Exhibit 10.1
AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT
THIS AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT is entered
into as of September 28, 2001, by and among:
(1) QUEST DIAGNOSTICS RECEIVABLES INC., a Delaware corporation
(together with its successors and permitted assigns, the "BORROWER"),
(2) QUEST DIAGNOSTICS INCORPORATED, a Delaware corporation (together
with its successors, "QUEST DIAGNOSTICS"), as initial servicer hereunder
(in such capacity, together with any successor servicer or sub-servicer
appointed pursuant to Section 8.1, the "SERVICER"),
(3) BLUE RIDGE ASSET FUNDING CORPORATION, a Delaware corporation
(together with its successors, "BLUE RIDGE"), WACHOVIA BANK, N.A., in its
capacity as a Liquidity Bank to Blue Ridge (together with its successors,
"WACHOVIA" and together with Blue Ridge, the "BLUE RIDGE GROUP"),
(4) ATLANTIC ASSET SECURITIZATION CORP., a Delaware corporation
(together with its successors, "ATLANTIC" and, together with Blue Ridge,
the "CONDUITS"), and Credit Lyonnais New York Branch, in its capacity as a
Liquidity Bank to Atlantic (together with its successors, "CLNY" and
together with Atlantic, the "ATLANTIC GROUP"),
(5) WACHOVIA BANK, N.A., in its capacity as agent for the Blue Ridge
Group (together with its successors in such capacity, the "BLUE RIDGE
AGENT" or a "CO-AGENT"), and Credit Lyonnais New York Branch, in its
capacity as agent for the Atlantic Group (together with its successors in
such capacity, the "ATLANTIC AGENT" or a "CO-AGENT"), and
(6) WACHOVIA BANK, N.A., as administrative agent for the Blue
Ridge Group, the Atlantic Group and the Co-Agents (in such capacity,
together with any successors thereto in such capacity, the
"ADMINISTRATIVE AGENT" and together with each of the Co-Agents, the
"AGENTS"),
with respect to that certain Credit and Security Agreement dated as of July 21,
2000 by and among the Borrower, Quest Diagnostics as Servicer, Blue Ridge,
Wachovia and the Administrative Agent, as amended from time to time prior to the
date hereof (the "EXISTING AGREEMENT").
UNLESS OTHERWISE INDICATED, CAPITALIZED TERMS USED IN THIS AGREEMENT
ARE DEFINED IN ANNEX A.
W I T N E S S E T H :
WHEREAS, the Borrower is a wholly-owned direct subsidiary of
Quest Diagnostics;
WHEREAS, Quest Diagnostics and certain of its Subsidiaries as
Originators and the Borrower have entered into the Sale Agreement pursuant
to which each of the Originators has (i) sold and/or contributed, and
hereafter will sell to the Borrower, all of such Originator's right, title
and interest in and to its private accounts receivable and certain related
rights and (ii) pledged to the Borrower and its assigns certain
non-assignable contracts related thereto;
WHEREAS, the Borrower and certain members of the Blue Ridge Group
are party to the Existing Agreement pursuant to which Blue Ridge has been
making revolving loans to the Borrower from time to time secured by the
Collateral, and Quest Diagnostics is acting as the initial Servicer for
the Collateral; and
WHEREAS, the Atlantic Group also wishes to make revolving loans to
the Borrower from time to time secured by the Collateral and accordingly,
the parties have agreed to amend and restate the Existing Agreement to add
the Atlantic Group as Lenders.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree that the Existing
Agreement is hereby amended and restated in its entirety as set forth herein:
ARTICLE I
THE CREDIT
Section 1.1 The Facility. On the terms and subject to the conditions
set forth in this Agreement, the Borrower (or the Servicer on the Borrower's
behalf) may from time to time during the Revolving Period request Advances by
delivering a Borrowing Request to the Co-Agents in accordance with Section 2.1.
Upon receipt of a copy of each Borrowing Request from the Borrower or Servicer,
each of the Co-Agents shall determine whether its Conduit will fund a Loan in an
amount equal to the portion of the requested Advance specified in such Borrowing
Request, and
(a) in the event that Blue Ridge elects not to make any such Loan to
the Borrower, the Blue Ridge Agent shall promptly notify the Borrower and,
unless the Borrower cancels its Borrowing Request, each of the Liquidity
Banks of Blue Ridge severally agrees to make its Ratable Share of such
Loan to the Borrower, on the terms and subject to the conditions hereof,
PROVIDED THAT at no time may the aggregate principal amount of Blue
Ridge's and its Liquidity Banks' Loans at any one time outstanding exceed
the lesser of (i) the aggregate amount of the Blue Ridge Liquidity Banks'
Commitments, and (ii) Blue Ridge's Percentage of the Borrowing Base (such
lesser amount, the "BLUE RIDGE ALLOCATION LIMIT"); and
2
(b) in the event that Atlantic elects not to make any such Loan to
the Borrower, the Atlantic Agent shall promptly notify the Borrower and,
unless the Borrower cancels its Borrowing Request, each of the Liquidity
Banks of Atlantic severally agrees to make its Ratable Share of such Loan
to the Borrower, on the terms and subject to the conditions hereof,
PROVIDED THAT at no time may the aggregate principal amount of Atlantic's
and its Liquidity Banks' Loans at any one time outstanding exceed the
lesser of (i) the aggregate amount of the Atlantic Liquidity Banks'
Commitments, and (ii) Atlantic's Percentage of the Borrowing Base (such
lesser amount, the "ATLANTIC ALLOCATION LIMIT").
Each Loan shall be in the minimum amount of $1,000,000 or a larger integral
multiple of $500,000. In no event may the aggregate principal amount of the
Advances hereunder exceed the lesser of (x) the Aggregate Commitment, or (y) the
Borrowing Base. Each Liquidity Bank's Commitment under this Agreement shall
terminate on the earlier to occur of such Liquidity Bank's Scheduled Termination
Date and the Termination Date. Each of the Loans, and all other Obligations of
the Borrower, shall be secured by the Collateral as provided in Article IX.
Section 1.2 Funding Mechanics; Liquidity Fundings.
(a) Each Advance hereunder shall consist of Loans made by (i)
Atlantic and/or its Liquidity Banks, on the one hand, and/or (ii) Blue Ridge
and/or its Liquidity Banks, on the other hand, and which (except for any Advance
which does not increase the aggregate principal amount of the Loans outstanding)
shall be made in such proportions by each Group such that, after giving effect
thereto, the aggregate outstanding principal balance of the Loans outstanding
from each Group shall be in proportion to such Group's Percentage of the
aggregate outstanding principal balance of all Advances then outstanding
hereunder. Any Advance which does not increase the aggregate principal amount
outstanding may be funded solely by one or more of the members of a single
Group.
(b) Each Lender funding any Loan (or portion thereof) shall wire
transfer the principal amount thereof to its applicable Co-Agent in immediately
available funds not later than 12:00 noon (New York City time) on the applicable
Borrowing Date and, subject to its receipt of such Loan proceeds, such Co-Agent
shall wire transfer such funds to the account specified by the Borrower in its
Borrowing Request not later than 2:00 p.m. (New York City time) on such
Borrowing Date.
(c) While it is the intent of each of the Conduits to fund its
respective Loans through the issuance of Commercial Paper Notes, the parties
acknowledge that if either of the Conduits is unable, or determines that it is
undesirable, to issue Commercial Paper Notes to fund all or any portion of its
Loans at a CP Rate, or is unable to repay such Commercial Paper Notes upon the
maturity thereof, such Conduit may sell all or any portion of its Loans (or
interests therein) to its Liquidity Banks at any time pursuant to its Liquidity
Agreement to finance or refinance the necessary portion of its Loans through a
Liquidity Funding to the extent available. The Liquidity Fundings may be
Alternate Base Rate Loans or Eurodollar Loans, or a combination thereof,
selected by the Borrower in accordance with Article II. In addition, the parties
acknowledge that Commercial Paper Notes are issued at a discount and at varying
discount rates; accordingly, it may not be possible for all CP Rate Loans to be
made in amounts precisely equal to the amounts specified in a Borrowing Request.
Regardless of whether a Liquidity Funding constitutes an assignment of a Loan or
the sale of one or more participations therein, each
3
Liquidity Bank participating in a Liquidity Funding shall have the rights of a
"Lender" hereunder with the same force and effect as if it had directly made a
Loan to the Borrower in the amount of its Liquidity Funding.
(d) Nothing herein shall be deemed to commit any Lender to make CP
Rate Loans.
Section 1.3 Interest Rates.
(a) Each CP Rate Loan shall bear interest on the outstanding
principal amount thereof from and including the first day of the CP Tranche
Period applicable thereto selected in accordance with Article II of this
Agreement to (but not including) the last day of such CP Tranche Period at the
applicable CP Rate. On the 5th Business Day immediately preceding each
Settlement Date, Blue Ridge shall calculate the aggregate amount of CP Costs for
the applicable Accrual Period and shall notify the Borrower of such aggregate
amount which shall be payable on such Settlement Date.
(b) Each Eurodollar Loan shall bear interest on the outstanding
principal amount thereof from and including the first day of the Interest Period
applicable thereto selected in accordance with Article II of this Agreement to
(but not including) the last day of such Interest Period at a rate per annum
equal to the sum of (i) the applicable Eurodollar Rate (Reserve Adjusted) for
such Interest Period plus (ii) the Applicable Percentage per annum.
(c) Each Alternate Base Rate Loan shall bear interest on the
outstanding principal amount thereof, for each day from and including the date
such Loan is made to but excluding the date it is paid at a rate per annum equal
to the Alternate Base Rate for such day. Changes in the rate of interest on
Alternate Base Rate Loans will take effect simultaneously with each change in
the Alternate Base Rate.
(d) Notwithstanding anything to the contrary contained in Sections
1.3(a), (b) or (c), upon the occurrence of an Event of Default, and during the
continuance thereof, all Obligations shall bear interest, payable upon demand,
at the Default Rate.
(e) Interest shall be payable for the day a Loan is made but not for
the day of any payment on the amount paid if payment is received prior to noon
(local time) at the place of payment. If any payment of principal of or interest
on a Loan shall become due on a day which is not a Business Day, such payment
shall be made on the next succeeding Business Day and, in the case of a
principal payment, such extension of time shall be included in computing
interest in connection with such payment.
Section 1.4 Payment Dates; Absence of Notes to Evidence Loans.
(a) The Borrower promises to pay the principal of each CP Rate Loan
on the last day of its CP Tranche Period.
(b) The Borrower promises to pay the principal of each Eurodollar
Loan on the last day of its Interest Period.
4
(c) The Borrower promises to pay the principal of each Alternate
Base Rate Loan on or before the earliest to occur of (i) the Termination Date,
(ii) the applicable Liquidity Bank's Scheduled Termination Date, and (iii) the
refinancing of such Loan with a CP Rate Loan or a Eurodollar Rate Loan.
(d) The Borrower promises to pay all accrued and unpaid interest on
each Loan on its applicable Interest Payment Date.
(e) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Borrower to such
Lender resulting from each Loan made by such Lender from time to time, including
the amounts of principal and interest payable and paid to such Lender from time
to time hereunder. Upon request of the Borrower, such Lender's Co-Agent or the
Administrative Agent, such Lender will confirm the outstanding principal
balances of its Loans and the amount of any accrued and unpaid interest thereon.
The entries maintained in the accounts maintained pursuant to this Section shall
be prima facie evidence of the existence and amounts of the Obligations therein
recorded; PROVIDED, HOWEVER, that the failure of any Lender to maintain such
accounts or any error therein shall not in any manner affect the obligation of
the Borrower to repay the Obligations in accordance with their terms.
Section 1.5 Prepayments. Subject, in the case of CP Rate Loans and
Eurodollar Loans, to the funding indemnification provisions of Section 4.3:
(a) The Borrower may from time to time voluntarily prepay, without
penalty or premium, all outstanding Advances, or, in a minimum aggregate amount
of $2,000,000 (or a larger integral multiple of $1,000,000), any portion of the
outstanding Advances by written notice to the Co-Agents (each, a "PREPAYMENT
NOTICE") given within the Required Notice Period; PROVIDED THAT each such
prepayment of principal is accompanied by a payment of all accrued and unpaid
interest on the amount prepaid, together with all amounts (if any) due under
Section 4.3, and except as provided in Sections 1.8(c) and Section 14.1(c) and
in the definitions of "APPROVED AMENDMENT" and "TERMINATION DATE," is made
between the Groups in such proportions so that after giving effect thereto, the
aggregate outstanding principal balance of the Loans outstanding from each Group
shall be in proportion to such Group's Percentage of the aggregate outstanding
principal balance of all Advances then outstanding hereunder.
(b) If, on any Business Day, the aggregate outstanding principal
amount of the Loans from the Blue Ridge Group exceeds the Blue Ridge Allocation
Limit, or the aggregate principal amount of the Loans outstanding from Blue
Ridge exceeds the Blue Ridge Liquidity Banks' Liquidity Commitments divided by
102%, the Borrower shall prepay such Loans by wire transfer to the Blue Ridge
Agent received not later than 12:00 noon (New York City time) on the first
Business Day thereafter of an amount sufficient to eliminate such excess,
together with accrued and unpaid interest on the amount prepaid.
(c) If, on any Business Day, the aggregate outstanding principal
amount of the Loans from the Atlantic Group exceeds the Atlantic Allocation
Limit, or the aggregate principal amount of the Loans outstanding from Atlantic
exceeds the Atlantic Liquidity Banks' aggregate Liquidity Commitments divided by
102%, the Borrower shall prepay such Loans by wire transfer to the Atlantic
5
Agent received not later than 12:00 noon (New York City time) on the first
Business Day thereafter of an amount sufficient to eliminate such excess,
together with accrued and unpaid interest on the amount prepaid.
(d) Upon receipt of any wire transfer pursuant to Section 1.5(a),
(b) or (c), the applicable Co-Agent shall wire transfer to each of its
Constituent Lenders their respective shares thereof not later than 1:00 p.m.
(New York City time) on the date when received. Any prepayment required pursuant
to Section 1.5(b) or (c) shall be applied FIRST, to the ratable reduction of the
applicable Group's Alternate Base Rate Loans outstanding, SECOND, to the ratable
reduction of the applicable Group's Eurodollar Loans outstanding, and LASTLY, to
the reduction of the applicable Group's CP Rate Loans selected by the Borrower
(or the Servicer, on the Borrower's behalf).
Section 1.6 Reductions in Aggregate Commitment. The Borrower may
permanently reduce the Aggregate Commitment in whole, or ratably between the
Groups in part, in a minimum amount of $10,000,000 (or a larger integral
multiple of $1,000,000), upon at least fifteen (15) Business Days' written
notice to the Co-Agents (each, a "COMMITMENT REDUCTION NOTICE"), which notice
shall specify the aggregate amount of any such reduction and the Blue Ridge
Liquidity Banks' and Atlantic Liquidity Banks' respective Percentages thereof,
PROVIDED, HOWEVER, that (a) the amount of the Aggregate Commitment may not be
reduced below the aggregate principal amount of the outstanding Advances, and
(b) the amount of the Aggregate Commitment may not be reduced below $100,000,000
unless the Aggregate Commitment is terminated in full. All accrued and unpaid
fees shall be payable on the effective date of any termination of the Aggregate
Commitment. Each Commitment Reduction Notice shall be irrevocable once delivered
to the Co-Agents.
Section 1.7 Requests for Increases in Aggregate Commitment. The
Borrower may from time to time request increases in the Aggregate Commitment in
a minimum amount of $10,000,000 (or a larger integral multiple of $1,000,000),
upon at least 30 days' prior written notice to the Co-Agents, which notice shall
specify the aggregate amount of and proposed effective date for any such
requested increase as well each Group's Percentage of the requested increase
(each, a "COMMITMENT INCREASE REQUEST"). If both Co-Agents agree to the
requested increase by notifying the Borrower in writing of their concurrence,
such increase shall be made to the Commitments of the Blue Ridge Liquidity Banks
and the Atlantic Liquidity Banks, ratably in accordance with their respective
Percentages and Ratable Shares as of the effective date specified in the
Commitment Increase Request. If either Co-Agent declines such request, the other
Co-Agent may elect to increase the Commitments of its Constituent Liquidity
Banks by all or any portion of the entire amount requested, in which case the
Percentages shall be adjusted to reflect such increase on the effective date
specified in the Commitment Increase Request. If neither Co-Agent agrees to such
increase, the amount of the Aggregate Commitment shall remain unchanged.
Section 1.8 Extension of the Scheduled Termination Date.
(a) Provided that no Unmatured Default or Event of Default exists
and is continuing, the Borrower may request one or more Liquidity Bank(s) to
extend its Scheduled Termination Date by submitting a request for an extension
(each, an "EXTENSION REQUEST") to the Co-Agents no more than 210 days prior to
each such Liquidity Bank's respective Scheduled Termination Date then in effect
(it being understood that no such request may be made with respect to CLNY's
Scheduled Termination
6
Date more than 90 days prior to or CLNY's Scheduled Termination Date, as
applicable). Each Extension Request must specify the new Scheduled Termination
Date requested by the Borrower for such Liquidity Bank(s) and the date (which
must be at least 30 days after the Extension Request is delivered to the
Co-Agents) as of which the Co-Agents and the applicable Liquidity Bank(s) must
respond to the Extension Request (the "RESPONSE DATE"). The new Scheduled
Termination Date for each applicable Liquidity Bank shall be no more than 364
days after the applicable Response Date, including such Response Date as one of
the days in the calculation of the days elapsed.
(b) Promptly upon receipt of an Extension Request, the Blue Ridge
Agent shall notify the Blue Ridge Group of the contents thereof and shall
request each applicable Blue Ridge Liquidity Bank to approve such Extension
Request, and the Atlantic Agent shall notify the Atlantic Group of the contents
thereof and shall request each applicable Atlantic Liquidity Bank to approve
such Extension Request. Each applicable Liquidity Bank approving such Extension
Request shall deliver its written approval to its Co-Agent no later than the
Response Date, whereupon such Co-Agent shall notify the other Co-Agent and the
Borrower within one Business Day thereafter as to which (if any) of such
Co-Agent's applicable Constituent Liquidity Banks have approved such Extension
Request.
(c) If any applicable Liquidity Bank does not approve the Extension
Request, its Co-Agent shall promptly notify its Conduit, the other Co-Agent and
the Borrower of such fact, and the Borrower shall have the right to (i) require
such Non-Approving Lender to assign all, but not less than all, of its
Commitment and outstanding Obligations by entering into written assignments with
one or more Eligible Assignees not later than the 5th Business Day prior to such
Non-Approving Lender's existing Scheduled Termination Date, or (ii) to pay in
full of all Obligations (if any) owing to such Non-Approving Lender and
terminate its Commitment no later than such Non-Approving Lender's existing
Scheduled Termination Date. Each assignment pursuant to clause (i) above to an
Eligible Assignee (which may include a Constituent of the other Co-Agent) shall
become effective on the existing Scheduled Termination Date and, subject to
receipt of payment in full on such existing Scheduled Termination Date for all
Obligations, if any, owing to such Non-Approving Lender, such Non-Approving
Lender shall make each such requested assignment; PROVIDED THAT any expenses or
other amounts which would be owing to such Non-Approving Lender pursuant to any
indemnification provision hereof shall be payable by the Borrower as if the
Borrower had prepaid the Loans of the assigning Lenders rather than such
assigning Lenders having assigned their respective interests hereunder. If no
assignment of a Non-Approving Lender's Commitment to an Eligible Assignee is
executed by the 5th Business Day prior to its existing Scheduled Termination
Date, the Scheduled Termination Date for all Lenders shall remain unchanged. If
all applicable Liquidity Banks approve an Extension Request by the Response
Date, the Scheduled Termination Date specified in such Extension Request shall
become effective on such Response Date as to the approving Liquidity Banks, and
each of the Co-Agents shall promptly notify the Borrower and the other Co-Agent
of the applicable Liquidity Banks' new Scheduled Termination Date.
Section 1.9 Distribution of Certain Notices; Notification of
Interest Rates. Promptly after receipt thereof, the Blue Ridge Agent will notify
the Blue Ridge Group, and the Atlantic Agent will notify the Atlantic Group, of
the contents of each Monthly Report, Weekly Report, Borrowing Request, Extension
Request, Commitment Reduction Notice, Prepayment Notice, Commitment Increase
Request or notice of default received by it from the Borrower or the Servicer
hereunder. In
7
addition, each of the Co-Agents shall promptly notify its Constituent Lenders
and the Borrower of each determination of and change in Interest Rates.
ARTICLE II
BORROWING AND PAYMENT MECHANICS; CERTAIN COMPUTATIONS
Section 2.1 Method of Borrowing. The Borrower (or the Servicer, on
the Borrower's behalf) shall give the Co-Agents irrevocable notice in the form
of Exhibit 2.1 hereto (each, a "BORROWING REQUEST") not later than 12:00 noon
(New York City time) at least two (2) Business Days before the Borrowing Date of
each Advance. On each Borrowing Date, each applicable Lender shall make
available its Loan or Loans in immediately available funds to its Co-Agent by
wire transfer of such amount received not later than 1:00 p.m. (New York City
time). Subject to its receipt of such wire transfers, each Co-Agent will wire
transfer the funds so received from its Constituent Lenders to the Borrower at
the account specified in its Borrowing Request not later than 2:00 p.m. (New
York City time) on the applicable Borrowing Date. Unless each of the Co-Agents
in its sole discretion shall otherwise agree, not more than one (1) Borrowing
Date shall occur in any calendar week.
Section 2.2 Selection of CP Tranche Periods and Interest Periods.
(a) Except upon the occurrence and during the continuance of an
Event of Default, the Borrower (or the Servicer, on the Borrower's behalf) in
its Borrowing Request may request CP Tranche Periods from time to time to apply
to Atlantic's CP Rate Loans; PROVIDED, HOWEVER, that (i) at any time while
Atlantic has CP Rate Loans outstanding, at least one CP Tranche Period of
Atlantic shall mature on each Settlement Date and (ii) no CP Tranche Period of
Atlantic may extend beyond the latest Scheduled Termination Date of any Atlantic
Liquidity Bank. In addition to the foregoing, except upon the occurrence and
during the continuance of an Event of Default, the Borrower (or the Servicer, on
the Borrower's behalf) in its Borrowing Request may request Interest Periods
from time to time to apply to the Eurodollar Loans; PROVIDED, HOWEVER, that (x)
at any time while any Lender has Eurodollar Loans outstanding, at least one
Interest Period of such Lender shall mature on each Settlement Date and (y) no
Interest Period of any Lender which began prior to its Scheduled Termination
Date shall extend beyond such Scheduled Termination Date.
(b) While the Atlantic Agent will use reasonable efforts to
accommodate the Borrower's or the Servicer's requests for CP Tranche Periods
except during the continuance of an Event of Default, the Atlantic Agent shall
have the right to subdivide any requested CP Rate Loan into one or more CP Rate
Loans of different CP Tranche Periods, or, if the requested period is not
feasible, to suggest an alternative CP Tranche Period. While each of the
Co-Agents will use reasonable efforts to accommodate the Borrower's or the
Servicer's requests for Interest Periods for Eurodollar Loans except during the
continuance of an Event of Default, each of the Co-Agents shall have the right
to subdivide any requested Eurodollar Loan into one or more Eurodollar Loans
with different Interest Periods, or, if the requested period is not feasible, to
suggest an alternative Interest Period. Notwithstanding the foregoing, not less
than $1,000,000 of principal may be allocated to any CP Tranche Period or
Interest Period of any Lender, and no Alternate Base Rate Loan may have a
principal amount of less than $1,000,000.
8
(c) The Borrower (or the Servicer, on the Borrower's behalf) may not
request an Interest Period for a Eurodollar Loan unless it shall have given each
of the applicable Co-Agent(s) written notice of its desire therefor not later
than 12:00 noon (New York City time) at least three (3) Business Days prior to
the first day of the desired Interest Period. Accordingly, all Liquidity
Fundings shall initially be Alternate Base Rate Loans.
(d) Unless both Co-Agents shall have received written notice by
12:00 noon (New York City time) on the Required Day prior to the last day of a
CP Tranche Period that the Borrower intends to reduce the aggregate principal
amount of the CP Rate Loans outstanding, each of the Co-Agents and the Conduits
shall be entitled to assume that the Borrower desires to refinance the principal
and interest of each maturing CP Rate Loan on the last day of its CP Tranche
Period with new CP Rate Loans having substantially similar CP Tranche Periods;
PROVIDED, HOWEVER, that the Borrower shall remain liable to pay in cash any
portion of the principal or interest on the maturing CP Rate Loan when due to
the extent that the applicable Conduit cannot issue Commercial Paper Notes or
avail itself of a Liquidity Funding, in either case, in the precise amount
necessary to refinance the maturing CP Rate Loan and the accrued and unpaid
interest thereon.
(e) Unless the Co-Agents shall have received written notice by 12:00
noon (New York City time) on the third (3rd) Business Day prior to the last day
of an Interest Period that the Borrower intends to reduce the aggregate
principal amount of the Eurodollar Loans outstanding from the Liquidity Banks,
each of the Liquidity Banks shall be entitled to assume that the Borrower
desires to refinance its maturing Eurodollar Loans on the last day of such
Interest Period with Alternate Base Rate Loans.
Section 2.3 Computation of Concentration Limits and Unpaid Net
Balance. The Obligor Concentration Limits and the aggregate Unpaid Net Balance
of Receivables of each Obligor and its Affiliated Obligors (if any) shall be
calculated as if each such Obligor and its Affiliated Obligors were one Obligor.
Section 2.4 Maximum Interest Rate. No provision of this Agreement
shall require the payment or permit the collection of interest in excess of the
maximum permitted by applicable law.
Section 2.5 Payments and Computations, Etc.
(a) Payments. All amounts to be paid or deposited by the Borrower or
the Servicer (on the Borrower's behalf) to any of the Agents or Lenders (other
than amounts payable under Section 4.2) shall be paid by wire transfer of
immediately available funds received not later than 1:00 p.m. (New York City
time) on the day when due in lawful money of the United States of America to the
applicable Co-Agent at its address specified in Schedule 14.2, and, to the
extent such payment is for the account of any Lender, the applicable Co-Agent
shall promptly disburse such funds to the appropriate Lender(s) in its Group.
(b) Late Payments. To the extent permitted by law, upon demand, the
Borrower or the Servicer (on the Borrower's behalf), as applicable, shall pay to
the applicable Co-Agent for the account of each Person in its Group to whom
payment of any Obligation is due, interest on all amounts not paid
9
or deposited by 1:00 p.m. (New York City time) on the date when due (without
taking into account any applicable grace period) at the Default Rate.
(c) Method of Computation. All computations of interest at the
Alternate Base Rate or the Default Rate shall be made on the basis of a year of
365 (or, when appropriate, 366) days for the actual number of days (including
the first day but excluding the last day) elapsed. All other computations of
interest, and all computations of Servicer's Fee, any per annum fees payable
under Section 4.1 and any other per annum fees payable by the Borrower to the
Lenders, the Servicer or any of the Agents under the Loan Documents shall be
made on the basis of a year of 360 days for the actual number of days (including
the first day but excluding the last day) elapsed.
(d) Avoidance or Rescission of Payments. To the maximum extent
permitted by applicable law, no payment of any Obligation shall be considered to
have been paid if at any time such payment is rescinded or must be returned for
any reason.
Section 2.6 Non-Receipt of Funds by the Co Agents. Unless a Lender
notifies its Co-Agent prior to the date and time on which it is scheduled to
fund a Loan that it does not intend to fund, such Co-Agent may assume that such
funding will be made and may, but shall not be obligated to, make the amount of
such Loan available to the intended recipient in reliance upon such assumption.
If such Lender has not in fact funded its Loan proceeds to the applicable
Co-Agent, the recipient of such payment shall, on demand by such Co-Agent, repay
to such Co-Agent the amount so made available together with interest thereon in
respect of each day during the period commencing on the date such amount was so
made available by such Co-Agent until the date such Co-Agent recovers such
amount at a rate per annum equal to the Federal Funds Rate for such day.
ARTICLE III
SETTLEMENTS
Section 3.1 Reporting.
(a) Monthly Reports. Not later than the Monthly Reporting Date in
each calendar month hereafter, the Servicer shall deliver to each of the
Co-Agents, a Monthly Report accompanied by an electronic file in a form
reasonably satisfactory to each of the Co-Agents; PROVIDED, HOWEVER, that if an
Unmatured Default or an Event of Default shall exist and be continuing, each of
the Co-Agents may request that a computation of the Borrowing Base also be made
on a date that is not a Monthly Reporting Date and, so long as such request is
not made on or within 5 Business Days prior to the last day of any calendar
month, the Servicer agrees to provide such computation within 3 Business Days
after such request.
(b) Weekly Reports; Right to Request Cash Collateral Payment. Not
later than each Weekly Reporting Date, the Servicer shall deliver to each of the
Co-Agents, a Weekly Report of the dollar amount of cash collections and the
number of requisitions, in each case, for the second preceding week (the "REPORT
WEEK"). If the dollar amount of cash Collections or the number of requisitions
for the Report Week is less than 50% of the arithmetic average of the
corresponding figures for the four immediately preceding Report Weeks, upon
request of either of the Co-Agents, the Servicer shall
10
provide a written computation of the Cash Collateral Payment within 3 Business
Days after such request.
(c) Interest; Other Amounts Due. At or before 12:00 noon (New York
City time) on the Business Day before each Settlement Date, each of the
Co-Agents shall notify the Borrower and the Servicer of (i) the aggregate
principal balance of all Loans that are then outstanding from its Constituents,
and (ii) the aggregate amount of all principal, interest and fees that will be
due and payable by the Borrower to such Co-Agent for the account of such
Co-Agent or its Constituents on such Settlement Date.
Section 3.2 Turnover of Collections. Without limiting any Agent's or
Lender's recourse to the Borrower for payment of any and all Obligations:
(a) If any Monthly Report reveals that a mandatory prepayment is
required under Section 1.5(b) or (c), not later than the 12:00 noon (New
York City time) on the next succeeding Settlement Date, the Servicer shall
turn over to each applicable Co-Agent, for distribution to its
Constituents, a portion of the Collections equal to the amount of such
required mandatory prepayment;
(b) If, on any Settlement Date, any Loans are to be voluntarily
prepaid in accordance with Section 1.5(a), or if the aggregate principal
amount of the Advances outstanding is to be reduced, the Servicer shall
turn over to each of the Co-Agents, for distribution to its Constituents,
a portion of the Collections equal to the Groups' respective Percentages
of the aggregate amount of such voluntary prepayment or reduction; and
(c) In addition to, but without duplication of, the foregoing, on
(i) each Settlement Date and (ii) each other date on which any principal
of or interest on any of the Loans becomes due (whether by acceleration or
otherwise) and, in the case of principal, has not been reborrowed pursuant
to Section 1.1, the Servicer shall turn over to each of the Co-Agents, for
distribution to their respective Constituents, the Groups' respective
Percentages of a portion of the Collections equal to the aggregate amount
of all other Obligations that are due and owing on such date. If the
Collections and proceeds of new Loans are insufficient to make all
payments required under clauses (a), (b) and (c) and to pay the Servicer's
Fees and, if applicable, all expenses due and owing to any replacement
Servicer under Section 8.1(d) (all of the foregoing, collectively, the
"REQUIRED AMOUNTS") and the Borrower has made any Demand Advances, the
Borrower shall make demand upon Quest Diagnostics for payment of the
Demand Advances in an amount equal to the lesser of the Required Amounts
or the aggregate outstanding principal balance of such Demand Advances
(plus any accrued and unpaid interest thereon) and, upon receipt of any
such amounts, the Borrower shall pay them to each of the Co-Agents,
ratably in accordance with their respective Groups' Percentages, for
distribution in accordance with this Section 3.2.
(d) If the aggregate amount of Collections and payments on Demand
Advances received by the Co-Agents on any Settlement Date are insufficient
to pay all Required
11
Amounts, the aggregate amount received shall be applied to the items
specified in the subclauses below, in the order of priority of such
subclauses:
(i) to any accrued and unpaid interest on the Loans that is
then due and owing, including any previously accrued interest which was
not paid on its applicable due date;
(ii) if the Servicer is not the Borrower or an Affiliate
thereof, to any accrued and unpaid Servicer's Fee that is then due and
owing to such Servicer, together with any invoiced expenses of the
Servicer due and owing pursuant to Section 8.1(d);
(iii) to the Facility Fee and the Usage Fee accrued during
such Settlement Period, plus any previously accrued Facility Fee and Usage
Fee not paid on a prior Settlement Date;
(iv) to the payment of the principal of any Loans
that are then due and owing;
(v) to other Obligations that are then due and owing;
(vi) if the Servicer is the Borrower, Quest Diagnostics or one
of their respective Affiliates, to the accrued and unpaid Servicer's Fee
and Supplemental Servicer's Fee that are then due and owing to such
Servicer; and
(vii) the balance, if any, to the Borrower.
(e) If the Servicer is ever required to deliver a computation of the
Cash Collateral Payment pursuant to Section 3.1(b), not later than one (1)
Business Day after delivery of such computation, the Borrower shall pay to
the applicable Co-Agent an amount equal to its Group's Percentage of the
Cash Collateral Payment to be invested in Permitted Investments selected
by such Co-Agent but held as Collateral for the Obligations until the next
Settlement Date pending distribution in accordance with Section 3.2(d). If
the Borrower lacks sufficient funds to make any such Cash Collateral
Payment, in whole or in part, the Borrower shall make immediate demand
upon Quest Diagnostics for payment of any Demand Advances that are then
outstanding, and, upon receipt of any such shortfall amount, the Borrower
shall pay each Group's Percentage of such shortfall amount to the
applicable Co-Agent for deposit into a cash collateral account to be
invested in Permitted Investments selected by the applicable Co-Agent but
held as Collateral for the Obligations until the next Settlement Date
pending distribution in accordance with Section 3.2(d).
(f) In addition to, but without duplication of, the foregoing, on
(i) each Settlement Date and (ii) each other date on which any principal
of or interest on any of the Loans becomes due (whether by acceleration
pursuant to Section 10.2(a) or 10.2(b) or otherwise), the Servicer shall
turn over to each of the Co-Agents, for distribution to
12
the Lenders, a portion of the Collections equal to the aggregate amount of
all Obligations that are due and owing on such date.
Section 3.3 Non-Distribution of Servicer's Fee. Each of the Agents
and the other Secured Parties hereby consents to the retention by the Servicer
of a portion of the Collections equal to the Servicer's Fee (and, if applicable,
any invoiced expenses of such Servicer that are due and owing pursuant to
Section 8.1(d)) so long as the Collections received by the Servicer are
sufficient to pay all amounts pursuant to Section 3.2 of a higher priority as
specified in such Section.
Section 3.4 Deemed Collections. If as of the last day of any
Settlement Period:
(a) the outstanding aggregate balance of the Net Receivables as
reflected in the preceding Monthly Report (net of any positive adjustments) has
been reduced for any of the following reasons:
(i) as a result of any rejected services, any cash discount or any
other adjustment by the applicable Originator or any Affiliate thereof
(regardless of whether the same is treated by such Originator or Affiliate
as a write-off), or as a result of any surcharge or other governmental or
regulatory action, or
(ii) as a result of any setoff or breach of the underlying agreement
in respect of any claim by the Obligor thereof (whether such claim arises
out of the same or a related or an unrelated transaction), or
(iii) on account of the obligation of the applicable Originator
or any Affiliate thereof to pay to the related Obligor any rebate or
refund, or
(iv) the Unpaid Net Balance of any Receivable is less than the
amount included in calculating the Net Pool Balance for purposes of any
Monthly Report (for any reason other than such Receivable becoming a
Defaulted Receivable), or
(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).
13
ARTICLE IV
FEES AND YIELD PROTECTION
Section 4.1 Fees. Quest Diagnostics or the Borrower, as applicable,
shall pay to each of the Agents and the Lenders certain fees from time to time
in amounts and payable on such dates as are set forth in the Fee Letters.
Section 4.2 Yield Protection.
(a) If any Regulatory Change occurring after the date hereof:
(i) shall subject an Affected Party to any Tax, duty or other charge
with respect to its Obligations or, as applicable, its Commitment or its
Liquidity Commitment, or shall change the basis of taxation of payments to
the Affected Party of any Obligations, owed to or funded in whole or in
part by it or any other amounts due under this Agreement in respect of its
Obligations or, as applicable, its Commitment or its Liquidity Commitment
except for (A) Taxes based on, or measured by, net income or net profits,
or changes in the rate of Tax on or determined by reference to the overall
net income or net profits, of such Affected Party imposed by the United
States of America, by the jurisdiction in which such Affected Party's
principal executive office and/or its applicable lending office is located
and, if such Affected Party's principal executive office or its applicable
lending office is not in the United States of America, by the jurisdiction
where such Affected Party's principal office or applicable lending office
is located, (B) franchise Taxes, Taxes on, or in the nature of, doing
business Taxes or capital Taxes, or (C) withholding Taxes required for
payments made to any foreign entity (other than withholding Taxes imposed
by the United States as a result of a change in law after the date hereof
and before such foreign entity issues its Commitment or Liquidity
Commitment or becomes an assignee of a Lender hereunder), unless such
foreign entity fails to deliver to each of the Co-Agents and the Borrower
an accurate IRS Form W-8BEN or W-8ECI (or the applicable successor form),
as applicable; or
(ii) shall impose, modify or deem applicable any reserve that was
not included in the computation of the applicable Interest Rate, or any
special deposit or similar requirement against assets of any Affected
Party, deposits or obligations with or for the account of any Affected
Party or with or for the account of any affiliate (or entity deemed by the
Federal Reserve Board to be an affiliate) of any Affected Party, or credit
extended by any Affected Party; or
(iii) shall affect the amount of capital required or expected to
be maintained by any Affected Party; or
(iv) shall impose any other condition affecting any Obligation owned
or funded in whole or in part by any Affected Party, or its rights or
obligations, if any, to make Loans or Liquidity Fundings; or
14
(v) shall change the rate for, or the manner in which the Federal
Deposit Insurance Corporation (or a successor thereto) assesses deposit
insurance premiums or similar charges;
and the result of any of the foregoing is or would be:
(x) to increase the cost to or to impose a cost on (I) an Affected
Party funding or making or maintaining any Loan, any Liquidity Funding, or
any commitment of such Affected Party with respect to any of the
foregoing, or (II) any of the Agents for continuing its or the Borrower's
relationship with any Affected Party, in each case, in an amount deemed to
be material by such Affected Party,
(y) to reduce the amount of any sum received or receivable by
an Affected Party under this Agreement or under the Liquidity
Agreement, or
(z) to reduce the rate of return on such Affected Party's capital as
a consequence of its Commitment, its Liquidity Commitment or the Loans
made by it to a level below that which such Affected Party could have
achieved but for the occurrence of such circumstances,
then, within thirty days after demand by such Affected Party (which demand shall
be made not more than 90 days after the date on which the Affected Party becomes
aware of such Regulatory Change and shall be accompanied by a certificate
setting forth, in reasonable detail, the basis of such demand and the
methodology for calculating, and the calculation of, the amounts claimed by the
Affected Party), the Borrower shall pay directly to such Affected Party such
additional amount or amounts as will compensate such Affected Party for such
actual additional cost, actual increased cost or actual reduction.
(b) Each Affected Party will promptly notify the Borrower, the
Administrative Agent and the applicable Co-Agent of any event of which it has
knowledge (including any future event that, in the judgment of such Affected
Party, is reasonably certain to occur) which will entitle such Affected Party to
compensation pursuant to this Section 4.2; PROVIDED, HOWEVER, no failure to give
or delay in giving such notification shall adversely affect the rights of any
Affected Party to such compensation unless such notification is given more than
90 days after the Affected Party becomes aware of such Regulatory Change.
(c) In determining any amount provided for or referred to in this
Section 4.2, an Affected Party may use any reasonable averaging and attribution
methods (consistent with its ordinary business practices) that it (in its
reasonable discretion) shall deem applicable. Any Affected Party when making a
claim under this Section 4.2 shall submit to the Borrower the above-referenced
certificate as to such actual increased cost or actual reduced return (including
calculation thereof in reasonable detail), which statement shall, in the absence
of demonstrable error, be conclusive and binding upon the Borrower.
(d) Each of the Lenders agrees, and to require each Affected Party
to agree that, with reasonable promptness after an officer of such Lender or
such Affected Party responsible for administering the Transaction Documents
becomes aware that it has become an Affected Party under
15
this Section 4.2, is entitled to receive payments under this Section 4.2, or is
or has become subject to U.S. withholding Taxes payable by any Loan Party in
respect of its investment hereunder, it will, to the extent not inconsistent
with any internal policy of such Person or any applicable legal or regulatory
restriction, (i) use all reasonable efforts to make, fund or maintain its
commitment or investment hereunder through another branch or office of such
Affected Party, or (ii) take such other reasonable measures, if, as a result
thereof, the circumstances which would cause such Person to be an Affected Party
under this Section 4.2 would cease to exist, or the additional amounts which
would otherwise be required to be paid to such Person pursuant to this Section
4.2 would be reduced, or such withholding Taxes would be reduced, and if the
making, funding or maintaining of such commitment or investment through such
other office or in accordance with such other measures, as the case may be,
would not otherwise adversely affect such commitment or investment or the
interests of such Person; PROVIDED THAT such Person will not be obligated to
utilize such other lending office pursuant to this Section 4.2 unless the
Borrower agrees to pay all incremental expenses incurred by such Person as a
result of utilizing such other office as described in clause (i) above.
(e) If any Liquidity Bank (other than a Co-Agent) makes a claim for
compensation under this Section 4.2, the Borrower may propose an Eligible
Assignee to the applicable Co-Agent who is willing to accept an assignment of
such Liquidity Bank's Commitment, Liquidity Commitment and outstanding Loans,
together with each of its other rights and obligations under the Transaction
Documents; PROVIDED THAT any expenses or other amounts which would be owing to
such Liquidity Bank pursuant to any indemnification provision hereof (including,
if applicable, Section 4.3) shall be payable by the Borrower as if the Borrower
had prepaid the Loans of the assigning Lenders rather than such assigning
Lenders having assigned their respective interests hereunder. If such proposed
Eligible Assignee is acceptable to the applicable Co-Agent (who shall not
unreasonably withhold or delay its approval), the claiming Liquidity Bank will
be obligated to assign all of its rights and obligations to such proposed
Eligible Assignee within ten (10) Business Days after such Co-Agent gives its
consent to such proposed Eligible Assignee.
Section 4.3 Funding Losses. In the event that any Lender shall
actually incur any actual loss or expense (including any actual loss or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to make or maintain any Loan or Liquidity Funding) as a
result of (i) any payment of principal with respect to such Lender's Loan or
Liquidity Funding being made on any day other than the scheduled last day of an
applicable CP Tranche Period or Interest Period with respect thereto, including,
without limitation, because of a prepayment required by Section 1.5(b) or (c)
(it being understood that the foregoing shall not apply to any Alternate Base
Rate Loans), or (ii) any Loan not being made in accordance with a request
therefor under Section 2.1, then, upon written notice from the applicable
Co-Agent to the Administrative Agent, the Borrower and the Servicer, the
Borrower shall pay to the Servicer, and the Servicer shall pay to the applicable
Co-Agent for the account of such Lender, the amount of such actual loss or
expense; PROVIDED, HOWEVER, that in the case of Blue Ridge, nothing in this
Section 4.3 shall duplicate any amount paid to it as Broken Funding Costs. 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.
16
ARTICLE V
CONDITIONS OF ADVANCES
Section 5.1 Conditions Precedent to Restructuring Effectiveness.
Effectiveness of this Agreement shall be subject to the conditions precedent
that on such date: (a) each of the statements contained in Sections 5.2(a), (b)
and (c) shall be true, and (b) the Administrative Agent shall have received not
less than two (2) originals (except in the case of item (xi) below) of each of
the following documents dated the date hereof:
(i) This Agreement, duly executed by the parties hereto;
(ii) A certificate of the Secretary or Assistant Secretary of each
Loan Party certifying (A) the names and true signatures of the officers
authorized on its behalf to sign this Agreement and the other Transaction
Documents to be delivered by it hereunder (on which certificate the Agents and
the Lenders may conclusively rely until such time as the Administrative Agent
shall receive from such Loan Party a revised certificate meeting the
requirements of this subsection (ii)), (B) that there has been no change in the
Organic Documents of such Loan Party since the date of the Existing Agreement
except for the amendments to Quest Diagnostics' articles of incorporation to
increase the authorized number of its shares of common stock and designate
additional rights and preferences for preferred stock and an amendment and
restatement of its by-laws to remove the maximum age for election as a director
(copies of which amendments shall be attached to such certificate), and (C) an
attached copy of resolutions of such Loan Party's board of directors authorizing
its execution and delivery of this Agreement;
(iii) Either (A) a reliance letter from Shearman & Sterling
authorizing each member of the Atlantic Group to rely on Shearman & Sterling's
bankruptcy opinion dated July 21, 2000 delivered in connection with the Sale
Agreement as though such opinion were dated the date hereof, or (B) new opinions
dated the date hereof addressed to each of the Agents and the Lenders addressing
(1) the existence of a "true sale" or "true contribution" of the Receivables
from each of the Originators to the Borrower under the Sale Agreement, and (2)
the inapplicability of the doctrine of substantive consolidation to the Borrower
and each of the Originators in connection with any bankruptcy proceeding
involving any of the Originators or the Borrower;
(iv) One or more favorable opinions of counsel to Loan Parties
covering the matters set forth in of Exhibit 5.1(h);
(v) Copies in form suitable for filing of any and all financing
statement amendments necessary to ensure that the Borrower continues to have a
perfected ownership interest or perfected first priority security interest in
the Receivables and Related Assets conveyed to it under the Sale Agreement and
the Administrative Agent, for the benefit of the Secured Parties, continues to
have a perfected first priority security interest in the Collateral hereunder;
(vii) A Monthly Report, prepared as of the Cut-Off Date of July 31,
2001;
(viii) The Liquidity Agreements, in form and substance satisfactory
to each of the Co-Agents, duly executed by the parties thereto;
17
(ix) The Fee Letters, together with payment of any and all fees due
on or prior to the date hereof;
(x) A certificate of an Authorized Officer of each of the Loan
Parties certifying that as of the date of the initial Advance, no Event of
Default or Unmatured Event of Default exists and is continuing; and
(xi) Evidence that the Rating Agency Condition has been satisfied
with respect to Atlantic.
Section 5.2 Conditions Precedent to All Advances. Each Advance
(including the initial Advance under this Agreement) shall be subject to the
further conditions precedent that on the applicable Borrowing Date, each of the
following statements shall be true (and the Borrower, by accepting the amount of
such Advances or by receiving the proceeds of any Loan comprising such Advance,
and each other Loan Party, upon such acceptance or receipt by the Borrower,
shall be deemed to have certified that):
(a) the representations and warranties contained in Section 6.1 are
correct in all respects on and as of the date of such Advance as though
made on and as of such day and shall be deemed to have been made on such
day,
(b) no event has occurred and is continuing, or would result from
such Advance, that constitutes an Event of Default or Unmatured Default,
(c) the Termination Date shall not have occurred,
(d) if such Advance is to be funded, in whole or in part, by either
Conduit's Liquidity Banks, such Conduit shall have Liquidity Banks in its
Group whose Scheduled Termination Dates have not occurred with sufficient
undrawn Commitments in an aggregate amount sufficient to fund the
requisite portion of such Advance, and
(e) each of the Co-Agents shall have received (with such receipt to
be determined in accordance with Section 14.2 of this Agreement) a timely
Borrowing Request in accordance with Section 2.1;
PROVIDED, HOWEVER, the absence of the occurrence and continuance of an Unmatured
Default shall not be a condition precedent to any Advance which does not
increase the aggregate principal amount of all Advances outstanding over the
aggregate outstanding principal balance of the Advances as of the opening of
business on such day.
18
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Section 6.1 Representations and Warranties of Loan Parties. Each
Loan Party, as to itself, represents and warrants to the Agents and the Lenders
as follows:
(a) Ownership of the Borrower. Quest Diagnostics owns, directly or
indirectly, all the issued and outstanding Equity Interests of the Borrower, and
all of such Equity Interests are fully paid and non-assessable and are free and
clear of any Liens.
(b) Existence; Due Qualification; Permits. Each of the Loan Parties:
(i) is a corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization; (ii) has all requisite
corporate power and authority necessary to own its Property and carry on its
business as now being conducted; (iii) is qualified to do business and is in
good standing in all jurisdictions in which the nature of the business conducted
by it makes such qualification necessary; and (iv) is in compliance with all
Requirements of Law, except in the case of clauses (i), (ii), (iii) and (iv)
where the failure thereof individually or in the aggregate could not reasonably
be expected to have a Material Adverse Effect. The Loan Parties hold all
governmental permits, licenses, authorizations, consents and approvals necessary
for the Loan Parties to own, lease, and operate their respective Properties and
to operate their respective businesses as now being conducted (collectively, the
"PERMITS"), except for Permits the failure of which to obtain would not have a
Material Adverse Effect. None of the Permits has been modified in any way that
is reasonably likely to have a Material Adverse Effect. All Permits are in full
force and effect except where the failure to be in full force and effect would
not have a Material Adverse Effect.
(c) Action. Each Loan Party has all necessary corporate or other
entity power, authority and legal right to execute, deliver and perform its
obligations under each Transaction Document to which it is a party and to
consummate the transactions herein and therein contemplated; the execution,
delivery and performance by each Loan Party of each Transaction Document to
which it is a party and the consummation of the transactions herein and therein
contemplated have been duly authorized by all necessary corporate or other
entity action on its part; and this Agreement has been duly and validly executed
and delivered by each Loan Party and constitutes, and each of the other
Transaction Documents to which it is a party when executed and delivered by such
Loan Party will constitute, its legal, valid and binding obligation, enforceable
against each Loan Party in accordance with its terms, except as such
enforceability may be limited by (i) bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or similar laws of general applicability
from time to time in effect affecting the enforcement of creditors' rights and
remedies and (ii) the application of general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
(d) Absence of Default. No Unmatured Default or Event of Default has
occurred and is continuing.
19
(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, 2000 and all filings made with the
SEC under the Exchange Act by any Loan Party subsequent thereto prior to the
date of this Agreement (copies of which have been provided to each of the
Co-Agents):
(i) There is no Proceeding (other than any qui tam Proceeding, to
which this Section is limited to the best of each Loan Party's knowledge)
pending against, or, to the knowledge of either Loan Party, threatened in
writing against or affecting, any Loan Party or any of its respective
Properties before any Governmental Authority that, if determined or
resolved adversely to such Loan Party, could reasonably be expected to
have a Material Adverse Effect.
(ii) There is (A) no unfair labor practice complaint pending against
any Loan Party or, to the best knowledge of each Loan Party, threatened
against such Loan Party, before the National Labor Relations Board or any
other Governmental Authority, and no grievance or arbitration proceeding
arising out of or under any collective bargaining agreement is so pending
against such Loan Party or, to the best knowledge of such Loan Party after
due inquiry, threatened against such Loan Party, (B) no strike, labor
dispute, slowdown or stoppage pending against such Loan Party or, to the
best knowledge of Borrower, after due inquiry, threatened against such
Loan Party and (C) to the best knowledge of Borrower after due inquiry, no
union representation question existing with respect to the employees of
such Loan Party and, to the best knowledge of such Loan Party, no union
organizing activities are taking place, except such as would not, with
respect to any matter specified in clause (A), (B) or (C) above,
individually or in the aggregate, have a Material Adverse Effect.
20
(g) Taxes.
(i) Except as would not have a Material Adverse Effect: (A) all tax
returns, statements, reports and forms (including estimated Tax or
information returns) (collectively, the "TAX RETURNS") required to be
filed with any taxing authority by, or with respect to, each Loan Party
have been timely filed in accordance with all applicable laws; (B) each
Loan Party has timely paid or made adequate provision for payment of all
Taxes shown as due and payable on Tax Returns that have been so filed,
and, as of the time of filing, each Tax Return was accurate and complete
and correctly reflected the facts regarding income, business, assets,
operations, activities and the status of each Loan Party (other than Taxes
which are being contested in good faith and for which adequate reserves
are reflected on the financial statements delivered hereunder); and (C)
each Loan Party has made adequate provision for all Taxes payable by such
Loan Party for which no Tax Return has yet been filed.
(ii) Except as set forth in Quest Diagnostics' Annual Report on Form
10-K for the year ended December 31, 2000: (A) as of the date hereof no
Loan Party is a member of an affiliated group of corporations within the
meaning of Section 1504 of the Code other than an affiliated group of
corporations of which Quest Diagnostics is the common parent; and (B)
there are no material tax sharing or tax indemnification agreements under
which Borrower is required to indemnify another party for a material
amount of Taxes.
(h) Government Approvals. No authorizations, approvals or consents
of, and no filings or registrations with, any Governmental Authority or any
securities exchange are necessary for the execution, delivery or performance by
any Loan Party of the Transaction Documents to which it is a party or for the
legality, validity or enforceability hereof or thereof or for the consummation
of the transactions herein and therein contemplated, except for filings and
recordings in respect of the Liens created pursuant to the Transaction Documents
(all of which have been duly made) and except for consents, authorizations and
filings that have been obtained or made and are in full force and effect or the
failure of which to obtain would not have a Material Adverse Effect.
(i) Financial Statements and Absence of Certain Material Adverse
Changes.
(i) The information, reports, financial statements, exhibits and
schedules furnished in writing by either of the Loan Parties to each of
the Co-Agents or Lenders in connection with the negotiation, preparation
or delivery of the Transaction Documents, including Quest Diagnostics'
Annual Report on Form 10-K for the year ended December 31, 2000, but in
each case excluding all projections, whether prior to or after the date of
this Agreement, when taken as a whole, do not, as of the date such
information was furnished, contain any untrue statement of material fact
or omit to state a material fact necessary in order to make the statements
herein or therein, in light of the circumstances under which they were
made, not materially misleading. The projections and pro forma financial
information, if any, furnished at any time by any Loan Party to any Lender
pursuant to this Agreement have been prepared in good faith based on
assumptions believed by Quest Diagnostics to be reasonable at the time
made, it being recognized by
21
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, 2000 through and including the date of the
initial Advance, there has been no material adverse change in Quest
Diagnostics' consolidated financial condition, business or operations.
Since the date of the initial Advance, there has been no material adverse
change in Quest Diagnostics' consolidated financial condition, business or
operations that has had, or would reasonably be expected to have, a
material adverse effect upon its ability to perform its obligations, as an
Originator or as Servicer, under the Transaction Documents when and as
required, and no material adverse effect on the collectibility of any
material portion of the Receivables.
(iii) Since the date of the initial Advance, no event has occurred
which would have a Material Adverse Effect.
(j) Nature of Receivables. Each Receivable constitutes an Account or
a Payment Intangible. None of the Receivables is a Health-Care-Insurance
Receivable.
(k) Margin Regulations. The use of all funds obtained by such Loan
Party under this Agreement or any other Transaction Document will not conflict
with or contravene any of Regulation T, U or X.
(l) Title to Receivables and Quality of Title.
(i) Each Receivable has been acquired by the Borrower from an
Originator in accordance with the terms of the Sale Agreement, and the
Borrower has thereby irrevocably obtained all legal and equitable title to
such Receivable and its Related Assets (other than any Related Asset
constituting a Non-Assignable Contract, in which case the Borrower has
obtained a valid and perfected first priority perfected security interest
in the rights to receive payments thereunder), and the Borrower has the
legal right to sell and encumber, such Receivable and the Related Assets.
Without limiting the foregoing, there have been duly delivered to each of
the Co-Agents in form suitable for filing all financing statements and
financing statements amendments or other similar instruments or documents
necessary under the UCC of all appropriate jurisdictions to perfect the
Borrower's ownership interest in such Receivable.
(ii) This Agreement creates a valid security interest in the
Collateral in favor of the Administrative Agent, for the benefit of the
Secured Parties, and, upon filing of the financing statements and
amendments described in clause (i), together with UCC
22
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 in form suitable for filing in all
applicable jurisdictions.
(m) Accurate Reports. No Monthly Report, Weekly Report or
computation of Cash Collateral Payment (in each case, if prepared by such Loan
Party, or to the extent information therein was supplied by such Loan Party), no
other information, exhibit, schedule or information concerning the Collateral
furnished or to be furnished verbally or in writing before or after the date of
this Agreement, by or on behalf of such Loan Party to each of the Co-Agents or
Lenders pursuant to this Agreement was or will be inaccurate in any material
respect as of the date it was or will be dated or (except as otherwise disclosed
to each of the Co-Agents or the Lenders at such time) as of the date so
furnished, or contained or (in the case of information or other materials to be
furnished in the future) will contain any material misstatement of fact or
omitted or (in the case of information or other materials to be furnished in the
future) will omit to state a material fact or any fact necessary to make the
statements contained therein not materially misleading in light of the
circumstances made or presented.
(n) Jurisdiction of Organization; Offices. Each Loan Party's
jurisdiction of organization is correctly set forth after its name in the
preamble to this Agreement. The principal places of business and chief executive
office of the Borrower is located at the addresses set forth on Schedule 6.1(n),
and the offices where the Servicer and the Borrower keep all their Records and
material Contracts are located at the addresses specified in Schedule 6.1(n) (or
at such other locations, notified to each of the Co-Agents in accordance with
Section 7.1(f), in jurisdictions where all action required by Section 8.5 has
been taken and completed).
(o) Lockboxes and Collection Accounts.
(i) One of the Loan Parties or the applicable Originator has
instructed all Obligors of all Receivables to pay all Collections thereon
either (A) by mail addressed to a Lockbox or (B) by wire transfer or other
electronic funds transfer directly to a Collection Account in the name of
the applicable Originator, as sub-servicer, or in the name of the
Borrower. Items received in the Lockboxes are deposited for collection
each Business Day into a Collection Account in the name of the applicable
Originator or the Borrower, and all collected and available funds from
time to time in each Collection Account in the name of any Originator are
swept each day to a Collection Account in the name of the Borrower. Each
of the Lockboxes and Collections Accounts is in full force
23
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 Requirements of Law (other than to the extent such failure
to comply would not reasonably be expected to have a Material Adverse Effect).
(r) Names. Since its incorporation, the Borrower has not used any
legal names, trade names or assumed names other than the name in which it has
executed this Agreement.
(s) Credit and Collection Policy. With respect to the Receivables
originated by each of the Originators, each of the applicable Originator, the
Borrower and the Servicer has complied in all material respects with the
applicable Credit and Collection Policy, and no change has been made to such
Credit and Collection Policy since the date of this Agreement which would be
reasonably likely to materially and adversely affect the collectibility of the
Receivables or decrease the credit quality of any newly created Receivables
except for such changes as to which each of the Co-Agents has received the
notice required under Section 7.2(j) and has given its prior written consent
thereto (which consent shall not be unreasonably withheld or delayed).
(t) Payments to Applicable Originator. With respect to each
Receivable sold or contributed to the Borrower by any Originator under the Sale
Agreement, the Borrower has given reasonably equivalent value to such Originator
in consideration for such Receivable and the Related
24
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 each of the Co-Agents shall otherwise
consent in writing:
(a) Compliance With Laws, Etc. Each Loan Party will comply with all
applicable laws, rules, regulations and orders, including those with respect to
the Receivables and related Contracts and Invoices, except, in each of the
foregoing cases, where the failure to so comply would not individually or in the
aggregate have a Material Adverse Effect.
(b) Preservation of Existence. Each Loan Party will preserve and
maintain its existence, rights, franchises and privileges in the jurisdiction of
its incorporation, and qualify and remain qualified in good standing as a
foreign corporation in each jurisdiction where the failure to preserve and
maintain such existence, rights, franchises, privileges and qualification would
have a Material Adverse Effect.
(c) Audits. Each Loan Party will, subject to compliance with
applicable law: (i) at any time and from time to time upon not less than ten
(10) Business Days' notice (unless an Unmatured Default or Event of Default has
occurred and is continuing, in which case, not more than one (1) Business Day's
notice shall be required) during regular business hours, permit each of the
Agents or any of its agents or representatives: (A) to examine and make copies
of and abstracts from all Records, Contracts and Invoices in the possession or
under the control of such Loan Party, and (B) to visit the offices and
properties of such Loan Party for the purpose of examining such Records,
Contracts and Invoices and to discuss matters relating to Receivables or such
Loan Party's performance hereunder with any of the officers or employees of such
Loan Party having knowledge of such matters; and (ii) without limiting the
provisions of clause (i) above, from time to time, at the expense of such Loan
Party, permit certified public accountants or auditors acceptable to each of the
Co-Agents to conduct a review of such Loan Party's Contracts, Invoices and
Records (each, a "REVIEW"); PROVIDED, HOWEVER, that (x) so long as no Event of
Default has occurred and is continuing, the Loan Parties shall only be
responsible for the costs and expenses of one (1) such Review under this Section
or under Section 7.2(i)
25
in any one calendar year unless the first such Review in such calendar year
resulted in negative findings (in which case the Loan Parties shall be
responsible for the costs and expenses of two (2) such Reviews in such calendar
year) and (y) so long as no Event of Default has occurred and is continuing and
no material adverse change in the Servicer's consolidated financial condition
has occurred, the Agents would anticipate that only one (1) Review per calendar
year will be conducted. Notwithstanding the foregoing, if (1) any Loan Party
requests the approval of a new Eligible Originator who is a Material Proposed
Addition or (2) any Material Acquisition is consummated, the Loan Parties shall
be responsible for the costs and expenses of one additional Review per proposed
Material Proposed Addition or per Material Acquisition in the calendar year in
which such Material Proposed Addition is expected to occur or such Material
Acquisition is expected to be consummated if such additional Review is requested
by either of the Co-Agents.
(d) Keeping of Records and Books of Account. The Servicer will
maintain and implement administrative and operating procedures (including,
without limitation, an ability to recreate essential Records evidencing the
Receivables in the event of the destruction of the originals thereof), and keep
and maintain, all Contracts, Records and other information necessary or
reasonably advisable for the collection of all Receivables (including, without
limitation, Records adequate to permit the identification as of any Business Day
when required of outstanding Unpaid Net Balances by Obligor and related debit
and credit details of the Receivables). Each of the Borrower and the Servicer
shall post all Demand Advances to its respective books in accordance with GAAP
on or before each Settlement Date.
(e) Performance and Compliance with Receivables, Invoices and
Contracts. Each Loan Party will, at its expense, timely and fully perform and
comply with all provisions, covenants and other promises, if any, required to be
observed by it under the Contracts and/or Invoices related to the Receivables
except for such failures to fully perform and comply as would not, individually
or in the aggregate, have a Material Adverse Effect.
(f) Jurisdiction of Organization; Location of Records. Each Loan
Party will keep its jurisdiction of organization, chief place of business and
(at any time while the location of its chief executive office remains germane to
perfection of any of the security interests or ownership interests purported to
be conveyed pursuant to the Transaction Documents) its chief executive office,
and the offices where it keeps its Records and material Contracts (and, to the
extent that any of the foregoing constitute instruments, chattel paper or
negotiable documents, all originals thereof), at the address(es) of the Servicer
and the Borrower referred to in Section 6.1(n) or, upon 15 days' prior written
notice to the Administrative Agent, at such other locations in jurisdictions
where all action required by Section 8.5 shall have been taken and completed.
(g) Credit and Collection Policies. Each Loan Party will comply in
all material respects with its Credit and Collection Policy in regard to the
Receivables and the related Contracts and Invoices.
(h) Sale Agreement. The Borrower will perform and comply in all
material respects with all of its covenants and agreements set forth in the Sale
Agreement, and will enforce the performance by each Originator of its respective
obligations thereunder.
26
(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 any of the Agents, 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.
(j) Further Assurances. Each of the Loan Parties shall take all
necessary action to establish and maintain (i) in favor of the Borrower, a valid
and perfected ownership interest in the Receivables and Related Assets (other
than the Non-Assignable Contracts) and a valid and perfected first priority
security interest in the rights to receive payments under the Non-Assignable
Contracts, and (ii) in favor of the Administrative Agent for the benefit of the
Secured Parties, a valid and perfected first priority security interest in the
Collateral, including, without limitation, taking such action to perfect,
protect or more fully evidence the security interests of the Administrative
Agent as the Administrative Agent may reasonably request.
Section 7.2 Reporting Requirements of Loan Parties. From the date
hereof until the Final Payout Date, unless each of the Co-Agents shall otherwise
consent in writing:
(a) Quarterly Financial Statements. (i) Quest Diagnostics will
furnish to each of the Co-Agents as soon as available and in any event within 60
days after the end of each of the first three quarters of each of its fiscal
years, copies of its report on SEC Form 10-Q as of the close of such fiscal
quarter, and (ii) beginning with the fiscal quarter commencing on July 1, 2000,
the Borrower will furnish to each of the Co-Agents as soon as available and in
any event within 60 days after the end of each of the first three quarters of
each of its fiscal years an unaudited balance sheet and income statement of the
Borrower as of the close of such fiscal quarter, prepared in accordance with
GAAP and certified in a manner reasonably acceptable to each of the Co-Agents by
the Borrower's chief executive
27
officer, chief financial officer or treasurer (or an officer acting in a similar
capacity to any of the foregoing);
(b) Annual Financial Statements. Quest Diagnostics will furnish to
each of the Co-Agents, as soon as available and in any event within 120 days
after the end of each fiscal year of Quest Diagnostics, copies of its annual
report on SEC Form 10-K for such year, and the Borrower will furnish to each of
the Co-Agents as soon as available and in any event within 120 days after the
end of each fiscal year of the Borrower, an unaudited balance sheet and income
statement of the Borrower as of the close of such fiscal year, prepared in
accordance with GAAP and certified in a manner reasonably acceptable to each of
the Co-Agents by the Borrower's chief executive officer, chief financial officer
or treasurer (or an officer acting in a similar capacity to any of the
foregoing);
(c) Reports to SEC and Exchanges. In addition to the reports
required by subsections (a) and (b) next above, promptly upon filing any report
on SEC Form 8-K with the SEC, Quest Diagnostics shall deliver copies thereof to
each of the Co-Agents;
(d) ERISA. Promptly after the filing or receiving thereof, each Loan
Party will furnish to each of the Co-Agents copies of all reports and notices
with respect to any Reportable Event which any Loan Party files under ERISA with
the Internal Revenue Service, the PBGC or the U.S. Department of Labor or which
such Loan Party receives from the PBGC;
(e) Events of Default, etc. As soon as possible and in any event
within five (5) Business Days after any Authorized Officer of either Loan Party
obtains knowledge of the occurrence of any Event of Default or any Unmatured
Default, each Loan Party will furnish to each of the Co-Agents a written
statement of an Authorized Officer of such Loan Party setting forth details of
such event and the action that such Loan Party will take with respect thereto;
(f) Litigation. As soon as possible and in any event within ten
Business Days after any Authorized Officer of either Loan Party obtains
knowledge thereof, such Loan Party will furnish to each of the Co-Agents notice
of (i) any litigation, investigation or proceeding which may exist at any time
which would reasonably be expected to have a Material Adverse Effect and (ii)
any development in previously disclosed litigation which development would
reasonably be expected to have a Material Adverse Effect;
(g) Reviews of Receivables. As soon as available and in any event
within 30 days after each Review referenced in Section 7.1(c), the Borrower will
deliver to each of the Co-Agents a written report on the results of such Review
prepared by accountants or auditors selected as specified therein and reasonably
acceptable to each of the Co-Agents, substantially in the form of the report
delivered for the prior Review, and covering such other matters as any of the
Agents may reasonably request in order to protect the interests of the
Administrative Agent, for the benefit of the Secured Parties, under or as
contemplated by this Agreement;
(h) Change in Business or Credit and Collection Policy. Each Loan
Party will furnish to each of the Co-Agents prompt written notice of any
material change in the character of such Loan Party's business prior to the
occurrence of such change, and each Loan Party will provide each of the
28
Co-Agents with not less than 15 Business Days' prior written notice of any
material change in the Credit and Collection Policy (together with a copy of
such proposed change); and
(i) Downgrade. Promptly after receipt of notice of any downgrade of
any Indebtedness of Quest Diagnostics by ▇▇▇▇▇'▇ or S&P, Quest Diagnostics shall
furnish to each of the Co-Agents 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 each of the Agents such other information, documents, Records or reports
respecting the Receivables or the condition or operations, financial or
otherwise, of such Loan Party as any of the Agents may from time to time
reasonably request in order to protect the interests of the Administrative
Agent, for the benefit of the Secured Parties, under or as contemplated by this
Agreement.
Section 7.3 Negative Covenants of Loan Parties. From the date hereof
until the Final Payout Date, without the prior written consent of each of the
Co-Agents:
(a) Sales, Liens, Etc. (i) The Borrower will not, except as
otherwise provided herein and in the other Transaction Documents, sell, assign
(by operation of law or otherwise) or otherwise dispose of, or create or suffer
to exist any Lien upon or with respect to, any Collateral, or any account to
which any Collections are sent, or any right to receive income or proceeds from
or in respect of any of the foregoing (except, prior to the execution of
Collection Account Agreements, set-off rights of any bank at which any such
account is maintained), and (ii) the Servicer will not assert any interest in
the Receivables, except as the Servicer.
(b) Extension or Amendment of Receivables. No Loan Party will,
except as otherwise permitted in Section 8.2(c), extend, amend or otherwise
modify the terms of any Receivable, or amend, modify or waive any term or
condition of any Contract or Invoice related thereto in any way that adversely
affects the collectibility of the Receivables originated by any Originator
(taken as a whole), or any material part thereof, or the rights of the Borrower
or the Administrative Agent (for the benefit of the Secured Parties) therein.
(c) Change in Business or Credit and Collection Policy. No Loan
Party will make or permit to be made any change in the character of its business
or Credit and Collection Policy, which change would, in either case, impair the
collectibility of any significant portion of the Receivables or otherwise
materially and adversely affect the interests or remedies of Lender under this
Agreement or any other Transaction Document.
(d) Change in Payment Instructions to Obligors. No Loan Party will
add or terminate any bank as a Collection Bank from those listed in Schedule
6.1(o) or, after the Collateral Account has been established pursuant to Section
7.1(i), make any change in its instructions to Obligors regarding payments to be
made to any Collection Account or Lockbox (except for a change in instructions
solely for the purpose of directing Obligors to make such payments to another
existing Collection Account or Lockbox, as applicable, and where such change is
immaterial and does not adversely affect the interests of the Administrative
Agent, on behalf of the Secured Parties, in any respect), unless (i) the
Co-Agents shall have received prior written notice of such addition, termination
or change and (ii) the
29
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 payment of all Obligations due and
owing on such Settlement Date, and (B) after giving effect to such
purchase, redemption, payment or distribution, the Borrower's net worth
(determined in accordance with GAAP) will at all times be at least 3% of
the greater of the Aggregate Commitment or the aggregate outstanding
principal amount of the Advances; or
(ii) Make any payment of principal or interest on the Subordinated
Notes if any Event of Default exists or would result therefrom or if such
payment would result in the Borrower's having insufficient cash on hand to
pay all Obligations that will be due and owing on the next succeeding
Settlement Date.
(h) Borrower Indebtedness. The Borrower will not incur or permit to
exist any Indebtedness or liability on account of deposits except: (A) as
provided in the Transaction Documents and (B) other current accounts payable
arising in the ordinary course of business and not overdue in any material
respect.
(i) Prohibition on Additional Negative Pledges. No Loan Party will
enter into or assume any agreement (other than this Agreement and the other
Transaction Documents) prohibiting the creation or assumption of any Lien upon
the Receivables or Related Assets, whether now owned or hereafter acquired,
except as contemplated by the Transaction Documents, or otherwise prohibiting or
restricting any transaction contemplated hereby or by the other Transaction
Documents, and no Loan Party will enter into or assume any agreement creating
any Lien upon the Subordinated Notes.
(j) Name Change, Offices, Records and Books of Accounts. The
Borrower will not change its name, identity or structure (within the meaning of
Article 9 of any applicable enactment of
30
the UCC) or relocate its chief executive office or any office where Records are
kept unless it shall have: (i) given the Co-Agents at least 15 days' prior
notice thereof and (ii) prior to effectiveness of such change, delivered to the
Administrative Agent all financing statements, instruments and other documents
requested by the Administrative Agent in connection with such change or
relocation.
(k) Mergers, Consolidations and Acquisitions. The Borrower will not
merge into or consolidate with any other Person, or permit any other Person to
merge into or consolidate with it, or purchase, lease or otherwise acquire (in
one transaction or a series of transactions) all or substantially all of the
assets of any other Person (whether directly by purchase, lease or other
acquisition of all or substantially all of the assets of such Person or
indirectly by purchase or other acquisition of all or substantially all of the
capital stock of such other Person) other than the acquisition of the
Receivables and Related Assets pursuant to the Sale Agreement.
(l) Disposition of Receivables and Related Assets. Except pursuant
to this Agreement, the Borrower will not sell, lease, transfer, assign, pledge
or otherwise dispose of or encumber (in one transaction or in a series of
transactions) any Receivables and Related Assets.
(m) Borrowing Base. The Borrower will not request any Advance if,
after giving effect thereto, the aggregate outstanding principal balance of the
Loans would exceed the Borrowing Base.
Section 7.4 Separate Existence of the Borrower. Each Loan Party
hereby acknowledges that Lenders and the Agents are entering into the
transactions contemplated hereby in reliance upon the Borrower's identity as a
legal entity separate from the Servicer and its other Affiliates. Therefore,
each Loan Party shall take all steps specifically required by this Agreement or
reasonably required by any of the Agents to continue the Borrower's identity as
a separate legal entity and to make it apparent to third Persons that the
Borrower is an entity with assets and liabilities distinct from those of its
Affiliates, and is not a division of Quest Diagnostics or any other Person.
Without limiting the foregoing, each Loan Party will take such actions as shall
be required in order that:
(a) The Borrower will be a limited purpose corporation whose primary
activities are restricted in its Certificate of Incorporation to
purchasing or otherwise acquiring from any of the Originators, owning,
holding, granting security interests in the Collateral, entering into
agreements for the financing and servicing of the Receivables, and
conducting such other activities as it deems necessary or appropriate to
carry out its primary activities;
(b) Not less than one member of the Borrower's Board of Directors
(the "INDEPENDENT DIRECTOR") shall be an individual who is not, and never
has been, a direct, indirect or beneficial stockholder, officer, director,
employee, affiliate, associate, material supplier or material customer of
Quest Diagnostics or any of its Affiliates (other than an Affiliate
organized with a limited purpose charter for the purpose of acquiring
receivables or other financial assets or intangible property). The
certificate of incorporation of the Borrower shall provide that (i) at
least one member of the Borrower's Board of Directors shall be an
Independent Director, (ii) the Borrower's Board of Directors shall not
approve, or take any other action to cause the filing of, a voluntary
bankruptcy petition with respect to the Borrower unless the Independent
31
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;
(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
32
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 capacity as the Servicer hereunder or under the Sale
Agreement) has independent access, PROVIDED THAT prior to demand by any of
the Agents pursuant to Section 7.1(i) to establish a segregated Collateral
Account, Collections may be deposited into general accounts of Quest
Diagnostics, subject to the obligations of the Servicer hereunder;
(m) Each Affiliate of the Borrower will maintain arm's length
relationships with the Borrower, and each Affiliate of the Borrower that
renders or otherwise furnishes services or merchandise to the Borrower
will be compensated by the Borrower at market rates for such services or
merchandise;
(n) No Affiliate of the Borrower will be, nor will it hold itself
out to be, responsible for the debts of the Borrower or the decisions or
actions in respect of the daily business and affairs of the Borrower.
Quest Diagnostics and the Borrower will immediately correct any known
misrepresentation with respect to the foregoing and they will not operate
or purport to operate as an integrated single economic unit with respect
to each other or in their dealing with any other entity;
(o) The Borrower will keep correct and complete books and records of
account and minutes of the meetings and other proceedings of its
stockholder and board of directors, as applicable, and the resolutions,
agreements and other instruments of the Borrower will be continuously
maintained as official records by the Borrower; and
(p) The Borrower will conduct its business solely in its own legal
name and in a manner separate from the Originators so as not to mislead
others with whom they are dealing.
33
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's designee shall assume each and all of Quest Diagnostics' obligations to
service and administer such Receivables, on the terms and subject to the
conditions herein set forth, and Quest Diagnostics shall use its reasonable best
efforts to assist the Administrative Agent's designee in assuming such
obligations. Without limiting the foregoing, Quest Diagnostics agrees, at its
expense, to take all actions necessary to provide the new Servicer with access
to all computer software necessary to generate reports useful in collecting or
billing Receivables, solely for use in collecting and billing Receivables. If
Quest Diagnostics disputes the occurrence of a Servicer Transfer Event, Quest
Diagnostics may take appropriate action to resolve such dispute; PROVIDED THAT
Quest Diagnostics must terminate its activities hereunder as Servicer and allow
the newly designated Servicer to perform such activities on the date specified
by the Administrative Agent as described above, notwithstanding the commencement
or continuation of any proceeding to resolve the aforementioned dispute, if the
Administrative Agent reasonably determines, in good faith, that such termination
is necessary or advisable to protect the Secured Parties' interests hereunder.
(c) Subcontracts. So long as Quest Diagnostics (or any of its
existing or hereafter arising Affiliates approved by the Co-Agents at the
request of Quest Diagnostics or the Borrower subject to satisfaction of the
Rating Agency Condition) is acting as the Servicer, it may subcontract with any
other Originator or other direct or indirect Subsidiary of Quest Diagnostics,
for servicing, administering or collecting all or any portion of the
Receivables, PROVIDED, HOWEVER, that no such subcontract shall relieve Quest
Diagnostics (or such approved affiliated substitute Servicer, if such approval
is not conditioned upon Quest Diagnostics' issuance of a performance guaranty
with respect to such affiliated substitute Servicer) of its primary liability
for performance of its duties as Servicer pursuant to the terms hereof and any
such sub-servicing arrangement may be terminated at the request of any of the
Agents at any time after a Successor Notice has been given. In addition to the
foregoing, with the prior written consent of the Co-Agents (which consent shall
not be unreasonably withheld or delayed), any Servicer may subcontract with
other Persons for servicing, administering or collecting all or any portion of
the Receivables, PROVIDED, HOWEVER, that no such subcontract shall relieve such
Servicer of its primary liability for performance of its duties as Servicer
pursuant to the terms hereof and any such sub-servicing arrangement may be
terminated at the request of any of the Agents at any time that the Co-Agents
reasonably determine that such sub-servicer is not performing adequately.
34
(d) Expense Indemnity after a Servicer Transfer Event. In addition
to, and not in lieu of the Servicer's Fee, if Quest Diagnostics or one of its
Affiliates is replaced as Servicer following a Servicer Transfer Event, the
Borrower shall reimburse the Servicer within 10 Business Days after receipt of a
written invoice, any and all reasonable costs and expenses of the Servicer
incurred in connection with its servicing of the Receivables for the benefit of
the Secured Parties.
Section 8.2 Duties of Servicer.
(a) Appointment; Duties in General. Each of the Borrower, the
Lenders and the Agents hereby appoints as its agent, the Servicer, as from time
to time designated pursuant to Section 8.1, to enforce its rights and interests
in and under the Collateral. The Servicer shall take or cause to be taken all
such actions as may be necessary or advisable to collect each Receivable from
time to time, all in accordance with applicable laws, rules and regulations,
with reasonable care and diligence, and in accordance with the Credit and
Collection Policy.
(b) Segregation of Collections. The Servicer shall not be required
(unless otherwise requested by any of the Agents) to segregate the funds
constituting Collections prior to the remittance thereof in accordance with
Article III. If instructed by any of the Agents, the Servicer shall segregate
Collections and deposit them into the Collateral Account not later than the
first Business Day following receipt by the Servicer of such Collections in
immediately available funds.
(c) Modification of Receivables. Quest Diagnostics, while it is the
Servicer, may, in accordance with the Credit and Collection Policy, so long as
no Event of Default shall have occurred and be continuing, extend the maturity
or adjust the Unpaid Net Balance of any Receivable as Quest Diagnostics may
reasonably determine to be appropriate to maximize Collections of the
Receivables taken as a whole in a manner consistent with the Credit and
Collection Policy (although no such extension or adjustment shall alter the
status of such Receivable as a Defaulted Receivable or a Delinquent Receivable
or, in the case of an adjustment, limit the rights of the Agents or the Lenders
under Section 3.4).
(d) Contracts and Records. Each Loan Party shall deliver to the
Servicer, and the Servicer shall, or shall direct the Originators as
sub-servicers to, hold in trust for the Borrower and the Secured Parties, all
Contracts and Records.
(e) Certain Duties to the Borrower. The Servicer shall, as soon as
practicable following receipt, turn over to the Borrower (i) that portion of the
Collections which are not required to be turned over to each of the Co-Agents,
less the Servicer's Fee and all reasonable and appropriate out-of-pocket costs
and expenses of the Servicer of servicing, collecting and administering the
Receivables to the extent not covered by the Servicer's Fee received by it, and
(ii) the Collections of any receivable which is not a Receivable. The Servicer,
if other than Quest Diagnostics or any other Loan Party or Affiliate thereof,
shall, as soon as practicable upon demand, deliver to the Borrower all Contracts
and other Records in its possession 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.
35
(f) Termination. The Servicer's authorization under this
Agreement shall terminate upon the Final Payout Date.
(g) Power of Attorney. The Borrower hereby grants to the
Servicer an irrevocable power of attorney, with full power of substitution,
coupled with an interest, to take in the name of the Borrower all steps which
are necessary or advisable to endorse, negotiate or otherwise realize on any
writing or other right of any kind held or transmitted by the Borrower or
transmitted or received by Lender in connection with any Receivable.
Section 8.3 Rights of the Agents.
(a) Notice to Obligors. At any time when an Event of Default
has occurred and is continuing, any of the Agents may notify the Obligors of
Receivables, or any of them, of the Borrower's ownership of the Receivables, and
the Administrative Agent's security interest, for the benefit of the Secured
Parties, in the Collateral.
(b) Notice to Collection Banks. At any time, the
Administrative Agent is hereby authorized to give notice to the Collection
Banks, as provided in the Collection Account Agreements, of the transfer to the
Administrative Agent of dominion and control over the Lockboxes and the
Collection Accounts, and the Administrative Agent hereby agrees to give such
notice upon request of either of the Co-Agents. 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) Any of the Agents may direct the Obligors of Receivables,
or any of them, to pay all amounts payable under any Receivable
directly to the Administrative Agent or its designee.
(ii) Any Loan Party shall, at any Agent's request and at such
Loan Party's expense, give notice of the Administrative Agent's
security interest in the Collateral to each Obligor of Receivables and
direct that payments be made directly to the Administrative Agent or
its designee.
(iii) Each Loan Party shall, at any Agent's request: (A)
assemble and make available all of the Contracts and Records which are
necessary or reasonably desirable to collect the Collateral, and make
the same available to the successor Servicer at such place or places as
the Administrative Agent may reasonably request, and (B) segregate all
cash, checks and other instruments received by it from time to time
constituting Collections in a manner acceptable to the Agents and
promptly upon receipt, remit all such cash, checks and instruments,
duly endorsed or with duly executed instruments of transfer, to the
successor Servicer.
36
(iv) Each of the Loan Parties, the Co-Agents and the Lenders
hereby authorizes the Administrative Agent and grants to the
Administrative Agent an irrevocable power of attorney (which shall
terminate on the Final Payout Date), to take any and all steps in such
Person's name and on behalf of such Person which are necessary or
desirable, in the determination of the Administrative Agent, to collect
all amounts due under any and all Receivables, including, without
limitation, endorsing any Loan Party's name on checks and other
instruments representing Collections and enforcing such Receivables and
the related Contracts and Invoices.
Section 8.4 Responsibilities of Loan Parties. Anything herein
to the contrary notwithstanding:
(a) Contracts. Each Originator shall remain responsible for
performing all of its obligations (if any) under each Non-Assignable Contract,
and each Loan Party shall remain responsible for performing all of its
obligations (if any) under all other Contracts, to the same extent as if the
ownership interest or security interests in such Contracts had not been granted
under the Transactions Documents, and the exercise by the Administrative Agent
or its designee of its rights hereunder shall not relieve any such Person from
such obligations.
(b) Limitation of Liability. The Secured Parties shall not
have any obligation or liability with respect to any Receivables, Invoices or
Contracts, nor shall any of them be obligated to perform any of the obligations
of any Loan Party or any Originator thereunder.
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, ▇▇▇▇
conspicuously each Contract or Invoice with a legend, acceptable to the
Administrative Agent, evidencing its security interest therein pursuant
to this Agreement.
(b) Additional Financing Statements; Continuation Statements;
Performance by Administrative Agent. Each Loan Party hereby authorizes the
Administrative Agent or its designee to file one or more financing or
continuation statements, and amendments thereto and assignments thereof,
37
relative to all or any of the Collateral now existing or hereafter arising in
the name of any Loan Party with, or to the fullest extent permitted by
applicable law, without the signature of such Loan Party (PROVIDED THAT the
Administrative Agent shall provide prompt written notice to such Loan Party
after filing any such record without the signature of such Loan Party). If any
Loan Party fails to promptly execute and deliver to the Administrative Agent any
financing statement or continuation statement or amendment thereto or assignment
thereof requested by the Administrative Agent and requiring a signature of such
Loan Party, such Loan Party hereby authorizes the Administrative Agent to
execute such statement on behalf of such Loan Party to the fullest extent
permitted by applicable law. If any Loan Party fails to perform any of its
agreements or obligations under this Agreement, the Administrative Agent or its
designee may (but shall not be required to) itself perform, or cause performance
of, such agreement or obligation, and the reasonable expenses of the
Administrative Agent or its designee incurred in connection therewith shall be
payable by Loan Parties as provided in Section 14.5.
Section 8.6 Application of Collections. Except as otherwise
specified by such Obligor or required by the underlying Contract or law, any
payment by an Obligor in respect of any indebtedness owed by it to an Originator
or to the Borrower shall be applied first, as a Collection of any Receivable or
Receivables then outstanding of such Obligor in the order of the age of such
Receivables, starting with the oldest of such Receivables (unless another
reasonable basis for allocation of such payments to the Receivables of such
Obligor exists), and second, to any other indebtedness of such Obligor.
ARTICLE IX
SECURITY INTEREST
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).
38
ARTICLE X
EVENTS OF DEFAULT
Section 10.1 Events of Default. The occurrence of any of the
following events shall constitute an "EVENT OF DEFAULT" hereunder:
(a) The Servicer or the Borrower shall fail to make (i) when
and as required to be made by it herein, any payment, prepayment or
deposit of any amount of principal of any Loan, or (ii) within three
(3) days after the same becomes due, any payment of any amount of
interest, fees or other Obligations payable hereunder or under any
other Transaction Document; PROVIDED THAT any interest, fees or other
amounts which are not paid on the due date shall bear interest at the
Default Rate after such due date.
(b) Any representation or warranty made or deemed to be made
by any Loan Party (or any of its officers) under this Agreement or any
other Transaction Document or in any Monthly Report, Weekly Report,
computation of Cash Collateral Payment or other information or report
delivered pursuant hereto shall prove to have been false or incorrect
in any material adverse respect when made, PROVIDED THAT the
materiality threshold in this subsection shall not be applicable with
respect to any representation or warranty which itself contains a
materiality threshold.
(c) Any Loan Party fails to perform or observe any other term
or covenant contained in this Agreement or any other Transaction
Document, and such default shall continue unremedied for a period of 5
days (in the case of nonperformance or nonobservance by the Servicer)
or 10 days (in the case of nonperformance or nonobservance by the
Borrower) after the earlier to occur of (i) the date upon which written
notice thereof is given to such Loan Party by the Administrative Agent
and (ii) the date the applicable Loan Party becomes aware thereof.
(d) (i) The Borrower shall (A) fail to pay any principal or
interest, regardless of amount, due in respect of any Indebtedness of
which the aggregate unpaid principal amount is in excess of $10,700,
when and as the same shall become due and payable (after expiration of
any applicable grace period) or (B) fail to observe or perform any
other term, covenant, condition or agreement (after expiration of any
applicable grace period) contained in any agreement or instrument
evidencing or governing any such Indebtedness if the effect of any
failure referred to in this clause (B) is to cause, or permit the
holder or holders of such Indebtedness or a trustee on its or their
behalf (with or without the giving of notice, the lapse of time or
both) to cause, such Indebtedness to become due prior to its stated
maturity; or (ii) any of the Originators (A) shall fail to pay any
principal or interest, regardless of amount, due in respect of any
Indebtedness of which the aggregate unpaid principal amount is in
excess of $50,000,000, when and as the same shall become due and
payable (after expiration of any applicable grace period) or (B) shall
fail to observe or perform any other term, covenant, condition or
agreement (after expiration of any applicable grace period) contained
in any agreement or instrument evidencing or governing any Indebtedness
in excess of $50,000,000 in aggregate principal amount of the
Originators if, as a result of such failure, the holder or
39
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 $50.0 million in the
aggregate (exclusive of judgment amounts to the extent covered by
insurance or indemnity payments) shall be rendered by one or more
courts, administrative tribunals or other bodies having jurisdiction
against any Originator and the same shall not be discharged (or
provision which results in a stay of execution shall not be made for
such discharge), vacated or bonded pending appeal, or
40
a stay of execution thereof shall not be procured, within 60 days from
the date of entry thereof and such Originator shall not, within said
period of 60 days, or such longer period during which execution of the
same shall have been stayed, appeal therefrom and cause the execution
thereof to be stayed during such appeal.
(n) An ERISA Event or noncompliance with respect to Foreign
Plans shall have occurred that when taken together with all other ERISA
Events and noncompliance with respect to Foreign Plans that have
occurred, is reasonably likely to result in liability of any Originator
or Loan Party in an aggregate amount exceeding $50.0 million.
(o) Quest Diagnostics shall fail to comply with each of the
covenants set forth in Section 7.2(a) and (b) of the Credit Agreement
as amended or otherwise modified from time to time by one or more
Approved Amendments, regardless of whether the same remains in effect.
(p) The occurrence of the Sale Termination Date under and as
defined in the Sale Agreement.
(q) Any other event occurs that (i) could reasonably be
expected to have a Material Adverse Effect of the type described in
clause (d) of the definition thereof, or (ii) has had a Material
Adverse Effect of the type described in any clause of the definition
thereof.
(r) On or within one week of receipt of post-filing lien
searches against each of the Originators and the Borrower in each
relevant jurisdiction, the Borrower's counsel, Shearman & Sterling,
shall fail to deliver an opinion as to the perfection and filing
priority of the security interests created under the Sale Agreement and
this Agreement, in form and substance reasonably satisfactory to the
Agents and in any event without assumptions as to the filing of UCC-1
financing statements and/or UCC-3 releases or termination statements.
Section 10.2 Remedies.
(a) Optional Acceleration. Upon the occurrence of an Event of
Default (other than an Event of Default described in Section 10.1(e) with
respect to the Borrower), the Administrative Agent may by notice to the
Borrower, declare the Termination Date to have occurred and the Obligations to
be immediately due and payable, whereupon the Aggregate Commitment shall
terminate and all Obligations shall become immediately due and payable.
(b) Automatic Acceleration. Upon the occurrence of an Event of
Default described in Section 10.1(e) with respect to the Borrower, the
Termination Date shall automatically occur and the Obligations shall be
immediately due and payable.
(c) Additional Remedies. Upon the Termination Date pursuant to
this Section 10.2, the Aggregate Commitment will terminate, no Loans or Advances
thereafter will be made, and the Administrative Agent, on behalf of the Secured
Parties, shall have, in addition to all other rights and remedies under this
Agreement or otherwise, all other rights and remedies provided to a secured
party
41
upon default under the UCC of each applicable jurisdiction and other applicable
laws, which rights shall be cumulative.
ARTICLE XI
THE AGENTS
Section 11.1 Appointment.
(a) Each member of the Blue Ridge Group hereby irrevocably
designates and appoints Wachovia Bank, N.A. as Blue Ridge Agent hereunder and
under the other Transaction Documents to which the Blue Ridge Agent is a party ,
and authorizes the Blue Ridge Agent to take such action on its behalf under the
provisions of the Transaction Documents and to exercise such powers and perform
such duties as are expressly delegated to the Blue Ridge Agent by the terms of
the Transaction Documents, together with such other powers as are reasonably
incidental thereto. Each member of the Atlantic Group hereby irrevocably
designates and appoints CLNY as Atlantic Agent hereunder and under the other
Transaction Documents to which the Atlantic Agent is a party , and authorizes
the Atlantic 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 Atlantic Agent by the terms of the Transaction
Documents, together with such other powers as are reasonably incidental thereto.
Each of the Lenders and the Co-Agents hereby irrevocably designates and appoints
Wachovia Bank, N.A. as Administrative Agent hereunder and under the Transaction
Documents to which the Administrative Agent is a party, and authorizes the
Administrative Agent to take such action on its behalf under the provisions of
the Transaction Documents and to exercise such powers and perform such duties as
are expressly delegated to the Administrative Agent by the terms of the
Transaction Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement, none of the Agents shall have any duties or responsibilities,
except those expressly set forth in the Transaction Documents to which it is a
party, or any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities on the part of
such Agent shall be read into any Transaction Document or otherwise exist
against such Agent.
(b) The provisions of this Article XI are solely for the
benefit of the Agents and the Lenders, and neither of the Loan Parties shall
have any rights as a third-party beneficiary or otherwise under any of the
provisions of this Article XI, except that this Article XI shall not affect any
obligations which any of the Agents or Lenders may have to either of the Loan
Parties under the other provisions of this Agreement.
(c) In performing its functions and duties hereunder, (i) the
Blue Ridge Agent shall act solely as the agent of the members of the Blue Ridge
Group and does not assume nor shall be deemed to have assumed any obligation or
relationship of trust or agency with or for either of the Loan Parties or any of
their respective successors and assigns, (ii) the Atlantic Agent shall act
solely as the agent of the members of the Atlantic Group and does not assume nor
shall be deemed to have assumed any obligation or relationship of trust or
agency with or for either of the Loan Parties or any of their respective
successors and assigns, and (iii) 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
42
relationship of trust or agency with or for either of the Loan Parties or any of
their respective successors and assigns.
Section 11.2 Delegation of Duties. Each of the Agents may
execute any of its duties under the Transaction Documents to which it is a party
by or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. None of the Agents
shall be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
Section 11.3 Exculpatory Provisions. None of the Agents nor
any of its directors, officers, agents or employees shall be (i) liable for any
action lawfully taken or omitted to be taken by it or them or any Person
described in Section 11.2 under or in connection with this Agreement (except for
its, their or such Person's own bad faith, gross negligence or willful
misconduct), or (ii) responsible in any manner to any of the Lenders or other
Agents for any recitals, statements, representations or warranties made by the
Borrower contained in this Agreement or in any certificate, report, statement or
other document referred to or provided for in, or received under or in
connection with, this Agreement or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other
document furnished in connection herewith, or for any failure of either of the
Loan Parties to perform its respective obligations hereunder, or for the
satisfaction of any condition specified in Article V, except receipt of items
required to be delivered to such Agent. None of the Agents shall be under any
obligation to any other Agent or any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements or covenants contained in, or
conditions of, this Agreement, or to inspect the properties, books or records of
the Loan Parties. This Section 11.3 is intended solely to govern the
relationship between the Agents, on the one hand, and the Lenders and their
respective Liquidity Banks, on the other.
Section 11.4 Reliance by Agents.
(a) Each of the Agents shall in all cases be entitled to rely,
and shall be fully protected in relying, upon any note, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Loan Parties), independent
accountants and other experts selected by such Agent. Each of the Agents shall
in all cases be fully justified in failing or refusing to take any action under
this Agreement or any other document furnished in connection herewith unless it
shall first receive such advice or concurrence of such of its Lenders and
Liquidity Banks, as it shall determine to be appropriate under the relevant
circumstances, or it shall first be indemnified to its satisfaction by its
Constituent Liquidity Banks against any and all liability, cost and expense
which may be incurred by it by reason of taking or continuing to take any such
action.
(b) Any action taken by any of the Agents in accordance with
Section 11.4(a) shall be binding upon all of the Agents and the Lenders.
Section 11.5 Notice of Events of Default. None of the Agents
shall be deemed to have knowledge or notice of the occurrence of any Event of
Default or Unmatured Default unless such Agent
43
has received notice from another Agent, a Lender or a Loan Party referring to
this Agreement, stating that an Event of Default or Unmatured Default has
occurred hereunder and describing such Event of Default or Unmatured Default. In
the event that any of the Agents receives such a notice, it shall promptly give
notice thereof to the Lenders and the other Agents. The Administrative Agent
shall take such action with respect to such Event of Default or Unmatured
Default as shall be directed by either of the Co-Agents PROVIDED THAT the
Administrative Agent is indemnified to its satisfaction by such Co-Agent and its
Constituent Liquidity Banks against any and all liability, cost and expense
which may be incurred by it by reason of taking any such action.
Section 11.6 Non-Reliance on Other Agents and Lenders. Each of
the Lenders expressly acknowledges that none of the Agents, nor any of the
Agents' respective officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representations or warranties to it and that no act by
any of the Agents hereafter taken, including, without limitation, any review of
the affairs of the Loan Parties, shall be deemed to constitute any
representation or warranty by such Agent. Each of the Lenders also represents
and warrants to the Agents and the other Lenders that it has, independently and
without reliance upon any such Person (or any of their Affiliates) and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
prospects, financial and other conditions and creditworthiness of the Loan
Parties and made its own decision to enter into this Agreement. Each of the
Lenders also represents that it will, independently and without reliance upon
the Agents or any other Liquidity Bank or Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement, and to make such investigation as it deems necessary to
inform itself as to the business, operations, property, prospects, financial and
other condition and creditworthiness of the Loan Parties. The Agents, the
Lenders and their respective Affiliates, shall have no duty or responsibility to
provide any party to this Agreement with any credit or other information
concerning the business, operations, property, prospects, financial and other
condition or creditworthiness of the Loan Parties which may come into the
possession of such Person or any of its respective officers, directors,
employees, agents, attorneys-in-fact or affiliates, except that each of the
Agents shall promptly distribute to the other Agents and the Lenders, copies of
financial and other information expressly provided to it by either of the Loan
Parties pursuant to this Agreement.
Section 11.7 Indemnification of Agents. Each Liquidity Bank
agrees to indemnify (a) its applicable Co-Agent, (b) the Administrative Agent,
and (c) the officers, directors, employees, representatives and agents of each
of the foregoing (to the extent not reimbursed by the Loan Parties and without
limiting the obligation of the Loan Parties to do so), ratably in accordance
with their respective Loans, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever (including, without
limitation, the reasonable fees and disbursements of counsel for such Co-Agent,
the Administrative Agent or such Person in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether or not
such Co-Agent or the Administrative Agent or such Person shall be designated a
party thereto) that may at any time be imposed on, incurred by or asserted
against such Co-Agent, the Administrative Agent or such Person as a result of,
or arising out of, or in any way related to or by reason of, any of the
transactions contemplated hereunder or the execution, delivery or performance of
this Agreement or any other document furnished in connection herewith (but
excluding any such liabilities, obligations, losses, damages, penalties,
actions, judgments,
44
suits, costs, expenses or disbursements resulting solely from the bad faith,
gross negligence or willful misconduct of such Co-Agent, the Administrative
Agent or such Person as finally determined by a court of competent
jurisdiction).
Section 11.8 Agents in their Individual Capacities. Each of
the Agents in its individual capacity and its affiliates may make loans to,
accept deposits from and generally engage in any kind of business with the Loan
Parties and their Affiliates as though such Agent were not an Agent hereunder.
With respect to its Loans, if any, pursuant to this Agreement, each of the
Agents shall have the same rights and powers under this Agreement as any Lender
and may exercise the same as though it were not an Agent, and the terms "Lender"
and "Lenders" shall include each of the Agents in their individual capacities.
Section 11.9 [Reserved].
Section 11.10 Conflict Waivers.
(a) Wachovia acts, or may in the future act: (i) as
administrative agent for Blue Ridge, (ii) as issuing and paying agent for Blue
Ridge's Commercial Paper Notes, (iii) to provide credit or liquidity enhancement
for the timely payment for Blue Ridge's Commercial Paper Notes and (iv) to
provide other services from time to time for Blue Ridge (collectively, the
"WACHOVIA ROLES"). Without limiting the generality of Sections 11.1 and 11.8,
each of the Administrative Agent and the Lenders hereby acknowledges and
consents to any and all Wachovia Roles and agrees that in connection with any
Wachovia Role, Wachovia may take, or refrain from taking, any action which it,
in its discretion, deems appropriate, including, without limitation, in its role
as administrative agent for Blue Ridge, the giving of notice to the Liquidity
Banks of a mandatory purchase pursuant to the Blue Ridge Liquidity Agreement,
and hereby acknowledges that neither Wachovia nor any of its Affiliates has any
fiduciary duties hereunder to any Lender (other than Blue Ridge) arising out of
any Wachovia Roles.
(b) CLNY acts, or may in the future act: (i) as administrator
of Atlantic, (ii) as issuing and paying agent for Atlantic's Commercial Paper
Notes, (iii) to provide credit or liquidity enhancement for the timely payment
for Atlantic's Commercial Paper Notes and (iv) to provide other services from
time to time for Atlantic (collectively, the "CLNY ROLES"). Without limiting the
generality of Sections 11.1 and 11.8, each of the Agents and the Lenders hereby
acknowledges and consents to any and all CLNY Roles and agrees that in
connection with any CLNY Role, CLNY may take, or refrain from taking, any action
which it, in its discretion, deems appropriate, including, without limitation,
in its role as administrator of Atlantic, the giving of notice to the Liquidity
Banks of a mandatory purchase pursuant to the Atlantic Liquidity Agreement, and
hereby acknowledges that neither CLNY nor any of its Affiliates has any
fiduciary duties hereunder to any Lender (other than Atlantic) arising out of
any CLNY 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
45
interest with respect to the Collateral. In addition, such listing shall impose
no duties on the Administrative Agent other than those expressly and
specifically undertaken in accordance with this Article XI.
ARTICLE XII
ASSIGNMENTS AND PARTICIPATIONS
Section 12.1 Restrictions on Assignments, etc.
(a) No Loan Party may assign its rights, or delegate its
duties hereunder or any interest herein without the prior written consent of
each of the Agents and satisfaction of the Rating Agency Condition; PROVIDED,
HOWEVER, that the foregoing shall not be deemed to restrict Quest Diagnostics'
right, prior to delivery of a Successor Notice, to request the Agents' consent
to the appointment of an Affiliate as replacement Servicer (subject to
satisfaction of the Rating Agency Condition) or to delegate all or any portion
of its duties as Servicer to other Originators, as sub-servicers, so long as
Quest Diagnostics remains primarily liable for the performance or
non-performance of such duties.
(b) Each of the Conduits may, at any time, assign all or any
portion of any of its Loans, or sell participations therein, to its Constituent
Liquidity Banks (or to its Co-Agent for the ratable benefit of its Constituent
Liquidity Banks).
(c) In addition to, and not in limitation of, assignments and
participations described in Section 12.1(b):
(i) in the event that any of Blue Ridge's Liquidity Banks
becomes a Downgraded Liquidity Bank, such Downgraded Liquidity Bank
shall give prompt written notice of its Downgrading Event to the Blue
Ridge Agent and the Borrower. Within 5 Business Days after the
Borrower's receipt of such notice, the Borrower may propose an Eligible
Assignee who is willing to accept an assignment of, and to assume, such
Downgraded Liquidity Bank's rights and obligations under this Agreement
and under the Liquidity Agreement. In the event that the Borrower fails
to propose such an Eligible Assignee within such 5 Business Day period,
or such Eligible Assignee does not execute and deliver assignment and
assumption documents reasonably acceptable to such Downgraded Liquidity
Bank and the Blue Ridge Agent and pays the Downgraded Liquidity Bank's
Obligations in full, in each case, not later than 5:00 p.m. (New York
City time) on the 10th Business Day following the Borrower's receipt of
notice of such Downgrading Event, the Blue Ridge Agent may identify an
Eligible Assignee without the Borrower's consent, and the Downgraded
Liquidity Bank shall promptly assign its rights and obligations to the
Eligible Assignee designated by the Blue Ridge Agent against payment in
full of its Obligations;
(ii) each of the Lenders may assign all or any portion of its
Loans and, if applicable, its Commitment and Liquidity Commitment, to
any Eligible Assignee with the prior written consent of (A) the
Borrower and (B) such Lender's applicable Co-Agent, which consents
shall not be unreasonably withheld or delayed.
46
(iii) each of the Lenders may, without the prior written
consent of the Borrower or any of the Agents, sell participations in
all or any portion of their respective rights and obligations in, to
and under the Transaction Documents and the Obligations in accordance
with Sections 12.2 and 14.7.
Section 12.2 Rights of Assignees and Participants.
(a) Upon the assignment by a Lender in accordance with Section
12.1(b) or (c), the Eligible Assignee(s) receiving such assignment shall have
all of the rights of such Lender with respect to the Transaction Documents and
the Obligations (or such portion thereof as has been assigned).
(b) In no event will the sale of any participation interest in
any Lender's or any Eligible Assignee's rights under the Transaction Documents
or in the Obligations relieve the seller of such participation interest of its
obligations, if any, hereunder or, if applicable, under the Liquidity Agreement
to which it is a party.
Section 12.3 Terms and Evidence of Assignment. Any assignment
to any Eligible Assignee(s) pursuant to Section 1.2(c), 12.1(b) or 12.1(c) shall
be upon such terms and conditions as the assigning Lender and the applicable
Co-Agent, on the one hand, and the Eligible Assignee, on the other, may mutually
agree, and shall be evidenced by such instrument(s) or document(s) as may be
satisfactory to such Lender, the applicable Co-Agent and the Eligible
Assignee(s). Any assignment made in accordance with the terms of this Article
XII shall relieve the assigning Lender of its obligations, if any, under this
Agreement (and, if applicable, the Liquidity Agreement to which it is a party)
to the extent assigned.
ARTICLE XIII
INDEMNIFICATION
Section 13.1 Indemnities by the Borrower.
(a) General Indemnity. Without limiting any other rights which
any such Person may have hereunder or under applicable law, the Borrower hereby
agrees to indemnify each of the Affected Parties, each of their respective
Affiliates, and all successors, transferees, participants and assigns and all
officers, directors, shareholders, controlling persons, employees and agents of
any of the foregoing (each, an "INDEMNIFIED PARTY"), forthwith on demand, from
and against any and all damages, losses, claims, liabilities and reasonable
related out-of-pocket costs and expenses, including reasonable attorneys' fees
and disbursements (all of the foregoing being collectively referred to as
"INDEMNIFIED AMOUNTS") awarded against or incurred by any of them arising out of
or relating to the Transaction Documents, the Obligations or the Collateral,
excluding, however: (i) Indemnified Amounts to the extent determined by a court
of competent jurisdiction to have resulted from bad faith, gross negligence or
willful misconduct on the part of such Indemnified Party or (ii) recourse
(except as otherwise specifically provided in this Agreement) for Indemnified
Amounts to the extent the same includes losses in respect of Receivables which
are uncollectible on account of the insolvency, bankruptcy or lack of
creditworthiness of the related Obligor; PROVIDED, HOWEVER, that prior to the
occurrence of an Event of Default, the Indemnified Parties shall only be
entitled to seek indemnity for the reasonable fees and disbursements of a single
law firm as special counsel to all such Indemnified Parties (and, if
47
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;
(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;
48
(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 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
49
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 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.
50
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 Agents, and any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; PROVIDED, HOWEVER, that:
(a) before either of the Agents enter into such an amendment
or grants such a waiver or consent that is deemed to be material by S&P
and/or ▇▇▇▇▇'▇, the Rating Agency Condition must be satisfied with
respect to each of the Conduits,
(b) without the prior written consent of all Liquidity Banks
in a Co-Agent's Group, such Co-Agent will not amend, modify or waive
any provision of this Agreement which would (i) reduce the amount of
any principal or interest that is payable on account of its Conduit's
Loans or delay any scheduled date for payment thereof; (ii) decrease
the Required Reserve, decrease the spread included in any Interest Rate
or change the Servicer's Fee; (iii) modify this Section 14.1; or (iv)
modify any yield protection or indemnity provision which expressly
inures to the benefit of assignees or participants of such Co-Agent's
Conduit,
(c) if only one of the Co-Agents declines to approve a
requested amendment and within 90 days after the Borrower's request for
approval of such amendment, either (i) the Borrower prepays the
dissenting Co-Agent's Group's Obligations in full or (ii) finds one or
more Eligible Assignees to replace such Co-Agent's Group, then the
requested amendment shall become effective on the effective date of
such prepayment or assignment as to the remaining Co-Agent's Group
(and, if applicable, as to any replacement Group), and
(d) if only one of the Co-Agents declines to approve a
requested waiver and (i) the Borrower either (A) identifies one or more
Eligible Assignee(s) to accept immediate written assignments of such
Co-Agent's Group's Commitment(s) and outstanding Obligations, or (B)
immediately pays all Obligations owing to the members of such
Co-Agent's Group in full, and (ii) the Administrative Agent has not
already declared the Termination Date to have occurred, such waiver
shall become effective as to the remaining Group on the effective date
of such assignment or repayment.
Section 14.2 Notices, Etc. All notices and other
communications provided for hereunder shall, unless otherwise stated herein, be
in writing (including facsimile communication) and shall be personally delivered
or sent by express mail or courier or by certified mail, postage prepaid, or by
facsimile, to the intended party at the address or facsimile number of such
party set forth on Schedule 14.2 or at such other address or facsimile number as
shall be designated by such party in a written notice to the other parties
hereto. All such notices and communications shall be effective, (a) if
personally delivered or sent by express mail or courier or if sent by certified
mail, when received, and (b) if transmitted by facsimile, when sent, receipt
confirmed by telephone or electronic means.
51
Section 14.3 No Waiver; Remedies. No failure on the part of
the Administrative Agent or any of the other Secured Parties to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law. Without limiting the foregoing, each of the Administrative Agent and the
Lenders is hereby authorized by the Borrower at any time and from time to time,
to the fullest extent permitted by law, to set off and apply to payment of any
Obligations that are then due and owing any and all deposits (general or
special, time or demand provisional or final) at any time held and other
indebtedness at any time owing by such Person to or for the credit or the
account of the Borrower.
Section 14.4 Binding Effect; Survival. This Agreement shall be
binding upon and inure to the benefit of each the Loan Parties, the
Administrative Agent, the Lenders and their respective successors and assigns,
and the provisions of Section 4.2 and Article XIII shall inure to the benefit of
the Affected Parties and the Indemnified Parties, respectively, and their
respective successors and assigns; PROVIDED, HOWEVER, nothing in the foregoing
shall be deemed to authorize any assignment not permitted by Section 12.1. This
Agreement shall create and constitute the continuing obligations of the parties
hereto in accordance with its terms, and shall remain in full force and effect
until the Final Payout Date. The rights and remedies with respect to any breach
of any representation and warranty made by the Borrower pursuant to Article VI
and the indemnification and payment provisions of Article XIII and Sections 4.2,
14.5, 14.6, 14.7, 14.8 and 14.15 shall be continuing and shall survive any
termination of this Agreement.
Section 14.5 Costs, Expenses and Stamp Taxes. In addition to
their obligations under the other provisions of this Agreement, the Loan Parties
jointly and severally agree to pay:
(a) within 30 days after receipt of a written invoice
therefor: all reasonable out-of-pocket costs and expenses incurred by
the Administrative Agent, in connection with (i) the negotiation,
preparation, execution and delivery of this Agreement, the other
Transaction Documents or the Liquidity Agreement (subject to the
limitations set forth in the Fee Letters), or (ii) the administration
of the Transaction Documents prior to an Event of Default including,
without limitation, (A) the reasonable fees and expenses of a single
law firm acting as counsel to the Administrative Agent and the Lenders
incurred in connection with any of the foregoing, and (B) subject to
the limitations set forth in the Fee Letters and in Section 7.1(c), the
reasonable fees and expenses of independent accountants incurred in
connection with any review of any Loan Party's books and records either
prior to or after the execution and delivery hereof;
(b) within 30 days after receipt of a written invoice
therefor: all reasonable out-of-pocket costs and expenses (including,
without limitation, the reasonable fees and expenses of counsel and
independent accountants) incurred by each of the Lenders, the
Administrative Agent and the Liquidity Banks in connection with the
negotiation, preparation, execution and delivery of any amendment or
consent to, or waiver of, any provision of the Transaction Documents
which is requested or proposed by any Loan Party (whether or not
consummated), the administration of the Transaction Documents following
an Event of Default (or following a waiver of or consent to any Event
of
52
Default), or the enforcement by any of the foregoing Persons of, or any
actual or claimed breach of, this Agreement or any of the other
Transaction Documents, including, without limitation, (i) the
reasonable fees and expenses of counsel to any of such Persons incurred
in connection with any of the foregoing or in advising such Persons as
to their respective rights and remedies under any of the Transaction
Documents in connection with any of the foregoing, and (ii) the
reasonable fees and expenses of independent accountants incurred in
connection with any review of any Loan Party's books and records or
valuation of the Receivables and Related Assets; and
(c) upon demand: all stamp and other similar or recording
taxes and fees payable or determined to be payable in connection with
the execution, delivery, filing and recording of this Agreement or the
other Transaction Documents (and Loan Parties, jointly and severally
agree to indemnify each Indemnified Party against any liabilities with
respect to or resulting from any delay in paying or omission to pay
such taxes and fees).
Section 14.6 No Proceedings. Each of the parties hereto hereby
agrees that it will not institute against the Borrower, Atlantic or Blue Ridge,
or join any Person in instituting against the Borrower, Atlantic or Blue Ridge,
any insolvency proceeding (namely, any proceeding of the type referred to in the
definition of Event of Bankruptcy) so long as any Obligations (in the case of
the Borrower) or any Commercial Paper Notes or other senior Indebtedness issued
by Atlantic or Blue Ridge, as the case may be, shall be outstanding or there
shall not have elapsed one year plus one day since the last day on which any
such Obligations and Commercial Paper Notes or other senior Indebtedness shall
have been outstanding. The parties' obligations under this Section 14.6 shall
survive termination of this Agreement.
Section 14.7 Confidentiality of Borrower Information. Each of
the Agents and the Lenders agrees to keep confidential information obtained by
it pursuant to the Transaction Documents confidential in accordance with such
Agent's or Lender's customary practices and in accordance with applicable law
and agrees that it will only use such information in connection with the
transactions contemplated hereby and not disclose any of such information other
than (a) to such Agent's or Lender's employees, representatives, directors,
attorneys, auditors, agents, professional advisors, trustees or affiliates who
are advised of the confidential nature thereof or to any direct or indirect
contractual counterparty in swap agreements or such contractual counterparty's
professional advisor (so long as such contractual counterparty or professional
advisor to such contractual counterparty agrees to be bound by the provision of
this Section 14.7, such Agent or Lender being liable for any breach of
confidentiality by any Person described in this clause (a) and with respect to
disclosures to an Affiliate to the extent disclosed by such Agent or Lender to
such Affiliate), (b) to the extent such information presently is or hereafter
becomes available to such Agent or Lender on a non-confidential basis from a
Person not an Affiliate of such Agent or Lender not known to such Lender to be
violating a confidentiality obligation by such disclosure, (c) to the extent
disclosure is required by any Law, subpoena or judicial order or process
(PROVIDED THAT notice of such requirement or order shall be promptly furnished
to the applicable Loan Party unless such notice is legally prohibited) or
requested or required by bank, securities, insurance or investment company
regulations or auditors or any administrative body or commission to whose
jurisdiction such Agent or Lender may be subject, (d) to any rating agency to
the extent required in connection with any rating to be assigned to such Lender,
(e)
53
to assignees or participants or prospective assignees or participants who agree
to be bound by the provisions of this Section 14.7, (f) to the extent required
in connection with any litigation between any Loan Party and any Lender with
respect to the Loans or any Transaction Document, (g) to any dealer or placement
agent for such party's Commercial Paper Notes, who (i) in the good faith belief
of such party, has a need to know such confidential information, (ii) is
informed by such party of the confidential nature of such information and the
terms of this Section 14.7 and (iii) has agreed in writing to be bound by the
provisions of this Section 14.7, (h) to any Liquidity Bank (whether or not on
the date of disclosure, such Liquidity Bank continues to be an Eligible
Assignee), to any other actual or potential permitted assignee or participant
permitted under Section 12.1 who has agreed to be bound by the provisions of
this Section 14.7, (i) to any rating agency that maintains a rating for such
party's Commercial Paper Notes or is considering the issuance of such a rating,
for the purposes of reviewing the credit of any Lender in connection with such
rating, (j) to any other party to this Agreement (and any independent attorneys
and auditors of such party), for the purposes contemplated hereby, (k) to any
entity that provides a surety bond or other credit enhancement to 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 Agents may disclose on a "no
name" basis to any actual or potential investor in Commercial Paper Notes
information regarding the nature of this Agreement, the basic terms hereof
(including without limitation the amount and nature of the Aggregate Commitment
and the Advances), the nature, amount and status of the Receivables, and 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 Letters, 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, subpoena, civil investigative demand or similar process) to
disclose any such Program Information, or (4) in financial statements
as required by GAAP;
54
(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 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
55
subject matter hereof and shall constitute the entire understanding among the
parties hereto with respect to the subject matter hereof, superseding all prior
oral or written understandings.
Section 14.11 Governing Law. EACH TRANSACTION DOCUMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF OTHER THAN
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW (except in the case of the other
Transaction Documents, to the extent otherwise expressly stated therein) AND
EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE OWNERSHIP INTERESTS OR SECURITY
INTERESTS OF THE BORROWER OR THE ADMINISTRATIVE AGENT, ON BEHALF OF THE SECURED
PARTIES, IN ANY OF THE COLLATERAL IS GOVERNED BY THE LAWS OF A JURISDICTION
OTHER THAN THE STATE OF NEW YORK.
Section 14.12 Waiver Of Jury Trial. EACH PARTY HERETO HEREBY
EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY OTHER TRANSACTION
DOCUMENT OR UNDER ANY AMENDMENT, INSTRUMENT OR DOCUMENT DELIVERED OR WHICH MAY
IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY BANKING OR
OTHER RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
TRANSACTION DOCUMENT AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL NOT BE
TRIED BEFORE A JURY.
Section 14.13 Consent To Jurisdiction; Waiver Of Immunities.
EACH PARTY HERETO HEREBY ACKNOWLEDGES AND AGREES THAT:
(a) IT IRREVOCABLY (i) SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION, FIRST, OF ANY UNITED STATES FEDERAL COURT, AND SECOND, IF
FEDERAL JURISDICTION IS NOT AVAILABLE, OF ANY NEW YORK STATE COURT, IN
EITHER CASE SITTING IN NEW YORK COUNTY, NEW YORK, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND (ii)
WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF
AN INCONVENIENT FORUM TO THE MAINTENANCE OF AN ACTION OR PROCEEDING IN
SUCH COURTS.
(b) TO THE EXTENT THAT IT HAS OR HEREAFTER MAY ACQUIRE ANY
IMMUNITY FROM THE JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID TO EXECUTION, EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, IT HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER OR IN CONNECTION WITH THIS AGREEMENT.
56
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 each of the
Conduits shall be liable for any claims that such party may have against such
Conduit only to the extent that such Conduit has excess funds and to the extent
such assets are insufficient to satisfy the obligations of such Conduit
hereunder, such Conduit shall have no liability with respect to any amount of
such obligations remaining unpaid and such unpaid amount shall not constitute a
claim against such Conduit. Any and all claims against either of the Conduits or
any of the Agents shall be subordinate to the claims against such Persons of the
holders of such Conduit's Commercial Paper Notes and its Liquidity Banks.
57
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:
58
ADMINISTRATIVE AGENT:
WACHOVIA BANK, N.A., as Administrative Agent
and as Blue Ridge Agent
By:
----------------------------------
Name:
Title:
LENDERS:
BLUE RIDGE ASSET FUNDING CORPORATION
BY: WACHOVIA BANK, N.A., ITS ATTORNEY-IN-FACT
By:
----------------------------------
Name:
Title:
Initial Commitment: not applicable
WACHOVIA BANK, N.A.
By:
----------------------------------
Name:
Title:
Initial Commitment: $206,000,000
59
ATLANTIC ASSET SECURITIZATION CORP.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Director
Initial Commitment: not applicable
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Director
Initial Commitment: $50,000,000
60
ANNEX A
DEFINITIONS
A. CERTAIN DEFINED TERMS. As used in this Agreement:
"ACCOUNT" shall have the meaning specified in Article 9 of the
UCC.
"ACCRUAL PERIOD" means each calendar month, PROVIDED THAT the
initial Accrual Period hereunder means the period from (and including) the date
of the initial Loan hereunder to (and including) the last day of the calendar
month thereafter.
"ADMINISTRATIVE AGENT" has the meaning provided in the
preamble of this Agreement.
"ADVANCE" means a borrowing hereunder consisting of the
aggregate amount of the several Loans made on the same Borrowing Date.
"AFFECTED PARTY" means each of the Lenders, the Agents and the
Liquidity Banks.
"AFFILIATE" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. A Person shall be deemed to control another Person if
the controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, membership interests, by contract,
or otherwise.
"AFFILIATED OBLIGOR" in relation to any Obligor means an
Obligor that is an Affiliate of such Obligor.
"AGENTS" means the Administrative Agent and the Co-Agents.
"AGGREGATE COMMITMENT" means the aggregate of the Commitments
of the Liquidity Banks, as reduced or increased from time to time pursuant to
the terms hereof.
"AGREEMENT" means this Credit and Security Agreement, as it
may be amended or modified and in effect from time to time.
"ALTERNATE BASE RATE" means for any day, the rate per annum
equal to the higher as of such day of (i) the Prime Rate, or (ii) one-half of
one percent (0.50%) above the Federal Funds Rate. For purposes of determining
the Alternate Base Rate for any day, changes in the Prime Rate or the Federal
Funds Rate shall be effective on the date of each such change.
"ALTERNATE BASE RATE LOAN" means a Loan which bears interest
at the Alternate Base Rate or the Default Rate.
"APPLICABLE PERCENTAGE" shall have the meaning provided in the
Credit Agreement (whether or not the Credit Agreement remains in effect).
61
"APPROVED AMENDMENT" means:
(a) until such time (if any) that Quest Diagnostics' long-term
senior unsecured debt rating from ▇▇▇▇▇'▇ is raised above Ba1, and for
so long as Quest Diagnostics' long-term senior unsecured debt ratings
remain at BBB- or higher from S&P and at (but not below) Ba1 from
Moody's, any amendment to or waiver of the Credit Agreement to which
the requisite banks under the Credit Agreement consents,
(b) after the time (if any) that Quest Diagnostics' long-term
senior unsecured debt rating from ▇▇▇▇▇'▇ is raised to Baa3 or higher,
and for so long as Quest Diagnostics' long-term senior unsecured debt
ratings remain at BBB- or higher from S&P and at Baa3 or higher from
Moody's, any amendment to or waiver of the Credit Agreement to which
the requisite banks under the Credit Agreement consents, and
(c) at any time while Quest Diagnostics' long-term senior
unsecured debt rating from either S&P or Moody's fails to meet the
applicable minimum level set forth in (a) or (b) above or any such
minimum rating is classified as being on "negative watch" or the
equivalent, any amendment to or waiver of the Credit Agreement approved
by the requisite banks under the Credit Agreement AND to which either
(i) each of the Co-Agents (acting in its capacity as such under this
Agreement) gives its written consent on or within 30 days after receipt
of a copy of the proposed amendment or waiver, or (ii) one of the
Co-Agents gives its written consent on or within 30 days after receipt
of a copy of the proposed amendment (but not waiver) and the
Obligations owing the dissenting Co-Agent's Group are paid in full on
or within 60 days after such 30th day.
"ARTICLE" means an article of this Agreement unless another
document is specifically referenced.
"ATLANTIC" has the meaning provided in the preamble of this
Agreement.
"ATLANTIC AGENT" has the meaning provided in the preamble of
this Agreement.
"ATLANTIC ALLOCATION LIMIT" has the meaning set forth in
Section 1.1(b).
"ATLANTIC FEE LETTER" means that certain Atlantic Fee Letter
dated as of September 28, 2001 by and among Quest Diagnostics, the Borrower,
Atlantic and CLNY, as Atlantic Agent.
"ATLANTIC GROUP" has the meaning provided in the preamble of
this Agreement.
"ATLANTIC LIQUIDITY AGREEMENT" means the Liquidity Asset
Purchase Agreement dated as of the date hereof among Atlantic, the Atlantic
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.
"ATLANTIC LIQUIDITY BANK" means any Liquidity Bank that now or
hereafter enters into this Agreement and the Atlantic Liquidity Agreement.
62
"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.
"BLUE RIDGE AGENT" has the meaning provided in the preamble of
this Agreement.
"BLUE RIDGE ALLOCATION LIMIT" has the meaning set forth in
Section 1.1(a).
"BLUE RIDGE FEE LETTER" means that certain Blue Ridge Fee
Letter dated as of September 28, 2001 by and among Quest Diagnostics, the
Borrower, Blue Ridge and Wachovia, as the Blue Ridge Agent and the
Administrative Agent.
"BLUE RIDGE GROUP" has the meaning provided in the preamble of
this Agreement.
"BLUE RIDGE LIQUIDITY AGREEMENT" means the Amended and
Restated Liquidity Asset Purchase Agreement dated as of the date hereof among
Blue Ridge, the Blue Ridge Agent, and the Liquidity Banks from time to time
party thereto, as the same may be amended, restated, supplemented, replaced or
otherwise modified from time to time.
"BLUE RIDGE LIQUIDITY BANK" means any Liquidity Bank that
enters into this Agreement and the Blue Ridge Liquidity Agreement.
"BORROWER" has the meaning provided in the preamble of this
Agreement.
"BORROWING BASE" means, on any date of determination, the Net
Pool Balance as of the last day of the period covered by the most recent Monthly
Report, MINUS the Required Reserve as of the last day of the period covered by
the most recent Monthly Report.
"BORROWING DATE" means a date on which an Advance is made
hereunder.
"BORROWING REQUEST" is defined in Section 2.1.
"BROKEN FUNDING COSTS" means, for any CP Rate Loan of Blue
Ridge which: (i) has its principal reduced without compliance by the Borrower
with the notice requirements hereunder or (ii) is not prepaid in the amount
specified in a Prepayment Notice on the date specified therein or (iii) is
assigned by Blue Ridge to its Liquidity Banks under its Liquidity Agreement or
terminated prior to the date on which it was originally scheduled to end; an
amount equal to the excess, if any, of (A) the CP Costs that would have accrued
during the remainder of the applicable commercial paper tranche periods
determined by the Blue Ridge Agent to relate to such Loan subsequent to the date
of such reduction, assignment or termination (or in respect of clause (ii)
above, the date such prepayment was designated to occur pursuant to the
applicable Prepayment Notice) of the principal of such CP Rate Loan if such
reduction, assignment or termination had not occurred or such Prepayment Notice
had not been delivered, over (B) the sum of (x) to the extent all or a portion
of such principal is allocated to another CP Rate Loan, the amount of CP Costs
actually accrued during the remainder of such period on such principal for the
new Loan, and (y) to the extent such principal is not allocated to another CP
Rate
63
Loan, the income, if any, actually received during the remainder of such period
by the holder of such Loan from investing the portion of such principal not so
allocated. All Broken Funding Costs shall be due and payable hereunder upon
demand.
"BUSINESS 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
(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.
64
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.
"CLNY" has the meaning provided in the preamble of this
Agreement.
"CLNY ROLES" has the meaning set forth in Section 11.10(b).
"CO-AGENTS" has the meaning provided in the preamble of this
Agreement.
"CODE" means the Internal Revenue Code of 1986, as the same
may be amended from time to time.
"COLLATERAL" has the meaning set forth in Section 9.1.
"COLLATERAL ACCOUNT" has the meaning set forth in Section
7.1(i)(iv).
"COLLECTION ACCOUNT" means each concentration account,
depositary account, lockbox account or similar account into which proceeds of
Receivables are deposited.
"COLLECTION ACCOUNT AGREEMENT" means an agreement in
substantially the form of Exhibit A hereto by and among a Collection Bank at
which a Lockbox or Collection Account is maintained, the applicable Originator
(if such Lockbox or Collection Account is in the name of an Originator), the
Borrower and the Administrative Agent.
"COLLECTION BANK" means any of the banks holding one or more
Collection Accounts or Lockboxes.
"COLLECTIONS" means, (a) with respect to any Receivable, all
funds which either (i) are received from or on behalf of the related Obligor in
payment of any amounts owed (including, without limitation, purchase prices,
finance charges, interest and all other charges) in respect of such Receivable,
or applied to such amounts owed by such Obligor (including, without limitation,
payments that the Borrower, any Originator or the Servicer receives from third
party payors and applies in the ordinary course of its business to amounts owed
in respect of such Receivable and net proceeds of sale or other disposition of
repossessed goods or other collateral or property of the Obligor or any other
party directly or indirectly liable for payment of such Receivable and available
to be applied thereon), or (ii) are Deemed Collections, and (b) with respect to
any Demand Advance, any payment of principal or interest in respect thereof and
any Permitted Investments and the proceeds thereof made with any such payment.
65
"COMMERCIAL PAPER NOTES" shall mean the commercial paper
promissory notes, if any, issued by or on behalf of either of the Conduits to
fund, in whole or in part, any of its CP Rate Loans.
"COMMITMENT" means, for each Liquidity Bank, its obligation to
make Loans not exceeding the amount set forth opposite its signature to the
Agreement, as such amount may be modified from time to time pursuant to the
terms hereof.
"COMMITMENT INCREASE REQUEST" has the meaning set forth in
Section 1.7.
"COMMITMENT REDUCTION NOTICE" has the meaning set forth in
Section 1.6.
"CONDUITS" has the meaning provided in the preamble of this
Agreement.
"CONSTITUENT" means (a) as to the Atlantic Agent, any member
of the Atlantic Group from time to time party hereto, and (b) as to the Blue
Ridge Agent, any member of the Blue Ridge Group from time to time party hereto,
and when used as an adjective, "CONSTITUENT" shall have a correlative meaning.
"CONTRACT" means, with respect to any Receivable, any
requisition, purchase order, agreement, contract or other writing with respect
to the provision of services by an Originator to an Obligor other than (i) an
Invoice, and (ii) any confidential patient information including, without
limitation, test results.
"CONTRACTION" means the dollar amount (if any) by which the
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 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 COSTS" means, for each day, the sum of (i) discount or
interest accrued on Pooled Commercial Paper on such day, plus (ii) any and all
accrued commissions in respect of placement
66
agents and Commercial Paper dealers, and issuing and paying agent fees incurred,
in respect of such Pooled Commercial Paper for such day, plus (iii) other costs
associated with funding small or odd-lot amounts with respect to all receivable
purchase or financing facilities which are funded by Pooled Commercial Paper for
such day, minus (iv) any accrual of income net of expenses received on such day
from investment of collections received under all receivable purchase or
financing facilities funded substantially with Pooled Commercial Paper, minus
(v) any payment received on such day net of expenses in respect of Broken
Funding Costs related to the prepayment of any investment of Blue Ridge pursuant
to the terms of any receivable purchase or financing facilities funded
substantially with Pooled Commercial Paper. In addition to the foregoing costs,
if the Borrower (or the Servicer, on the Borrower's behalf) shall request any
Advance during any period of time determined by the Blue Ridge Agent in its sole
discretion to result in incrementally higher CP Costs applicable to Blue Ridge's
Loan included in such Advance, the principal associated with any such Loan of
Blue Ridge shall, during such period, be deemed to be funded by Blue Ridge in a
special pool (which may include capital associated with other receivable
purchase or financing facilities) for purposes of determining such additional CP
Costs applicable only to such special pool and charged each day during such
period against such principal.
"CP RATE" means:
(a) with respect to Blue Ridge for any CP Tranche Period, the
per annum interest rate that, when applied to the outstanding principal
balance of Blue Ridge's CP Rate Loans for the actual number of days
elapsed in such CP Tranche Period, would result in an amount of accrued
interest equivalent to Blue Ridge's CP Costs for such CP Tranche
Period; and
(b) with respect to Atlantic for any CP Tranche Period, the
per annum interest rate equivalent to the rate (or if more than one
rate, the weighted average of the rates) at which Commercial Paper
Notes of Atlantic 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 either of the Conduits
which bears interest at a CP Rate.
"CP TRANCHE PERIOD" means:
(a) with respect to Blue Ridge, an Accrual Period, and
(b) with respect to Atlantic, 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 Atlantic Agent
pursuant to Section 2.2; PROVIDED, HOWEVER, that if any such CP Tranche
Period would end on a day which is not a Business Day, such CP Tranche
Period shall end on the preceding Business Day.
67
"CREDIT AGREEMENT" means that certain Credit Agreement dated
as of June 27, 2001 among Quest Diagnostics as borrower, certain of its
Subsidiaries as guarantors, various lenders from time to time party thereto, and
Bank of America, N.A., as administrative agent and as issuing lender, as in
effect on the date of this Agreement, or as thereafter modified from time to
time in one or more Approved Amendments.
"CREDIT AND COLLECTION POLICY" means those credit and
collection policies and practices of the Originators relating to Contracts and
Receivables, copies or summaries of which are attached as Exhibit C to the Sale
Agreement, as the same may be modified from time to time without violating
Section 7.3(c) of this Agreement.
"CUT-OFF DATE" means November 30, 1999 and the last day of
each calendar month thereafter.
"DAYS SALES OUTSTANDING" means, as of any day, an amount equal
to the product of (x) 91, multiplied by (y) the amount obtained by dividing (i)
the aggregate Unpaid Net Balance of Receivables as of the most recent Cut-Off
Date, by (ii) the aggregate Net Revenues generated by the Originators during the
three calendar months including and immediately preceding such Cut-Off Date.
"DEEMED COLLECTIONS" means Collections deemed received by the
Borrower under Section 3.4.
"DEFAULT RATE" means a rate per annum equal to the sum of (i)
the Alternate Base Rate plus (ii) 2.00%, changing when and as the Alternate Base
Rate changes.
"DEFAULT RATIO" means, as of any Cut-Off Date, the ratio
(expressed as a percentage) computed by dividing (x) the total amount of
Defaulted Receivables as of such Cut-Off Date, by (y) the aggregate Unpaid
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
68
Unmatured Default exists and is continuing, which advance (a) is payable upon
demand, (b) is not evidenced by an instrument, chattel paper or a certificated
security, (c) bears interest at a market rate determined by the Borrower and the
Servicer from time to time, (d) is not subordinated to any other Indebtedness or
obligation of Quest Diagnostics, and (e) may not be offset by Quest Diagnostics
against amounts due and owing from the Borrower to Quest Diagnostics under its
Subordinated Note.
"DILUTION" means the amount of any reduction or cancellation
of the Unpaid Net Balance of a Receivable as described in Section 3.4(a) or (b).
"DISALLOWED RECEIVABLE" means a Receivable for which payment
is not expected to be received by the applicable Originator.
"DOLLARS" means dollars in lawful money of the United States
of America.
"DOWNGRADED LIQUIDITY BANK" means a Liquidity Bank of Blue
Ridge which becomes the subject of a Downgrading Event.
"DOWNGRADING EVENT" with respect to any Person means the
lowering of the rating with regard to the short-term securities of such Person
to below (i) A-1 by S&P, or (ii) P-1 by Moody's.
"ELIGIBLE ASSIGNEE" means (a) any "bankruptcy remote" special
purpose entity which is administered by Wachovia or CLNY (or any Affiliate of
Wachovia or CLNY) that is in the business of acquiring or financing receivables,
securities and/or other financial assets and which issues commercial paper notes
that are rated at least A-1 by S&P and P-1 by Moody's, (b) any Qualifying
Liquidity Bank, or (c) in the case of Blue Ridge, any Downgraded Liquidity Bank
whose liquidity commitment has been fully drawn by the Blue Ridge Agent and
funded into a collateral account.
"ELIGIBLE ORIGINATOR" means any of (a) Quest Diagnostics, (b)
Quest Diagnostics Incorporated a Michigan corporation, Quest Diagnostics
Incorporated, 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 Co-Agents if such Subsidiary constitutes a Material
Proposed Addition) becomes a "seller" party to the Sale Agreement by executing a
Joinder Agreement and complying with the conditions set forth in Article V of
the Sale Agreement.
"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;
69
(b) as to which the perfection of the Administrative Agent's
security interest, on behalf of the Secured Parties, is governed by the
laws of a jurisdiction where the Uniform Commercial Code-Secured
Transactions is in force, and which constitutes an "account" as defined in
the Uniform Commercial Code as in effect in such jurisdiction;
(c) the Obligor of which is resident of the United States or any of
its possessions or territories, and is not an Affiliate of any Loan Party
or Originator;
(d) which is not a Disallowed Receivable at such time;
(e) which is not a Defaulted Receivable or a Delinquent Receivable
at such time;
(f) with regard to which the representations and warranties of the
Borrower in Sections 6.1(j), (l) and (p) are true and correct;
(g) with regard to which the granting of a security interest therein
does not contravene or conflict with any law;
(h) which is denominated and payable only in Dollars in the United
States;
(i) which 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;
70
(n) the original term of which has not been extended (except as
permitted in Section 8.2(c));
(o) which has not been identified, either specifically or as a
member of a class, in a notice by any of the Agents, in the exercise of
its commercially reasonable credit judgment, as a Receivable that is not
acceptable, including, without limitation, because such Receivables arises
under a Contract that is not acceptable to such Agent; and
(p) if the applicable Eligible Originator acquired such Receivable
through a Material Acquisition requiring a Review, the Administrative
Agent has notified the Borrower in writing that (i) such Receivable is
(and other similarly-acquired Receivables are) acceptable to the Agents
based on the satisfactory outcome of such Review, and (ii) that each
Conduit's Rating Agency Condition has been satisfied.
"EMPLOYEE BENEFIT PLAN" 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
71
condition which could constitute grounds under ERISA for the termination of, or
the appointment of a trustee to administer, any Pension Plan; (f) the incurrence
by any ERISA Entity of any liability with respect to the withdrawal or partial
withdrawal from any Pension Plan or Multiemployer Plan; (g) the receipt by an
ERISA Entity of any notice, or the receipt by any Multiemployer Plan from any
ERISA Entity of any notice, concerning the imposition of Withdrawal Liability or
a determination that a Multiemployer Plan is, or is expected to be, insolvent or
in reorganization, within the meaning of Title IV of ERISA; (h) the making of
any amendment to any Pension Plan which could result in the imposition of a lien
or the posting of a bond or other security; or (i) the occurrence of a nonexempt
prohibited transaction (within the meaning of Section 4975 of the Code or
Section 406 of ERISA) which could result in liability to any Loan Party.
"ERISA GROUP" 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 Q "
effective as of 11:00 a.m., London time, two Business Days prior to the first
day of such Interest Period, PROVIDED THAT if no such offered rates appear on
such page, the Eurodollar Rate for such Interest Period will be the arithmetic
average (rounded upwards, if necessary, to the next higher 1/100th of 1%) of
rates quoted by not less than two major banks in New York City, selected by the
Co-Agents, at approximately 10:00 a.m., New York City time, two Business Days
prior to the first day of such Interest Period, for deposits in Dollars offered
by leading European banks for a period comparable to such Interest Period in an
amount comparable to the principal amount of such Liquidity Funding.
"EURODOLLAR RATE (RESERVE ADJUSTED)" applicable to any Interest
Period means a rate per annum equal to the quotient obtained (rounded upwards,
if necessary, to the next higher 1/100th of 1%) by dividing (i) the applicable
Eurodollar Rate for such Interest Period by (ii) 1.00 minus the Eurodollar
Reserve Percentage.
"EURODOLLAR RESERVE PERCENTAGE" 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 be determined or (b) any category of extensions of credit
or other assets which include LIBOR-based credits or assets.
72
"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.
"EXTENSION FEE" has the meaning set forth in the Fee Letters.
"EXTENSION REQUEST" has the meaning set forth in Section 1.8.
73
"FACILITY FEE" has the meaning set forth in the Fee Letters.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upwards, if necessary, to the next higher 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day, PROVIDED THAT (i) if the day for which such rate is to be
determined is not a Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (ii) if such rate is not so
published for any day, the Federal Funds Rate for such day shall be the average
rate charged to the applicable Co-Agent on such day on such transactions, as
reasonably determined by such Co-Agent.
"FEDERAL RESERVE BOARD" means the Board of Governors of the Federal
Reserve System, or any successor thereto or to the functions thereof.
"FEE LETTERS" means, collectively, the Atlantic Fee Letter and the
Blue Ridge Fee Letter.
"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 Article 9
of the UCC.
"GOVERNMENT RECEIVABLE" means:
(i) any Receivable with respect to which the Obligor is the United
States (or an agency or intermediary thereof) obligated to pay, pursuant to
federal Medicare statutes and regulations, for services rendered to eligible
beneficiaries thereunder,
(ii) any Receivable arising under any state's Medicaid statutes and
regulations, for services rendered to eligible beneficiaries thereunder,
(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
74
applicable to The Civilian Health and Medical Program of the Uniform Services,
for services rendered to eligible beneficiaries thereunder and not in
contravention of any statute or regulation applicable thereto and (B) any
Receivable with respect to which the Obligor is any Person (other than a
Governmental Authority) who enters into a contract with the United States for
the provision of health care services rendered to eligible beneficiaries under
The Civilian Health and Medical Program of the Uniform Services,
(iv) any Receivable with respect to which the Obligor is the United
States (or an agency or fiscal intermediary thereof) obligated to pay, pursuant
to federal statutes and regulations applicable to The Civilian Health and
Medical Program of Veterans Affairs, for services rendered to eligible
beneficiaries thereunder and not in contravention of any statute or regulation
applicable thereto,
(v) any other Receivable as to which the Obligor is a Governmental
Authority,
(vi) any other Receivable as to which payment is required by law to
be made directly to the provider of the services giving rise thereto or to an
account under such provider's exclusive dominion and control, or
(vii) any other Receivable requiring compliance with the Federal
Assignment of Claims Act or any similar state legislation.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state
or other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"GROUP" means the Blue Ridge Group or the Atlantic Group, as the
case may be.
"GUARANTEE" of or by any Person means any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other Person (the "PRIMARY OBLIGOR") in any
manner, whether directly or indirectly, and including any obligation of such
Person, direct or indirect, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or to purchase (or to advance
or supply funds for the purchase of) any security for the payment of such
Indebtedness, (b) to purchase property, securities or services for the purpose
of assuring the owner of such Indebtedness of the payment of such Indebtedness
or (c) to maintain working capital, equity capital or other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness; provided however that the term Guarantee shall
not include endorsements for collection or deposit, in either case, in the
ordinary course of business.
"HEALTH-CARE-INSURANCE RECEIVABLE" means an interest in or claim
under a policy of insurance which is a right to payment of a monetary obligation
for heath-care goods or services provided.
"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
75
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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP.
"INTEREST PAYMENT DATE" means:
(a) with respect to any CP Rate Loan of Blue Ridge, each Settlement
Date, and with respect to any CP Rate Loan of Atlantic, the last day of
its CP Tranche Period, the date on which any such CP Rate Loan is prepaid,
in whole or in part, and the Termination Date;
(b) with respect to any Eurodollar Loan, the last day of its
Interest Period, the date on which any such Loan is prepaid, in whole or
in part, and the Termination Date;
(c) with respect to any Alternate Base Rate Loan, each Settlement
Date while such Loan remains outstanding, the date on which any such Loan
is prepaid, in whole or in part, the date on which the applicable
Liquidity Bank's Scheduled Termination Date occurs, and the Termination
Date; and
(d) with respect to any Loan while the Default Rate is applicable
thereto, upon demand or, in the absence of any such demand, each
Settlement Date while such Loan remains outstanding, the date on which any
such Loan is prepaid, in whole or in part, the Termination Date, and if
the applicable Loan was funded by a Liquidity Bank, the date on which the
applicable Liquidity Bank's Scheduled Termination Date occurs.
76
"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 applicable Co-Agent. Such Interest Period shall end on the
day which corresponds numerically to such date one, two, or three calendar
months thereafter, PROVIDED, HOWEVER, that (i) if there is no such numerically
corresponding day in such next, second or third succeeding calendar month, such
Interest Period shall end on the last Business Day of such next, second or third
succeeding calendar month, and (ii) if an Interest Period would otherwise end on
a day which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day unless said next succeeding Business Day falls in a new
calendar month, then such Interest Period shall end on the immediately preceding
Business Day.
"INTEREST RATE" means a Eurodollar Rate (Reserve Adjusted), a CP
Rate, an Alternate Base Rate or the Default Rate.
"INTEREST RESERVE" 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 ▇▇▇▇, 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, the Blue Ridge Liquidity
Banks, Atlantic, the Atlantic Liquidity Banks and their respective successors
and permitted assigns.
"LIEN" means any security interest, lien, encumbrance, pledge,
assignment, title retention, similar claim, right or interest.
"LIQUIDITY AGREEMENTS" means, collectively, the Atlantic Liquidity
Agreement and the Blue Ridge Liquidity Agreement.
"LIQUIDITY BANK" means (a) Wachovia or any Eligible Assignee of
Wachovia's Commitment and Liquidity Commitment, and (b) CLNY or any Eligible
Assignee of Wachovia's Commitment and Liquidity Commitment, in each of the
foregoing cases, to which the Borrower has consented if required under Section
12.1. A Liquidity Bank will become a "LENDER" hereunder at such time as it makes
any Liquidity Funding.
"LIQUIDITY COMMITMENT" means, with respect to each Liquidity Bank,
its 364-day commitment to make Liquidity Fundings pursuant to the Liquidity
Agreement to which it is a party.
77
"LIQUIDITY FUNDING" means (a) a purchase made by any Liquidity Bank
pursuant to its Liquidity Commitment of all or any portion of, or any undivided
interest in, a Loan of either of the Conduits, or (b) any Loan made by the
applicable Liquidity Banks in lieu of a Conduit pursuant to Section 1.1.
"LOAN" means any loan made by a Lender to the Borrower pursuant to
this Agreement. Each Loan shall either be a CP Rate Loan, an Alternate Base Rate
Loan or a Eurodollar Rate Loan, selected in accordance with the terms of this
Agreement.
"LOAN PARTIES" means, collectively, (i) the Borrower, and (ii) Quest
Diagnostics so long as it is acting as the Servicer (or as a sub-servicer)
hereunder.
"LOCKBOX" means any post office box maintained by an Originator on
behalf of the Borrower to which payments on certain Receivables are mailed.
"MATERIAL ACQUISITION" means that any existing Originator acquires
the Unpaid Net Balance of Receivables of one or more other Persons who are not
existing Eligible Originators, whether by purchase, merger, consolidation or
otherwise, if (i) the aggregate Unpaid Net Balance of receivables so acquired
from any one such Person exceeds 10% of the Allocation Limit in effect on the
date of acquisition, merger or consolidation, or (ii) the aggregate Unpaid Net
Balance of receivables so acquired from all Persons in any calendar year exceeds
(or from all such Persons in any calendar year) exceeds 10% of the weighted
average Allocation Limit in effect during such calendar year.
"MATERIAL ADVERSE EFFECT" means an event, circumstance, occurrence,
or condition which has caused as of any date of determination any of (a) a
material adverse effect, or any condition or event that has resulted in a
material adverse effect, on the business, operations, financial condition or
assets of (i) the Originators taken as a whole (after taking into account
indemnification obligations by third parties that are Solvent to the extent that
such third party has not disputed (after notice of claim in accordance with the
applicable agreement therefor) liability to make such indemnification payment),
(ii) the Servicer, or (iii) the Borrower, (b) a material adverse effect on the
ability of the Originators, the Servicer or the Borrower to perform when and as
due any of their material obligations under any Transaction Document to which
they are parties, (c) a material adverse effect on the legality, binding effect
or enforceability of any Transaction Document or any of the material rights and
remedies of any of the Agents or Lenders thereunder or the legality, priority,
or enforceability of the Lien on a material portion of the Collateral, or (d) a
material adverse effect upon the validity, enforceability or collectibility of a
material portion of the Receivables.
"MATERIAL PROPOSED ADDITION" means a Person whom any Loan Party
proposes to add as a "seller" under the Sale Agreement if either (i) the
aggregate Unpaid Net Balance of such Person's receivables (on the proposal date)
exceeds 10% of the weighted average Allocation Limit in effect on the proposal
date, or (ii) the Unpaid Net Balance of such Person's receivables (on such
proposal date), when aggregated with the receivables of all other Persons added
as "sellers" under the Sale Agreement in the same calendar year (measured on the
respective dates such other Persons became "sellers" under the Sale Agreement)
exceeds 10% of the weighted average Allocation Limit in effect during such
calendar year.
78
"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 ▇▇▇▇ 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 being understood that if a private carrier or
government action imposes any change expected to have an adverse impact on the
information gathering process of the Originators, this percentage will not be
utilized in the calculation of a Missing Information Trigger Event for the 3
Settlement Periods immediately following such change); PROVIDED, HOWEVER, that
regardless of the foregoing, the Borrower and the Co-Agents agree that they will
negotiate in good faith to re-define the "MISSING INFORMATION TRIGGER EVENT"
prior to the 9th Settlement Period following the date of the initial Advance.
"MONTHLY REPORT" means a report in the form of Exhibit 3.1(a).
"MONTHLY REPORTING DATE" means the 20th day of each calendar month;
PROVIDED, HOWEVER, that if any such day is not a Business Day, then the Monthly
Reporting Date shall occur on the next succeeding Business Day.
"MOODY'S" means ▇▇▇▇▇'▇ 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.
79
"NON-APPROVING LENDER" means any Lender that does not approve (a) an
Extension Request, (b) a requested waiver to this Agreement or the Credit
Agreement, or (c) a requested amendment to this Agreement or the Credit
Agreement.
"NON-ASSIGNABLE CONTRACT" means a Contract that contains a
prohibition on assignment to, among other Persons, Affiliates of the Originator
party thereto.
"OBLIGATIONS" means all unpaid principal of and accrued and unpaid
interest on the Loans, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Borrower to the Lenders
(or any Lender), any of the Agents or any Indemnified Party arising under the
Transaction Documents.
"OBLIGOR" means a Person obligated to make payments with respect to
a Receivable, including any guarantor thereof.
"OBLIGOR CONCENTRATION LIMIT" means, at any time, in relation to the
aggregate Unpaid Net Balance of Receivables owed by any single Obligor and its
Affiliated Obligors (if any), the applicable concentration limit shall (unless
both Co-Agents from time to time upon the Borrower's request agree to a higher
percentage of Eligible Receivables for a particular Obligor and its Affiliates,
which agreement may be conditioned upon an increase in the percentage set forth
in clause (A)(i) of the definition of "REQUIRED RESERVE" or upon satisfaction of
the Rating Agency Condition) be determined as follows for Obligors who have
short term unsecured debt ratings currently assigned to them by S&P and Moody's,
the applicable concentration limit shall be determined according to the
following table; PROVIDED, HOWEVER, that if such Obligor has a split rating, the
applicable rating will be the lower of the two:
Allowable % of
S&P Rating ▇▇▇▇▇'▇ Rating Eligible 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 2%
Rated
and PROVIDED, FURTHER, that (a) unless and until any of the Agents gives the
Borrower 5 Business Days' notice to the contrary, the Obligor Concentration
Limit for Aetna U.S. Healthcare, Inc. and its Affiliated Obligors shall be 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
80
and all shareholder agreements, voting trusts and similar arrangements
applicable to any of its authorized Equity Interests.
"ORIGINATOR" means Quest Diagnostics or any its direct or indirect
wholly-owned Subsidiaries who is or becomes a "seller" under the Sale Agreement.
"PAYMENT INTANGIBLE" means a general intangible under which the
account debtor's principal obligation is a monetary obligation.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"PENSION PLAN" means an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code or Section 302 of ERISA
and is maintained or contributed to by any ERISA Entity or with respect to which
any Loan Party could incur liability.
"PERCENTAGE" means, for each Group on any date of determination, the
ratio which the sum of the Commitments for all Liquidity Banks in that Group
bears to the Aggregate Commitment.
"PERMITTED INVESTMENTS" means, on any date, any one or more of the
following types of investments PROVIDED that they mature on or prior to the next
Settlement Date:
(a) marketable obligations of the United States of America, the full
and timely payment of which are backed by the full faith and credit of the
United States of America and which have a maturity of not more than 270
days from the date of acquisition;
(b) marketable obligations, the full and timely payment of which are
directly and fully guaranteed by the full faith and credit of the United
States of America and which have a maturity of not more than 270 days from
the date of acquisition;
(c) bankers' acceptances and certificates of deposit and other
interest-bearing obligations (in each case having a maturity of not more
than 270 days from the date of acquisition) denominated in dollars and
issued by any bank with capital, surplus and undivided profits aggregating
at least $50,000,000, the short-term obligations of which are rated at
least A-1 by S&P and P-1 by Moody's;
(d) repurchase obligations with a term of not more than ten days for
underlying securities of the types described in clauses (a), (b) and (c)
above entered into with any bank of the type described in clause (c)
above;
(e) commercial paper rated at least A-1 by S&P and P-1 by Moody's;
and,
(f) demand deposits, time deposits or certificates of deposit
(having original maturities of no more than 365 days) of depository
institutions or trust companies incorporated under the laws of the United
States of America or any state thereof (or domestic branches of any
foreign bank) and subject to supervision and examination by
81
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.
"POOLED COMMERCIAL PAPER" means Commercial Paper Notes of Blue Ridge
subject to any particular pooling arrangement by Blue Ridge, but excluding
Commercial Paper Notes issued by Blue Ridge for a tenor and in an amount
specifically requested by any Person in connection with any agreement effected
by Blue Ridge.
"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.
"PRINCIPAL AMOUNT" means the actual net cash proceeds received by a
Conduit upon issuance by it 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 each of the Conduits has
received written notice from S&P and Moody's that an amendment, a change or a
waiver will not result in a withdrawal or downgrade of the then current ratings
on such Conduit's Commercial Paper Notes.
"RECEIVABLE" means any Account or any Payment Intangible arising
from the sale of Clinical Laboratory Services by an Originator, including,
without limitation, the right to payment of any
82
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.
"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
83
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 DAY" means, with respect to any event, the Business Day
preceding such event by the Required Notice Period.
"REQUIRED NOTICE PERIOD" means the number of days required notice
set forth below applicable to the aggregate principal reduction indicated below:
AGGREGATE REDUCTION REQUIRED NOTICE PERIOD
------------------- ----------------------
< 25% of the Aggregate 2 Business Days
Commitment
25%-50% of the Aggregate 5 Business Days
Commitment
> 50% of Aggregate 10 Business Days
Commitment
"REQUIRED RESERVE" means, on any day during a Settlement Period, an
amount equal to the product of (A) the greater of (i) 35% and (ii) at all times
while no Missing Information Trigger Event exists and is continuing, the
Contraction Reserve, and at all times while a Missing Information Trigger Event
exists and is continuing, the sum of the Contraction Reserve, the Interest
Reserve and the Servicing Reserve times (B) the Net Pool Balance on such day.
"REQUIREMENT OF LAW" means as to any Person, the Organic Documents
of such Person, and any Law or determination of an arbitrator or any
Governmental Authority, in each case applicable to or binding upon such Person
or any of its Property or to which such Person or any of its Property is
subject.
"RESPONSE DATE" has the meaning set forth in Section 1.8.
"REVIEW" has the meaning set forth in Section 7.1(c).
"REVOLVING PERIOD" means, as to each Group, the period from and
after the date of its initial Advance under this Agreement to but excluding the
earlier to occur of (a) the Termination Date, and (b) the last Scheduled
Termination Date of any Liquidity Bank in such Group.
84
"S&P" means Standard and Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ 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, as to each Liquidity Bank, the
earlier to occur of July 21, 2003 and the date on which its Liquidity Commitment
terminates in accordance with the Liquidity Agreement to which it is a party, in
either of the foregoing cases, unless extended by agreement of such Liquidity
Bank in accordance with Section 1.8.
"SEC" means the Securities and Exchange Commission.
"SECTION" means a numbered section of this Agreement, unless another
document is specifically referenced.
"SECURED PARTIES" means the Indemnified Parties.
"SERVICER" has the meaning set forth in the preamble of this
Agreement.
"SERVICER TRANSFER EVENT" means the occurrence of any Event of
Default.
"SERVICER'S FEE" accrued for any day in a Settlement Period means:
(a) an amount equal to (x) 5.0% per annum (or, at any time while
Quest Diagnostics is the Servicer, such lesser percentage as may be agreed
between the Borrower and the Servicer on an arms' length basis based on
then prevailing market terms for similar services), times (y) the
aggregate Unpaid Net Balance of the Receivables at the close of business
on the first day of such Settlement Period, times (z) 1/360; or
(b) on and after the Servicer's reasonable request made at any time
when Quest Diagnostics shall no longer be the Servicer, an alternative
amount specified by the Servicer not exceeding (x) 110% of the Servicer's
costs and expenses of performing its obligations under the Agreement
during the Settlement Period when such day occurs, divided by (y) the
number of days in such Settlement Period.
"SERVICING RESERVE" 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.
85
"SETTLEMENT DATE" means (a) the second Business Day after each
Monthly Reporting Date, (b) such other Business Days as the Co-Agents may
specify by written notice to the Lenders, the Borrower and the Servicer, and (c)
the Termination Date.
"SETTLEMENT PERIOD" means: (a) the period from and including the
date of the initial Advance to but excluding the next Cut-Off Date; and (b)
thereafter, each period from and including a Cut-Off Date to the earlier to
occur of the next Cut-Off Date or the Final Payout Date.
"SOLVENT" and "SOLVENCY" means, for any Person on a particular date,
that on such date (a) the fair value of the Property of such Person is greater
than the total amount of liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair salable value of the assets of
such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that it will,
incur debts and liabilities beyond such Person's ability to pay such debts and
liabilities as they mature and (d) such Person is not engaged in a business or a
transaction, and is not about to engage in a business or a transaction, for
which such Person's Property would constitute an unreasonably small capital.
"SUBORDINATED LOAN" has the meaning set forth in the Sale Agreement.
"SUBORDINATED NOTE" has the meaning set forth in the Sale Agreement.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership or other entity of which at least a majority of the securities or
other ownership interests having by the terms thereof ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions of such corporation, partnership or other entity (irrespective of
whether or not at the time securities or other ownership interests of any other
class or classes of such corporation, partnership or other entity shall have or
might have voting power by reason of the happening of any contingency) is at the
time directly or indirectly owned or controlled by such Person and/or one or
more Subsidiaries of such Person.
"SUCCESSOR NOTICE" has the meaning set forth in Section 8.1(b).
"TAXES" 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 last
Scheduled Termination Date of any Liquidity Bank; (b) the date designated by the
Borrower as the "Termination Date" on not less than fifteen (15) Business Days'
notice to the Co-Agents, PROVIDED THAT on such date the
86
Obligations have been paid in full; (c) the date specified in Section 10.2(a) or
(b) (including, without limitation, any such specified date following either
Co-Agent's failure to approve a requested waiver hereunder); (d) the 90th day
after the Co-Agents receive a copy of any proposed amendment (but not waiver) to
the Credit Agreement which does not become an Approved Amendment within 30 days
after such date of receipt; and (e) the 90th day after any requested amendment
to this Agreement (as opposed to a requested waiver hereunder) is not approved
by both Co-Agents within 30 days after receipt of such request (unless such
proposed amendment is approved by one Co-Agent and the Obligations owing the
dissenting Co-Agent's Group are paid in full on or within 60 days after such
30th day).
"TRANSACTION DOCUMENTS" means this Agreement, the Collection Account
Agreements, the Sale Agreement, the Fee Letters, the Subordinated Notes and the
other documents to be executed and delivered in connection herewith or
therewith.
"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 Letters.
"WACHOVIA" has the meaning set forth in the preamble of this
Agreement.
"WACHOVIA ROLES" has the meaning set forth in Section 11.10(a).
"WEEKLY REPORT" means a report in the form of Exhibit 3.1(b).
"WEEKLY REPORTING DATE" means, with respect to any week in which
Weekly Reports are required to be delivered hereunder, the second Monday
following the end of each 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"
87