPARTS......................................................................62
SECTION 14.15 NO RECOURSE AGAINST OTHER PARTIES..............................................................62
ANNEXES, EXHIBITS AND SCHEDULES
ANNEX A: DEFINITIONS.............................................................................65
EXHIBIT A: FORM OF COLLECTION ACCOUNT AGREEMENT....................................................
EXHIBIT 2.1: FORM OF BORROWING REQUEST...............................................................
EXHIBIT 3.1(A): FORM OF MONTHLY REPORT..................................................................
EXHIBIT 3.1(B): FORM OF WEEKLY REPORT...................................................................
EXHIBIT 5.1(H): SUBSTANCE OF CORPORATE/UCC OPINIONS.....................................................
SCHEDULE 6.1(N): FEDERAL TAXPAYER ID NUMBER, CHIEF EXECUTIVE OFFICE, PRINCIPAL PLACE(S) OF BUSINESS AND
OTHER RECORDS LOCATION(S)...............................................................
SCHEDULE 6.1(O): LOCKBOXES AND ASSOCIATED ACCOUNTS.......................................................
SCHEDULE 14.2: NOTICE ADDRESSES AND WIRE TRANSFER INFORMATION..........................................
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CREDIT AND SECURITY AGREEMENT
THIS CREDIT AND SECURITY AGREEMENT is entered into as of July
21, 2000, 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"), and WACHOVIA
BANK, N.A., a national banking association, in its capacity as a
Liquidity Bank to Blue Ridge (together with its successors,
"WACHOVIA"), as Lenders (hereinafter defined), and
(4) WACHOVIA BANK, N.A., as administrative agent for the
Lenders (in such capacity, together with any successors thereto in such
capacity, the "ADMINISTRATIVE AGENT").
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 has requested that the Lenders make
revolving loans to the Borrower from time to time hereafter secured by
the Collateral, and, subject to the terms and conditions contained in
this Agreement, Blue Ridge is willing to make such secured loans on an
uncommitted basis, and the Liquidity Banks are willing to make such
secured loans on a committed basis;
WHEREAS, the Lenders have requested that Quest Diagnostics act
as the initial Servicer for the Collateral, and, subject to the terms
and conditions contained in this Agreement, Quest Diagnostics is
willing to act in such capacity; PROVIDED, HOWEVER, that Quest
Diagnostics has advised the Administrative Agent and the Lenders that
it may wish to designate an alternate Affiliate to serve as the
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Servicer, subject to approval of the Administrative Agent and to
satisfaction of the Rating Agency Condition, and
WHEREAS, Wachovia has been requested, and is willing, to act
as the Administrative Agent under this Agreement.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein contained, the parties hereto hereby agree as follows:
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 Administrative Agent in
accordance with Section 2.1. Upon receipt of a copy of each Borrowing Request
from the Borrower (or the Servicer, on the Borrower's behalf), the
Administrative Agent shall determine whether Blue Ridge will fund all or any
portion of the requested Advance, and in the event that Blue Ridge elects not to
make all or any part of such Advance, the Administrative Agent shall promptly
notify the Borrower and, unless the Borrower cancels its Borrowing Request, each
of the Liquidity Banks severally agrees to make its Ratable Share of such
Advance to the Borrower, on the terms and subject to the conditions hereof,
PROVIDED THAT at no time may the aggregate principal amount of the Advances at
any one time outstanding exceed the lesser of the Aggregate Commitment and the
Borrowing Base (such lesser amount, the "ALLOCATION LIMIT"). Each Advance shall
be in the minimum amount of $1,000,000 or a larger integral multiple of
$500,000. All Liquidity Banks' Commitments to make Loans hereunder shall
terminate on 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 RATABLE LOANS; FUNDING MECHANICS; LIQUIDITY
FUNDINGS.
(a) Each Advance hereunder shall consist of one or more Loans
made by Blue Ridge and/or the Liquidity Banks.
(b) Each Lender funding any Loan shall wire transfer the
principal amount of its Loan to the Administrative 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, the
Administrative 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.
(c) While it is the intent of Blue Ridge to fund each
requested Advance through the issuance of one or more tranches of Commercial
Paper Notes, the parties acknowledge that if Blue Ridge 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, Blue Ridge may put all or any portion of its
Loans to the
7
Liquidity Banks at any time pursuant to the 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. 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. 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.
(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.
(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 Margin 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 in full 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 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.
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Section 1.4 PAYMENT DATES; NOTELESS AGREEMENT.
(a) The Borrower promises to pay each CP Rate Loan on the last
day of its CP Tranche Period.
(b) The Borrower promises to pay each Eurodollar Loan on the
last day of its Interest Period.
(c) The Borrower promises to pay each Alternate Base Rate
Loan, together with all accrued and unpaid interest thereon, on or before the
earlier to occur of (i) the Termination Date, and (ii) 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(s).
(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 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.
(f) If the Administrative Agent is required to make any
indemnity payment or reimbursement to any Collection Bank pursuant to a
Collection Account Agreement, the Borrower will reimburse the Administrative
Agent for the amount of such payment or reimbursement not later than the next
Settlement Date, and the Borrower's obligations hereunder shall constitute part
of the Obligations and shall be secured by the Collateral.
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 Administrative Agent (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 thereon and is made ratably amongst the Lenders; and
(b) If on any Business Day, the aggregate outstanding
principal amount of the Advances (whether funded by Blue Ridge or through
Liquidity Fundings) exceeds the Allocation Limit, the Borrower shall prepay the
Advances by wire transfer to the Administrative Agent received not later than
12:00 noon (New York City time) on the first Business Day thereafter of
9
an amount sufficient to eliminate such excess, together with accrued and unpaid
interest on the amount prepaid.
Upon receipt of any wire transfer pursuant to Section 1.5(a) or (b), the
Administrative Agent shall wire transfer to the 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) shall be applied first, to
the ratable reduction of any Alternate Base Rate Loans outstanding, second, to
the ratable reduction of any Eurodollar Loans outstanding, and last, to the
reduction of 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 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 Administrative
Agent (each, a "COMMITMENT REDUCTION NOTICE"), which notice shall specify the
aggregate amount of any such reduction; 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 Aggregate Commitment may not be
reduced below $25,000,000 unless it 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 Administrative Agent.
Section 1.7 REQUESTS FOR INCREASES IN AGGREGATE COMMITMENT.
(a) Subject to Section 1.7(b) below: (i) 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' (or such lesser time as the Administrative Agent may approve) prior
written notice to the Administrative Agent specifying the amount of and proposed
effective date for any such requested increase (each, a "COMMITMENT INCREASE
REQUEST"); (ii) if (A) with respect to any request to increase the Aggregate
Commitment up to $350,000,000, the Administrative Agent and each directly
affected Liquidity Bank, or (B) with respect to any request to increase the
Aggregate Commitment in excess of $350,000,000, the Administrative Agent and all
of the Liquidity Banks, agree to the requested increase by notifying the
Borrower in writing of their concurrence, then such adjustments shall be made to
the Commitments of the Liquidity Banks, ratably in accordance with their
respective Ratable Shares, as of the effective date specified in the Commitment
Increase Request, and (iii) if (A) with respect to any request to increase the
Aggregate Commitment up to $350,000,000, the Administrative Agent and each
directly affected Liquidity Bank, or (B) with respect to any request to increase
the Aggregate Commitment in excess of $350,000,000, the Administrative Agent or
any Liquidity Bank declines such request, the amount of the Aggregate Commitment
shall remain the same.
(b) Notwithstanding the foregoing, if any increase in the
Aggregate Commitment is requested prior to September 30, 2000, the Loan Parties
acknowledge that on September 30, 2000, Wachovia's Commitment shall
automatically reduce to $225,000,000, and that the first $31,000,000 of such new
Lenders'
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Commitments will reduce Wachovia's Commitment on a dollar-for-dollar basis, and
thereafter, 50% of such new Lenders' Commitments will reduce Wachovia's
Commitment (until such time as it is reduced to $150,000,000), and the remainder
will increase the Aggregate Commitment until it reaches $350,000,000. If one or
more new Lenders joins this Agreement after September 30, 2000, 50% of such new
Lenders' Commitments will reduce Wachovia's Commitment (until such time as it is
reduced to $150,000,000), and the remainder will increase the Aggregate
Commitment until it reaches $350,000,000.
Section 1.8 EXTENSION OF THE SCHEDULED TERMINATION DATE.
Provided that no Unmatured Default or Event of Default exists and is continuing,
the Borrower may request an extension of the Scheduled Termination Date by
submitting a request for an extension (each, an "EXTENSION REQUEST") to the
Administrative Agent no more than 210 days prior to the Scheduled Termination
Date then in effect, together with a fully-earned and non-refundable fee of
$5,000 (the "EXTENSION REQUEST FEE"). Each Extension Request must specify the
new Scheduled Termination Date requested by the Borrower and the date (which
must be at least 30 days after the Extension Request is delivered to the
Administrative Agent) as of which the Administrative Agent and the Liquidity
Banks must respond to the Extension Request (the "RESPONSE DATE"). The new
Scheduled Termination Date shall be no more than 364 days after the Response
Date, including the Response Date as one of the days in the calculation of the
days elapsed. Promptly upon receipt of an Extension Request and the Extension
Request Fee, the Administrative Agent shall notify the Lenders of the contents
thereof and shall request each Lender to approve the Extension Request. Each
Lender approving the Extension Request shall deliver its written approval to the
Administrative Agent no later than the Response Date, whereupon the
Administrative Agent shall notify the Borrower within one (1) Business Day
thereafter as to whether all of the Lenders have approved the Extension Request.
If all of the Lenders have approved the Extension Request, the Scheduled
Termination Date specified in the Extension Request shall become effective on
such Response Date, and the Administrative Agent shall promptly notify the
Borrower and the Lenders of the new Scheduled Termination Date. If any Liquidity
Bank does not agree to an Extension Request, the Scheduled Termination Date
shall not be extended for such Liquidity Bank, and the Borrower shall have the
right to require such Liquidity Bank to assign all, but not less than all, of
its Commitment and outstanding Obligations by entering into an assignment with
one or more Eligible Assignees in accordance with the provisions of Section
12.1(c), to which the extended Scheduled Termination Date shall apply. Each such
assignment to an Eligible Assignee shall become effective on the date set forth
in the applicable assignment agreement, and subject to receipt of payment in
full on such existing Scheduled Termination Date for all such Obligations, the
non-extending Lender shall make such assignment. In the event that no Eligible
Assignee is identified that is willing to accept an assignment of the Commitment
and Obligations of a Liquidity Bank that does not agree to an Extension Request,
such Liquidity Bank's Commitment will terminate on the existing Scheduled
Termination Date and the Aggregate Commitment will be reduced by such amount on
such date.
Section 1.9 DISTRIBUTION OF CERTAIN NOTICES; NOTIFICATION OF
INTEREST RATES. Promptly after receipt thereof, the Administrative Agent will
notify the Lenders of the contents of each Monthly Report, Weekly Report,
computation of Cash Collateral Payment, 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.
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In addition, the Administrative Agent shall promptly notify the applicable
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 Administrative Agent
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 Lender shall make available its Loan or Loans in immediately available
funds to the Administrative 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, the Administrative Agent will wire transfer the funds so received
from the 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 the Administrative Agent 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 (or, in the case of
Liquidity Fundings, Interest Periods) from time to time to apply to each
Lender's CP Rate Loans or Eurodollar Loans, as applicable; PROVIDED, HOWEVER,
that (i) at least one CP Tranche Period or one Interest Period shall mature on
each Settlement Date, and (ii) no CP Tranche Period or Interest Period which
began prior to the Scheduled Termination Date shall extend beyond the Scheduled
Termination Date.
(b) While, except during the continuance of an Event of
Default, the Administrative Agent will use reasonable efforts to accommodate the
Borrower's or the Servicer's requests for CP Tranche Periods or Interest
Periods, the Administrative Agent shall have the right to subdivide any
requested Advance into one or more Loans of different CP Tranche Periods or
Interest Periods, as the case may be, or, if the requested period is not
feasible, to suggest an alternative CP Tranche Period or Interest Period,
PROVIDED THAT 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 the Administrative Agent 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 the Administrative Agent shall have received
written notice by 12:00 noon (New York City time) on the second (2nd) Business
Day prior to the last day of a CP Tranche Period that the Borrower intends to
reduce the aggregate principal amount of the CP
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Rate Loans outstanding, Blue Ridge 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 selected by the Administrative Agent;
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 Blue Ridge 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 Administrative Agent 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 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 the Administrative Agent
or any of the 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 Administrative Agent at its address specified in
Schedule 14.2, and, to the extent such payment is for the account of any Lender,
the Administrative Agent shall promptly disburse such funds to the appropriate
Lender(s).
(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 Administrative Agent for the account of each Person 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,
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the Servicer or the Administrative Agent 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 RECISSION 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 ADMINISTRATIVE AGENT.
Unless a Lender notifies the Administrative Agent prior to the date and time on
which it is scheduled to fund a Loan that it does not intend to fund, the
Administrative 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 Administrative Agent, the recipient of such
payment shall, on demand by the Administrative Agent, repay to the
Administrative 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 the Administrative Agent until the date the Administrative
Agent recovers such amount at a rate PER ANNUM equal to the Federal Funds Rate
for such day.
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 the
Administrative Agent, a Monthly Report accompanied by an electronic file in a
form reasonably satisfactory to the Administrative Agent; PROVIDED, HOWEVER,
that if an Unmatured Default or an Event of Default shall exist and be
continuing, the Administrative Agent 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 the
Administrative Agent, 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 the Administrative Agent, 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, the
Administrative Agent shall notify the Borrower and the Servicer of (i) the
aggregate principal balance of all Advances that are then
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outstanding, and (ii) the aggregate amount of all principal, interest and fees
that will be due and payable by the Borrower to the Administrative Agent for the
account of the Administrative Agent or the Lenders on such Settlement Date.
Section 3.2 TURNOVER OF COLLECTIONS. Without limiting the
Administrative Agent's or any 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), not later than the 12:00 noon (New
York City time) on the next succeeding Settlement Date, the Servicer
shall turn over to the Administrative Agent, for distribution to the
Lenders, a portion of the Collections equal to the aggregate amount of
such required mandatory prepayments;
(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 the Administrative Agent, for
distribution to the Lenders, a portion of the Collections equal to the
aggregate amount of such optional 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 the Loans becomes due (whether by
acceleration or otherwise), the Servicer shall turn over to the
Administrative Agent, for distribution to the Lenders, 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 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 the Administrative Agent
for distribution in accordance with this Section 3.2.
(d) If the amount of Collections and payments on Demand
Advances received by the Administrative Agent on any Settlement Date
are insufficient to pay all Required Amounts, such amount 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;
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(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 Supplemental Servicer's Fee that are then due
and owing to such Servicer; and
(vii) the balance, if any, to the Borrower.
(e) If (i) the Servicer is ever required to deliver a
computation of the Cash Collateral Payment pursuant to Section 3.1(b), and (ii)
the Borrower has made any Demand Advances, the Borrower shall make immediate
demand upon Quest Diagnostics for payment of the Demand Advances in an amount
equal to such Cash Collateral Payment, and, upon receipt of any such amounts,
the Borrower shall pay them to the Administrative Agent for deposit into a cash
collateral account to be invested in Permitted Investments selected by the
Borrower or the Servicer 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 the
Administrative Agent, 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
Administrative Agent 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:
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(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
(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 the Administrative Agent and the Lenders certain fees
from time to time in amounts and payable on such dates as are set forth in the
Fee Letter.
Section 4.2 YIELD PROTECTION. If any Regulatory Change
occurring after the date hereof:
(a) 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 (1) Taxes based on,
or measured by, net income or net profits, or changes in the rate of
Tax on or
17
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, (2) franchise Taxes, Taxes on, or in the nature of, doing
business Taxes or capital Taxes, or (3) 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 the Administrative Agent
and the Borrower an accurate IRS Form 1001 or 4224 (or the applicable
successor form), as applicable; or
(b) 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
(c) shall affect the amount of capital required or expected to
be maintained by any Affected Party; or
(d) 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
(e) 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) the Administrative Agent 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
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(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.
(f) Each Affected Party will promptly notify the Borrower and
the Administrative 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.
(g) 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 detail), which statement
shall, in the absence of demonstrable error, be conclusive and binding upon the
Borrower.
(h) 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
19
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.
(i) If any Liquidity Bank makes a claim for compensation under
this Section 4.2, the Borrower may propose an Eligible Assignee to the
Administrative 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 Administrative 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 the Administrative 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 Administrative
Agent to the Borrower and the Servicer, the Borrower shall pay to the Servicer,
and the Servicer shall pay to the Administrative Agent for the account of such
Lender, the amount of such actual loss or expense. Such written notice (which
shall include the 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 INITIAL ADVANCE. The
initial Advance pursuant to this Agreement is subject to the condition precedent
that the Administrative Agent shall have received, on or before the date of such
initial Advance, the following each (unless otherwise indicated) dated such date
and in form and substance reasonably satisfactory to the Administrative Agent:
(a) The Sale Agreement, duly executed by the parties thereto;
(b) A certificate of the Secretary or Assistant Secretary of
each Loan Party certifying the names and true signatures of the officers
authorized on its behalf to sign this
20
Agreement and the other Transaction Documents to be delivered by it hereunder
(on which certificate the Administrative Agent 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 (b));
(c) The Organic Documents of each Loan Party, duly certified
as of a recent date by the Secretary of State of such Loan Party's state of
organization or by the Secretary or an Assistant Secretary of such Loan Party,
as applicable;
(d) Copies of good standing certificates for each Loan Party,
issued by the Secretaries of State of the state of organization of such Loan
Party and the state where such Loan Party's principal place of business is
located, on or within 30 days prior to the date of this Agreement;
(e) Executed copies in form suitable for filing of (i) proper
financing statements (Form UCC-1) reasonably describing the Receivables and the
Related Assets sold or contributed, and the rights to payment under
Non-Assignable Contracts that are pledged, under the Sale Agreement and naming
each of the Originators as debtor, the Borrower, as secured party, and the
Administrative Agent, as assignee of secured party, (ii) proper financing
statements (Form UCC-1) reasonably describing the Collateral naming the
Borrower, as debtor, and the Administrative Agent, as agent for the Secured
Parties, as secured party, and (iii) such other similar instruments or
documents, as may be necessary or, in the opinion of the Administrative Agent
reasonably desirable under the UCC or any comparable law of all appropriate
jurisdictions to perfect (A) the sales, contributions and security interests by
each of the Originators to the Borrower under the Sale Agreement, and (B) the
Administrative Agent's security interest in the Collateral under this Agreement;
(f) A copy of the consent solicitation materials sent to the
holders of Quest Diagnostics' bondholders seeking their consent to not
subordinating the Demand Advances, and evidence that the requisite numbers of
such bondholders have consented thereto;
(g) The Subordinated Notes, duly executed by the Borrower;
(h) One or more favorable opinions of counsel to Loan Parties
covering the matters set forth in of Exhibit 5.1(h);
(i) One or more favorable opinions of counsel to Loan Parties,
as to: (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;
(j) A pro forma Monthly Report, prepared as of the Cut-Off
Date of June 30, 2000;
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(k) A report in form and substance satisfactory to the
Administrative Agent from the Initial Due Diligence Auditor as to a pre-closing
due diligence audit by the Initial Due Diligence Auditor;
(l) The Liquidity Agreement, in form and substance
satisfactory to the Administrative Agent, duly executed by the parties thereto;
(m) Executed UCC-3 partial releases and/or termination
statements, in form suitable for filing, with respect to any existing Liens on
the Collateral;
(n) With respect to Quest Diagnostics, copies of its most
recent reports on SEC Forms 10-K and 10-Q;
(o) The Fee Letter, together with payment of any and all fees
due on or prior to the date of the initial Advance;
(p) 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;
(q) Collection Account Agreements with respect to each
Collection Account and Lockbox (other than the Collection Account at China Trust
Bank); and
(r) Such other agreements, instruments, certificates, opinions
and other documents as the Administrative Agent may reasonably request.
Section 5.2 CONDITIONS PRECEDENT TO ALL ADVANCES. Each Advance
(including the initial Advance) 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, and
(d) the Administrative Agent 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;
22
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.
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 Administrative
Agent 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 other than pursuant to the Security Agreement
(as defined in the Credit Agreement).
(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).
23
(d) ABSENCE OF DEFAULT. No Unmatured Default or Event of
Default has occurred and is continuing.
(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, 1999 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 the Administrative
Agent):
(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
24
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.
(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, 1999: (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 the
Administrative Agent 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,
1999, but in each case excluding all projections, whether prior to or
after the date of this Agreement, when taken as a
25
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
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 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, 1999 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 "General Intangible" and is not are not an "interest or claim in
or under any policy of insurance" within the meaning of 9-104(g) of the New York
UCC.
(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.
26
(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 the Administrative Agent in form suitable for filing
all financing statements 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 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.
(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.
(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 the Administrative Agent
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 the Administrative Agent 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) OFFICES. 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
27
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 the Administrative Agent 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 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
28
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 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 the Administrative Agent have 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. Sections101 et seq.), as amended.
(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.
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 the Administrative Agent 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.
29
(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 the
Administrative Agent 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 the
Administrative Agent to conduct a review of such Loan Party's Contracts,
Invoices and Records (each, a "REVIEW"); PROVIDED, HOWEVER, that, 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) in any one calendar year unless (1) 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), or (2) the Borrower delivers an Extension
Request and the applicable Response Date is more than 3 calendar months after
the first Review in such calendar year. 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 the Administrative Agent.
(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
30
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) LOCATION OF RECORDS. Each Loan Party will keep its chief
place of business and 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.
(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 the Administrative Agent, the Borrower or
the Servicer shall establish a segregated account at Wachovia Bank,
N.A. 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.
31
(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 the Administrative Agent shall
otherwise consent in writing:
(a) QUARTERLY FINANCIAL STATEMENTS. (i) Quest Diagnostics will
furnish to the Administrative Agent 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, 2000,
the Borrower will furnish to the Administrative Agent 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 the Administrative Agent
by the Borrower's chief executive officer, vice president-finance, or treasurer
(or an officer acting in a similar capacity to any of the foregoing);
(b) ANNUAL FINANCIAL STATEMENTS. Quest Diagnostics will
furnish to the Administrative Agent, 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 the Administrative Agent 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 the Administrative Agent by the Borrower's chief executive officer, vice
president-finance, 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
the Administrative Agent;
(d) ERISA. Promptly after the filing or receiving thereof,
each Loan Party will furnish to the Administrative Agent 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
32
the Administrative Agent 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 the Administrative Agent
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 prior to each Extension Request, the Borrower will furnish
to the Administrative Agent a report of the Review referenced in Section 7.1(c)
prepared by accountants or auditors selected as specified therein and reasonably
acceptable to the Administrative Agent as of the end of the 6 calendar month
period then most recently ended, substantially in the form of the report
delivered pursuant to Section 5.1(k) and covering such other matters as the
Administrative Agent may reasonably request in order to protect the interests of
the Administrative Agent or 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 the Administrative Agent 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 the Administrative
Agent 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 the Administrative Agent a 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 the Administrative Agent such other information, documents, Records
or reports respecting the Receivables or the condition or operations, financial
or otherwise, of such Loan Party as the Administrative Agent may from time to
time reasonably request in order to protect the interests of the Administrative
Agent or 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 the
Administrative Agent:
(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
33
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 Borrower's or the
Administrative Agent's rights 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 Lenders, in any respect), unless (i) the
Administrative Agent 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 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
34
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.
(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
Section 9-402(7) 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 Administrative Agent 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
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.
35
(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 Administrative Agent 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 the Administrative Agent 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;
(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;
36
(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;
(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
37
capacity as the Servicer hereunder or under the Sale Agreement) has
independent access, provided that prior to demand by the Administrative
Agent 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 the Administrative Agent
(or the designee of the
38
Administrative Agent) 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 to assist the Administrative Agent (or 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 Administrative Agent 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 the
Administrative Agent at any time after a Successor Notice has been given. In
addition to the foregoing, with the prior written consent of the Administrative
Agent (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 the Administrative
Agent at any time that the Administrative Agent reasonably determines 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.
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Section 8.2 DUTIES OF SERVICER.
(a) APPOINTMENT; DUTIES IN GENERAL. Each of the Borrower, the
Lenders and the Administrative Agent 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 the Administrative Agent) to segregate
the funds constituting Collections prior to the remittance thereof in accordance
with Article III. If instructed by the Administrative Agent, the Servicer shall
segregate 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 Administrative Agent
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 the
Administrative Agent, 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 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.
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(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 ADMINISTRATIVE AGENT.
(a) NOTICE TO OBLIGORS. At any time when an Event of Default
has occurred and is continuing, the Administrative Agent 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. The Borrower and the Servicer hereby transfer to the
Administrative Agent, 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) The Administrative Agent 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 the Administrative 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 the Administrative 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 Administrative Agent 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 and the Lenders hereby
authorizes the Administrative Agent and grants to the Administrative
Agent an irrevocable
41
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.
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
42
assignments thereof, relative to all or any of the Collateral now existing or
hereafter arising in the name of any 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 each Loan Party hereby authorizes the Administrative
Agent to execute such statement on behalf of such Loan Party. 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
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).
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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, payments of or deposits of any
amount of principal of any Loan, or (ii) within three (3) days after
the same becomes due, payment of any amount of interest, fees or any
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 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 $15,000,000,
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,
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condition or agreement (after expiration of any applicable grace
period) contained in any agreement or instrument evidencing or
governing any Indebtedness in excess of $15,000,000 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 12%.
(g) The three-calendar month rolling average Default Ratio at
any Cut-Off Date exceeds 30%.
(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.
(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 $15.0
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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 $20.0 million.
(o) Without the prior written consent of the Administrative
Agent, Quest Diagnostics shall fail to comply with each of the
covenants set forth in Section 9.11(a) through (f) (inclusive) of the
Credit Agreement, 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.
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.
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(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 ADMINISTRATIVE AGENT
Section 11.1 APPOINTMENT.
(a) Each Lender hereby irrevocably designates and appoints
Wachovia Bank, N.A. as Administrative Agent hereunder and under the Liquidity
Agreement, 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
contrary elsewhere in this Agreement, the Administrative Agent shall not have
any duties or responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities on the part of the
Administrative Agent shall be read into this Agreement or otherwise exist
against the Administrative Agent.
(b) The provisions of this Article XI are solely for the
benefit of the Administrative Agent 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 the Administrative Agent or any Lender may have to
either of the Loan Parties under the other provisions of this Agreement.
(c) In performing its functions and duties hereunder, 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. The Administrative Agent
may execute any of its duties under this Agreement by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Administrative Agent 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. Neither the
Administrative Agent 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
47
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 the Administrative Agent. The Administrative Agent shall be under
no obligation to 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 Administrative Agent, on the one hand, and the Lenders and their respective
Liquidity Banks, on the other.
Section 11.4 RELIANCE BY ADMINISTRATIVE AGENT.
(a) The Administrative Agent 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 the
Administrative Agent. The Administrative Agent 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 the Administrative Agent in accordance
with Section 11.4(a) shall be binding upon the Administrative Agent and the
Lenders.
Section 11.5 NOTICE OF EVENTS OF DEFAULT. Neither the
Administrative Agent shall be deemed to have knowledge or notice of the
occurrence of any Event of Default or Unmatured Default unless the
Administrative Agent has received notice from 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 the Administrative Agent receives such a notice, it shall
promptly give notice thereof to the Lenders. The Administrative Agent shall take
such action with respect to such Event of Default or Unmatured Default as shall
be directed by the Majority Lenders.
Section 11.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER
LENDERS. Each of the Lenders expressly acknowledges that neither the
Administrative Agent, nor any of the Administrative Agent's officers, directors,
employees, agents, attorneys-in-fact or affiliates has made any representations
or warranties to it and that no act by the Administrative Agent hereafter taken,
including, without limitation, any review of the affairs of the Loan Parties,
shall be
48
deemed to constitute any representation or warranty by the Administrative Agent.
Each of the Lenders also represents and warrants to the Administrative Agent 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 Administrative Agent 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 Administrative Agent, 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 come into the possession of such
Person or any of its respective officers, directors, employees, agents,
attorneys-in-fact or affiliates, except that the Administrative Agent shall
promptly distribute to 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 ADMINISTRATIVE AGENT. Each
Liquidity Bank agrees to indemnify the Administrative Agent and its officers,
directors, employees, representatives and agents (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 the Administrative Agent or such Person in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not the Administrative Agent in its capacity as Administrative Agent
or such Person shall be designated a party thereto) that may at any time be
imposed on, incurred by or asserted against 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 the
Administrative Agent or such Person as finally determined by a court of
competent jurisdiction).
Section 11.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.
The Administrative Agent 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 the Administrative Agent were
not an Agent hereunder. With respect to its Loans, if any, pursuant to this
Agreement, the Administrative Agent 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 the Administrative
Agent in its individual capacity.
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Section 11.9 SUCCESSOR ADMINISTRATIVE AGENT. The
Administrative Agent, upon five (5) days' notice to the Loan Parties and the
Lenders, may voluntarily resign and may be removed at any time, with or without
cause, by the Majority Lenders; PROVIDED, HOWEVER, that Wachovia Bank, N.A.
shall not voluntarily resign as the Administrative Agent so long as any of the
Liquidity Commitments remain in effect or Blue Ridge has any outstanding Loans.
If the Administrative Agent (other than Wachovia Bank, N.A.) shall voluntarily
resign or be removed as Administrative Agent under this Agreement, then the
Majority Lenders during such five-day period shall appoint, with the consent of
the Borrower from among the remaining Liquidity Banks, a successor
administrative agent, whereupon such successor administrative agent shall
succeed to the rights, powers and duties of the Administrative Agent and the
term "Administrative Agent" shall mean such successor agent, effective upon its
appointment, and the former Administrative Agent's rights, powers and duties as
Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Agreement. Upon resignation or replacement of any Administrative Agent in
accordance with this Section 11.9, the retiring Administrative Agent shall
execute such UCC-3 assignments and amendments, and assignments and amendments of
the Transaction Documents, as may be necessary to give effect to its replacement
by a successor Administrative Agent. After any retiring Administrative Agent's
resignation hereunder as Administrative Agent, the provisions of this Article XI
and Article XIII shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Administrative Agent under this Agreement.
Section 11.10 CONFLICT WAIVERS. 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 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.
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.
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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 the
Administrative Agent 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 Administrative
Agent's 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.
(b) Blue Ridge may, at any time, assign all or any portion of
any Loan, or sell participations therein, to the Liquidity Banks (or to the
Administrative Agent for the ratable benefit of the 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 Liquidity Bank becomes a Downgraded
Liquidity Bank, such Downgraded Liquidity Bank shall give prompt
written notice of its Downgrading Event to the Administrative Agent and
to 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 Administrative Agent 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 Administrative Agent
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 Administrative
Agent 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) the Administrative 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 the Administrative Agent, sell
participations in all or any portion of
51
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.
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 Administrative
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 Administrative 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 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
52
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, 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;
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(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 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
54
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 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
55
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 Administrative Agent, 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 the Administrative Agent enters into such an
amendment or granting 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,
(b) without the prior written consent of all Liquidity Banks,
the Administrative 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 Blue Ridge's Loans or delay any
scheduled date for payment thereof; (ii) decrease the Required Reserve,
decrease the spread included in any Interest Rate or change the
Servicer's Fee; (iii) modify this Section 14.1; (iv) modify the
definition of "MAJORITY LENDERS", or (v) modify any yield protection or
indemnity provision which expressly inures to the benefit of assignees
or participants of Blue Ridge, and
(c) without the prior written consent of the Majority Lenders,
waive, amend or consent to a departure from any Event of Default.
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.
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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 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 Letter), 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 Letter 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,
57
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 or Blue Ridge, or join
any Person in instituting against the Borrower 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 or any Commercial Paper Notes or
other senior Indebtedness issued by Blue Ridge 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.
Section 14.7 CONFIDENTIALITY OF BORROWER INFORMATION. The
Administrative Agent and the Lenders agrees to keep confidential information
obtained by it pursuant to the Transaction Documents confidential in accordance
with the Administrative 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 the Administrative 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
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 the Administrative Agent or Lender to such Affiliate), (b) to the
extent such information presently is or hereafter becomes available to the
Administrative Agent or Lender on a non-confidential basis from a Person not an
Affiliate of the Administrative 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 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
58
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 Blue Ridge, (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
Administrative Agent 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 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 Blue Ridge and the Administrative Agent 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 Blue
Ridge or the Administrative 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 Letter, or (B) any information which is furnished
by Blue Ridge or the Administrative Agent to such party and which is
designated by Blue Ridge or the Administrative 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,
59
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 Administrative Agent, all documents
or other written material received from Blue Ridge 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:
(i) provide the Administrative Agent with prompt written
notice so that the Administrative Agent may seek a 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; and
(ii) unless the Administrative Agent agrees that such Program
Information may be disclosed, make a timely objection to the request or
compulsion to provide such Program Information on the basis that such
Program Information is confidential and subject to the agreements
contained in this Section 14.8.
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) 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
60
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 COLLATERAL 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 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
61
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 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 14.15 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 Blue Ridge
shall be liable for any claims that such party may have against Blue Ridge only
to the extent Blue Ridge has excess funds and to the extent such assets are
insufficient to satisfy the obligations of Blue Ridge hereunder, Blue Ridge
shall have no liability with respect to any amount of such obligations remaining
unpaid and such unpaid amount shall not constitute a claim against Blue Ridge.
Any and all claims against Blue Ridge or the Administrative Agent shall be
subordinate to the claims against such Persons of the holders of Blue Ridge's
Commercial Paper Notes and the Liquidity Banks.
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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:
63
ADMINISTRATIVE AGENT:
WACHOVIA BANK, N.A., as Administrative Agent
By:
-------------------------------
Name: Xxxxx XxXxxxxxx
Title: Senior Vice President
LENDERS:
BLUE RIDGE ASSET FUNDING CORPORATION
BY: WACHOVIA BANK, N.A., ITS ATTORNEY-IN-FACT
By:
-------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Senior Vice President
Initial Commitment: not applicable
WACHOVIA BANK, N.A.
By:
-------------------------------
Name: Xxxxx XxXxxxxxx
Title: Senior Vice President
Initial Commitment: $256,000,000
64
ANNEX A
DEFINITIONS
A. CERTAIN DEFINED TERMS. As used in this Agreement:
"ACCOUNT" shall have the meaning specified in Section 9-106 of
the UCC.
"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 Administrative
Agent 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.
"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" has the meaning set forth in Section 1.1.
"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 MARGIN" shall have the meaning provided in the
Credit Agreement (whether or not the Credit Agreement remains in effect).
"ARTICLE" means an article of this Agreement unless another
document is specifically referenced.
65
"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.
"BLUE RIDGE" has the meaning provided in the preamble of this
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.
"BUSINESS DAY" means any day on which banks are not authorized
or required to close in New York, New York, Atlanta, Georgia, 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 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
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(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.
"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.
"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.
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"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 or interest in respect thereof and
any Permitted Investments and the proceeds thereof made with any such payment.
"COMMERCIAL PAPER NOTES" shall mean the commercial paper
promissory notes, if any, issued by or on behalf of Blue Ridge to fund, in whole
or in part, any CP Rate Loan.
"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; PROVIDED, HOWEVER, that on September 30, 2000, Wachovia's
Commitment shall automatically reduce to $225,000,000, it being understood that
if one or more new Lenders joins this Agreement prior to September 30, 2000, the
first $31,000,000 of such new Lenders' Commitments will reduce Wachovia's
Commitment on a dollar-for-dollar basis, and thereafter, 50% of such new
Lenders' Commitments will reduce Wachovia's Commitment (until such time as it is
reduced to $150,000,000), and the remainder will increase the Aggregate
Commitment until it reaches $350,000,000. If one or more new Lenders joins this
Agreement after September 30, 2000, 50% of such new Lenders' Commitments will
reduce Wachovia's Commitment (until such time as it is reduced to $150,000,000),
and the remainder will increase the Aggregate Commitment until it reaches
$350,000,000.
"COMMITMENT INCREASE REQUEST" has the meaning set forth in
Section 1.7.
"COMMITMENT REDUCTION NOTICE" has the meaning set forth in
Section 1.6.
"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
outstanding Net Pool Balance 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
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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 instrument,
document or agreement to which such Person is a party or by which it or any of
its property is bound.
"CP RATE" shall mean, for any CP Tranche Period, the per annum
rate equivalent to the rate (or if more than one rate, the weighted average of
the rates) at which Commercial Paper Notes of Blue Ridge 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 Blue Ridge which bears
interest at a CP Rate.
"CP TRANCHE PERIOD" shall mean, 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 Administrative Agent pursuant to
Section 2.2, PROVIDED, HOWEVER, that if any 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 August 16, 1999, by and among Quest Diagnostics, as borrower, various of
its Subsidiaries, as guarantors, the lenders from time to time party thereto,
Xxxxxxx Xxxxx & Co. and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, as
joint lead arranger and syndication agent, Bank of America Securities LLC, as
joint lead arranger, Bank of America, N.A., as administrative agent, and
Wachovia and The Bank of New York, as Co-Documentation Agents, as in effect on
the date of this Agreement, or as modified after the date hereof with the
consent of the Administrative Agent.
"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 the last day of each calendar month
thereafter.
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"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
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 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), (b),
(c) or (d).
"DISALLOWED RECEIVABLE" means a Receivable for which payment
is not expected to be received by the applicable Originator.
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"DOLLARS" means dollars in lawful money of the United States
of America.
"DOWNGRADED LIQUIDITY BANK" means a Liquidity Bank which has
been 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 (or any Affiliate of Wachovia)
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)
any Downgraded Liquidity Bank whose liquidity commitment has been fully drawn by
Blue Ridge or the Administrative 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, an Ohio corporation, Quest Diagnostics Incorporated, a Maryland
corporation, Quest Diagnostics Incorporated, a California corporation, Quest
Diagnostics Incorporated, a Connecticut corporation, Quest Diagnostics
Incorporated, a Massachusetts corporation, Quest Diagnostics of Pennsylvania
Incorporated, 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 Administrative Agent 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.
"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;
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(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 is evidenced by an Invoice that, together with such
Receivable, is in full force and effect and 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;
(l) which is due and payable within 60 days from the invoice
date of such Receivable;
(m) not more than 50% of the aggregate Unpaid Net Balance of
all Receivables of the Obligor of such Receivable are Defaulted
Receivables;
(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 the Administrative Agent, in the
exercise of its commercially reasonable credit judgment, as a
Receivable that is not acceptable, including,
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without limitation, because such Receivables arises under a Contract
that is not acceptable to the Administrative 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 Administrative Agent based on the satisfactory outcome of such
Review, and (ii) that Rating Agency Condition has been satisfied.
"EMPLOYEE BENEFIT PLAN" shall mean 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" shall mean, 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" shall mean the United States Employee Retirement
Income Security Act of 1974, as amended.
"ERISA ENTITY" shall mean any member of an ERISA Group.
"ERISA EVENT" shall mean (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 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
73
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" shall mean 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 Administrative Agent, 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" shall mean, 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 Regulatory Change against (a) any category of liabilities
which includes deposits by reference to which the "London Interbank Offered
Rate" or "LIBOR" is to
74
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" has the meaning set forth in the Fee Letter.
"EXTENSION REQUEST" has the meaning set forth in Section 1.8.
"FACILITY FEE" has the meaning set forth in the Fee Letter.
"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 Administrative Agent on such day on such transactions, as
reasonably determined by the Administrative Agent.
"FEDERAL RESERVE BOARD" means the Board of Governors of the
Federal Reserve System, or any successor thereto or to the functions thereof.
"FEE LETTER" means that certain Fee Letter dated as of July
21, 2000 by and among Quest Diagnostics, the Borrower, Blue Ridge and the
Administrative Agent.
"FEHB RECEIVABLE" means any Receivable arising under The
Federal Employees Health Benefits program, as to which the Obligor is a natural
person, a managed care organization or a commercial insurance company.
"FINAL PAYOUT DATE" means the date on or following the
Termination Date on which the Obligations have been paid in full.
"FOREIGN PLAN" shall mean 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" shall mean 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
Section 9-105 of the UCC.
"GOVERNMENT RECEIVABLE" means:
76
(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,
(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.
"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
77
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.
"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(ii).
"INITIAL DUE DILIGENCE AUDITOR" means Xxxxxx Xxxxxxxx, LLP.
"INTEREST PAYMENT DATE" means:
(a) with respect to any CP Rate Loan, 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, and the Termination
Date; and
78
(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, and the
Termination Date.
"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 Borrower's behalf) pursuant to this
Agreement and agreed to by the Administrative 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" shall mean, 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.
"LAWS" shall mean, 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 and the 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 AGREEMENT" means the Liquidity Asset Purchase
Agreement dated as of the date hereof among Blue Ridge, the Administrative 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.
79
"LIQUIDITY BANK" means (a) Wachovia, or (b) any Eligible
Assignee of Wachovia's Commitment and Liquidity Commitment, in each case, 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 pursuant to the Liquidity Agreement to make
Liquidity Fundings.
"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 Blue Ridge Loan, or (b) any Loan made by the Liquidity
Banks in lieu of Blue Ridge pursuant to Section 1.1.
"LIQUIDITY TERMINATION DATE" means the earlier to occur of the
following:
(a) the date on which the Liquidity Banks' Liquidity
Commitments expire, cease to be available to Blue Ridge or otherwise
cease to be in full force and effect; or
(b) the date on which a Downgrading Event with respect to a
Liquidity Bank shall have occurred and been continuing for not less
than 30 days, and either (i) the Downgraded Liquidity Bank shall not
have been replaced by a Qualifying Liquidity Bank pursuant to the
Liquidity Agreement, or (ii) the Liquidity Commitment of such
Downgraded Liquidity Bank shall not have been funded or collateralized
in such a manner that will avoid a reduction in or withdrawal of the
credit rating applied to the Commercial Paper Notes to which such
Liquidity Agreement applies by any of the rating agencies then rating
such Commercial Paper Notes.
"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.
"LOCKBOX" means any post office box maintained by an
Originator on behalf of the Borrower to which payments on certain Receivables
are mailed.
"MAJORITY LENDERS" means those Lenders holding in excess of
50% of the Aggregate Commitment hereunder (and of the aggregate Liquidity
Commitments under the Liquidity Agreement) and if not Aggregate Commitment or
Liquidity Commitment is outstanding on any date of determination, those Lenders
holding in excess of 50% of the outstanding Loans hereunder.
"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
80
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 the Administrative Agent or the 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.
"MISSING INFORMATION TRIGGER EVENT" means that the most recent
three-calendar month rolling average Missing Information Percentage at any
Cut-Off Date exceeds 10.75% (it
81
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 Administrative Agent 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 (a) the 20th day of May, June
and July, 2000, and (b) the 15th day of each calendar month thereafter;
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" shall mean 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)
the aggregate Unpaid Net Balance of all Eligible Receivables at such time, minus
(ii) the Excess Concentration Amount at such time.
"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-ASSIGNABLE CONTRACT" means a Contract that contains a
prohibition on assignment to, among other Persons, Affiliates of the Originator
party thereto.
"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), the Administrative Agent 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 the Administrative Agent from time to time upon the Borrower's request
agrees to a higher percentage of Eligible Receivables for a particular
82
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 the Administrative Agent 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 9% 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 for money due
or to become due" as such phrase is used in Section 9-318(4) of the UCC.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"PENSION PLAN" shall mean 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.
"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:
83
(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.
"PREPAYMENT NOTICE" has the meaning set forth in Section
1.5(a).
"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.
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"PRINCIPAL AMOUNT" means the actual net cash proceeds received
by Blue Ridge upon issuance of a Commercial Paper Note.
"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 Blue Ridge 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 Blue
Ridge's Commercial Paper Notes.
"RECEIVABLE" means any Account or any Payment Intangible
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. Rights to payment arising from any one transaction,
including, without limitation, rights to payment represented 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.
85
"REGULATORY CHANGE" shall mean any change after the date of
this Agreement in United States (federal, state or municipal) or foreign laws or
regulations (including Regulation D) 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, or regulations (whether or not having the force of
law) by any court or governmental or monetary authority charged with the
interpretation or administration thereof.
"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
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 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
------------------- ----------------------
$100,000,000 2 Business Days
$100,000,000 to $250,000,000 5 Business Days
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>$250,000,000 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 the period from and after the date of
the initial Advance under this Agreement to but excluding the Termination Date.
"S&P" means Standard and Poor's Ratings Services, a division
of The XxXxxx-Xxxx Companies, Inc.
"SALE AGREEMENT" means the Receivables Sale Agreement dated as
of July 21, 2000 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 July 21, 2003, unless
extended by unanimous agreement of the Lenders and the Administrative Agent.
"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.
"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:
87
(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" shall mean 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.
"SETTLEMENT DATE" means (a) the second Business Day after each
Monthly Reporting Date, (b) such other Business Days as the Administrative Agent
may specify in a written notice to the Lenders and the Loan Parties, 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.
"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
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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" shall mean 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 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
Scheduled Termination Date; (b) the date designated by the Borrower as the
"Termination Date" on not less than fifteen (15) Business Days' notice to the
Administrative Agent, PROVIDED that on such date the Obligations have been paid
in full; and (c) the date specified in Section 10.2(a) or (b).
"TRANSACTION DOCUMENTS" means this Agreement, the Collection
Account Agreements, the Sale Agreement, the Fee Letter, the Subordinated Notes
and the other documents to be executed and delivered in connection herewith or
therewith.
"TRANSFEREE" is defined in Section 12.4.
"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
Letter.
"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, the second Monday
following the end of each
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week; PROVIDED, HOWEVER, that if any such Monday is not a Business Day, then the
Weekly Reporting Date shall be the next succeeding Business Day.
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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