Exhibit 10.2

Published CUSIP Number:  74834QAF6 

BRIDGE CREDIT AGREEMENT,

DATED AS OF MAY 31, 2007

among

QUEST DIAGNOSTICS INCORPORATED
as Borrower,

AND

CERTAIN SUBSIDIARIES OF THE BORROWER
as Guarantors,

AND

THE LENDERS IDENTIFIED HEREIN,

AND

BANK OF AMERICA, N.A.,
as Administrative Agent

AND

MORGAN STANLEY SENIOR FUNDING, INC.
as Syndication Agent

AND

BARCLAYS BANK PLC,
JPMORGAN CHASE BANK, N.A.,
MERRILL LYNCH BANK, USA
and
WACHOVIA BANK, NATIONAL ASSOCIATION
as Co-Documentation Agents

MORGAN STANLEY SENIOR FUNDING, INC.
and
BANC OF AMERICA SECURITIES LLC
as Joint Lead Arrangers and Joint Book Runners

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TABLE OF CONTENTS

 

 

 

 

 

 

 

 

 

Page

 

 

 

 

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SECTION 1

 

      DEFINITIONS AND ACCOUNTING TERMS

2

 

1.1

 

Definitions

2

 

1.2

 

Other Interpretive Provisions

25

 

1.3

 

Accounting Terms/Calculation of Financial Covenants

25

 

1.4

 

Time

26

 

1.5

 

Rounding

26

 

1.6

 

References to Agreements and Laws

26

SECTION 2

 

      CREDIT FACILITIES

26

 

2.1

 

Bridge Loans

26

 

2.2

 

Continuations and Conversions

28

 

2.3

 

Minimum Amounts

28

SECTION 3

 

      GENERAL PROVISIONS APPLICABLE TO LOANS

29

 

3.1

 

Interest

29

 

3.2

 

Place and Manner of Payments

29

 

3.3

 

Prepayments

30

 

3.4

 

Fees

30

 

3.5

 

Payment in full at Maturity

31

 

3.6

 

Computations of Interest and Fees

31

 

3.7

 

Pro Rata Treatment

32

 

3.8

 

Sharing of Payments

32

 

3.9

 

Capital Adequacy/Regulation D

33

 

3.10

 

Inability To Determine Interest Rate

33

 

3.11

 

Illegality

34

 

3.12

 

Requirements of Law

34

 

3.13

 

Taxes

34

 

3.14

 

Compensation

38

 

3.15

 

Determination and Survival of Provisions

38

 

3.16

 

Notification by Lenders

38

 

3.17

 

Mitigation; Mandatory Assignment

39

SECTION 4

 

      GUARANTY

39

 

4.1

 

Guaranty of Payment

39

 

4.2

 

Obligations Unconditional

39

 

4.3

 

Modifications

40

 

4.4

 

Waiver of Rights

41

 

4.5

 

Reinstatement

41

 

4.6

 

Remedies

41

 

4.7

 

Limitation of Guaranty

41

 

4.8

 

Rights of Contribution

42

 

4.9

 

Release of Guarantors

42

SECTION 5

 

      CONDITIONS PRECEDENT

42

 

5.1

 

Closing Conditions to Extensions of Credit Made on the Closing Date

42

 

5.2

 

Conditions to All Other Extensions of Credit

44

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TABLE OF CONTENTS
(continued)

 

 

 

 

 

 

 

 

 

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SECTION 6

 

      REPRESENTATIONS AND WARRANTIES

45

 

6.1

 

Organization and Good Standing

45

 

6.2

 

Due Authorization

45

 

6.3

 

Enforceable Obligations

46

 

6.4

 

No Conflicts

46

 

6.5

 

Consents

46

 

6.6

 

Financial Condition

46

 

6.7

 

Intentionally Omitted

47

 

6.8

 

Disclosure

47

 

6.9

 

No Default

47

 

6.10

 

Litigation

47

 

6.11

 

Taxes

47

 

6.12

 

Compliance with Law

47

 

6.13

 

Licensing and Accreditation

48

 

6.14

 

Title to Properties, Liens

48

 

6.15

 

Insurance

48

 

6.16

 

Use of Proceeds

49

 

6.17

 

Government Regulation

49

 

6.18

 

ERISA

49

 

6.19

 

Environmental Matters

50

 

6.20

 

Intellectual Property

51

 

6.21

 

Subsidiaries

52

 

6.22

 

Solvency

52

 

6.23

 

Taxpayer Identification Number

52

SECTION 7

 

      AFFIRMATIVE COVENANTS

52

 

7.1

 

Information Covenants

52

 

7.2

 

Financial Covenants

56

 

7.3

 

Preservation of Existence and Franchises

56

 

7.4

 

Books and Records

56

 

7.5

 

Compliance with Law

56

 

7.6

 

Payment of Taxes and Other Indebtedness

57

 

7.7

 

Insurance

57

 

7.8

 

Maintenance of Property

57

 

7.9

 

Performance of Obligations

58

 

7.10

 

Use of Proceeds

58

 

7.11

 

Audits/Inspections

58

 

7.12

 

Additional Credit Parties

59

 

7.13

 

Compliance Program

59

SECTION 8

 

      NEGATIVE COVENANTS

59

 

8.1

 

Indebtedness

60

 

8.2

 

Liens

61

 

8.3

 

Nature of Business

61

 

8.4

 

Consolidation and Merger

61

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(continued)

 

 

 

 

 

 

 

 

 

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8.5

 

Sale or Lease of Assets

61

 

8.6

 

Investments

62

 

8.7

 

Transactions with Affiliates

62

 

8.8

 

Fiscal Year; Accounting; Organizational Documents

62

 

8.9

 

Stock Repurchases

63

 

8.10

 

Sale/Leasebacks

63

SECTION 9

 

      EVENTS OF DEFAULT

64

 

9.1

 

Events of Default

64

 

9.2

 

Acceleration; Remedies

66

 

9.3

 

Allocation of Payments After Event of Default

67

SECTION 10

 

      AGENCY PROVISIONS

68

 

10.1

 

Appointment

68

 

10.2

 

Delegation of Duties

68

 

10.3

 

Exculpatory Provisions

69

 

10.4

 

Reliance on Communications

69

 

10.5

 

Notice of Default

70

 

10.6

 

Non-Reliance on Administrative Agent and Other Lenders

70

 

10.7

 

Indemnification

71

 

10.8

 

Administrative Agent in Its Individual Capacity

71

 

10.9

 

Successor Agent

71

 

10.10

 

Agent May File Proofs of Claim

72

SECTION 11

 

      MISCELLANEOUS

73

 

11.1

 

Notices, Etc

73

 

11.2

 

Right of Set-Off

75

 

11.3

 

Benefit of Agreement

76

 

11.4

 

No Waiver; Remedies Cumulative

80

 

11.5

 

Payment of Expenses; Indemnification

80

 

11.6

 

Amendments, Waivers and Consents

82

 

11.7

 

Counterparts

83

 

11.8

 

Headings

83

 

11.9

 

Defaulting Lender

83

 

11.10

 

Survival of Indemnification

83

 

11.11

 

Governing Law; Venue; Jurisdiction

84

 

11.12

 

Waiver of Jury Trial; Waiver of Consequential Damages

84

 

11.13

 

Severability

85

 

11.14

 

Further Assurances

85

 

11.15

 

Confidentiality

85

 

11.16

 

Entirety

86

 

11.17

 

Binding Effect; Continuing Agreement

86

 

11.18

 

USA Patriot Act Notice

87

 

11.19

 

No Advisory or Fiduciary Responsibility

87

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SCHEDULES

 

 

 

Schedule 1.1(a)

Commitment Percentages/Lending Offices

Schedule 6.10

Litigation

Schedule 6.21

Subsidiaries

Schedule 6.23

Taxpayer Identification Number

Schedule 8.1

Indebtedness

Schedule 8.2

Liens

Schedule 8.6

Investments

Schedule 8.7

Affiliate Transactions

Schedule 11.1

Notices

 

 

EXHIBITS

 

 

 

Exhibit 2.1(b)

Form of Notice of Borrowing

Exhibit 2.1(d)

Form of Bridge Note

Exhibit 2.2

Form of Notice of Continuation/Conversion

Exhibit 5.1(e)

Form of 5.1(e) Certificate

Exhibit 7.12

Form of Joinder Agreement

Exhibit 11.3(b)

Form of Assignment and Assumption

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BRIDGE CREDIT AGREEMENT

          THIS BRIDGE CREDIT AGREEMENT (this “Credit Agreement”), is entered
into as of May 31, 2007 among QUEST DIAGNOSTICS INCORPORATED, a Delaware
corporation (the “Borrower”), certain of the Subsidiaries of the Borrower
(individually a “Guarantor” and collectively the “Guarantors”), the various
financial institutions and other Persons from time to time parties hereto (the
“Lenders”), BANK OF AMERICA, N.A., as administrative agent (in such capacity,
the “Administrative Agent”) for the Lenders, MORGAN STANLEY SENIOR FUNDING, INC.
(“Morgan Stanley”) as syndication agent (in such capacity, the “Syndication
Agent”), for the Lenders, Barclays Bank PLC, JPMorgan Chase Bank, N.A., Merrill
Lynch Bank, USA and Wachovia Bank, National Association, as the co-documentation
agents for the Lenders (in such capacities, the “Co-Documentation Agents”) for
the Lenders and Morgan Stanley and Banc of America Securities LLC, as the joint
lead arrangers and joint lead bookrunners (in such capacities, the “Lead
Arrangers”).

RECITALS

          WHEREAS, the Borrower, Ace Acquisition Sub, Inc., a Delaware
corporation and wholly-owned subsidiary of the Borrower (“Merger Sub”) and
Ameripath Group Holdings, Inc. (“Ameripath) have entered into that certain
Agreement and Plan of Merger, dated as of April 15, 2007 (as it may be amended
from time to time in accordance with its terms, the “Merger Agreement”),
pursuant to which, among other things, (i) the Borrower will acquire Ameripath
by means of a merger (the “Merger”) of Merger Sub and Ameripath (the “Ameripath
Acquisition”), with Ameripath being the surviving company of the Merger and the
Borrower being the 100% owner of all Capital Securities of Ameripath immediately
upon the effectiveness of the Merger and (ii) in connection with the Ameripath
Acquisition, the Borrower will repay (or cause to be repaid) (a) certain
Indebtedness of Ameripath and its Subsidiaries (the “Ameripath Refinancing”) and
(b) certain Indebtedness of the Borrower and its Subsidiaries (the “Borrower
Refinancing” and, together with Ameripath Refinancing, the “Refinancing”);

          WHEREAS, for purposes of consummating the Ameripath Acquisition, the
Refinancing, paying related fees, costs and expenses, and providing financing
for the post-Merger working capital and general corporate needs of the Borrower
and its Subsidiaries, including acquisitions (collectively, the “Transaction”),
the Borrower has requested the following financing facilities:

                    (i) (a) a $1,600,000,000 term loan facility (the “Term Loan
Facility”) and (b) a $750,000,000 revolving credit facility (the “Revolving
Credit Facility”); and

                    (ii) a $1,000,000,000 bridge loan facility (the “Bridge Loan
Facility”); and

          WHEREAS, the Lenders are willing, on the terms and subject to the
conditions hereinafter set forth, to provide the Bridge Loan Facility;

          NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

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SECTION 1

DEFINITIONS AND ACCOUNTING TERMS

                    1.1 Definitions.

          As used herein, the following terms shall have the meanings herein
specified unless the context otherwise requires. Defined terms herein shall
include in the singular number the plural and in the plural the singular:

          “Acquisition” means the acquisition by any Person of (a) more than 50%
of the Capital Stock of another Person, (b) all or substantially all of the
assets of another Person or (c) all or substantially all of a line of business
of another Person, in each case whether or not involving a merger or
consolidation with such other Person.

          “Additional Credit Party” means each Person that becomes a Guarantor
after the Closing Date, as provided in Section 7.12 or otherwise.

          “Administrative Agent” means Bank of America, N.A. (or any successor
thereto) or any successor administrative agent appointed pursuant to Section
10.9.

          “Administrative Questionnaire” means an Administrative Questionnaire
in a form supplied by the Administrative Agent.

          “Affiliate” means, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all directors
and officers of such Person), controlled by or under direct or indirect common
control with such Person. A Person shall be deemed to control a corporation if
such Person possesses, directly or indirectly, the power (a) to vote 10% or more
of the securities having ordinary voting power for the election of directors of
such corporation or (b) to direct or cause direction of the management and
policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise.

          “Affiliated Practice” means any physician-owned professional
organization, association or corporation that employs or contracts with
physicians engaged in a pathology or other medical practice and has entered into
a Management Services Agreement with the Borrower or any of its Subsidiaries.

          “Agency Services Address” means Bank of America, N.A., NC1-001-04-39,
101 North Tryon Street, Charlotte, North Carolina 28255, Attn: Agency Services,
Attn: Credit Services, or such other address as may be identified by written
notice from the Administrative Agent to the Borrower.

          “Agent-Related Person” means the Administrative Agent (including any
successor administrative agent), together with its Affiliates (including, in the
case of Bank of America in its capacity as the Administrative Agent, BAS), and
their respective officers, directors, employees, agents, counsel and
attorneys-in-fact.

2

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          “Agents” means Bank of America N.A., in its capacity as Administrative
Agent, Morgan Stanley Senior Funding, Inc., in its capacity as Syndication
Agent, Barclays Bank PLC, in its capacity as Co-Documentation Agent, JPMorgan
Chase Bank, N.A., , in its capacity as Co-Documentation Agent, Merrill Lynch
Bank, USA , in its capacity as Co-Documentation Agent, and Wachovia Bank,
National Association in its capacity as Co-Documentation Agent.

          “Ameripath Acquisition” has the meaning given to it in the first
recital.

          “Ameripath Refinancing” has the meaning given to it in the first
recital.

          “Applicable Percentage” means the appropriate applicable percentages
corresponding to the Debt Rating of the Borrower in effect from time to time as
described below:

 

 

 

 

 

 

Pricing
Level

Debt Rating

Applicable
Percentage for
Eurodollar Loans

Applicable
Percentage for
Commitment Fee

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--------------------------------------------------------------------------------

I

³ BBB+ from S&P/
³ Baa1 from Moody’s

.400

%

.080

%

II

³BBB but < BBB+ from S&P/
³Baa2 but <Baa1 from Moody’s

.500

%

.100

%

III

³BBB- but <BBB from S&P/
³Baa3 but <Baa2 from Moody’s

.625

%

.125

%

IV

³BB+ but < BBB- from S&P/
³Ba1 but <Baa3 from Moody’s

.750

%

.175

%

V

<BB+ or unrated by S&P/
<Ba1 or unrated by Moody’s

1.250

%

.250

%

The Applicable Percentage for the Eurodollar Loans shall be determined and
adjusted on the date (each a “Calculation Date”) one Business Day after the date
on which the Borrower’s Debt Rating is upgraded or downgraded in a manner which
requires a change in the then applicable Pricing Level set forth above. If at
any time there is a split in the Borrower’s Debt Ratings between S&P and
Moody’s, the Applicable Percentages shall be determined by the higher of the two
Debt Ratings (i.e. the lower pricing); provided that if the two Debt Ratings are
more than one level apart, the Applicable Percentage shall be based on the Debt
Rating which is one level higher than the lower rating. Each Applicable
Percentage shall be effective from one Calculation Date until the next
Calculation Date. Any adjustment in the Applicable Percentage shall be
applicable to all existing Eurodollar Loans as well as any new Eurodollar Loans
made.

          “Approved Fund” means any Fund that is administered or managed by (i)
a Lender, (ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an
entity that administers or manages a Lender.

          “Assignee Group” means two or more Eligible Assignees that are
Affiliates of one another or two or more Approved Funds managed by the same
investment advisor.

          “Assignment and Assumption” means an Assignment and Assumption
substantially in the form of Exhibit 11.3(b).

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          “Attorney Costs” means all reasonable fees and disbursements of any
law firm or other external counsel and the reasonable allocated cost of internal
legal services and all disbursements of internal counsel.

          “Attributable Debt” means, with respect to a Sale and Leaseback
Transaction, an amount equal to the lesser of: (a) the fair market value of the
Principal Property (as determined in good faith by the Borrower’s board of
directors); and (b) the present value of the total net amount of rent payments
to be made under the lease during its remaining term, discounted at the rate of
interest set forth or implicit in the terms of the lease, compounded
semi-annually.

          “Authorized Officer” means any of the chief executive officer,
president, chief financial officer, corporate controller, treasurer or assistant
treasurer of the Borrower.

          “Bank of America” means Bank of America, N.A. or any successor
thereto.

          “Bankruptcy Code” means the Bankruptcy Code in Title 11 of the United
States Code, as amended, modified, succeeded or replaced from time to time.

          “BAS” means Banc of America Securities LLC.

          “Base Rate” means, for any day, the rate per annum equal to the
greater of (a) the Federal Funds Rate in effect on such day plus ½ of 1% or (b)
the Prime Rate in effect on such day. If for any reason the Administrative Agent
shall have determined (which determination shall be conclusive absent manifest
error) that it is unable after due inquiry to ascertain the Federal Funds Rate
for any reason, including the inability or failure of the Administrative Agent
to obtain sufficient quotations in accordance with the terms hereof, the Base
Rate shall be determined without regard to clause (a) of the first sentence of
this definition until the circumstances giving rise to such inability no longer
exist. Any change in the Base Rate due to a change in the Prime Rate or the
Federal Funds Rate shall be effective at the opening of business on the day
specified in the public announcement of such change.

          “Base Rate Loan” means any Loan bearing interest at a rate determined
by reference to the Base Rate.

          “BBA LIBOR” is defined within the definition of “London Interbank
Offered Rate”.

          “Borrower” means Quest Diagnostics Incorporated, a Delaware
corporation, together with any successors and permitted assigns.

          “Borrower Materials” has the meaning set forth in Section 7.1(i).

          “Borrower Refinancing” has the meaning given to it in the first
recital.

          “Bridge Loan Committed Amount” means ONE BILLION DOLLARS
($1,000,000,000); provided, however, that not more than $500,000,000 in the
aggregate

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--------------------------------------------------------------------------------

of the Bridge Loan Committed Amount shall be available for Delayed Draw Bridge
Loans (such amount being the “Delayed Draw Committed Amount”).

          “Bridge Loan Commitment Percentage” means, for each Lender, the
percentage identified as its Bridge Loan Commitment Percentage on Schedule
1.1(a), as such percentage may be modified in connection with any assignment
made in accordance with the provisions of Section 11.3.

          “Bridge Loan Facility” has the meaning given to it in the second
recital.

          “Bridge Loans” means the Bridge Loans made to the Borrower pursuant to
Section 2.1.

          “Bridge Notes” means the promissory notes of the Borrower in favor of
each of the Lenders evidencing the Bridge Loans provided pursuant to Section
2.1, individually or collectively, as appropriate, as such promissory notes may
be amended, modified, supplemented, extended, renewed or replaced from time to
time and as evidenced in the form of Exhibit 2.1(d).

          “Business Day” means any day other than a Saturday, a Sunday, a legal
holiday or a day on which banking institutions are authorized or required by law
or other governmental action to close in New York, New York or Charlotte, North
Carolina; provided that in the case of Eurodollar Loans, such day is also a day
on which dealings between banks are carried on in U.S. dollar deposits in the
London interbank market..

          “Businesses” has the meaning set forth in Section 6.19(a)(i).

          “Calculation Date” has the meaning set forth in the definition of
Applicable Percentage.

          “CAP” means the College of American Pathologists.

          “Capital Lease” means, as applied to any Person, any lease of any
Property (whether real, personal or mixed) by that Person as lessee which, in
accordance with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person and the amount of such obligation shall be the
capitalized amount thereof determined in accordance with GAAP.

          “Capital Stock” means (a) in the case of a corporation, all classes of
capital stock of such corporation, (b) in the case of a partnership, partnership
interests (whether general or limited), (c) in the case of a limited liability
company, membership interests and (d) 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, the issuing Person.

          “Cash Equivalents” means (a) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof having maturities of not more than eighteen months from
the date of acquisition, (b) Dollar denominated time and demand deposits,
certificates of deposit and banker’s acceptances of

5

--------------------------------------------------------------------------------

(i) any Lender, (ii) any domestic commercial bank having capital and surplus in
excess of $500,000,000 or (iii) any bank whose short-term commercial paper
rating from S&P is at least A-1 or the equivalent thereof or from Moody’s is at
least P-1 or the equivalent thereof (any such bank being an “Approved Bank”), in
each case with maturities of not more than 270 days from the date of
acquisition, (c) commercial paper and variable or fixed rate notes issued by any
Approved Bank (or by the parent company thereof) or any variable rate notes
issued by, or guaranteed by, any domestic corporation rated A-1 (or the
equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or
better by Moody’s and maturing within six months of the date of acquisition, (d)
repurchase agreements with a bank or trust company (including any of the
Lenders) or recognized securities dealer having capital and surplus in excess of
$500,000,000 for direct obligations issued by or fully guaranteed by the United
States of America in which the Borrower shall have a perfected first priority
security interest (subject to no other Liens) and having, on the date of
purchase thereof, a fair market value of at least 100% of the amount of the
repurchase obligations, (e) Investments in tax-exempt municipal bonds rated A
(or the equivalent thereof) or better by S&P or MIG2 (or the equivalent thereof)
or better by Moody’s, (f) auction rate securities rated AA or better by S&P or
Moody’s, in either case with a reset of no longer than 90 days and (g)
Investments, classified in accordance with GAAP as current assets, in money
market investment programs registered under the Investment Company Act of 1940,
as amended, which are administered by reputable financial institutions having
capital of at least $500,000,000 and the portfolios of which are limited to
Investments of the character described in the foregoing subdivisions (a) through
(f).

          “Cash Interest Expenses” means all Interest Expense actually paid in
cash by the Borrower and its Subsidiaries.

          “CHAMPUS” means the United States Department of Defense Civilian
Health and Medical Program of the United States or any successor thereto
including, without limitation, TRICARE.

          “Change of Control” means either of the following events:

          (a) any “person” or “group” (within the meaning of Section 13(d) or
14(d) of the Exchange Act) has become, directly or indirectly, the “beneficial
owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), by way of
merger, consolidation or otherwise of 35% or more of the Voting Stock of the
Borrower on a fully-diluted basis, after giving effect to the conversion and
exercise of all outstanding warrants, options and other securities of the
Borrower convertible into or exercisable for Voting Stock of the Borrower
(whether or not such securities are then currently convertible or exercisable);
or

          (b) during any period of twelve calendar months, individuals who at
the beginning of such period constituted the board of directors of the Borrower
together with any new members of such board of directors whose elections by such
board or board of directors or whose nomination for election by the stockholders
of the Borrower was approved by a vote of a majority of the members of such
board of directors then still in office who either were directors at

6

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the beginning of such period or whose election or nomination for election was
previously so approved cease for any reason to constitute a majority of the
directors of the Borrower then in office.

          “CLIA” means the Clinical Laboratory Improvement Amendment as set
forth at 42 U.S.C. 263a and the regulations promulgated thereunder, as amended.

          “Closing Date” means the date on which the conditions set forth in
Section 5.1 shall have been fulfilled (or waived in the sole discretion of the
Lenders) and on which the initial Loans shall have been made.

          “CMS” means the Centers for Medicare and Medicaid Services of HHS, any
successor thereof and any predecessor thereof, including the HCFA.

          “Co-Documentation Agents” has the meaning given to it in the preamble.

          “Code” means the Internal Revenue Code of 1986 and the rules and
regulations promulgated thereunder, as amended, modified, succeeded or replaced
from time to time.

          “Commitment Fee” means the fees payable pursuant to Section 3.4(a).

          “Commitments” means the commitment of each Lender with respect to the
Bridge Loan Committed Amount.

          “Company” has the meaning given to it in the preamble.

          “Credit Agreement” has the meaning given to it in the preamble.

          “Credit Documents” means this Credit Agreement, the Notes, any Joinder
Agreement and any Notice of Borrowing.

          “Credit Exposure” has the meaning set forth in the definition of
Required Lenders in this Section 1.1.

          “Credit Parties” means the Borrower and the Guarantors and “Credit
Party” means any one of them.

          “Credit Party Obligations” means, without duplication, all of the
obligations of the Credit Parties to the Lenders and the Administrative Agent,
whenever arising, under this Credit Agreement, the Notes, or any of the other
Credit Documents.

          “Debt Issuance” means the issuance after the Closing Date of any
Indebtedness

          for borrowed money by the Borrower, other than (a) extensions of
credit under the Five-Year Credit Agreement, (b) Indebtedness incurred solely
for the acquisition of an asset or property, (c) Indebtedness incurred after the
Closing Date in connection with the acquisition of a Person or Property as long
as such Indebtedness existed prior to such acquisition and was not created in
anticipation thereof, (d) Indebtedness incurred by the

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Borrower arising from Permitted Receivables Financings or (e) Indebtedness
issued to a Credit Party or any of its Subsidiaries.

          “Debt Rating” means the long-term senior unsecured, non-credit
enhanced debt rating of the Borrower from S&P and Moody’s.

          “Default” means any event, act or condition which with notice or lapse
of time, or both, would constitute an Event of Default.

          “Defaulting Lender” means, at any time, any Lender that, (a) has
failed to make a Loan or purchase a Participation Interest required pursuant to
the terms of this Credit Agreement (but only for so long as such Loan is not
made or such Participation Interest is not purchased), (b) has failed to pay to
the Administrative Agent or any Lender an amount owed by such Lender pursuant to
the terms of this Credit Agreement (but only for so long as such amount has not
been repaid) or (c) has been deemed insolvent or has become subject to a
bankruptcy or insolvency proceeding or to a receiver, trustee or similar
official.

          “Delayed Draw Bridge Loans” means a portion of the Bridge Loans made
after the Closing Date in an aggregate amount not to exceed the Delayed Draw
Committed Amount.

          “Delayed Draw Borrowing Date” has the meaning given to it in Section
2.1(a).

          “Delayed Draw Committed Amount” has the meaning given to it in the
proviso of the definition of “Bridge Loan Committed Amount”.

          “Delayed Draw Commitment Termination Date” has the meaning given to it
in Section 2.1(a).

          “Dividends” means any payment of dividends or any other distribution
upon any shares of any class of Capital Stock of the Borrower.

          “Dollars” and “$” means dollars in lawful currency of the United
States of America.

          “Domestic Subsidiary” means each direct and indirect Subsidiary of the
Borrower that is domiciled or organized under the laws of any State of the
United States or the District of Columbia.

          “EBITDA” means, for any period, with respect to the Borrower and its
Subsidiaries on a consolidated basis, (a) Net Income for such period (excluding
the effect of any extraordinary or other non-recurring gains and losses
(including any gain or loss from the sale of Property)) plus (b) an amount
which, in the determination of Net Income for such period, has been deducted for
(i) Interest Expense for such period, (ii) total Federal, state, foreign or
other income or franchise taxes for such period, (iii) all depreciation and
amortization for such period, (iv) other items of expense during such period
that do not involve a cash payment at any time (other than the provision for bad

8

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debt in connection with uncollectible accounts receivable), (v) cash charges
during such period for which the Borrower and its Subsidiaries are reimbursed by
a third party during such period, (vi) special or restructuring items during any
such period included in Net Income that do not involve a cash payment during
such period (collectively, “Non-Cash Items”) and (vii) expenses charged pursuant
to FAS 123(R), as promulgated in accordance with GAAP, during such period minus
(c) any actual cash payments during the applicable period related to Non-Cash
Items expensed or reserved under clauses (v) and (vi) above plus (d) Tender
Costs during such period; provided that, for purposes of calculating the
Leverage Ratio and the Interest Coverage Ratio hereunder, EBITDA shall be
calculated as if Ameripath and its Subsidiaries were Subsidiaries of the
Borrower on the Closing Date and during the twelve-month period preceding such
date unless, in the case of any Subsidiary of Ameripath which has not been a
Subsidiary for the entire twelve-month period preceding the Closing Date, such
lesser period of time.

          “Eligible Assets” means any assets or any business (or any substantial
part thereof) used or useful in the same or a similar line of business as the
Borrower and its Subsidiaries are engaged on the date hereof or other
healthcare-related businesses or businesses reasonably related thereto.

           “Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender;
(c) an Approved Fund and (d) any other Person approved by the Administrative
Agent and the Borrower (such approval not to be unreasonably withheld or
delayed); provided that (i) the Borrower’s consent is not required during the
existence and continuation of a Default or an Event of Default, (ii) approval by
the Borrower shall be deemed given if no objection is received by the assigning
Lender and the Administrative Agent from the Borrower within five Business Days
after notice of such proposed assignment has been delivered to the Borrower;
(iii) neither the Borrower nor an Affiliate of the Borrower shall qualify as an
Eligible Assignee; and (iv) no competitor of the Borrower shall qualify as an
Eligible Assignee.

          “EMU Legislation” means the legislative measures of the European
Council for the introduction of, changeover to or operation of a single or
unified European currency.

          “Environmental Laws” means any current or future legally enforceable
requirement of any Governmental Authority pertaining to (a) the protection of
the indoor or outdoor environment, (b) the conservation, management, or use of
natural resources and wildlife, (c) the protection or use of surface water and
groundwater or (d) the management, manufacture, possession, presence, use,
generation, transportation, treatment, storage, disposal, release, threatened
release, abatement, removal, remediation or handling of, or exposure to, any
hazardous or toxic substance or material or (e) pollution (including any release
to land surface water and groundwater) and includes, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 USC
9601 et seq., Solid Waste Disposal Act, as amended by the Resource Conservation
and Recovery Act of 1976 and Hazardous and Solid Waste Amendments of 1984, 42
USC 6901 et seq., Federal Water Pollution Control Act, as amended by the Clean
Water Act of 1977, 33 USC 1251 et seq., Clean Air Act of 1966,

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as amended, 42 USC 7401 et seq., Toxic Substances Control Act of 1976, 15 USC
2601 et seq., Hazardous Materials Transportation Act, 49 USC App. 1801 et seq.,
Occupational Safety and Health Act of 1970, as amended, 29 USC 651 et seq., Oil
Pollution Act of 1990, 33 USC 2701 et seq., Emergency Planning and Community
Right-to-Know Act of 1986, 42 USC 11001 et seq., National Environmental Policy
Act of 1969, 42 USC 4321 et seq., Safe Drinking Water Act of 1974, as amended,
42 USC 300(f) et seq., any analogous implementing or successor law, and any
amendment, rule, regulation, order, or directive issued thereunder.

          “Equity Issuance” means any issuance by the Borrower to any Person
(other than a Credit Party or any of its Subsidiaries) of shares of its Capital
Stock or other equity interests other than equity issued to employees pursuant
to benefit plans in the ordinary course.

          “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto, as interpreted by the rules and
regulations thereunder, all as the same may be in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.

          “ERISA Affiliate” means an entity, whether or not incorporated, which
is treated as a single employer with the Borrower or any Subsidiary of the
Borrower under Sections 414(b) or (c) of the Code and solely for purposes of
Section 412 of the Code under Section 414(m) of the Code.

          “ERISA Event” means (a) with respect to any Single Employer or
Multiple Employer Plan, the occurrence of a Reportable Event or the substantial
cessation of operations (within the meaning of Section 4062(e) of ERISA); (b)
the withdrawal of the Borrower, any Subsidiary of the Borrower or any ERISA
Affiliate from a Multiple Employer Plan during a plan year in which it was a
substantial employer (as such term is defined in Section 4001(a)(2) of ERISA),
or the termination of a Multiple Employer Plan; (c) the distribution of a notice
of intent to terminate or the actual termination of a Plan pursuant to Section
4041(a)(2) or 4041A of ERISA; (d) the institution of proceedings to terminate or
the actual termination of any Plan by the PBGC under Section 4042 of ERISA; (e)
any event or condition which might constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Plan; (f) the complete or partial withdrawal of the Borrower, any Subsidiary of
the Borrower or any ERISA Affiliate from a Multiemployer Plan or notification
that a Multiemployer Plan is in reorganization; (g) the conditions for
imposition of a lien under Section 302(f) of ERISA exist with respect to any
Plan; or (h) the adoption of an amendment to any Plan requiring the provision of
security to such Plan pursuant to Section 307 of ERISA.

          “Eurodollar Loan” means a Loan bearing interest based at a rate
determined by reference to the Eurodollar Rate.

          “Eurodollar Rate” means, for the Interest Period for each Eurodollar
Loan comprising part of the same borrowing (including conversions, extensions
and renewals), a per annum interest rate equal to the London Interbank Offered
Rate.

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          “Eurodollar Reserve Percentage” means, with respect to each Lender,
the percentage (expressed as a decimal) applicable to such Lender which is in
effect from time to time under Regulation D as the reserve requirement
(including, without limitation, any basic, supplemental, emergency, special, or
marginal reserves) applicable with respect to its Eurocurrency liabilities, as
that term is defined in Regulation D (or against any other category of
liabilities that includes deposits by reference to which the interest rate of
Eurodollar Loans is determined). Eurodollar Loans made by a Lender shall be
deemed to constitute Eurocurrency liabilities and as such shall be deemed
subject to reserve requirements, if applicable, without benefits of credits for
proration, exceptions or offsets that may be available from time to time to such
Lender.

          “Event of Default” means any of the events or circumstances specified
in Section 9.1.

          “Exchange Act” means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder, as amended, modified,
succeeded or replaced from time to time.

          “Extension of Credit” means, as to any Lender, the making of a Loan by
such Lender (or a participation therein by a Lender).

          “Federal Funds Rate” means for any day the rate per annum 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 (a) if such day 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 (b) if no such rate is so published on such next preceding Business Day,
the Federal Funds Rate for such day shall be the average rate (rounded upward,
if necessary, to a whole multiple of 1/100 of 1%) charged to the Administrative
Agent on such day on such transactions as determined by the Administrative
Agent.

          “Fee Letter” means that certain letter agreement dated as of April 23,
2007 among the Borrower, BAS, Bank of America and Morgan Stanley.

          “Five-Year Credit Agreement” means the Credit Agreement, dated as of
the date hereof, among the Borrower, the lenders party thereto and the Agents.

          “Foreign Subsidiary” means each direct and indirect Subsidiary of the
Borrower that is not a Domestic Subsidiary.

          “Fund” means any Person (other than a natural person) that is (or will
be) engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

          “Funded Debt” means, without duplication, the sum of (a) all
Indebtedness of the Borrower and its Subsidiaries for borrowed money, (b) all
purchase money Indebtedness

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of the Borrower and its Subsidiaries, (c) the principal portion of all
obligations of the Borrower and its Subsidiaries under Capital Leases, (d) all
drawn but unreimbursed amounts under all letters of credit (other than letters
of credit supporting trade payables in the ordinary course of business) issued
for the account of the Borrower or any of its Subsidiaries, (e) all Funded Debt
of another Person secured by a Lien on any Property of the Borrower and its
Subsidiaries whether or not such Funded Debt has been assumed by a Borrower or
any of its Subsidiaries, (f) all Funded Debt of any partnership or
unincorporated joint venture to the extent the Borrower or one of its
Subsidiaries is legally obligated with respect thereto and (g) the amount of
principal attributable under any outstanding Synthetic Lease. It is understood
and agreed that Indebtedness incurred pursuant to Hedging Agreements is not
Funded Debt.

          “GAAP” means generally accepted accounting principles in the United
States applied on a consistent basis and subject to Section 1.3.

          “Government Acts” has the meaning set forth in Section 2.3(j)(i).

          “Governmental Authority” means any, Federal, state, local, provincial
or foreign court or governmental agency, authority (including executive
authority), instrumentality or regulatory body.

          “Granting Lender” has the meaning set forth in Section 11.3(g).

          “Guarantor” means each of the Material Domestic Subsidiaries of the
Borrower, any other Subsidiary of the Borrower that guaranties any Pari Passu
Debt or the Five-Year Credit Agreement and each Additional Credit Party,
together with their successors and assigns.

          “Guaranty” means the guaranty of the Credit Party Obligations provided
by the Guarantors pursuant to Section 4.

          “Guaranty Obligations” means, with respect to any Person, without
duplication, any obligations (other than endorsements in the ordinary course of
business of negotiable instruments for deposit or collection) guaranteeing any
Indebtedness of any other Person in any manner, whether direct or indirect, and
including without limitation any obligation, whether or not contingent, (a) to
purchase any such Indebtedness or other obligation or any Property constituting
security therefor, (b) to advance or provide funds or other support for the
payment or purchase of such Indebtedness or obligation or to maintain working
capital, solvency or other balance sheet condition of such other Person
(including, without limitation, maintenance agreements, comfort letters, take or
pay arrangements, put agreements or similar agreements or arrangements) for the
benefit of the holder of Indebtedness of such other Person, (c) to lease or
purchase Property, securities or services primarily for the purpose of assuring
the owner of such Indebtedness or (d) to otherwise assure or hold harmless the
owner of such Indebtedness or obligation against loss in respect thereof. The
amount of any Guaranty Obligation hereunder shall (subject to any limitations
set forth therein) be deemed to be an amount

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equal to the outstanding principal amount (or maximum principal amount, if
larger) of the Indebtedness in respect of which such Guaranty Obligation is
made.

          “Hazardous Materials” means any substance, material or waste defined
in or regulated under any Environmental Laws.

          “HCFA” means the United States Health Care Financing Administration
and any successor thereto, including CMS.

          “Hedging Agreements” means, collectively, interest rate protection
agreements, foreign currency exchange agreements, commodity purchase or option
agreements or other interest or exchange rate or commodity price hedging
agreements, in each case, entered into or purchased by a Credit Party.

          “HHS” means the United States Department of Health and Human Services
and any successor thereof.

          “HIPAA” means the Health Insurance Portability and Accountability Act
of 1996, Pub. L. 104-191, Aug. 21, 1996, 110 Stat. 1936 and regulations
promulgated thereunder, as amended from time to time.

          “Indebtedness” of any Person means, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, or upon
which interest payments are customarily made, (c) all obligations of such Person
under conditional sale or other title retention agreements relating to Property
purchased by such Person to the extent of the value of such Property (other than
customary reservations or retentions of title under agreements with suppliers
entered into in the ordinary course of business), (d) all obligations, other
than intercompany items, of such Person issued or assumed as the deferred
purchase price of property or services purchased by such Person which would
appear as liabilities on a balance sheet of such Person, (e) 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, or payable out of
the proceeds of production from, property owned or acquired by such Person,
whether or not the obligations secured thereby have been assumed, (f) all
Guaranty Obligations of such Person, (g) the principal portion of all
obligations of such Person under (i) Capital Leases and (ii) any synthetic
lease, tax retention operating lease, off-balance sheet loan or similar
off-balance sheet financing product of such Person where such transaction is
considered borrowed money indebtedness for tax purposes but is classified as an
operating lease in accordance with GAAP, (h) all obligations of such Person to
repurchase any securities which repurchase obligation is related to the issuance
thereof, including, without limitation, obligations commonly known as residual
equity appreciation potential shares, (i) all net obligations of such Person in
respect of Hedging Agreements, (j) the maximum amount of all performance and
standby letters of credit issued or bankers’ acceptances facilities created for
the account of such Person and, without duplication, all drafts drawn thereunder
(to the extent unreimbursed), and (k) the aggregate amount of uncollected
accounts receivable of such Person subject at such time to a sale of receivables
(or similar

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transaction) regardless of whether such transaction is effected without recourse
to such Person or in a manner that would not be reflected on the balance sheet
of such Person in accordance with GAAP. The Indebtedness of any Person shall
include the Indebtedness of any partnership or unincorporated joint venture in
which such Person is legally obligated.

          “Indemnified Liabilities” has the meaning set forth in Section
11.5(b)(i).

          “Indemnitees” has the meaning set forth in Section 11.5(b)(i).

          “Intellectual Property” has the meaning set forth in Section 6.20.

          “Information” is defined in Section 11.15.

          “Interest Coverage Ratio” means, as of the last day of each fiscal
quarter, the ratio of (a) EBITDA for the twelve month period ending on such date
to (b) Cash Interest Expense for the twelve month period ending on such date.

          “Interest Expense” means, with respect to the Borrower and its
Subsidiaries on a consolidated basis for any period, all interest expense,
including, without duplication, the interest component under Capital Leases, as
determined in accordance with GAAP.

          “Interest Payment Date” means (a) as to Base Rate Loans, the last day
of each calendar quarter and the Maturity Date and (b) as to Eurodollar Loans,
the last day of each applicable Interest Period and the Maturity Date and in
addition, where the applicable Interest Period for a Eurodollar Loan is greater
than three months, then also the date three months from the beginning of the
Interest Period and each three months thereafter. If an Interest Payment Date
falls on a date which is not a Business Day, such Interest Payment Date shall be
deemed to be the next succeeding Business Day, except that in the case of
Eurodollar Loans where the next succeeding Business Day falls in the next
succeeding calendar month, then on the next preceding Business Day.

          “Interest Period” means as to Eurodollar Loans, a period of one, two,
three or six months’ duration, as the Borrower may elect, commencing, in each
case, on the date of the borrowing (including continuations and conversions
thereof); provided, however, (i) if any Interest Period would end on a day which
is not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day (except that where the next succeeding Business Day
falls in the next succeeding calendar month, then on the next preceding Business
Day), (ii) no Interest Period shall extend beyond the Maturity Date and
(iii) where an Interest Period begins on a day for which there is no numerically
corresponding day in the calendar month in which the Interest Period is to end,
such Interest Period shall end on the last Business Day of such calendar month.

          “Investment” in any Person means (a) the acquisition (whether for
cash, property, services, assumption of Indebtedness, securities or otherwise)
of assets, shares of Capital Stock, bonds, notes, debentures, partnership, joint
ventures or other ownership interests or other securities of such other Person
or (b) any deposit with, or advance, loan or other extension of credit to, such
Person (other than deposits or advances made in connection

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with the purchase of equipment or other assets or services in the ordinary
course of business) or (c) any other capital contribution to or investment in
such Person, including, without limitation, any Guaranty Obligation (including
any support for a letter of credit issued on behalf of such Person) incurred for
the benefit of such Person.

          “Joinder Agreement” means a Joinder Agreement substantially in the
form of Exhibit 7.12.

          “Laws” means, collectively, all international, foreign, federal, state
and local statutes, treaties, rules, guidelines, regulations, ordinances, codes
and administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

          “Lead Arrangers” has the meaning given to it in the preamble.

          “Lender” means any of the Persons identified as a “Lender” on the
signature pages hereto, and any Eligible Assignee which may become a Lender by
way of assignment in accordance with the terms hereof, together with their
successors and permitted assigns.

          “Lending Office” means, as to any Lender, the office or offices of
such Lender described as such on Schedule 1.1(a), or such other office or
offices as a Lender may from time notify to the Borrower and the Administrative
Agent.

          “Leverage Ratio” means, as of the last day of each fiscal quarter, the
ratio of (a) Funded Debt on such date to (b) EBITDA for the twelve month period
ending on such date.

          “Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, security interest, encumbrance, lien (statutory or otherwise),
preference, priority or charge of any kind, including, without limitation, any
agreement to give any of the foregoing, any conditional sale or other title
retention agreement, and any lease in the nature thereof (other than operating
leases).

          “Loan” or “Loans” means the Bridge Loans, individually or
collectively, as appropriate.

          “Loan Participant” has the meaning set forth in Section 11.3(d).

          “London Interbank Offered Rate” means for any Interest Period with
respect to any Eurodollar Loan, the rate per annum equal to the British Bankers
Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other
commercially available source providing quotations of BBA LIBOR as designated by
the Administrative Agent from time to time) at approximately 11:00 a.m., London
time, two Business Days prior to the commencement of such Interest Period, for
Dollar deposits (for delivery on the first day

15

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of such Interest Period) with a term equivalent to such Interest Period. If such
rate is not available at such time for any reason, then the “London Interbank
Offered Rate” for such Interest Period shall be the rate per annum determined by
the Administrative Agent to be the rate at which deposits in Dollars for
delivery on the first day of such Interest Period in same day funds in the
approximate amount of the Eurodollar Loan being made, continued or converted by
Bank of America and with a term equivalent to such Interest Period would be
offered by Bank of America’s London Branch to major banks in the London
interbank eurodollar market at their request at approximately 11:00 a.m. (London
time) two Business Days prior to the commencement of such Interest Period.

          “Management Services Agreement” means a written management agreement
entered into by the Borrower or any of its Subsidiaries in connection with an
Affiliated Practice, which agreement has been approved in accordance with the
Borrower’s customary policies and procedures (as then in effect) for similar
contracts and agreements.

          “Material Adverse Effect” means a material adverse effect on (a) the
business, operations or financial condition of the Borrower and its Subsidiaries
taken as a whole, (b) the ability of a Credit Party to perform its obligations
under this Credit Agreement or any of the other Credit Documents, or (c) the
validity or enforceability of this Credit Agreement, any of the other Credit
Documents, or the rights and remedies of the Lenders hereunder or thereunder
taken as a whole.

          “Material Domestic Subsidiary” means any wholly-owned Domestic
Subsidiary of the Borrower that, directly or indirectly, (a) owns assets in
excess of $20,000,000 or (b) has annual revenues, as of the most recently ended
fiscal year of the Borrower, in excess of two percent (2%) of the total revenues
of the Borrower and its Subsidiaries on a consolidated basis; provided that
neither Quest Receivables nor any Affiliated Practice shall be deemed to be a
Material Domestic Subsidiary; and provided further that neither Ameripath nor
any of its wholly-owned Domestic Subsidiaries that would otherwise qualify as a
Material Domestic Subsidiary on the date hereof shall be deemed to be a Material
Domestic Subsidiary for purposes of Section 7.12(a) hereof until the date that
the 10½% Subordinated Note Tender Offer shall have been consummated.

          “Maturity Date” means the date that is 364 days after the Closing
Date.

          “Medicaid” shall mean that entitlement program under Title XIX of the
Social Security Act that provides federal grants to states for medical
assistance based on specific eligibility criteria.

           “Medicaid Provider Agreement” means an agreement entered into between
a state agency or other such entity administering the Medicaid program and a
health care provider or supplier under which the health care provider or
supplier agrees to provide services for Medicaid patients in accordance with the
terms of the agreement and Medicaid Regulations.

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          “Medicaid Regulations” means, collectively, (a) all federal statutes
(whether set forth in Title XIX of the Social Security Act or elsewhere)
affecting Medicaid and any statutes succeeding thereto; (b) all applicable
provisions of all federal rules, regulations, manuals and orders and
administrative, reimbursement and other guidelines having the force of law of
all Governmental Authorities promulgated pursuant to or in connection with the
statutes described in clause (a) above; (c) all state statutes and plans for
medical assistance enacted in connection with the statutes and provisions
described in clauses (a) and (b) above; and (d) all applicable provisions of all
rules, regulations, manuals and orders and administrative, reimbursement and
other guidelines having the force of law of all Governmental Authorities
promulgated pursuant to or in connection with the statutes described in clause
(c) above and all state administrative, reimbursement and other guidelines of
all Governmental Authorities having the force of law promulgated pursuant to or
in connection with the statutes described in clause (b) above, in each case as
may be amended, supplemented or otherwise modified from time to time.

          “Medical Reimbursement Programs” shall mean the Medicare, Medicaid,
CHAMPUS and TRICARE programs and any other healthcare program operated by or
financed in whole or in part by any foreign, domestic, federal, state or local
government and any other non-government funded third party payor programs.

          “Medicare” shall mean that government-sponsored entitlement program
under Title XVIII of the Social Security Act that provides for a health
insurance system for eligible elderly and disabled individuals.

          “Medicare Provider Agreement” means an agreement entered into between
CMS or other such entity administering the Medicare program on behalf of CMS,
and a health care provider or supplier under which the health care provider or
supplier agrees to provide services for Medicare patients in accordance with the
terms of the agreement and Medicare Regulations.

          “Medicare Regulations” shall mean, collectively, all federal statutes
(whether set forth in Title XVIII of the Social Security Act or elsewhere)
affecting the health insurance program for the aged and disabled established by
Title XVIII of the Social Security Act and any statutes succeeding thereto;
together with all applicable provisions of all rules, regulations, manuals and
orders and administrative, reimbursement and other guidelines having the force
of law of all Governmental Authorities (including, without limitation, the HHS,
CMS, the OIG, or any person succeeding to the functions of any of the foregoing)
promulgated pursuant to or in connection with any of the foregoing having the
force of law, as each may be amended, supplemented or otherwise modified from
time to time.

          “Merger” has the meaning given to it in the first recital.

          “Merger Agreement” has the meaning given to it in the first recital.

          “Merger Sub” has the meaning given to it in the first recital.

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          “Moody’s” means Moody’s Investors Service, Inc., or any successor or
assignee of the business of such company in the business of rating securities.

          “Morgan Stanley” has the meaning given to it in the preamble.

          “Multiemployer Plan” means a Plan which is a multiemployer plan as
defined in Sections 3(37) or 4001(a)(3) of ERISA.

          “Multiple Employer Plan” means a Plan covered by Title IV of ERISA
(other than a Multiemployer Plan) in which the Borrower, any Subsidiary of the
Borrower or any ERISA Affiliate and at least one employer other than the
Borrower, any Subsidiary of the Borrower or any ERISA Affiliate are contributing
sponsors.

           “Net Income” means, for any period, the net income after taxes for
such period of the Borrower and its Subsidiaries on a consolidated basis,
determined in accordance with GAAP and without duplication.

          “Non-Cash Items” has the meaning set forth in the definition of EBITDA
in Section 1.1.

          “Non-Consenting Lender” has the meaning set forth in Section 11.6.

          “Non-Material Domestic Subsidiary” means any wholly-owned Domestic
Subsidiary that is not a Guarantor other than Quest Receivables and any
Affiliated Practice.

          “Note” or “Notes” means the Bridge Notes, individually or
collectively, as appropriate.

          “Notice of Borrowing” means a request by the Borrower for a Loan, in
the form of Exhibit 2.1(b).

          “Notice of Continuation/Conversion” means a request by the Borrower to
continue an existing Eurodollar Loan to a new Interest Period or to convert a
Eurodollar Loan to a Base Rate Loan or a Base Rate Loan to a Eurodollar Loan, in
the form of Exhibit 2.2.

          “OIG” means the Office of Inspector General of HHS and any successor
thereof.

          “Other Taxes” has the meaning given to it in Section 3.13(b).

          “Pari Passu Debt” means all unsecured indebtedness of the Borrower.

          “Participating Member State” means each state so described in any EMU
Legislation.

          “Participation Interest” means the Extension of Credit by a Lender by
way of a purchase of a participation in any Loans as provided in Section 3.8.

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          “Patriot Act” means the USA PATRIOT Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)), as amended and supplemented from time to
time.

          “Patriot Act Disclosures” means all documentation and other
information available to the Borrower or its Subsidiaries which a Lender, if
subject to the Patriot Act, is required to provide pursuant to the applicable
section of the Patriot Act and which required documentation and information the
Administrative Agent or any Lender reasonably requests in order to comply with
their ongoing obligations under applicable “know your customer” and anti-money
laundering rules and regulations, including the Patriot Act.

          “PBGC” means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any successor thereto.

          “Permitted Acquisition” means an Acquisition by the Borrower or any of
its Subsidiaries; provided that (a) substantially all of the Property acquired
(or the Property of the Person acquired) in such Acquisition constitutes
Eligible Assets (or goodwill associated therewith), (b) in the case of an
Acquisition of the Capital Stock of another Person, the board of directors (or
other comparable governing body) of such other Person or its parent shall have
duly approved such Acquisition, (c) on the date of such Acquisition no Event of
Default exists, (d) after giving effect to such Acquisition, no Default or Event
of Default shall exist, (e) if such Acquisition involves the formation of a new
Subsidiary of the Borrower, such Subsidiary complies with Section 7.12, (f) such
Acquisition is undertaken in accordance with all laws, rules, regulations,
orders, writs, judgments, injunctions, decrees and awards to which any party to
such Acquisition may be subject and (g) the Borrower shall have delivered to the
Administrative Agent a compliance certificate for the period of four full fiscal
quarters immediately preceding such acquisition (prepared in good faith and in a
manner and using such methodology which is consistent with the most recent
financial statements delivered pursuant to Section 7.1) giving pro forma effect
to the consummation of such acquisition and evidence compliance with the
covenants set forth in Section 7.2.

          “Permitted Investments” means Investments which constitute the
following: (a) cash or Cash Equivalents, (b) trade accounts receivable created,
acquired or made in the ordinary course of business, (c) inventory, raw
materials, general intangibles and other current assets acquired in the ordinary
course of business, (d) Investments by the Borrower or one of its Subsidiaries
in each other, (e) Permitted Acquisitions, (f) advances to management personnel
and employees in the ordinary course of business, (g) Investments existing as of
the date hereof; provided that any such Investment in excess of $2,000,000 is
set forth on Schedule 8.6, (h) Investments consisting of non-cash consideration
received in the form of securities, notes or similar obligations in connection
with any conveyance, sale, lease, assignment, transfer or other disposition of
any Property by the Borrower or one of its Subsidiaries to any Person, and which
are permitted hereunder, and (i) any other Investment as long as(i) on the date
of such Investment, no Event of Default exists and (ii) after giving effect to
such Investment no Default or Event of Default shall exist.

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          “Permitted Liens” means (a) Liens securing Credit Party Obligations,
if any, (b) Liens for taxes not yet due or Liens for taxes being contested in
good faith by appropriate proceedings for which adequate reserves determined in
accordance with GAAP have been established (and as to which the Property subject
to any such Lien is not yet subject to foreclosure, sale, collection, levy or
loss on account thereof), (c) Liens in respect of Property imposed by law
arising in the ordinary course of business such as materialmen’s, mechanics’,
warehousemen’s, carrier’s, landlords’ and other nonconsensual statutory Liens
which are not yet due and payable or which are being contested in good faith by
appropriate proceedings for which adequate reserves determined in accordance
with GAAP have been established (and as to which the Property subject to any
such Lien is not yet subject to foreclosure, sale or loss on account thereof),
(d) Liens (other than Liens imposed under ERISA) consisting of pledges or
deposits made in the ordinary course of business to secure payment of worker’s
compensation insurance, unemployment insurance, pensions or social security
programs, (e) Liens arising from good faith deposits in connection with or to
secure performance of tenders, bids, leases, government contracts, performance
and return-of-money bonds and other similar obligations incurred in the ordinary
course of business (other than obligations in respect of the payment of borrowed
money), (f) Liens arising from good faith deposits in connection with or to
secure performance of statutory obligations and surety and appeal bonds,
(g) easements, rights-of-way, restrictions (including zoning restrictions),
matters of plat, minor defects or irregularities in title and other similar
charges or encumbrances not, in any material respect, impairing the use of the
encumbered Property for its intended purposes, (h) judgment Liens that would not
constitute an Event of Default, (i) Liens in connection with Indebtedness of the
type permitted by Section 8.1(e) incurred by any Subsidiary, (j) Liens arising
by virtue of any statutory or common law provision relating to banker’s liens,
rights of setoff or similar rights as to deposit accounts or other funds
maintained with a creditor depository institution, (k) Liens existing on the
date hereof and identified on Schedule 8.2, (l) Liens upon Property acquired (or
the Property of a Subsidiary that is acquired) after the Closing Date by the
Borrower or its Subsidiaries, which Liens either (i) existed on such Property
before the time of such acquisition and was not created in anticipation thereof
or (ii) were created solely for the purpose of securing Indebtedness
representing, or incurred to finance or refinance, the cost of such Property or
improvements thereon; provided, however; that (A) no such Lien shall extend to
or cover any Property of any Credit Party other than the Property so acquired
and improvements thereon and proceeds thereof, (B) the principal amount of
Indebtedness secured by any such Lien shall at no time exceed 100% of the fair
market value of such Property at the time it was acquired or constructed and
(C) the Indebtedness secured by any such Lien is permitted hereunder; provided
that (x) no such Lien shall extend to any Property other than the Property
subject thereto on the closing date of such acquisition and (y) the principal
amount of the Indebtedness secured by such Liens shall not be increased, (m)
Liens in connection with Permitted Receivables Financing, (n) Liens with respect
to lease filings for notice purposes only, (o) Liens on purchase money
Indebtedness incurred by the Borrower in an amount not to exceed, in the
aggregate, $100,000,000 less Indebtedness incurred by Subsidiaries of the
Borrower pursuant to Section 8.1(e), (p) Liens on Property of non-wholly owned
Subsidiaries of the Borrower incurred to finance working capital, (q) Liens

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on Property of Foreign Subsidiaries securing Indebtedness of the type permitted
by Section 8.1(k) incurred by Foreign Subsidiaries, and (r) renewals and
extensions of the foregoing so long as such Lien (i) does not cover any
additional Property, (ii) does not secure additional Indebtedness and (iii) is
not otherwise prohibited by this Credit Agreement.

          “Permitted Receivables Financing” means any transaction entered into
pursuant to documentation reasonably acceptable to the Administrative Agent in
which (a) one or more Credit Parties sells, conveys or otherwise transfers to
Quest Receivables and (b) Quest Receivables sells, conveys or otherwise
transfers to any other Person or grants a security interest to any Person in,
any Receivables (whether now existing or hereafter acquired) of a Credit Party,
and any assets related thereto including all collateral securing such
Receivables, all contracts and all Guaranty Obligations or other obligations in
respect of such Receivables, all proceeds of such Receivables and all other
assets that are customarily transferred or in respect of which security
interests are customarily granted in connection with asset securitization
transactions involving Receivables.

          “Person” means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
(whether or not incorporated), or any Governmental Authority.

          “Plan” means any employee benefit plan (as defined in Section 3(3) of
ERISA) which is covered by ERISA and with respect to which the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed to be) an
“employer” within the meaning of Section 3(5) of ERISA.

          “Platform” has the meaning given thereto in Section 7.1(i).

          “Prime Rate” means the per annum rate of interest established from
time to time by the Administrative Agent at its principal office in Charlotte,
North Carolina (or such other principal office of the Administrative Agent as
communicated in writing to the Borrower and the Lenders) as its Prime Rate. Any
change in the interest rate resulting from a change in the Prime Rate shall
become effective as of 12:01 a.m. of the Business Day on which each change in
the Prime Rate is announced by the Administrative Agent. The Prime Rate is a
reference rate used by the Administrative Agent in determining interest rates on
some loans which may be priced at, above or below such announced rate and is not
intended to be the lowest rate of interest charged on any extension of credit to
any debtor.

          “Principal Property” means any real property and any related
buildings, fixtures or other improvements located in the United States owned by
the Borrower or its Subsidiaries (a) on or in which one of its 30 largest
domestic clinical laboratories conducts operations, as determined by net
revenues for the four most recent fiscal quarters for which financial statements
have been filed with the Securities and Exchange Commission, or (b) the net book
value of which at the time of the determination exceeds 1% of Total Assets.

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          “Projections” has the meaning given thereto in Section 5.1(j).

          “Property” means any right, title or interest in or to any property or
asset of any kind whatsoever, whether real, personal or mixed and whether
tangible or intangible.

          “Public Lender” has the meaning given thereto in Section 7.1(i).

          “Quest Receivables” means Quest Diagnostics Receivables Incorporated,
a Delaware corporation, a wholly-owned, bankruptcy-remote, special purpose
Subsidiary of the Borrower.

          “Real Properties” has the meaning given thereto in Section 6.19.

          “Receivable” means the indebtedness and payment obligations of any
Person to any Credit Party or acquired by any Credit Party (including
obligations constituting an account or general intangible or evidenced by a
note, instrument, contract, security agreement, chattel paper or other evidence
of indebtedness or security) arising from a sale of merchandise or the provision
of services in the ordinary course of business by such Credit Party or the
Person from which such indebtedness and payment obligation were acquired by any
Credit Party, including (a) any right to payment for goods sold or for services
rendered and (b) the right to payment of any interest, sales taxes, finance
charges, returned check or late charges and other obligations of such Person
with respect thereto.

          “Refinancing” has the meaning given to it in the first recital.

           “Register” has the meaning given to it in Section 11.3(c).

          “Regulation T, U or X” means Regulation T, U or X, respectively, of
the Board of Governors of the Federal Reserve System as from time to time in
effect and any successor to all or a portion thereof.

          “Reportable Event” means any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the notice requirement has
been waived by regulation or by the PBGC.

          “Required Lenders” means Lenders whose aggregate Credit Exposure (as
hereinafter defined) constitutes more than 50% of the Credit Exposure of all
Lenders at such time; provided, however, that if any Lender shall be a
Defaulting Lender at such time then there shall be excluded from the
determination of Required Lenders the aggregate principal amount of Credit
Exposure of such Lender at such time. For purposes hereof, the term “Credit
Exposure” as applied to each Lender shall mean the principal balance of the
outstanding Loans of such Lender.

          “Requirement of Law” means, as to any Person, the articles or
certificate of incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or final,
non-appealable determination of

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an arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or to which any of its material
Property is subject.

          “S&P” means Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc. or any successor or assignee of the business of such
division in the business of rating securities.

          “Sale and Leaseback Transaction” means any arrangement with any Person
providing for the leasing by the Borrower or one of its Subsidiaries of any
Principal Property that has been or is to be sold or transferred by the Borrower
or any Guarantor to such Person, as the case may be.

          “Same Day Funds” means with respect to disbursements and payments in
Dollars, immediately available funds.

          “Securities Act” means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, as amended, modified, succeeded or
replaced from time to time.

          “Single Employer Plan” means any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan or a Multiple Employer Plan.

          “Social Security Act” means the Social Security Act as set forth in
Title 42 of the United States Code, as amended, and any successor statute
thereto, as interpreted by the rules and regulations issued thereunder, in each
case as in effect from time to time. References to sections of the Social
Security Act shall be construed also to refer to any successor sections.

          “Solvent” means, with respect to any Person as of a particular date,
that on such date (a) such Person is able to pay its debts and other
liabilities, contingent obligations and other commitments as they mature in the
normal course of business, (b) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person’s ability to
pay as such debts and liabilities mature in their ordinary course, (c) 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 assets would constitute
unreasonably small capital after giving due consideration to the prevailing
practice in the industry in which such Person is engaged or is to engage, (d)
the fair value of the assets of such Person is greater than the total amount of
liabilities, including, without limitation, contingent liabilities, of such
Person and (e) the present fair saleable 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. In computing the
amount of contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability reduced by the amount of
any contribution or indemnity that can reasonably be expected to be received.

          “SPC” has the meaning set forth in Section 11.3(g).

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          “Stock Repurchase” has the meaning set forth in Section 8.9.

          “Strategic Investment Portfolio” means all Investments in Persons in
which the Borrower and its Subsidiaries own less than 50% of the Voting Stock of
such Person.

          “Subsidiary” means, as to any Person, (a) any corporation more than
50% of whose stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time, any class or classes of such
corporation shall have or might have voting power by reason of the happening of
any contingency) is at the time owned by such Person directly or indirectly
through Subsidiaries, and (b) any partnership, association, joint venture or
other entity in which such person directly or indirectly through Subsidiaries
has more than a 50% equity interest at any time.

          “Syndication Agent” has the meaning given to it in the preamble.

          “Synthetic Lease” means any synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing product
where such transaction is considered borrowed money indebtedness for tax
purposes but is classified as an operating lease in accordance with GAAP.

          “Taxes” has the meaning given to it in Section 3.13(a).

          “10½% Subordinated Note Tender Offer” has the meaning given to it in
Section 5.1(f).

          “Tender Costs” means the costs incurred by the Borrower in connection
with any tender for outstanding indebtedness of the Borrower, and the
termination of the interest rate swap contracts related thereto in an aggregate
amount not to exceed $50,000,000 during the term of this Credit Agreement.

          “Termination Date” means the date on which the Merger Agreement is
terminated pursuant to Section 10.1 of the Merger Agreement (as in effect on the
date hereof).

          “Total Assets” means all items that in accordance with GAAP would be
classified as assets of the Borrower and its Subsidiaries on a consolidated
basis.

          “Transaction” has the meaning given to it in the second recital.

          “TRICARE” means the United States Department of Defense health care
program for service families including, but not limited to, TRICARE Prime,
TRICARE Extra and TRICARE Standard, and any successor to or predecessor thereof
(including, without limitation, CHAMPUS).

          “Voting Stock” means all classes of the Capital Stock of such Person
then outstanding and normally entitled to vote in the election of directors (or
similar governing authority).

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                    1.2 Other Interpretive Provisions.

          With reference to this Credit Agreement and each other Credit
Document, unless otherwise specified herein or in such other Credit Document:

 

 

 

 

          (a) The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.

 

 

 

 

          (b) (i) The words “herein”, “hereto”, “hereof” and “hereunder” and
words of similar import when used in any Credit Document shall refer to such
Credit Document as a whole and not to any particular provisions thereof.

 

 

 

 

 

      (ii) Article, Section, Exhibit and Schedule references are to the Credit
Document in which such reference appears.

 

 

 

 

 

      (iii) The term “including” is by way of example and not limitation.

 

 

 

 

 

      (iv) the term “documents” includes any and all instruments, documents,
agreements, certificates, notices, reports, financial statements and other
writings, however evidenced, whether in physical or electronic form.

 

 

 

 

          (c) In the computation of periods of time from a specified date to a
later specified date, the word “from” means “from and including”; the words “to”
and “until” each mean “to but excluding”; and the word “through” means “to and
including”.

 

 

 

 

          (d) Section headings herein and in the other Credit Documents are
included for convenience of reference only and shall not affect the
interpretation of this Credit Agreement or any other Credit Document.

                    1.3 Accounting Terms/Calculation of Financial Covenants.

 

 

 

          (a) Except as otherwise expressly provided herein, all accounting
terms used herein shall be interpreted, and all financial statements and
certificates and reports as to financial matters required to be delivered to the
Lenders hereunder shall be prepared, in accordance with GAAP applied on a
consistent basis. All calculations made for the purposes of determining
compliance with this Credit Agreement shall (except as otherwise expressly
provided herein) be made by application of GAAP applied on a basis consistent
with the most recent annual or quarterly financial statements delivered pursuant
to Section 7.1 (or, prior to the delivery of the first financial statements
pursuant to Section 7.1, consistent with the financial statements delivered to
the Lenders prior to the Closing Date); provided, however, if (a) the Borrower
shall object to determining such compliance on such basis at the time of
delivery of such financial statements due to any change in GAAP or the rules
promulgated with respect thereto or (b) the Administrative Agent or the Required
Lenders shall so object in writing within 30 days after delivery of such
financial statements, then such calculations shall be made on a basis consistent
with GAAP as in effect as of the date of the most recent financial statements
delivered by the Borrower to the Lenders to which no such objection shall have
been made.

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          (b) Notwithstanding anything herein to the contrary, for the purposes
of calculating the financial covenants set forth in Section 7.2, (i) income
statement items (positive or negative) attributable to any Person or Property
acquired in a Permitted Acquisition and Indebtedness incurred in connection with
such Permitted Acquisition shall, without duplication, be treated as if such
Person or Property was acquired or such Indebtedness incurred as of the first
day of the twelve month period ending as of the most recently completely fiscal
quarter of the Borrower and (ii) income statement items (positive or negative)
attributable to Property disposed of in any asset sale permitted by Section
8.5(g) and Indebtedness retired in connection with such sale shall, without
duplication, be treated as if such sale occurred as of the first day of the
twelve month period ending as of the most recently completed fiscal quarter of
the Borrower.

 

 

 

          1.4 Time.

                    All references to time herein shall be references to Eastern
Standard Time or Eastern Daylight Time, as the case may be, unless specified
otherwise.

                    1.5 Rounding.

                    Any financial ratios required to be maintained by the
Borrower pursuant to this Credit Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).

                    1.6 References to Agreements and Laws.

                    Unless otherwise expressly provided herein, (a) references
to organization documents, agreements (including the Credit Documents) and other
contractual instruments shall be deemed to include all subsequent amendments,
restatements, extensions, supplements and other modifications thereto, but only
to the extent that such amendments, restatements, extensions, supplements and
other modifications are not prohibited by any Credit Document and (b) references
to any law shall include all statutory and regulatory provisions (having the
force of law) consolidating, amending, replacing, supplementing or interpreting
such law.

SECTION 2

CREDIT FACILITIES

                    2.1 Bridge Loans.

                    (a) Bridge Loan Commitment. Subject to the terms and
conditions set forth herein, on the Closing Date and on each Delayed Draw
Borrowing Date, each Lender severally agrees to make bridge loans (collectively
the “Bridge Loans” or “Loans”) to the Borrower, in Dollars, in an amount equal
to such Lender’s Bridge Loan Commitment Percentage of the Bridge Loan Committed
Amount; provided, however, that (i) the aggregate amount of such Bridge Loans
made shall not exceed the Bridge Loan Committed Amount; (ii) no Bridge Loans
shall be made hereunder unless, prior to or simultaneously with such Bridge
Loans being made, the initial

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Term Loans (as defined in the Five-Year Credit Agreement) have been made, (iii)
the borrowing, on up to two separate dates (each of which shall be a Business
Day) following the Closing Date, of Delayed Draw Bridge Loans (each a “Delayed
Draw Borrowing Date”), if any, shall have occurred on or prior to the 90th day
following the Closing Date or such later date as mutually agreed upon by the
Borrower and the Administrative Agent (the “Delayed Draw Commitment Termination
Date”) and (iv) the aggregate amount of such Delayed Draw Bridge Loans shall not
exceed the Delayed Draw Committed Amount. Once repaid or prepaid, Bridge Loans
cannot be reborrowed.

                    (b) Method for Borrowing Bridge Loans. By no later than
11:00 a.m. (i) on the date of the requested borrowing of Bridge Loans that will
be made as Base Rate Loans or (ii) three Business Days prior to the date of the
requested borrowing of Bridge Loans that will be made as Eurodollar Loans
denominated in Dollars, the Borrower shall provide telephonic notice to the
Administrative Agent, followed promptly by a written Notice of Borrowing in the
form of Exhibit 2.1(b) (which may be submitted by telecopy), each of such
telephonic notice and such written Notice of Borrowing setting forth (A) the
amount requested, (B) whether such Bridge Loans shall accrue interest at the
Base Rate or the Eurodollar Rate, (C) with respect to Bridge Loans that will be
Eurodollar Loans, the Interest Period applicable thereto and (D) certification
that the Borrower has complied in all respects with Sections 5.1 and 5.2 as
applicable. Each such notice must be received by the Administrative Agent not
later than (i) three Business Days prior to the requested date of any borrowing
of, conversion to or continuation of Eurodollar Loans or of any conversion of
Eurodollar Loans to Base Rate Loans and (ii) on the requested date of any
borrowing of Base Rate Loans; provided, however, that if the Borrower wishes to
request Eurodollar Loans having an Interest Period other than one, two, three or
six months in duration as provided in the definition of “Interest Period,” the
applicable notice must be received by the Administrative Agent not later than
11:00 a.m. four Business Days prior to the requested date of such borrowing,
conversion or continuation of Eurodollar Loans, whereupon the Administrative
Agent shall give prompt notice to the Lenders of such request and determine
whether the requested Interest Period is acceptable to all of them. Not later
than 11:00 a.m. three Business days before the requested date of such borrowing,
conversion or continuation of Eurodollar Loans, the Administrative Agent shall
notify the Borrower (which notice may be by telephone) whether or not the
requested Interest Period has been consented to by all the Lenders.

                    (c) Funding of Bridge Loans. Each Lender shall make its
Bridge Loan Commitment Percentage of the Bridge Loan Committed Amount available
to the Administrative Agent by 1:00 p.m. on the Closing Date or the Delayed Draw
Borrowing Date, as applicable, by deposit, in Dollars, of immediately available
funds at the Agency Services Address. The amount of the Bridge Loans will then
be made available to the Borrower by the Administrative Agent as directed by the
Borrower, to the extent the amount of such Bridge Loans are made available to
the Administrative Agent. The obligations of the Lenders hereunder to make
Bridge Loans and to make payments pursuant to Section 10.7 are several and not
joint. No Lender shall be responsible for the failure or delay by any other
Lender in its obligation to make Bridge Loans hereunder; provided, however, that
the failure of any Lender to fulfill its obligations hereunder shall not relieve
any other Lender of its obligations hereunder. Unless the Administrative Agent
shall have been notified by any Lender prior to the date of any such Bridge Loan
that such Lender does not intend to make available to the Administrative Agent
its portion of the Bridge Loans to be made on such date, the Administrative
Agent may assume that such Lender has

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made such amount available to the Administrative Agent on the date of such
Bridge Loans, and the Administrative Agent in reliance upon such assumption, may
(in its sole discretion but without any obligation to do so) make available to
the Borrower a corresponding amount. If such corresponding amount is not in fact
made available to the Administrative Agent, the Administrative Agent shall be
able to recover such corresponding amount from such Lender. If such Lender does
not pay such corresponding amount upon the Administrative Agent’s demand
therefor, the Administrative Agent will promptly notify the Borrower, and the
Borrower shall immediately pay such corresponding amount to the Administrative
Agent. The Administrative Agent shall also be entitled to recover from such
Lender or the Borrower, as the case may be, interest on such corresponding
amount in respect of each day from the date such corresponding amount was made
available by the Administrative Agent to the Borrower to the date such
corresponding amount is recovered by the Administrative Agent at a per annum
rate equal to (i) from the Borrower at the Base Rate or (ii) from such Lender,
at a rate per annum equal to, during the period to but excluding the date two
Business Days after demand therefor, the Federal Funds Rate, and, thereafter,
the Base Rate plus two percent (2%) per annum.

                    (d) Bridge Notes. The Bridge Loans made by each Lender shall
be evidenced by a duly executed promissory note of the Borrower to each Lender
that requests a Bridge Note in substantially the form of Exhibit 2.1(d).

                    2.2 Continuations and Conversions.

          Subject to the terms below, the Borrower shall have the option, on any
Business Day, to continue existing Eurodollar Loans for a subsequent Interest
Period, to convert Base Rate Loans into Eurodollar Loans or to convert
Eurodollar Loans into Base Rate Loans. By no later than 11:00 a.m. (a) on the
date of the requested conversion of a Eurodollar Loan denominated in Dollars to
a Base Rate Loan or (b) three Business Days prior to the date of the requested
continuation of a Eurodollar Loan denominated in Dollars or conversion of a Base
Rate Loan to a Eurodollar Loan, the Borrower shall provide telephonic notice to
the Administrative Agent, followed promptly by a written Notice of
Continuation/Conversion, in the form of Exhibit 2.2 setting forth (i) whether
the Borrower wishes to continue or convert such Loans and (ii) if the request is
to continue a Eurodollar Loan or convert a Base Rate Loan to a Eurodollar Loan,
the Interest Period applicable thereto. Notwithstanding anything herein to the
contrary, (A) except as provided in Section 3.11, Eurodollar Loans may only be
continued or converted into Base Rate Loans on the last day of the Interest
Period applicable thereto, (B) Eurodollar Loans may not be continued nor may
Base Rate Loans be converted into Eurodollar Loans during the existence and
continuation of a Default or an Event of Default, (C) any request to continue a
Eurodollar Loan that fails to comply with the terms hereof or any failure to
request a continuation of a Eurodollar Loan at the end of an Interest Period
shall constitute a conversion to a Base Rate Loan on the last day of the
applicable Interest Period and (D) any failure to state the Interest Period with
respect to the continuation of a Eurodollar Loan or the conversion of a Base
Rate Loan to a Eurodollar Loan shall constitute a request for a one month
Interest Period.

                    2.3 Minimum Amounts.

          Each request for a conversion or continuation shall be subject to the
requirements that (a) each Eurodollar Loan shall be in a minimum amount of
$10,000,000 and in integral multiples

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of $1,000,000 in excess thereof, (b) each Base Rate Loan shall be in a minimum
amount of $5,000,000 (and in integral multiples of $1,000,000 in excess thereof)
and (c) no more than ten Eurodollar Loans shall be outstanding hereunder at any
one time. For the purposes of this Section 2.3, all Eurodollar Loans with the
same Interest Periods that begin and end on the same date shall be considered as
one Eurodollar Loan, but Eurodollar Loans with different Interest Periods, even
if they begin on the same date, shall be considered as separate Eurodollar
Loans.

SECTION 3

GENERAL PROVISIONS APPLICABLE
TO LOANS

                    3.1 Interest.

 

 

 

          (a) Interest Rate. Subject to Section 3.1(b), (i) all Base Rate Loans
shall accrue interest at the Base Rate and (ii) all Eurodollar Loans shall
accrue interest at the Eurodollar Rate plus the Applicable Percentage.

 

 

 

          (b) Default Rate of Interest. Upon the occurrence, and during the
continuation, of an Event of Default pursuant to Sections 9.1(a) and (k), the
principal of and, to the extent permitted by law, interest on the Loans and any
other amounts owing hereunder or under the other Credit Documents (including
without limitation fees and expenses) shall bear interest, payable on demand, at
a per annum rate equal to 2% plus the rate which would otherwise be applicable
(or if no rate is applicable, then the Base Rate plus two percent (2%) per
annum).

 

 

 

          (c) Interest Payments. Except as set forth in clause (b) above,
interest on Loans shall be due and payable in arrears on each Interest Payment
Date.

 

 

 

          3.2 Place and Manner of Payments.

          All payments to be made by the Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein, all payments by the Borrower
hereunder shall be made to the Administrative Agent, for the account of the
respective Lenders to which such payment is owed, at the applicable Agency
Services Address in Dollars and in Same Day Funds not later than 2:00 p.m. on
the date specified herein. The Administrative Agent will promptly distribute to
each Lender its pro rata share of such payment (based upon the applicable
Commitments of the Lenders) in like funds as received by wire transfer to such
Lender’s Lending Office. All payments received by the Administrative Agent after
2:00 p.m., in the case of payments in Dollars shall be deemed received on the
next succeeding Business Day and any applicable interest or fee shall continue
to accrue. If any payment to be made by any Borrower shall come due on a day
other than a Business Day, payment shall be made on the next following Business
Day, and such extension of time shall be reflected in computing interest or
fees, as the case may be.

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                    3.3 Prepayments.

 

 

 

          (a) Voluntary Prepayments. The Borrower shall have the right to prepay
Loans in whole or in part from time to time without premium or penalty;
provided, however, that (i) (A) Eurodollar Loans denominated in Dollars may only
be prepaid on three Business Days’ prior written notice to the Administrative
Agent and (B) Base Rate Loans may be prepaid on same-day prior written notice to
the Administrative Agent and (ii) each such partial prepayment of Eurodollar
Loans or Base Rate Loans shall be in the minimum principal amount of $5,000,000
and integral multiples of $1,000,000. Amounts prepaid pursuant to this Section
3.3(a) shall be applied in the manner set forth in Section 3.3(c) below.

 

 

 

          (b) Mandatory Prepayments. Within five (5) Business Days following
receipt by a Credit Party or any of its Subsidiaries of proceeds from a Debt
Issuance or an Equity Issuance, the Borrower shall prepay the Loans in an amount
equal to 100% of the net cash proceeds of such Debt Issuance or Equity Issuance.
All such prepayments hereunder shall be applied as set forth in Section 3.3(c)
below.

 

 

 

          (c) Application of Prepayments. All amounts paid pursuant to Sections
3.3(a) and 3.3(b)(i) shall be applied first to Base Rate Loans and then to
Eurodollar Loans. All prepayments under this Section 3.3(c) shall be subject to
Section 3.14.

 

 

 

          3.4 Fees .

 

 

 

          (a) Commitment Fee. In consideration of the commitments under the
Bridge Credit Facility being made available by the Lenders hereunder, the
Borrower agrees to pay to the Administrative Agent a per annum fee (the
“Commitment Fee”) for the pro rata benefit of each Lender (based upon such
Lender’s pro rata committed portion of the Bridge Loan Committed Amount), which
Commitment Fee shall be calculated by multiplying, at any time of determination,
the Applicable Percentage then in effect for the Commitment Fee, by the daily
average unused amount of the Bridge Loan Committed Amount during the fiscal
quarter or other relevant period for which such Commitment Fee is being
calculated. The Commitment Fee shall accrue from the Closing Date and shall be
due and payable in arrears on the last day of each fiscal quarter of the
Borrower and on the earliest of (i) the termination in full of the Bridge Loan
Facility Commitments, (ii) the borrowing of all available amounts under the
Bridge Loan Facility Commitments and (iii) the Delayed Draw Commitment
Termination Date, with the first such payment to be made on the last day of the
first full fiscal quarter following the Closing Date.

 

 

 

          (b) Bridge Funding Fee. The Borrower agrees to pay to the
Administrative Agent, for the pro rata benefit of each Lender, a fee equal to
(i) 0.15% multiplied by the principal amount under the Bridge Loan Facility then
outstanding which shall be payable on December 31, 2007 and (ii) 0.10%
multiplied by the principal amount under the Bridge Loan Facility then
outstanding which shall be payable on February 29, 2008.

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                    3.5 Payment in full at Maturity.

          On the Maturity Date, the entire outstanding principal balance of all
Loans, together with accrued but unpaid interest and all other sums owing with
respect thereto, shall be due and payable in full, unless accelerated sooner
pursuant to Section 9.

 

 

 

          3.6 Computations of Interest and Fees.

 

 

 

          (a) Except for Base Rate Loans that are based upon the Prime Rate, in
which case interest shall be computed on the basis of the actual number of days
elapsed over a year of 365 or 366 days, as the case may be, all computations of
interest and fees hereunder shall be made on the basis of the actual number of
days elapsed over a year of 360 days. Interest shall accrue from and include the
date of borrowing (or continuation or conversion) but exclude the date of
payment.

 

 

 

          (b) It is the intent of the Lenders and the Credit Parties to conform
to and contract in strict compliance with applicable usury law from time to time
in effect. All agreements between the Lenders and the Credit Parties are hereby
limited by the provisions of this paragraph which shall override and control all
such agreements, whether now existing or hereafter arising and whether written
or oral. In no way, nor in any event or contingency (including but not limited
to prepayment or acceleration of the maturity of any obligation), shall the
interest taken, reserved, contracted for, charged, or received under this Credit
Agreement, under the Notes or otherwise, exceed the maximum nonusurious amount
permissible under applicable law. If, from any possible construction of any of
the Credit Documents or any other document, interest would otherwise be payable
in excess of the maximum nonusurious amount, any such construction shall be
subject to the provisions of this paragraph and such documents shall be
automatically reduced to the maximum nonusurious amount permitted under
applicable law, without the necessity of execution of any amendment or new
document. If any Lender shall ever receive anything of value which is
characterized as interest on the Loans under applicable law and which would,
apart from this provision, be in excess of the maximum nonusurious amount, an
amount equal to the amount which would have been excessive interest shall,
without penalty, be applied to the reduction of the principal amount owing on
the Loans and not to the payment of interest, or refunded to the Borrower or the
other payor thereof if and to the extent such amount which would have been
excessive exceeds such unpaid principal amount of the Loans. The right to demand
payment of the Loans or any other Indebtedness evidenced by any of the Credit
Documents does not include the right to accelerate the payment of any interest
which has not otherwise accrued on the date of such demand, and the Lenders do
not intend to charge or receive any unearned interest in the event of such
demand. All interest paid or agreed to be paid to the Lenders with respect to
the Loans shall, to the extent permitted by applicable law, be amortized,
prorated, allocated, and spread throughout the full stated term (including any
renewal or extension) of the Loans so that the amount of interest on account of
such Indebtedness does not exceed the maximum nonusurious amount permitted by
applicable law.

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          3.7 Pro Rata Treatment.

 

 

 

Except to the extent otherwise provided herein, each Bridge Loan borrowing, each
payment or prepayment of principal of any Bridge Loan, each payment of fees
(other than the fees retained by the Administrative Agent for its own account),
and each conversion or continuation of any Bridge Loan, shall (except as
otherwise provided in Section 3.11) be allocated pro rata among the relevant
Lenders in accordance with the respective Bridge Loan Commitment Percentages of
such Lenders, as applicable, (or, if the Commitments of such Lenders have
expired or been terminated, in accordance with the respective principal amounts
of the outstanding Bridge Loans and Participation Interests of such Lenders);
provided that, if any Lender shall have failed to pay its applicable pro rata
share of any Bridge Loan, then any amount to which such Lender would otherwise
be entitled pursuant to this Section 3.7 shall instead be payable to the
Administrative Agent until the share of such Loan not funded by such Lender has
been repaid; provided further, that in the event any amount paid to any Lender
pursuant to this Section 3.7 is rescinded or must otherwise be returned by the
Administrative Agent, each Lender shall, upon the request of the Administrative
Agent, repay to the Administrative Agent the amount so paid to such Lender, with
interest for the period commencing on the date such payment is returned by the
Administrative Agent until the date the Administrative Agent receives such
repayment at a rate per annum equal to, during the period to but excluding the
date two Business Days after such request, the Federal Funds Rate, and
thereafter, the Base Rate plus two percent (2%) per annum.

 

 

 

          3.8 Sharing of Payments.

 

 

          The Lenders agree among themselves that, except to the extent
otherwise provided herein, in the event that any Lender shall obtain payment in
respect of any Loan or any other obligation owing to such Lender under this
Credit Agreement through the exercise of a right of setoff, banker’s lien or
counterclaim, or pursuant to a secured claim under Section 506 of the Bankruptcy
Code or other security or interest arising from, or in lieu of, such secured
claim, received by such Lender under any applicable bankruptcy, insolvency or
other similar law or otherwise, or by any other means, in excess of its pro rata
share of such payment as provided for in this Credit Agreement, such Lender
shall promptly pay in cash or purchase from the other Lenders a participation in
such Loans and other obligations in such amounts, and make such other
adjustments from time to time, as shall be equitable to the end that all Lenders
share such payment in accordance with their respective ratable shares as
provided for in this Credit Agreement. The Lenders further agree among
themselves that if payment to a Lender obtained by such Lender through the
exercise of a right of setoff, banker’s lien, counterclaim or other event as
aforesaid shall be rescinded or must otherwise be restored, each Lender which
shall have shared the benefit of such payment shall, by payment in cash or a
repurchase of a participation theretofore sold, return its share of that benefit
(together with its share of any accrued interest payable with respect thereto)
to each Lender whose payment shall have been rescinded or otherwise restored.
The Borrower agrees that any Lender so purchasing such a participation may, to
the fullest extent permitted by law, exercise all rights of payment, including
setoff, banker’s lien or counterclaim, with respect to such participation as
fully as if such Lender were a holder of such Loan or other obligation in the
amount of such participation. Except as otherwise expressly provided in this
Credit Agreement, if any Lender or the Administrative Agent shall fail to remit
to any other Lender an amount payable by such Lender or the Administrative

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Agent to such other Lender pursuant to this Credit Agreement on the date when
such amount is due, such payments shall be made together with interest thereon
for each date from the date such amount is due until the date such amount is
paid to the Administrative Agent or such other Lender at a rate per annum equal
to the Federal Funds Rate. If under any applicable bankruptcy, insolvency or
other similar law, any Lender receives a secured claim in lieu of a setoff to
which this Section 3.8 applies, such Lender shall, to the extent practicable,
exercise its rights in respect of such secured claim in a manner consistent with
the rights of the Lenders under this Section 3.8 to share in the benefits of any
recovery on such secured claim.

 

 

 

          3.9 Capital Adequacy/Regulation D.

 

 

 

          (a) If, after the date thereof, any Lender determines that the
introduction after the Closing Date of any law, rule or regulation or other
Requirement of Law regarding capital adequacy or any change therein or in the
interpretation thereof, or compliance by such Lender (or its Lending Office)
therewith, has or would have the effect of reducing the rate of return on the
capital or assets of such Lender or any corporation controlling such Lender as a
consequence of such Lender’s obligations hereunder (taking into consideration
its policies with respect to capital adequacy and such Lender’s desired return
on capital), then from time to time upon demand of such Lender (with a copy of
such demand to the Administrative Agent), the Borrower shall pay to such Lender
such additional amounts as will compensate such Lender for such reduction.

 

 

 

          (b) The Borrower shall pay to each Lender, as long as such Lender
shall be required under regulations of the Board of Governors of the Federal
Reserve System of the United States of America to maintain reserves with respect
to liabilities or assets consisting of or including Eurodollar funds or deposits
(currently known as “Eurodollar Liabilities”), additional interest on the unpaid
principal amount of each Eurodollar Loan equal to (i) (A) the applicable
Eurodollar Rate divided by (B) one minus the Eurodollar Reserve Percentage minus
(ii) the applicable Eurodollar Rate. Such additional interest shall be due and
payable on each date on which interest is payable on such Loan; provided the
Borrower shall have received at least five days’ prior notice (with a copy to
the Administrative Agent) of such additional interest from such Lender. If a
Lender fails to give notice five days prior to the relevant Interest Payment
Date, such additional interest shall be due and payable five days from the
receipt by the Borrower of such notice.

 

 

 

          3.10 Inability To Determine Interest Rate.

          If the Administrative Agent determines (which determination shall be
conclusive and binding upon the Borrower) in connection with any request for a
Eurodollar Loan or a conversion to or continuation thereof that (a) Dollar
deposits are not being offered to banks in the applicable offshore Dollar market
for the applicable amount and Interest Period of such Eurodollar Loan, (b)
adequate and reasonable means do not exist for determining the Eurodollar Rate
for such Eurodollar Loan, or (c) the Eurodollar Rate for such Eurodollar Loan
does not adequately and fairly reflect the cost to the Lenders of funding such
Eurodollar Loan, the Administrative Agent will promptly notify the Borrower and
all the Lenders. Thereafter, the obligation of the Lenders to make or maintain
Eurodollar Loans shall be suspended until the Administrative Agent revokes

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such notice. Upon receipt of such notice, the Borrower may revoke any pending
Notice of Borrowing or Notice of Continuation/Conversion with respect to
Eurodollar Loans or, failing that, will be deemed to have converted such request
into a request for a borrowing of or conversion into a Base Rate Loan in the
amount specified therein.

                    3.11 Illegality.

          If any Lender determines that any Requirement of Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund
Eurodollar Loans, or materially restricts the authority of such Lender to
purchase or sell, or to take deposits of, Dollars in the applicable offshore
Dollar market, or to determine or charge interest rates based upon the
Eurodollar Rate, then, on notice thereof by such Lender to the Borrower through
the Administrative Agent, any obligation of such Lender to make or continue
Eurodollar Loans or to convert Base Rate Loans to Eurodollar Loans shall be
suspended until such Lender notifies the Administrative Agent and the Borrower
that the circumstances giving rise to such determination no longer exist. Upon
receipt of such notice, the Borrower shall, upon demand from such Lender (with a
copy to the Administrative Agent), prepay or, if applicable, convert all
Eurodollar Loans of such Lender to Base Rate Loans, either on the last day of
the Interest Period thereof, if such Lender may lawfully continue to maintain
such Eurodollar Loans to such day, or immediately, if such Lender may not
lawfully continue to maintain such Eurodollar Loans. Upon any such prepayment or
conversion, the Borrower shall also pay interest on the amount so prepaid or
converted, together with any amounts due with respect thereto pursuant to
Section 3.14. Each Lender agrees to designate a different Lending Office if such
designation will avoid the need for such notice and will not, in the good faith
judgment of such Lender, otherwise be materially disadvantageous to such Lender.

                    3.12 Requirements of Law.

          If any Lender determines that as a result of the introduction of or
any change in, or in the interpretation of, any Requirement of Law, or such
Lender’s compliance therewith, there shall be any increase in the cost to such
Lender of agreeing to make or making, funding or maintaining Eurodollar Loans or
a reduction in the amount received or receivable by such Lender in connection
with any of the foregoing (excluding for purposes of this subsection (a) any
such increased costs or reduction in amount resulting from (i) Taxes or Other
Taxes (as to which Section 3.13 shall govern) and (ii) reserve requirements
utilized in the determination of the Eurodollar Rate), then from time to time,
within 10 days of demand of such Lender (with a copy of such demand to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amounts as will compensate such Lender for such increased cost or reduction in
yield.

                    3.13 Taxes.

 

 

 

          (a) Any and all payments by or on behalf of a Credit Party to or for
the account of the Administrative Agent or any Lender under any Credit Document
shall be made free and clear of and without deduction for any and all present or
future income, stamp or other taxes, duties, levies, imposts, deductions,
assessments, fees, withholdings or similar charges, and all liabilities with
respect thereto, but excluding, in the case of the

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Administrative Agent and each Lender, any branch profit taxes or taxes imposed
on or measured by its net income, and franchise taxes imposed on it (in lieu of
net income taxes), by the jurisdiction (or any political subdivision thereof)
under the laws of which the Administrative Agent or such Lender, as the case may
be, is organized or maintains its Lending Office (all such non-excluded present
or future income, stamp or other taxes, duties, levies, imposts, deductions,
assessments, fees, withholdings or similar charges, and liabilities being
hereinafter referred to as “Taxes”). If a Credit Party shall be required by any
Requirement of Law to deduct any Taxes from or in respect of any sum payable
under any Credit Document to the Administrative Agent or any Lender, (i) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 3.13(a)), the Administrative Agent or such Lender, as the case may
be, receives an amount equal to the sum it would have received had no such
deductions been made, (ii) such Credit Party shall make such deductions, (iii)
such Credit Party shall pay the full amount deducted to the relevant taxation
authority or other Governmental Authority in accordance with applicable
Requirements of Law, and (iv) within 30 days after the date of such payment,
such Credit Party shall furnish to the Administrative Agent (which shall forward
the same to such Lender) the original or a certified copy of a receipt
evidencing payment thereof, to the extent such receipt is issued therefor, or
other written proof of payment thereof that is reasonably satisfactory to the
Administrative Agent.

 

 

          (b) In addition, each Credit Party agrees to pay any and all present
or future stamp, court or documentary taxes and any other excise or property
taxes or charges or similar levies which arise from any payment made under any
Credit Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Credit Document (hereinafter
referred to as “Other Taxes”).

 

 

          (c) If a Credit Party shall be required to deduct or pay any Taxes or
Other Taxes from or in respect of any sum payable under any Credit Document to
the Administrative Agent or any Lender, such Credit Party shall also pay to the
Administrative Agent (for the account of such Lender) or to such Lender, at the
time interest is paid, such additional amount that such Lender reasonably
specifies by written notice to such Credit Party as necessary to preserve the
after-tax yield (after factoring in all taxes, including taxes imposed on or
measured by net income) such Lender would have received if such Taxes or Other
Taxes had not been imposed; provided that if such Lender fails to provide such
notice to such Credit Party before the date which is five days prior to the date
such interest is paid, such Credit Party shall pay at the time such interest is
paid such amount as such Credit Party reasonably estimates will preserve such
Lender’s after-tax yield (after factoring in only such Taxes or Other Taxes) and
pay the balance within five days after receiving such notice.

 

 

          (d) Each Credit Party agrees to indemnify the Administrative Agent and
each Lender for (i) the full amount of Taxes and Other Taxes (including any
Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable
under this Section 3.13(d)) paid by the Administrative Agent and such Lender,
and (ii) any liability (including penalties, interest and reasonable expenses)
arising therefrom or with respect thereto.

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          (e) In the case of any payment hereunder or under any other Credit
Document by or on behalf of a Credit Party through an account or branch outside
the United States, or on behalf of a Credit Party by a payor that is not a
United States person, if such Credit Party determines that no taxes are payable
in respect thereof, such Credit Party shall furnish, or shall cause such payor
to furnish, to the Administrative Agent, an opinion of counsel reasonably
acceptable to the Administrative Agent stating that such payment is exempt from
Taxes. For purposes of this subsection (e), the terms “United States” and
“United States person” shall have the meanings specified in Section 7701 of the
Code.

 

 

 

          (f) Each Lender that is a foreign corporation, foreign partnership or
foreign trust within the meaning of the Code shall deliver to the Administrative
Agent, prior to receipt of any payment subject to withholding under the Code,
two duly signed completed copies of either IRS Form W-8BEN or any successor
thereto (relating to such Lender and entitling it to an exemption from, or
reduction of, withholding tax on all payments to be made to such Lender by the
Credit Parties pursuant to this Credit Agreement) or IRS Form W-8ECI or any
successor thereto (relating to all payments to be made to such Lender by a
Credit Party pursuant to this Credit Agreement), as appropriate, or such other
evidence satisfactory to the Borrower and the Administrative Agent that such
Lender is entitled to an exemption from, or reduction of, United States
withholding tax. Upon the request of the Administrative Agent or the Borrower,
each Lender that is a “United States person” within the meaning of Section
7701(a)(30) of the Code shall deliver to the Administrative Agent two duly
signed completed copies of IRS Form W-9 or any successor thereto or such other
evidence satisfactory to the Borrower and the Administrative Agent that such
Lender is entitled to an exemption from, or reduction of, United States
withholding tax. Thereafter and from time to time, each such Lender shall (i)
promptly submit to the Administrative Agent such additional duly completed and
signed copies of one of such forms (or such successor forms as shall be adopted
from time to time by the relevant United States taxing authorities), as
appropriate, as may reasonably be requested by the Borrower or the
Administrative Agent and then be available under then current United States laws
and regulations to avoid, or such evidence as is satisfactory to the Borrower
and the Administrative Agent of any available exemption from or reduction of,
United States withholding taxes in respect of all payments to be made to such
Lender by the Borrower pursuant to this Credit Agreement, (ii) promptly notify
the Administrative Agent of any change in circumstances which would modify or
render invalid any claimed exemption or reduction (or it is determined the
earlier claimed exemption was incorrectly claimed for any reason), and (iii)
take such steps as shall not be materially disadvantageous to it, in the
reasonable judgment of such Lender, and as may be reasonably necessary
(including the re-designation of its Lending Office) to avoid any Requirement of
Law that the Credit Parties make any deduction or withholding for taxes from
amounts payable to such Lender. If the forms or other evidence provided by such
Lender at the time such Lender first becomes a party to this Credit Agreement
indicate a United States interest withholding tax rate in excess of zero,
withholding tax at such rate shall be considered excluded from Taxes for purpose
of any indemnity or gross up unless and until such Lender provides the
appropriate forms certifying that a lesser rate applies, whereupon withholding
tax at such lesser rate only shall be considered excluded from Taxes for periods
governed by such forms; provided, however, that, if at the date of any
assignment pursuant to which a Lender becomes a

36

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party to this Credit Agreement, the Lender assignor was entitled to payments
under subsection (a) of this Section 3.13 in respect of United States
withholding tax with respect to interest paid at such date, then, to such
extent, the term Taxes shall include (in addition to withholding taxes that may
be imposed in the future or other amounts otherwise includable in Taxes) United
States withholding tax, if any, applicable with respect to the Lender assignee
on such date. If such Lender fails to deliver the above forms or other evidence,
then the Borrower or the Administrative Agent may withhold from any interest
payment to such Lender an amount equal to the applicable withholding tax imposed
by the Code, without reduction. If any Governmental Authority asserts that the
Borrower or the Administrative Agent did not properly withhold any tax or other
amount from payments made in respect of such Lender, such Lender shall indemnify
the Borrower or the Administrative Agent therefor, including all penalties and
interest, any taxes imposed by any jurisdiction on the amounts payable to the
Borrower or the Administrative Agent under this Section 3.13(f), and costs and
expenses (including Attorney Costs) of the Borrower or the Administrative Agent.
For any period with respect to which a Lender has failed to provide the
Administrative Agent with the above forms or other evidence (other than if such
failure is due to a change in the applicable law, or in the interpretation or
application thereof, occurring after the date on which such form or other
evidence originally was required to be provided or if such form or other
evidence otherwise is not required), such Lender shall not be entitled to
indemnification under subsection (d) of this Section 3.13 nor shall the Credit
Party be required to deduct or withhold under subsections (a) or (c) of this
Section 3.13 with respect to Taxes imposed by the United States by reason of
such failure; provided, however, that should a Lender become subject to Taxes
because of its failure to deliver such form or other evidence required
hereunder, the Borrower shall take such steps as such Lender shall reasonably
request to assist such Lender in recovering such Taxes. The obligation of the
Lenders under this Section 3.13(f) shall survive the payment of all Credit Party
Obligations and the resignation or replacement of the Administrative Agent.

 

 

 

          (g) In the event that an additional payment is made under Section
3.13(a) or (c) for the account of any Lender and such Lender, in its reasonable
judgment, determines that it has finally and irrevocably received or been
granted a credit against or release or remission for, or repayment of, any tax
paid or payable by it in respect of or calculated with reference to the
deduction or withholding giving rise to such payment, such Lender shall, to the
extent that it determines that it can do so without prejudice to the retention
of the amount of such credit, relief, remission or repayment, pay to the
Borrower such amount as such Lender shall, in its reasonable judgment, have
determined to be attributable to such deduction or withholding and which will
leave such Lender (after such payment) in no worse position than it would have
been in if the Borrower had not been required to make such deduction or
withholding. Nothing herein contained shall interfere with the right of a Lender
to arrange its tax affairs in whatever manner it thinks fit nor oblige any
Lender to claim any tax credit or to disclose any information relating to its
tax affairs or any computations in respect thereof or require any Lender to do
anything that would prejudice its ability to benefit from any other credits,
reliefs, remissions or repayments to which it may be entitled.

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          3.14 Compensation.

 

 

          Upon the written demand of any Lender, the Borrower shall promptly
compensate such Lender for and hold such Lender harmless from any loss, cost or
expense incurred by it as a result of:

 

 

          (a) any continuation, conversion, payment or prepayment of any
Eurodollar Loan on a day other than the last day of the Interest Period for such
Eurodollar Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise); or

 

 

 

          (b) any failure by the Borrower (for a reason other than the failure
of such Lender to make a Eurodollar Loan) to prepay, borrow, continue or convert
any Eurodollar Loan on the date or in the amount previously requested by the
Borrower; or

 

 

 

          (c) any assignment required pursuant to Section 3.17 or Section 11.6.

 

 

The amount each such Lender shall be compensated pursuant to this Section 3.14
shall include, without limitation, (i) any loss incurred by such Lender in
connection with the re-employment of funds prepaid, repaid, not borrowed or
paid, as the case may be and (ii) any reasonable out-of-pocket expenses
(including Attorney Costs) incurred and reasonably attributable thereto.

 

For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.14, each Lender may deem that it funded each Eurodollar Loan made
by it at the Eurodollar Rate for such Eurodollar Loan by a matching deposit or
other borrowing in the applicable offshore interbank markets for such currency
for a comparable amount and for a comparable period, whether or not such
Eurodollar Loan was in fact so funded.

 

 

          3.15 Determination and Survival of Provisions.

 

 

          All determinations by the Administrative Agent or a Lender of amounts
owing under Sections 3.9 through 3.14, inclusive, shall, absent manifest error,
be conclusive and binding on the parties hereto. In determining such amount, the
Administrative Agent or such Lender may use any reasonable averaging and
attribution methods. Section 3.9 through 3.14, inclusive, shall survive the
termination of this Credit Agreement and the payment of all Credit Party
Obligations.

 

 

          3.16 Notification by Lenders.

 

 

          Subject to Section 3.13(c), each Lender shall notify the Borrower (and
any applicable Credit Party) of any event that will entitle such Lender to
compensation under Section 3.9, 3.12, 3.13 or 3.14 as promptly as practicable,
but in any event within 90 days after such Lender obtains actual knowledge
thereof; provided, however, that if any Lender fails to give such notice within
90 days after it obtains actual knowledge of such an event, such Lender shall,
with respect to compensation payable pursuant to Section 3.9, 3.12, 3.13 or 3.14
in respect of any costs resulting from such event, only be entitled to payment
under Section 3.9, 3.12, 3.13 or 3.14 for costs incurred from and after the date
90 days prior to the date that such Lender gives such notice. If requested by
the Borrower, each Lender will furnish to Borrower within ten Business Days of
the time the Lender requests compensation under Section 3.9, 3.12, 3.13 or 3.14,
a certificate setting forth the basis, amount and reasonable detail of
computation of each request by such Lender for

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compensation under Section 3.9, 3.12, 3.13 or 3.14, which certificate shall,
except for demonstrable error, be final, conclusive and binding for all
purposes.

 

 

          3.17 Mitigation; Mandatory Assignment.

 

 

          Each Lender shall use reasonable efforts to avoid or mitigate any
increased cost or suspension of the availability of an interest rate under
Sections 3.9 through 3.14 above to the greatest extent practicable (including
transferring the Loans to another Lending Office or Affiliate of a Lender)
unless, in the reasonable opinion of such Lender, such efforts would be likely
to have an adverse effect upon it. In the event a Lender makes a request to the
Borrower for additional payments in accordance with Section 3.9, 3.11, 3.12,
3.13 or 3.14, then, provided that no Default or Event of Default has occurred
and is continuing at such time, the Borrower may, at its own expense (such
expense to include, without limitation, any transfer fee payable to the
Administrative Agent under Section 11.3(b)) and in its sole discretion, require
such Lender to transfer and assign in whole (but not in part), without recourse
(in accordance with and subject to the terms and conditions of Section 11.3(b)),
all of its interests, rights and obligations under this Credit Agreement to an
Eligible Assignee which shall assume such assigned obligations (which assignee
may be another Lender, if a Lender accepts such assignment); provided that (a)
such assignment shall not conflict with any law, rule or regulation or order of
any court or other Governmental Authority and (b) the Borrower or such assignee
shall have paid to the assigning Lender in immediately available funds the
principal of and interest accrued to the date of such payment on the portion of
the Loans hereunder held by such assigning Lender and all other amounts owed to
such assigning Lender hereunder, including amounts owed pursuant to Sections 3.9
through 3.14 hereof.

 

SECTION 4

 

GUARANTY

 

 

          4.1 Guaranty of Payment.

 

 

          Subject to Section 4.7 below, each of the Guarantors hereby, jointly
and severally, unconditionally guarantees to each Lender and the Administrative
Agent the prompt payment of the Credit Party Obligations in full when due
(whether at stated maturity, as a mandatory prepayment, by acceleration or
otherwise) and the timely performance of all other obligations under the Credit
Documents. This Guaranty is a guaranty of payment and not of collection and is a
continuing guaranty and shall apply to all Credit Party Obligations whenever
arising.

 

 

          4.2 Obligations Unconditional.

 

 

          The obligations of the Guarantors hereunder are absolute and
unconditional, irrespective of the value, genuineness, validity, regularity or
enforceability of any of the Credit Documents, or any other agreement or
instrument referred to therein, to the fullest extent permitted by applicable
law, irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor.
Each Guarantor agrees that this Guaranty may be enforced by the Lenders without
the necessity at any time of resorting to or exhausting any other security or
collateral and without the necessity at any time of having recourse to the Notes
or

39

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any other of the Credit Documents or any collateral, if any, hereafter securing
the Credit Party Obligations or otherwise and each Guarantor hereby waives the
right to require the Lenders to proceed against the Borrower or any other Person
(including a co-guarantor) or to require the Lenders to pursue any other remedy
or enforce any other right. Each Guarantor further agrees that it shall have no
right of subrogation, indemnity, reimbursement or contribution against the
Borrower or any other Guarantor of the Credit Party Obligations for amounts paid
under this Guaranty until such time as the Lenders have been paid in full and
all Commitments under the Credit Agreement have been terminated. Each Guarantor
further agrees that nothing contained herein shall prevent the Lenders from
suing on the Notes or any of the other Credit Documents or foreclosing its
security interest in or Lien on any collateral, if any, securing the Credit
Party Obligations or from exercising any other rights available to it under this
Credit Agreement, the Notes, any other of the Credit Documents, or any other
instrument of security, if any, and the exercise of any of the aforesaid rights
and the completion of any foreclosure proceedings shall not constitute a
discharge of any of any Guarantor’s obligations hereunder; it being the purpose
and intent of each Guarantor that its obligations hereunder shall be absolute,
independent and unconditional under any and all circumstances. Neither any
Guarantor’s obligations under this Guaranty nor any remedy for the enforcement
thereof shall be impaired, modified, changed or released in any manner
whatsoever by an impairment, modification, change, release or limitation of the
liability of the Borrower or by reason of the bankruptcy or insolvency of the
Borrower. Each Guarantor waives any and all notice of the creation, renewal,
extension or accrual of any of the Credit Party Obligations and notice of or
proof of reliance of by the Administrative Agent or any Lender upon this
Guaranty or acceptance of this Guaranty. The Credit Party Obligations, and any
of them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon this
Guaranty. All dealings between the Borrower and any of the Guarantors, on the
one hand, and the Administrative Agent and the Lenders, on the other hand,
likewise shall be conclusively presumed to have been had or consummated in
reliance upon this Guaranty. The Guarantors further agree to all rights of
set-off as set forth in Section 11.2.

                    4.3 Modifications.

          Each Guarantor agrees that (a) all or any part of the collateral, if
any, now or hereafter held for the Credit Party Obligations, if any, may be
exchanged, compromised or surrendered from time to time; (b) the Lenders shall
not have any obligation to protect, perfect, secure or insure any such security
interests, liens or encumbrances now or hereafter held, if any, for the Credit
Party Obligations or the properties subject thereto; (c) the time or place of
payment of the Credit Party Obligations may be changed or extended, in whole or
in part, to a time certain or otherwise, and may be renewed or accelerated, in
whole or in part; (d) the Borrower and any other party liable for payment under
the Credit Documents may be granted indulgences generally; (e) any of the
provisions of the Notes or any of the other Credit Documents may be modified,
amended or waived; (f) any party (including any co-guarantor) liable for the
payment thereof may be granted indulgences or be released; and (g) any deposit
balance for the credit of the Borrower or any other party liable for the payment
of the Credit Party Obligations or liable upon any security therefor may be
released, in whole or in part, at, before or after the stated, extended or
accelerated maturity of the Credit Party Obligations, all without notice to or
further assent by such Guarantor, which shall remain bound thereon,
notwithstanding any such exchange, compromise, surrender, extension, renewal,
acceleration, modification, indulgence or release.

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                    4.4 Waiver of Rights.

          Each Guarantor expressly waives to the fullest extent permitted by
applicable law: (a) notice of acceptance of this Guaranty by the Lenders and of
all extensions of credit to the Borrower by the Lenders; (b) presentment and
demand for payment or performance of any of the Credit Party Obligations; (c)
protest and notice of dishonor or of default (except as specifically required in
the Credit Agreement) with respect to the Credit Party Obligations or with
respect to any security therefor; (d) notice of the Lenders obtaining, amending,
substituting for, releasing, waiving or modifying any security interest, lien or
encumbrance, if any, hereafter securing the Credit Party Obligations, or the
Lenders’ subordinating, compromising, discharging or releasing such security
interests, liens or encumbrances, if any; and (e) all other notices to which
such Guarantor might otherwise be entitled.

                    4.5 Reinstatement.

          The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit Party
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Administrative Agent and each Lender on demand for all reasonable costs and
expenses (including, without limitation, reasonable Attorney Costs) incurred by
the Administrative Agent or such Lender in connection with such rescission or
restoration, including any such costs and expenses incurred in defending against
any claim alleging that such payment constituted a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or similar law.

                    4.6 Remedies.

          The Guarantors agree that, as between the Guarantors, on the one hand,
and the Administrative Agent and the Lenders, on the other hand, the Credit
Party Obligations may be declared to be forthwith due and payable as provided in
Section 9 (and shall be deemed to have become automatically due and payable in
the circumstances provided in Section 9) notwithstanding any stay, injunction or
other prohibition preventing such declaration (or preventing such Credit Party
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or such Credit Party
Obligations being deemed to have become automatically due and payable), such
Credit Party Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors.

                    4.7 Limitation of Guaranty.

          Notwithstanding any provision to the contrary contained herein or in
any of the other Credit Documents, to the extent the obligations of any
Guarantor shall be adjudicated to be invalid or unenforceable for any reason
(including, without limitation, because of any applicable state or federal law
relating to fraudulent conveyances or transfers) then the obligations of such
Guarantor hereunder shall be limited to the maximum amount that is permissible
under applicable law (whether federal or state or otherwise and including,
without limitation, the Bankruptcy Code).

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                    4.8 Rights of Contribution.

          The Credit Parties agree among themselves that, in connection with
payments made hereunder, each Credit Party shall have contribution rights
against the other Credit Parties as permitted under applicable law. Such
contribution rights shall be subordinate and subject in right of payment to the
obligations of the Credit Parties under the Credit Documents and no Credit Party
shall exercise such rights of contribution until all Credit Party Obligations
have been paid in full and the Commitments terminated.

                    4.9 Release of Guarantors.

          Subject to Section 7.12(b), if any of the Guarantors shall cease to be
a Material Domestic Subsidiary of the Borrower for any reason subject to and in
accordance with the terms of the Credit Agreement, then such Guarantor shall,
automatically and without any further action on the part of any party to any
Credit Document, and upon notice to the Administrative Agent, be fully released
and discharged from all its liabilities and obligations under or in respect of
the Credit Documents to which such Guarantor is a party (other than liabilities
and obligations resulting from a demand on such Guarantor’s Guaranty pursuant to
Section 9.2) and, promptly upon the request of the Borrower and at the expense
of the Borrower, the Administrative Agent shall execute such documents and take
such other action as is reasonably requested by the Borrower to evidence the
release and discharge of such Guarantor from all such liabilities and
obligations and shall, if applicable, certify to the Borrower that such
Guarantor has no liabilities or obligations resulting from a demand on such
Guarantor’s Guaranty pursuant to Section 9.2.

SECTION 5

CONDITIONS PRECEDENT

                    5.1 Closing Conditions to Extensions of Credit Made on the
Closing Date.

          The obligation of the Lenders to make the initial Extensions of Credit
is subject to satisfaction (or waiver) of the following conditions:

 

 

 

 

          (a) Executed Credit Documents. Receipt by the Administrative Agent of
duly executed copies of: (i) this Credit Agreement; (ii) the Notes requested by
Lenders prior to the Closing Date; and (iii) all other Credit Documents, each in
form and substance reasonably acceptable to the Lenders in their sole
discretion.

 

 

 

          (b) Authority Documents. Receipt by the Administrative Agent of the
following with respect to each Credit Party:

 

 

 

 

          (i) Organizational Documents. Copies of the articles or certificates
of incorporation or other organizational documents of each Credit Party
certified to be true and complete as of a recent date by the appropriate
Governmental Authority of the state or other jurisdiction of its formation and
certified by a secretary or assistant secretary of such Credit Party to be true
and correct as of the Closing Date.

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          (ii) Bylaws. A copy of the bylaws or other governing documents of each
Credit Party certified by a secretary or assistant secretary of such Credit
Party to be true and correct as of the Closing Date.

 

 

 

 

 

          (iii) Resolutions. Copies of resolutions of the Board of Directors or
other governing body of each Credit Party approving and adopting the Credit
Documents to which it is a party, the transactions contemplated therein and
authorizing execution and delivery thereof, certified by a secretary or
assistant secretary of such Credit Party to be true and correct and in full
force and effect as of the Closing Date.

 

 

 

 

 

          (iv) Good Standing. Copies of certificates of good standing, existence
or its equivalent with respect to each Credit Party certified as of a recent
date by the appropriate Governmental Authority of the state or other
jurisdiction of its formation.

 

 

 

 

 

          (v) Incumbency. An incumbency certificate of each Credit Party
certified by a secretary or assistant secretary of such Credit Party to be true
and correct as of the Closing Date.

 

 

 

 

          (c) Opinions of Counsel. Receipt by the Administrative Agent of
opinions reasonably satisfactory to the Administrative Agent, addressed to the
Administrative Agent on behalf of the Lenders and dated as of the Closing Date.

 

 

 

          (d) Consents. Receipt by the Administrative Agent of evidence that all
necessary governmental, shareholder and third party consents and approvals, if
any, have been received and no condition or Requirement of Law exists which
would reasonably be likely to restrain, prevent or impose any material adverse
conditions on the transactions contemplated hereby.

 

 

 

          (e) Officer’s Certificate. The Borrower shall have delivered a
certificate of an Authorized Officer in substantially the form of Exhibit
5.1(e).

 

 

 

          (f) Existing Debt. (A) Receipt by the Administrative Agent of “payoff
letters” (or the like) or other evidence satisfactory to it that (i) the Amended
and Restated Credit Agreement, dated as of April 20, 2004, among the Borrower,
certain of the Borrower’s subsidiaries, as Guarantors, the Lenders (as defined
therein), and Bank of America, N.A., as Administrative Agent, (ii) the Interim
Credit Agreement, dated as of January 31, 2007, among the Borrower, certain of
the Borrower’s subsidiaries, as Guarantors, the Lenders (as defined therein),
and Bank of America, N.A., as Administrative Agent, (iii) the 10% Senior
Subordinated Note due 2014 of Ameripath Holdings, Inc., and (iv) the Credit
Agreement, dated as of January 31, 2006, and as amended on September 27, 2006,
by and among Ameripath Holdings, Inc., Ameripath, Inc., Wachovia Bank, N.A.,
Citigroup Global Markets Inc., Deutsche Bank Securities Inc., UBS Securities
LLC, and Wachovia Capital Markets, LLC have been paid in full (or will be paid
in full with the proceeds of the initial Loans made hereunder) and all
agreements and notes executed or delivered in connection therewith have been
cancelled

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or terminated, (B) receipt by the Administrative Agent of evidence satisfactory
to it that funds sufficient to defease the Floating Rate PIK Toggle Notes of
Ameripath Intermediate Holdings, Inc. shall have been deposited with the trustee
thereunder from the proceeds of the initial Loans made hereunder, and (C)
evidence satisfactory to the Administrative Agent that the tender offer (the “10
½ Subordinated Note Tender Offer”) for the 10½% Senior Subordinated Notes due
2013 of AmeriPath, Inc. shall have been commenced.

 

 

 

          (g) Fees and Expenses. Payment by the Credit Parties of all fees (and
all expenses for which invoices have been presented at least three Business Days
prior to the Closing Date) owed by them as of the Closing Date to the Agents and
the Lenders, including, without limitation, as set forth in the Fee Letter.

 

 

 

          (h) Five-Year Credit Agreement. The Five-Year Credit Agreement shall
have been duly executed and be in full force and effect.

 

 

 

          (i) Consummation of Ameripath Acquisition. The Lead Arrangers shall
have received evidence reasonably satisfactory to it that the Ameripath
Acquisition shall have been concurrently consummated in accordance with the
Merger Agreement (as in effect on the date hereof).

 

 

 

          (j) Financial Projections. The Administrative Agent shall have
received financial projections prepared on a pro forma basis giving effect to
the Transaction as if the Transaction had occurred as of the most recent fiscal
quarter ended prior to the Closing Date (the “Projections”). The Borrower shall
have prepared the Projections in good faith and based upon reasonable
assumptions.

 

 

 

          (k) Patriot Act Disclosures. The Lenders shall have received all
Patriot Act Disclosures reasonably requested by them prior to execution of this
Credit Agreement.

 

 

 

          (l) Material Adverse Effect. Since April 15, 2007, there shall not
have been a Material Adverse Effect (as defined in the Merger Agreement as in
effect on the date hereof).

 

 

 

          (m) [Intentionally Omitted].

 

 

 

          (n) Termination Date. The Termination Date shall not have occurred.

 

 

 

          (o) Other. Receipt by the Administrative Agent of such other customary
closing documents, certificates and instruments, as reasonably and timely
requested by the Administrative Agent.

 

 

 

          5.2 Conditions to All Other Extensions of Credit.

 

 

          In addition to the conditions precedent stated elsewhere herein, the
Lenders shall not be obligated to make Loans nor shall the Issuing Lender be
required to issue or extend a Letter of Credit in each case, after the Closing
Date and excluding the initial funding of the Loans hereunder, unless, as of the
date thereof:

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          (a) Notice. The Borrower shall have delivered in the case of any Loan,
to the Administrative Agent, an appropriate Notice of Borrowing, duly executed
and completed, by the time specified in Section 2.1.

 

 

 

          (b) Representations and Warranties. The representations and warranties
made by the Credit Parties in this Agreement or any Credit Document are true and
correct in all material respects at and as if made as of such date except to the
extent they expressly and exclusively relate to an earlier date in which case
such representations and warranties shall be true and correct as of such earlier
date.

 

 

 

          (c) No Default. No Default or Event of Default shall exist and be
continuing either prior to or after giving effect to such Extension of Credit.

 

 

 

          (d) Availability. Immediately after giving effect to the making of a
Loan (and the application of the proceeds thereof) the sum of all outstanding
Bridge Loans shall not exceed the Bridge Loan Committed Amount and, immediately
after giving effect to the making of a Delayed Draw Bridge Loan (and the
application of the proceeds thereof) the sum of all outstanding Delayed Draw
Bridge Loans shall not exceed the Delayed Draw Committed Amount.

 

 

The delivery of each Notice of Borrowing shall constitute a representation and
warranty by the Borrower of the correctness of the matters specified in
subsections (b), (c), and (d) above.

 

SECTION 6

 

REPRESENTATIONS AND WARRANTIES

 

 

The Credit Parties hereby represent to the Administrative Agent and each Lender
that:

 

 

 

          6.1 Organization and Good Standing.

 

 

          Each Credit Party (a) is either a partnership, a corporation or a
limited liability company duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) is duly qualified
and in good standing as a foreign organization and authorized to do business in
every other jurisdiction where its ownership or operation of property or the
conduct of its business would require it to be qualified, in good standing and
authorized, unless the failure to be so qualified, in good standing or
authorized would not have or would not reasonably be expected to have a Material
Adverse Effect and (c) has the power and authority to own and operate its
properties and to carry on its business as now conducted and as currently
proposed to be conducted.

 

 

          6.2 Due Authorization.

 

 

          Each Credit Party (a) has the power and authority to execute, deliver
and perform this Credit Agreement and the other Credit Documents to which it is
a party and to incur the obligations herein and therein provided for and (b) has
duly taken all necessary action to authorize, and is duly authorized, to
execute, deliver and perform this Credit Agreement and the other Credit
Documents to which it is a party.

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                    6.3 Enforceable Obligations.

          Each Credit Party has duly executed this Credit Agreement and each
other Credit Document to which such Credit Party is a party and this Credit
Agreement and such other Credit Documents constitute legal, valid and binding
obligations of such Credit Party enforceable against such Credit Party in
accordance with their respective terms, except as may be limited by bankruptcy
or insolvency laws or similar laws affecting creditors’ rights generally or by
general equitable principles.

                    6.4 No Conflicts.

          Neither the execution and delivery of the Credit Documents to which it
is a party, nor the consummation of the transactions contemplated herein and
therein, nor the performance of or compliance with the terms and provisions
hereof and thereof by a Credit Party will (a) violate, contravene or conflict
with any provision of such Credit Party’s organizational documents, (b) violate,
contravene or conflict with any Requirement of Law (including, without
limitation, Regulations T, U or X), order, writ, judgment, injunction, decree,
license or permit applicable to such Credit Party which violation would have or
would reasonably be expected to have a Material Adverse Effect, (c) violate,
contravene or conflict with contractual provisions of, or cause an event of
default under, any indenture, loan agreement, mortgage, deed of trust, contract
or other agreement or instrument to which such Credit Party is a party or by
which it or its properties may be bound which violation would have or would
reasonably be expected to have a Material Adverse Effect, or (d) result in or
require the creation of any Lien upon or with respect to the properties of such
Credit Party.

                    6.5 Consents.

          Except for consents, approvals and authorizations which have been
obtained or the absence of which would not have or would not reasonably be
expected to have a Material Adverse Effect, no consent, approval, authorization
or order of, or filing, registration or qualification with, any Governmental
Authority, equity owner or third party in respect of any Credit Party is
required in connection with the execution, delivery or performance of this
Credit Agreement or any of the other Credit Documents, or the consummation of
any transaction contemplated herein or therein by such Credit Party.

                    6.6 Financial Condition.

          The financial statements delivered to the Administrative Agent and the
Lenders pursuant to Sections 7.1(a) and (b): (a) have been prepared in
accordance with GAAP and (b) present fairly the consolidated financial
condition, results of operations and cash flows of the Borrower and its
Subsidiaries as of such date and for such periods. Since December 31, 2006,there
has been no sale, transfer or other disposition by the Borrower or any of its
Subsidiaries of any material part of the business or property of the Borrower
and its Subsidiaries, taken as a whole, or purchase or other acquisition by any
such Person of any business or property (including any Capital Stock of any
other Person) material in relation to the consolidated financial condition of
the Borrower and its Subsidiaries, taken as a whole, in each case, which, is not
(i) reflected in the most recent financial statements delivered to the Lenders
prior to the date hereof or pursuant to Section 7.1 or in the notes

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thereto or (ii) otherwise permitted by the terms of this Credit Agreement and
communicated to the Administrative Agent and the Lenders.

                    6.7 Intentionally Omitted.

                    6.8 Disclosure.

          Neither this Credit Agreement, nor any other Credit Document, nor any
financial statements delivered to the Administrative Agent or the Lenders nor
any other document, certificate or statement furnished to the Administrative
Agent or the Lenders by or on behalf of any Credit Party in connection with the
transactions contemplated hereby, taken as a whole, contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained therein or herein not misleading.

                    6.9 No Default.

          No Default or Event of Default has occurred and is continuing or would
result from the consummation of the transactions contemplated by this Credit
Agreement and the other Credit Documents.

                    6.10 Litigation.

          Except as set forth in Schedule 6.10, no litigation, investigation,
claim, criminal prosecution, civil investigative demand, imposition of criminal
or civil fines and penalties, or any other proceeding of or before any
arbitrator or Governmental Authority is pending or, to the knowledge of the
Borrower, threatened by or against the Borrower or any of its Subsidiaries or
against any of its or their respective Properties (a) with respect to the Credit
Documents or any Loan or any of the transactions contemplated hereby or (b)
which would reasonably be expected to have a Material Adverse Effect.

                    6.11 Taxes.

          The Borrower and each of its Subsidiaries has filed, or caused to be
filed, all material tax returns (federal, state, local and foreign) required to
be filed and has paid (a) all amounts of taxes shown thereon to be due
(including interest and penalties) and (b) all other material taxes, fees,
assessments and other governmental charges (including mortgage recording taxes,
documentary stamp taxes and intangibles taxes) owing by it, except for such
taxes (i) which are not yet delinquent or (ii) that are being contested in good
faith and by proper proceedings, and against which adequate reserves are being
maintained in accordance with GAAP.

                    6.12 Compliance with Law.

          Except to the extent the same would not have or would not reasonably
be expected to have a Material Adverse Effect:

          (a) The Borrower and each of its Subsidiaries is in compliance with
all Requirements of Law (including, without limitation, Environmental Laws,
ERISA,

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HIPAA, Medicaid Regulations and Medicare Regulations) and all material orders,
writs, injunctions and decrees applicable to it, or to its Properties.

 

 

 

          (b) (i) Neither the Borrower nor any of its Subsidiaries nor any
individual employed by the Borrower or any of its Subsidiaries has been, or may
reasonably be expected to be, excluded or suspended from participation in any
Medical Reimbursement Program for their corporate or individual actions or
failures to act; and (ii) there is no member of management continuing to be
employed by the Borrower or any of its Subsidiaries who has been, or may
reasonably be expected to have, individual criminal culpability for healthcare
matters under investigation by any Governmental Authority unless such member of
management has been, within a reasonable period of time after discovery of such
actual or potential culpability, either suspended or removed from positions of
responsibility related to those activities under challenge by the Governmental
Authority.

 

 

 

          (c) Current billing policies, arrangements, protocols and instructions
comply with all material requirements of Medical Reimbursement Programs and are
administered by properly trained personnel.

 

 

 

          (d) Current medical director compensation arrangements and other
arrangements with referring physicians comply with state and federal
self-referral and anti-kickback laws, including without limitation 42 U.S.C.
Section 1320a-7b(b)(1) - (b)(2) and 42 U.S.C. Section 1395nn.

 

 

 

          6.13 Licensing and Accreditation.

 

 

          Except to the extent the same would not have or would not be
reasonably expected to have a Material Adverse Effect, each of the Credit
Parties has, to the extent applicable: (a) obtained and maintains in good
standing all required licenses, permits, authorization and approvals of each
Governmental Authority necessary to the conduct of its business; (b) to the
extent prudent and customary in the industry in which it is engaged, obtained
and maintains accreditation from all generally recognized accrediting agencies
(including, but not limited to, CAP); (c) obtained and maintains CLIA
certification; (d) entered into and maintains in good standing its Medicare
Provider Agreements and its Medicaid Provider Agreements; and (e) ensured that
all such required licenses, certifications and accreditations are in full force
and effect on the date hereof and have not been revoked or suspended or
otherwise limited.

 

 

          6.14 Title to Properties, Liens.

 

 

          The Borrower and each of its Subsidiaries, is the owner of, and has
good title to, or has a valid license or lease to use, all of its material
Properties. All Liens on the Properties of the Borrower and its Subsidiaries are
Permitted Liens.

 

 

          6.15 Insurance.

 

 

          The properties of the Borrower and each of its Subsidiaries are
insured with financially sound and reputable insurance companies that are not
Affiliates of the Borrower (except to the

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extent that self-insurance is maintained in reasonable amounts), in such
amounts, with such deductibles and covering such risks, as is reasonable and
prudent.

 

 

 

          6.16 Use of Proceeds.

 

 

 

The proceeds of the Loans will be used solely for the purposes specified in
Section 7.10.

 

 

 

          6.17 Government Regulation.

 

 

 

          (a) “Margin stock” within the meaning of Regulation U does not
constitute more than 25% of the value of the consolidated assets of the Borrower
and its Subsidiaries. None of the transactions contemplated by the Credit
Documents (including, without limitation, the direct or indirect use of the
proceeds of the Loans) will violate or result in a violation of (i) the
Securities Act, (ii) the Exchange Act or (iii) Regulations T, U or X.

 

 

 

          (b) Neither the Borrower nor any of its Subsidiaries is subject to
regulation under the Federal Power Act or the Investment Company Act of 1940,
each as amended.

 

 

 

          6.18 ERISA.

 

 

 

Except as would not result in or would not reasonably be expected to result in a
Material Adverse Effect:

 

 

 

          (a) (i) No ERISA Event has occurred, and, to the best knowledge of the
Borrower, each of its Subsidiaries and each ERISA Affiliate, no event or
condition has occurred or exists as a result of which any ERISA Event could
reasonably be expected to occur, with respect to any Plan; (ii) no “accumulated
funding deficiency,” as such term is defined in Section 302 of ERISA and Section
412 of the Code, whether or not waived, has occurred with respect to any Plan
and no application for a funding waiver or an extension of any amortization
period pursuant to Section 412 of the Code has been made with respect to any
Plan; (iii) each Plan has been maintained, operated, and funded in compliance
with its own terms and in material compliance with the provisions of ERISA, the
Code, and any other applicable federal or state laws; (iv) each Plan that is
intended to qualify under Section 401(a) of the Code has received a favorable
determination letter from the IRS or an application for such a letter is
currently being processed by the IRS with respect thereto and, to the best
knowledge of the Borrower, each of its Subsidiaries and each ERISA Affiliate,
nothing has occurred which would prevent, or cause the loss of, such
qualification; and (v) no Lien in favor of the PBGC or a Plan has arisen or is
reasonably likely to arise on account of any Plan.

 

 

 

          (b) Neither the Borrower nor any Subsidiary of the Borrower nor any
ERISA Affiliate has incurred, or, to the best of each such party’s knowledge, is
reasonably expected to incur, any liability under Title IV of ERISA with respect
to any Single Employer Plan, or any withdrawal liability under ERISA to any
Multiemployer Plan or Multiple Employer Plan. Neither the Borrower nor any
Subsidiary of the Borrower nor any ERISA Affiliate has received any notification
that any Multiemployer Plan is in reorganization (within the meaning of Section
4241 of ERISA), is insolvent (within the

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meaning of Section 4245 of ERISA), or has been terminated (within the meaning of
Title IV of ERISA), and no Multiemployer Plan is, to the best of each such
Person’s knowledge, reasonably expected to be in reorganization, insolvent, or
terminated. Neither the Borrower nor any Subsidiary of the Borrower nor any
ERISA Affiliate has engaged in a transaction that could be subject to Sections
4069 or 4212(c) of ERISA.

 

 

 

          (c) No prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Code) or breach of fiduciary responsibility has
occurred with respect to a Plan which has subjected or may subject the Borrower,
any Subsidiary of the Borrower or any ERISA Affiliate to any liability under
Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the Code, or
under any agreement or other instrument pursuant to which the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate has agreed or is required to
indemnify any person against any such liability. There are no pending or, to the
best knowledge of the Borrower, each of its Subsidiaries and each ERISA
Affiliate, threatened claims, actions or lawsuits, or action by any Governmental
Authority, with respect to any Plan that could reasonably be expected to have a
Material Adverse Effect.

 

 

 

          (d) Each Plan that is a welfare plan (as defined in Section 3(1) of
ERISA) to which Sections 601-609 of ERISA and Section 4980B of the Code apply
has been administered in compliance in all material respects with such sections.

 

 

 

          6.19 Environmental Matters.

 

 

 

          (a) Except as would not result in or would not reasonably be expected
to result in a Material Adverse Effect:

 

 

 

 

 

          (i) Each of the real properties owned, leased or operated by the
Borrower or any of its Subsidiaries (the “Real Properties”) and all operations
at the Real Properties are in compliance with all applicable Environmental Laws,
and there is no violation of any Environmental Law with respect to the Real
Properties or the businesses operated by the Borrower or any of its Subsidiaries
(the “Businesses”), and there are no conditions relating to the Businesses or
Real Properties that would reasonably be expected to give rise to liability
under any applicable Environmental Laws.

 

 

 

 

 

          (ii) No Credit Party has received any written notice of, or inquiry
from any Governmental Authority regarding, any violation, alleged violation,
non-compliance, liability or potential liability regarding Hazardous Materials
or compliance with Environmental Laws with regard to any of the Real Properties
or the Businesses, nor, to the knowledge of the Borrower or any of its
Subsidiaries, is any such notice being threatened.

 

 

 

 

 

          (iii) Hazardous Materials have not been transported or disposed of
from the Real Properties, or generated, treated, stored or disposed of at, on or
under any of the Real Properties or any other location, in each case by, or on
behalf or with

50

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the permission of, the Borrower or any of its Subsidiaries in a manner that
would give rise to liability under any applicable Environmental Laws.

 

 

 

 

 

          (iv) No judicial proceeding or governmental or administrative action
is pending or, to the knowledge of the Borrower or any of its Subsidiaries,
threatened, under any Environmental Law to which the Borrower or any of its
Subsidiaries is or will be named as a party, nor are there any consent decrees
or other decrees, consent orders, administrative orders or other orders, or
other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Borrower or any of its Subsidiaries, the
Real Properties or the Businesses.

 

 

 

 

 

          (v) There has been no release (including, without limitation,
disposal) or threat of release of Hazardous Materials at or from the Real
Properties, or arising from or related to the operations of the Borrower or any
of its Subsidiaries in connection with the Real Properties or otherwise in
connection with the Businesses where such release constituted a violation of, or
would give rise to liability under, any applicable Environmental Laws.

 

 

 

 

 

          (vi) None of the Real Properties contains, or has previously
contained, any Hazardous Materials at, on or under the Real Properties in
amounts or concentrations that, if released, constitute or constituted a
violation of, or could give rise to liability under, Environmental Laws.

 

 

 

 

 

          (vii) Neither the Borrower, nor any of its Subsidiaries, has assumed
any liability of any Person (other than among themselves) under any
Environmental Law.

 

 

 

 

          (b) The Credit Parties have adopted procedures that are designed to
(i) ensure that each Credit Party, any of its operations and each of the Real
Properties complies with applicable Environmental Laws and (ii) minimize any
liabilities or potential liabilities that each Credit Party, any of its
operations and each of the Real Properties may have under applicable
Environmental Laws.

 

 

 

 

6.20 Intellectual Property.

          The Borrower and each of its Subsidiaries owns, or has the legal right
to use, all material patents, trademarks, tradenames, copyrights, technology,
know-how and processes (the “Intellectual Property”) necessary for each of them
to conduct its business as currently conducted other than as would not have or
would not be reasonably expected to have a Material Adverse Effect. No claim has
been asserted and is pending by any Person challenging or questioning the use of
any Intellectual Property owned by the Borrower or any of its Subsidiaries or
that the Borrower or any of its Subsidiaries has a right to use or the validity
or effectiveness of any such Intellectual Property, nor does the Borrower or any
of its Subsidiaries have knowledge of any such claim, and, to the knowledge of
the Borrower and its Subsidiaries, the use of any Intellectual Property by the
Borrower and its Subsidiaries does not infringe on the rights of any Person,
except for such claims

51

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and infringements that in the aggregate, would not have or would not reasonably
be expected to have a Material Adverse Effect.

                    6.21 Subsidiaries.

          As of the date hereof, set forth on Schedule 6.21 is a complete and
accurate list of all Subsidiaries of the Borrower and which of such Subsidiaries
are Material Domestic Subsidiaries.

                    6.22 Solvency.

          Each Credit Party is and, after consummation of the transactions
contemplated by this Credit Agreement, will be Solvent.

                    6.23 Taxpayer Identification Number.

          The Borrower’s true and correct U.S. taxpayer identification number is
set forth on Schedule 6.23.

SECTION 7

AFFIRMATIVE COVENANTS

          Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect and until the Loans, together with interest and
fees and other obligations then due and payable hereunder, have been paid in
full:

                    7.1 Information Covenants.

          The Credit Parties will furnish, or cause to be furnished, to the
Administrative Agent and each of the Lenders an electronic (if readily
available) and a hard copy of:

 

 

 

          (a) Annual Financial Statements. As soon as available, and in any
event within the earlier of (i) 95 days after the close of each fiscal year of
the Borrower or (ii) ten Business Days after the date the Borrower files its
Form 10-K with the Securities and Exchange Commission, a consolidated balance
sheet and income statement of the Borrower and its Subsidiaries, as of the end
of such fiscal year, together with related consolidated statements of
operations, cash flows and changes in stockholders’ equity for such fiscal year,
setting forth in comparative form consolidated figures for the preceding fiscal
year, all such consolidated financial information described above to be audited
by independent certified public accountants of recognized national standing and
whose opinion shall be to the effect that such financial statements fairly
present in all material respects the consolidated financial position, results of
operations and cash flows of the Borrower and its Subsidiaries as at the end of,
and for, such fiscal year in accordance with GAAP and shall not be limited as to
the scope of the audit or qualified in any manner.

 

 

 

          (b) Quarterly Financial Statements. As soon as available, and in any
event within the earlier of (i) 50 days after the close of each of the first
three fiscal quarters of

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the Borrower or (ii) ten Business Days after the date the Borrower files its
Form 10-Q with the Securities and Exchange Commission, a consolidated balance
sheet and income statement of the Borrower and its Subsidiaries, as of the end
of such fiscal quarter, together with related consolidated statements of
operations, cash flows and changes in stockholders’ equity for such fiscal
quarter setting forth in each case in comparative form the corresponding
consolidated statements of operations and cash flows for the corresponding
period of the preceding fiscal year, and accompanied by a certificate of an
Authorized Officer of the Borrower to the effect that such quarterly financial
statements fairly present in all material respects the consolidated financial
condition of the Borrower and its Subsidiaries and in accordance with GAAP,
subject to changes resulting from audit and normal year-end audit adjustments.
Notwithstanding the above, it is understood and agreed that delivery of the
Borrower’s applicable Form 10-Q shall satisfy the requirements of this Section
7.1(b).

 

 

 

          (c) Officer’s Certificate. At the time of delivery of the financial
statements provided for in Sections 7.1(a) and 7.1(b) above, a certificate of an
Authorized Officer of the Borrower substantially in the form of Exhibit 7.1(c),
(i) demonstrating compliance with the financial covenants contained in Section
7.2 and the covenant requirements in Section 7.12(b) by calculation thereof as
of the end of each such fiscal period, (ii) demonstrating compliance with any
other terms of this Credit Agreement as reasonably requested by the
Administrative Agent, (iii) stating that no Default or Event of Default exists,
or if any Default or Event of Default does exist, specifying the nature and
extent thereof and what action the Borrower proposes to take with respect
thereto and (iv) updating Schedule 6.21 as of the end of such fiscal period.

 

 

 

          (d) Reports. Promptly upon transmission or receipt thereof, copies of
all financial statements, proxy statements, notices and reports as the Borrower
or any of its Subsidiaries shall send to shareholders of the Borrower generally
and, upon request of the Administrative Agent, copies of any filings and
registrations with, and reports to or from, any Governmental Authority which has
regulatory authority with respect to the Borrower and its Subsidiaries.

 

 

 

          (e) Notices. Upon a Credit Party obtaining knowledge thereof, the
Borrower will give written notice to the Administrative Agent promptly (and in
any event within five Business Days) of (i) the occurrence of an event or
condition consisting of a Default or Event of Default, specifying the nature and
existence thereof and what action the Borrower proposes to take with respect
thereto, (ii) the occurrence of any of the following with respect to the
Borrower or any of its Subsidiaries (A) the pendency or commencement of any
litigation, arbitration or governmental proceeding against the Borrower or any
of its Subsidiaries which (x) would have or would reasonably be expected to have
a Material Adverse Effect, or (y) would result in a significant liability to the
Credit Parties or (B) material non-compliance with, or the institution of any
proceedings against the Borrower or any of its Subsidiaries with respect to, or
the receipt of written notice by such Person of potential liability or
responsibility for violation, or alleged violation of, any Requirement of Law
(including, without limitation, Environmental Laws) the violation of which would
have or would reasonably be expected to have a Material Adverse Effect ,(iii)
any change to the Debt Rating of the

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Borrower, and (iv) any investigation or proceeding against the Borrower or any
of its Subsidiaries to suspend, revoke or terminate, any Medicaid Provider
Agreement, Medicare Provider Agreement, or exclusion from any Medical
Reimbursement Program, which is reasonably expected to have a Material Adverse
Effect.

 

 

 

          (f) ERISA. Upon the Borrower, any Subsidiary of the Borrower or any
ERISA Affiliate obtaining knowledge thereof, such Person shall give written
notice to the Administrative Agent and each of the Lenders promptly (and in any
event within two Business Days) of the occurrence of any of the following events
which has had or would be reasonably expected to have a Material Adverse Effect:
(i) any Reportable Event, that constitutes an ERISA Event; (ii) with respect to
any Multiemployer Plan, the receipt of notice as prescribed in ERISA or
otherwise of any withdrawal liability assessed against the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate, or of a determination that
any Multiemployer Plan is in reorganization or insolvent (both within the
meaning of Title IV of ERISA); (iii) the failure to make full payment on or
before the due date (including extensions) thereof of all amounts which the
Borrower, any Subsidiary of the Borrower or any ERISA Affiliate is required to
contribute to each Plan pursuant to its terms and as required to meet the
minimum funding standard set forth in ERISA and the Code with respect thereto;
or (iv) any change in the funding status of any Plan that could have a Material
Adverse Effect; in each case together with a description of any such event or
condition or a copy of any such notice and a statement by an Authorized Officer
of the Borrower briefly setting forth the details regarding such event,
condition, or notice, and the action, if any, which has been or is being taken
or is proposed to be taken by such Person with respect thereto. Promptly upon
request, the Credit Parties shall furnish the Administrative Agent and the
Lenders with such additional information concerning any Plan as may be
reasonably requested, including, but not limited to, copies of each annual
report/return (Form 5500 series), as well as all schedules and attachments
thereto required to be filed with the Department of Labor and/or the Internal
Revenue Service pursuant to ERISA and the Code, respectively, for each “plan
year” (within the meaning of Section 3(39) of ERISA).

 

 

 

          (g) Environmental.

 

 

 

 

 

          (i) Subsequent to a written notice from any Governmental Authority
that would reasonably be expected to result in a Material Adverse Effect, or
during the existence of an Event of Default, and upon the written request of
Administrative Agent, the Credit Parties will furnish or cause to be furnished
to the Administrative Agent, at the Credit Parties’ expense, a report of an
environmental assessment of reasonable scope, form and depth, including, where
appropriate, invasive soil or groundwater sampling, by a consultant reasonably
acceptable to the Administrative Agent addressing the subject of such notice or,
if during the existence of an Event of Default, regarding any release or threat
of release of Hazardous Materials on any Property owned, leased or operated by a
Credit Party and the compliance by the Credit Parties with Environmental Laws.
If the Credit Parties fail to deliver such an environmental report within
seventy-five (75) days after receipt of such written request, then the
Administrative Agent may arrange for same, and the Credit Parties hereby grant
to the Administrative

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Agent and its representatives access to the Real Properties and a license of a
scope reasonably necessary to undertake such an assessment (including, where
appropriate, invasive soil or groundwater sampling). The reasonable cost of any
assessment arranged for by the Administrative Agent pursuant to this provision
will be payable by the Credit Parties on demand.

 

 

 

 

 

          (ii) Each Credit Party will conduct and complete, or cause to be
conducted and completed, all investigations, studies, sampling, and testing and
all remedial, removal, and other actions necessary to address all Hazardous
Materials on, from, or affecting any Real Properties to the extent necessary to
be in compliance with all Environmental Laws and all other applicable federal,
state, and local laws, regulations, rules and policies and with the orders and
directives of all Governmental Authorities exercising jurisdiction over such
Real Properties to the extent any failure would have or would reasonably be
expected to have a Material Adverse Effect.

 

 

 

 

          (h) Other Information. With reasonable promptness upon any such
request, such other information regarding the business, properties or financial
condition of the Borrower and its Subsidiaries as the Administrative Agent may
reasonably request.

 

 

 

          (i) Public/Private Information. The Borrower hereby acknowledges that
(i) the Administrative Agent will make available to the Lenders materials and/or
information provided by or on behalf of the Borrower hereunder (collectively,
“Borrower Materials”) by posting the Borrower Materials on IntraLinks or another
similar electronic system (the “Platform”) and (ii) certain of the Lenders may
be “public-side” Lenders (i.e., Lenders that do not wish to receive material
non-public information with respect to the Borrower or its securities) (each, a
“Public Lender”). The Borrower hereby agrees that (A) all Borrower Materials
that are to be made available to the Public Lenders shall be clearly and
conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word
“PUBLIC” shall appear prominently on the first page thereof; (B) by marking
Borrower Materials “PUBLIC”, the Borrower shall be deemed to have authorized the
Administrative Agent and the Lenders to treat such Borrower Materials as either
publicly available information or not material information (although it may be
sensitive and proprietary) with respect to the Borrower or its securities for
purposes of United States federal and state securities laws; (C) all Borrower
Materials marked “PUBLIC” are permitted to be made available through a portion
of the Platform designated as “Public”; and (D) the Administrative Agent shall
be entitled to treat any Borrower Materials that are not marked “PUBLIC” as
being suitable only for posting on a portion of the Platform not marked
“Public”. Notwithstanding the foregoing, the Borrower shall be under no
obligation to mark any Borrower Materials “PUBLIC”.

 

 

 

          (j) Electronic Delivery. Documents required to be delivered pursuant
to Section 7.1(a) or (b) (to the extent any such documents are included in
materials otherwise filed with the Securities and Exchange Commission) may be
delivered electronically and if so delivered, shall be deemed to have been
delivered on the date (i) on which the Borrower posts such documents, or
provides a link thereto on the Borrower’s website on the Internet at the website
address listed on Schedule 11.1 or

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(ii) on which such documents are posted on the Borrower’s behalf on an Internet
or intranet website, if any, to which each Lender and the Administrative Agent
have access (whether a commercial, third-party website or whether sponsored by
the Administrative Agent); provided that: (A) the Borrower shall deliver paper
copies of such documents to the Administrative Agent or any Lender that requests
the Borrower to deliver such paper copies until a written request to cease
delivering paper copies is given by the Administrative Agent or such Lender and
(B) the Borrower shall notify (which may be facsimile or electronic mail) the
Administrative Agent and each Lender of the posting of any such documents and
provide to the Administrative Agent by electronic mail electronic versions
(i.e., soft copies) of such documents. Notwithstanding anything contained
herein, in every instance the Borrower shall be required to provide paper copies
of the compliance certificates required by Section 7.1(c) to the Administrative
Agent. Except for such compliance certificates, the Administrative Agent shall
have no obligation to request the delivery or to maintain copies of the
documents referred to above, and in any event shall have no responsibility to
monitor compliance by the Borrower with any such request for delivery, and each
Lender shall be solely responsible for requesting delivery to it or maintaining
its copies of such documents.

 

 

 

          7.2 Financial Covenants.

 

 

 

          (a) Leverage Ratio. The Leverage Ratio, as of the last day of each
fiscal quarter of the Borrower, shall be less than or equal to (x) 3.50 to 1.0
through June 30, 2008 and (y) 3.25 to 1.0 thereafter.

 

 

 

          (b) Interest Coverage Ratio. The Interest Coverage Ratio, as of the
last day of each fiscal quarter of the Borrower, shall be greater than or equal
to 3.5 to 1.0.

 

 

 

          7.3 Preservation of Existence and Franchises.

          The Borrower will, and will cause its Subsidiaries to, do all things
necessary to preserve and keep in full force and effect its existence, rights,
franchises, Intellectual Property and authority except as permitted by Section
8.4; provided that neither the Borrower nor any of its Subsidiaries shall be
required to preserve any rights, franchises, Intellectual Property or authority
if the Borrower or such Subsidiary shall determine that the preservation thereof
is no longer desirable in the conduct of its business and if the loss thereof
would not have or would not reasonably be expected to have a Material Adverse
Effect.

                    7.4 Books and Records.

          The Borrower will, and will cause its Subsidiaries to, keep complete
and accurate books and records of its transactions in order to produce its
financial statements in accordance with GAAP (including the establishment and
maintenance of appropriate reserves).

                    7.5 Compliance with Law.

          Except to the extent the failure to do so would not have or would not
reasonably be expected to have a Material Adverse Effect, the Borrower will, and
will cause each of its Subsidiaries to, (a) comply with all Requirements of Law,
and all applicable restrictions imposed by all

56

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Governmental Authorities, applicable to it and its Property (including, without
limitation, Environmental Laws and ERISA), (b) conform with and duly observe in
all material respects all laws, rules and regulations and all other valid
requirements of any regulatory authority with respect to the conduct of its
business, including without limitation, HIPAA, Medicare Regulations, Medicaid
Regulations, and all laws, rules and regulations of Governmental Authorities,
pertaining to the business of the Credit Parties; (c) obtain and maintain all
licenses, permits, certifications and approvals of all applicable Governmental
Authorities as are required for the conduct of its business as currently
conducted and herein contemplated, including without limitation professional
licenses, CLIA certifications, Medicare Provider Agreements and Medicaid
Provider Agreements; (d) ensure that (i) billing policies, arrangements,
protocols and instructions will comply with reimbursement requirements under
Medicare, Medicaid and other Medical Reimbursement Programs and will be
administered by properly trained personnel; (ii) medical director compensation
arrangements and other arrangements with referring physicians will comply with
applicable state and federal self-referral and anti-kickback laws, including
without limitation 42 U.S.C. Section 1320a-7b(b)(1) - (b)(2) 42 U.S.C. and 42
U.S.C. Section 1395nn; and (iii) no event or related events occur that results
in the exclusion of the Borrower or any of its Subsidiaries from participation
in any Medical Reimbursement Program and (e) make commercially reasonable
efforts to implement policies that are consistent with HIPAA on or before the
date that any Credit Party is required to comply therewith.

                    7.6 Payment of Taxes and Other Indebtedness.

          The Borrower will, and will cause its Subsidiaries to, pay, settle or
discharge (a) all material taxes, assessments and governmental charges or levies
imposed upon it, or upon its income or profits, or upon any of its properties,
before they shall become delinquent, (b) all material lawful claims (including
claims for labor, materials and supplies) which, if unpaid, might give rise to a
Lien upon any of its properties, and (c) all of its other material Indebtedness
as it shall become due (to the extent such repayment is not otherwise prohibited
by this Credit Agreement); provided, however, that a Credit Party shall not be
required to pay any such tax, assessment, charge, levy, claim or Indebtedness
which is being contested in good faith by appropriate proceedings and as to
which adequate reserves therefor have been established in accordance with GAAP,
unless the failure to make any such payment (i) would give rise to an immediate
right to foreclose or collect on a Lien securing such amounts or (ii) would have
or would reasonably be expected to have a Material Adverse Effect.

                    7.7 Insurance.

          The Borrower will, and will cause each of its Subsidiaries to, at all
times maintain in full force and effect insurance (including worker’s
compensation, liability, casualty and business interruption insurance) with
reputable national companies that are not Affiliates of the Borrower (except to
the extent that self-insurance is maintained in reasonable amounts), in such
amounts, covering such risks and liabilities as is reasonable and prudent.

                    7.8 Maintenance of Property.

          The Borrower will, and will cause its Subsidiaries to, maintain and
preserve its properties and equipment in good repair, working order and
condition, normal wear and tear excepted, and will

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make, or cause to be made, in such properties and equipment from time to time
all repairs, renewals, replacements, extensions, additions, betterments and
improvements thereto as may be needed or proper, in each case to the extent and
in the manner customary for companies in similar businesses.

                    7.9 Performance of Obligations.

          Except to the extent the failure to do so would not have or would not
reasonably be expected to have a Material Adverse Effect, the Borrower will, and
will cause its Subsidiaries to, perform all of its obligations under the terms
of all contracts, agreements or other agreements not evidencing Indebtedness to
which it is a party or by which it or its Properties may be bound.

                    7.10 Use of Proceeds.

          The Borrower will use the proceeds of the Loans solely for the
Transactions; provided, however, that the proceeds of any Delayed Draw Bridge
Loans shall be used solely for the purpose of paying the principal of, and any
accrued and unpaid interest on, Ameripath’s existing debt as set forth below,
together with related fees and expenses:

 

 

 

          (a) the 10% Senior Subordinated Note due 2014 of Ameripath Holdings,
Inc.,

 

 

 

          (b) the Credit Agreement, dated as of January 31, 2006, and as amended
on September 27, 2006, by and among Ameripath Holdings, Inc., Ameripath, Inc.,
Wachovia Bank, N.A., Citigroup Global Markets Inc., Deutsche Bank Securities
Inc., UBS Securities LLC, and Wachovia Capital Markets, LLC

 

 

 

          (c) the Floating Rate PIK Toggle Notes of Ameripath Intermediate
Holdings, Inc., and

 

 

 

          (d) the 10½% Senior Subordinated Notes due 2013 of AmeriPath, Inc.

                    7.11 Audits/Inspections.

          Upon reasonable notice and during normal business hours, but not more
than once per calendar year, the Borrower will, and will cause each of its
Subsidiaries to, permit representatives appointed by the Administrative Agent or
any Lender, including, without limitation, independent accountants, agents,
attorneys and appraisers to visit and inspect the Borrower’s or any Subsidiary’s
Property, including its books and records, its accounts receivable and
inventory, its facilities and its other business assets, and to make photocopies
or photographs thereof and to write down and record any information such
representative obtains and shall permit the Administrative Agent, any Lender or
its representatives to investigate and verify the accuracy of information
provided to the Administrative Agent or the Lenders and to discuss all such
matters with the officers, employees and representatives of the Borrower and/or
its Subsidiaries; provided, however, during the existence of a Default or Event
of Default, the Administrative Agent and the Lenders may request as many
inspections as reasonable under the circumstances. Any expenses incurred in
connection with this Section 7.11 shall be for the account of the Lenders unless
an Event of Default exists in which case such expenses shall be for the account
of the Borrower. Any representatives appointed by the Administrative Agent shall
sign a confidentiality agreement reasonably acceptable to the Borrower prior to
any visit, investigation, inspection or verification permitted by this Section
7.11.

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                    7.12 Additional Credit Parties.

 

 

 

          (a) At the time any Person becomes a Material Domestic Subsidiary or
at the time any Subsidiary of the Borrower guaranties the Five-Year Credit
Agreement or any other Pari Passu Debt (if it is not already a Guarantor), the
Borrower shall so notify the Administrative Agent and promptly thereafter (but
in any event within 30 days) shall cause such Person to (i) execute a Joinder
Agreement in substantially the same form as Exhibit 7.12, thereby, among other
things, causing such Person to become a Guarantor, and (ii) deliver such other
documentation as the Administrative Agent may reasonably request in connection
with the foregoing, including, without limitation, certified resolutions and
other organizational and authorizing documents of such Person and favorable
opinions of counsel to such Person (which shall cover, among other things, the
legality, validity, binding effect and enforceability of the documentation
referred to above), all in form, content and scope reasonably satisfactory to
the Administrative Agent.

 

 

 

          (b) If at any time Non-Material Domestic Subsidiaries own assets in an
aggregate amount greater than five percent (5%) of Total Assets or produce
revenues in an aggregate amount greater than five percent (5%) of the total
revenues of the Borrower and its Subsidiaries on a consolidated basis, the
Borrower will designate one or more Non-Material Domestic Subsidiaries to become
a Guarantor (and such Non-Material Domestic Subsidiary shall become a Guarantor
in accordance with clause (a) above) so that after giving effect to such
designation and action, Non-Material Domestic Subsidiaries own assets in the
aggregate of equal to or less than five percent (5%) of Total Assets and produce
revenues in an aggregate amount equal to or less than five percent (5%) of the
total revenues of the Borrower and its Subsidiaries on a consolidated basis.

                    7.13 Compliance Program.

          The Borrower will, and will cause each of its Domestic Subsidiaries
that operates a clinical laboratory to, maintain, and be operated in accordance
with, a compliance program which is reasonably designed to provide effective
internal controls that promote adherence to applicable federal and state law and
the program requirements of federal and state health plans, and which includes
the implementation of internal audits and monitoring on a regular basis to
monitor compliance with the requirements of the compliance program and
applicable law, regulations and company policies.

SECTION 8

NEGATIVE COVENANTS

          Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect and until the Loans, together with interest, fees
and other obligations then due and payable hereunder, have been paid in full:

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                    8.1 Indebtedness.

          The Borrower will not permit any of its Subsidiaries to, contract,
create, incur, assume or permit to exist any Indebtedness, other than:

 

 

 

          (a) Guaranty Obligations arising under this Credit Agreement and the
other Credit Documents;

 

 

 

          (b) [Intentionally Omitted];

 

 

 

          (c) Indebtedness in respect of current accounts payable and accrued
expenses incurred in the ordinary course of business;

 

 

 

          (d) Indebtedness owing by a Subsidiary of the Borrower to the Borrower
or another Subsidiary of the Borrower;

 

 

 

          (e) purchase money Indebtedness (including Capital Leases) to finance
the purchase of fixed assets (including equipment); provided that (i) the total
of all such Indebtedness shall not exceed an aggregate principal amount of
$100,000,000 (less any purchase money Indebtedness incurred by the Borrower) at
any one time outstanding; (ii) such Indebtedness when incurred shall not exceed
the purchase price of the asset(s) financed; and (iii) no such Indebtedness
shall be refinanced for a principal amount in excess of the principal balance
outstanding thereon at the time of such refinancing;

 

 

 

          (f) Indebtedness arising from Permitted Receivables Financings in an
amount not to exceed $600,000,000, in the aggregate (less any Indebtedness
incurred by the Borrower arising from Permitted Receivables Financings), at any
one time outstanding;

 

 

 

          (g) Indebtedness evidenced by Hedging Agreements entered into in the
ordinary course of business and not for speculative purposes;

 

 

 

          (h) Any guaranty of Indebtedness of the Borrower;

 

 

 

          (i) Indebtedness incurred after the Closing Date in connection with
the acquisition of a Person or Property as long as such Indebtedness existed
prior to such acquisition and was not created in anticipation thereof;

 

 

 

          (j) Indebtedness existing on the date hereof as set forth on Schedule
8.1;

 

 

 

          (k) Indebtedness incurred after the Closing Date by Foreign
Subsidiaries in an amount not to exceed $400,000,000 (or the Dollar equivalent
thereof) in the aggregate at any time outstanding; and

 

 

 

          (l) other unsecured Indebtedness in an amount not to exceed
$200,000,000, in the aggregate, at any one time outstanding.

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                    8.2 Liens.

          The Borrower will not, nor will it permit its Subsidiaries to,
contract, create, incur, assume or permit to exist any Lien with respect to any
of its Property of any kind (whether real or personal, tangible or intangible),
whether now owned or after acquired, other than Permitted Liens.

                    8.3 Nature of Business.

          The Borrower will not, nor will it permit its Subsidiaries to, alter
the character of its business from that conducted as of the date hereof or
engage in any substantial manner in any business other than (a) the business
conducted by the Borrower and its Subsidiaries as of the date hereof and (b)
other healthcare-related businesses and businesses reasonably related thereto.

                    8.4 Consolidation and Merger.

          The Borrower will not, nor will it permit any Subsidiary to, enter
into any transaction of merger or consolidation or liquidate, wind up or
dissolve itself, or suffer any such liquidation, wind-up or dissolution;
provided that (subject to Sections 7.12 and 7.13) (a) a Subsidiary of the
Borrower may merge into the Borrower or another Subsidiary of the Borrower, (b)
a Subsidiary of the Borrower may merge or consolidate with another Person in a
transaction otherwise permitted by Section 8.5 or (c) the Borrower or a
Subsidiary of the Borrower may merge or consolidate with or into another Person
if the following conditions are satisfied:

 

 

 

          (i) if such transaction involves total consideration (cash and
non-cash) in excess of $750,000,000, the Administrative Agent is given prompt
written notice of such action;

 

 

 

          (ii) if the merger or consolidation involves a Credit Party, the
surviving entity of such merger or consolidation shall either (A) be such Credit
Party or (B) be a Subsidiary of the Borrower and expressly assume in writing all
of the obligations of such Credit Party under the Credit Documents; provided
that if the transaction is between the Borrower and another Person, the Borrower
must be the surviving entity;

 

 

 

          (iii) the Credit Parties execute and deliver such documents,
instruments and certificates as the Administrative Agent may reasonably request;
and

 

 

 

          (iv) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing.

                    8.5 Sale or Lease of Assets.

          The Borrower will not, nor will it permit its Subsidiaries to, convey,
sell, lease, transfer or otherwise voluntarily dispose of, in one transaction or
a series of transactions, all or any part of its business or assets whether now
owned or hereafter acquired, including, without limitation, inventory,
receivables, equipment, real property interests (whether owned or leasehold) and
securities, other than a sale, lease, transfer or other disposal of (a) subject
to Sections 7.12 and 7.13, assets from the Borrower or one of its Subsidiaries
to each other; (b) inventory and supplies in the

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ordinary course of business; (c) obsolete, surplus, slow-moving, idle or
worn-out assets no longer used or useful in the business of such Credit Party or
the trade-in of equipment for equipment in better condition or of better
quality; (d) assets which constitute a Permitted Investment in the ordinary
course of business; (e) Receivables pursuant to a Permitted Receivables
Financing; (f) Investments in the Strategic Investments Portfolio and (g) assets
of the Borrower and its Subsidiaries, in addition to those permitted above in
this Section 8.5; provided that in the case of this clause (g) (i) no Event of
Default exists prior to such transfer, (ii) no Default or Event of Default
exists after giving effect to such transfer and (iii) after giving effect to
such transfer, the aggregate amount of all such transfers, calculated on a net
book value basis, does not exceed ten percent (10%) of Total Assets, as
determined on the last day of the most recently ended fiscal quarter of the
Borrower for which an officer’s certificate has been delivered pursuant to
Section 7.1(c).

                    8.6 Investments.

          The Borrower will not, nor will it permit its Subsidiaries to, make or
permit to exist any Investments except for Permitted Investments.

                    8.7 Transactions with Affiliates.

          The Borrower will not, nor will it permit its Subsidiaries to, enter
into any transaction or series of transactions, whether or not in the ordinary
course of business, with any officer, director, shareholder, Subsidiary or
Affiliate other than on terms and conditions substantially as favorable as would
be obtainable in a comparable arm’s-length transaction with a Person other than
an officer, director, shareholder, Subsidiary or Affiliate, except that,
notwithstanding the foregoing, each of the following shall be permitted:
(a) transactions between or among the Credit Parties; (b) transactions between
or among the Borrower and its wholly owned Subsidiaries as long as such
transaction is not disadvantageous to the Lenders in any material respect;
(c) transactions between or among the Borrower or one or more of its wholly
owned Subsidiaries (on the one hand) and one of the non-wholly owned
Subsidiaries of the Borrower (on the other hand) as long as none of the equity
of such non-wholly owned Subsidiary is owned or controlled by an officer or
director of any Credit Party;(d) advances to employees permitted by clause (f)
of the definition of Permitted Investments; (e) Dividends; (f) fees,
compensation and other benefits paid to, and customary indemnity and
reimbursement provided on behalf of, officers, directors and employees of any
Credit Party in the ordinary course of business; (g) any employment agreements
entered into by the Borrower or any of its Subsidiaries in the ordinary course
of business; (h) any Permitted Receivables Financing; and (i) transactions and
agreements in existence on the date hereof and listed on Schedule 8.7 and, in
each case, any amendment thereto, that is not disadvantageous to the Lenders in
any material respect.

                    8.8 Fiscal Year; Accounting; Organizational Documents.

          The Borrower will not, nor will it permit its Subsidiaries to, unless
such action (i) would not affect the calculation of the financial covenants in
Section 7.2 and (ii) would not or would not reasonably be likely to affect the
rights of the Lenders under the Credit Documents: (a) change its fiscal year
other than changing the fiscal year of a Subsidiary of the Borrower to a
calendar year

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end, (b) change its accounting procedures, except as a result of changes in GAAP
and in accordance with Section 1.3 or (c) change its organizational or governing
documents.

                    8.9 Stock Repurchases.

          The Borrower will not, nor will it permit its Subsidiaries to,
directly or indirectly, purchase, redeem or otherwise acquire or retire or make
any provisions for redemption, acquisition or retirement of any shares of the
Capital Stock of the Borrower of any class or any warrants or options to
purchase any such shares (collectively, a “Stock Repurchase”); provided that the
Borrower or its Subsidiaries may consummate Stock Repurchases as long as on the
date of such Stock Repurchase and after giving effect to such Stock Repurchase
no Default or Event of Default exists and is continuing.

                    8.10 Sale/Leasebacks.

 

 

 

          (a) Except as set forth in clause (b) below, the Borrower will not,
and will not permit any Subsidiary to, enter into any Sale and Leaseback
Transaction with respect to any Principal Property unless:

 

 

 

          (i) the Sale and Leaseback Transaction is solely with the Borrower or
a Guarantor; or

 

 

 

          (ii) the lease is for a period not in excess of five years, including
renewal rights; or

 

 

 

          (iii) prior to or within 270 days after the completion of the sale of
such Principal Property in connection with the Sale and Leaseback Transaction,
the Borrower or its Subsidiary applies the net cash proceeds of the sale of such
Principal Property to: (A) a prepayment pursuant to Section 8.10(a)(iii)(A) of
the Five-Year Credit Agreement; or (B) the acquisition of different property,
facilities or equipment or the expansion of the Borrower and its Subsidiaries’
existing business, including the acquisition of other businesses.

 

 

 

          (b) In addition to the Sale and Leaseback Transactions permitted by
clause (a) above, the Borrower or any of its Subsidiaries may enter into any
Sale and Leaseback Transactions if all Attributable Debt (measured, in each
case, at the time such Sale and Leaseback Transaction is entered into by the
Borrower or its Subsidiary) in respect of such Sale and Leaseback Transactions
(not including any Sale and Leaseback Transactions permitted under clause (a)
above), in the aggregate, does not exceed 5% of Total Assets.

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SECTION 9

EVENTS OF DEFAULT

                    9.1 Events of Default.

          An Event of Default shall exist upon the occurrence, and during the
continuation, of any of the following specified events (each an “Event of
Default”):

 

 

 

          (a) Payment. Any Credit Party shall default in the payment (i) when
due of any principal of any of the Loans, whether hereunder, under any Guaranty
or otherwise, or (ii) within three Business Days of when due of any interest on
the Loans or any fees or other amounts owing hereunder, under any Guaranty or
other Credit Documents or in connection herewith or therewith.

 

 

 

          (b) Representations. Any representation, warranty or statement made or
deemed to be made by any Credit Party herein, in any of the other Credit
Documents, or in any statement or certificate delivered or required to be
delivered pursuant hereto or thereto shall prove untrue in any material respect
on the date as of which it was made or deemed to have been made.

 

 

 

          (c) Covenants. Any Credit Party shall:

 

 

 

          (i) default in the due performance or observance of any term, covenant
or agreement contained in Sections 7.2, 7.3, 7.10 or 7.12 or Section 8
inclusive;

 

 

 

          (ii) default in the due performance or observance by it of any term,
covenant or agreement contained in Section 7.1 (excepting Section 7.1(e) for
which the unremedied period shall only be five Business Days) and 7.11 and such
default shall continue unremedied for a period of ten Business Days; or

 

 

 

          (iii) default in the due performance or observance by it of any term,
covenant or agreement (other than those referred to in subsections (a), (b) or
(c)(i) or (ii) of this Section 9.1) contained in this Credit Agreement and such
default shall continue unremedied for a period of at least 30 days after the
earlier of an Authorized Officer of the Borrower becoming aware of such default
or notice thereof given by the Administrative Agent.

 

 

 

          (d) Other Credit Documents. (i) Any Credit Party shall default in the
due performance or observance of any term, covenant or agreement in any of the
other Credit Documents and such default shall continue unremedied for a period
of at least 30 days after the earlier of an Authorized Officer of the Borrower
becoming aware of such default or notice thereof given by the Administrative
Agent, (ii) any Credit Document shall fail to be in full force and effect or any
Credit Party shall so assert or (iii) any Credit Document shall fail to give the
Administrative Agent and/or the Lenders the rights, powers and privileges
purported to be created by such Credit Document.

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          (e) Guaranties. The guaranty given by the Credit Parties hereunder or
by any Additional Credit Party or material provision thereof shall cease to be
in full force and effect, or any Guarantor or any Person acting by or on behalf
of such Guarantor shall deny or disaffirm such Guarantor’s obligations under
such guaranty or such Guarantor shall default in the due payment or performance
of such guaranty.

 

 

 

          (f) Bankruptcy, etc. The occurrence of any of the following with
respect to a Credit Party (i) a court or governmental agency having jurisdiction
in the premises shall enter a decree or order for relief in respect of a Credit
Party in an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or appoint a receiver, liquidator,
assignee, custodian, trustee, sequestrator, administrator or similar official of
a Credit Party or for any substantial part of its Property or ordering the
winding up or liquidation of, or an administrator in respect of, its affairs; or
(ii) an involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect is commenced against a Credit Party and
such petition remains unstayed and in effect for a period of 60 consecutive
days; or (iii) a Credit Party shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or consent to the entry of an order for relief in an involuntary case
under any such law, or consent to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator, administrator
or similar official of such Person or any substantial part of its Property or
make any general assignment for the benefit of creditors; or (iv) a Credit Party
shall fail generally, or shall admit in writing its inability, to pay its debts
as they become due or any action shall be taken by such Person in furtherance of
any of the aforesaid purposes.

 

 

 

          (g) Defaults under Other Indebtedness. With respect to any
Indebtedness in excess of $150,000,000 (other than Indebtedness outstanding
under this Credit Agreement) of the Borrower or any of its Subsidiaries (A) such
Person shall (x) default in any payment (beyond the applicable grace period with
respect thereto, if any) with respect to any such Indebtedness, or (y) default
(after giving effect to any applicable grace period) in the observance or
performance of any covenant or agreement relating to such Indebtedness or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event or condition shall occur or condition exist, the
effect of which default or other event or condition is to cause, or permit, the
holder or holders of such Indebtedness (or trustee or agent on behalf of such
holders, if any) to require (determined without regard to whether any notice or
lapse of time is required) any such Indebtedness to become due prior to its
stated maturity; or (B) any such Indebtedness shall be declared due and payable,
or required to be prepaid other than by a regularly scheduled required
prepayment prior to the stated maturity thereof; or (C) any such Indebtedness
shall mature and remain unpaid.

 

 

 

          (h) Judgments. One or more judgments, orders, or decrees shall be
entered against any one or more of the Borrower and its Subsidiaries involving a
liability of $150,000,000 or more, in the aggregate, (to the extent not paid,
covered by insurance provided by a carrier who has acknowledged coverage or
covered by an indemnification from Corning Incorporated or SmithKline Beecham
PLC) and such judgments, orders or decrees (i) are the subject of any
enforcement proceeding commenced by any creditor or

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(ii) shall continue unsatisfied, undischarged and unstayed for a period ending
on the first to occur of (A) the last day on which such judgment, order or
decree becomes final and unappealable or (B) 60 days.

 

 

 

          (i) ERISA. The occurrence of any of the following events or conditions
which individually or in the aggregate has had or would reasonably be expected
to have a Material Adverse Effect: (i) any “accumulated funding deficiency,” as
such term is defined in Section 302 of ERISA and Section 412 of the Code,
whether or not waived, shall exist with respect to any Plan, other than a
Multiemployer Plan, or any Lien shall arise on the assets of the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate in favor of the PBGC or a
Plan, other than a Multiemployer Plan; (ii) an ERISA Event shall occur with
respect to a Single Employer Plan, which is reasonably likely to result in the
termination of such Plan for purposes of Title IV of ERISA; (iii) an ERISA Event
shall occur with respect to a Multiemployer Plan or Multiple Employer Plan,
which is reasonably likely to result in (A) the termination of such plan for
purposes of Title IV of ERISA, or (B) the Borrower, any Subsidiary of the
Borrower or any ERISA Affiliate incurring any liability in connection with a
withdrawal from, reorganization of (within the meaning of Section 4241 of
ERISA), or insolvency (within the meaning of Section 4245 of ERISA) of such
plan; (iv) any prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Code) or breach of fiduciary responsibility shall
occur which may subject the Borrower, any Subsidiary of the Borrower or any
ERISA Affiliate to any liability under Sections 406, 409, 502(i), or 502(l) of
ERISA or Section 4975 of the Code, or under any agreement or other instrument
pursuant to which the Borrower, any Subsidiary of the Borrower or any ERISA
Affiliate has agreed or is required to indemnify any Person against any such
liability; or (v) the Borrower, any Subsidiary of the Borrower or any ERISA
Affiliate fails to pay when due, after the expiration of any applicable grace
period, any installment payment with respect to its withdrawal liability under
Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in
excess of $150,000,000.

 

 

 

          (j) Ownership. There shall occur a Change of Control.

 

 

 

          (k) Borrower Material Adverse Effect. Any event or other circumstance
shall have occurred or come into effect on or prior to the Closing Date which
shall have resulted in a Material Adverse Effect which shall be continuing on
the 45th day following the Closing Date.

 

 

 

          9.2 Acceleration; Remedies.

          Upon the occurrence and during the continuation of an Event of
Default, the Administrative Agent may or shall, upon the request and direction
of the Required Lenders, take the following actions without prejudice to the
rights of the Administrative Agent or any Lender to enforce its claims against
the Credit Parties, except as otherwise specifically provided for herein:

 

 

 

          (a) Termination of Commitments. Declare the Commitments terminated
whereupon the Commitments shall be immediately terminated.

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          (b) Acceleration of Loans. Declare the unpaid principal of and any
accrued interest in respect of all Loans and any and all other Indebtedness or
obligations of any and every kind owing by a Credit Party to any of the Lenders
under the Credit Documents to be due whereupon the same shall be immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Credit Parties.

 

 

 

          (c) Enforcement of Rights. To the extent permitted by law, enforce any
and all rights and interests created and existing under the Credit Documents,
including, without limitation, all rights and remedies against a Guarantor and
all rights of set-off.

Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(f) shall occur, then all Loans, all accrued interest in respect thereof, all
accrued and unpaid fees and other indebtedness or obligations owing to the
Lenders hereunder shall immediately become due and payable without the giving of
any notice or other action by the Administrative Agent or the Lenders, which
notice or other action is expressly waived by the Credit Parties.

Notwithstanding the fact that enforcement powers reside primarily with the
Administrative Agent, each Lender has, to the extent permitted by law, a
separate right of payment and shall be considered a separate “creditor” holding
a separate “claim” within the meaning of Section 101(5) of the Bankruptcy Code
or any other insolvency statute.

                    9.3 Allocation of Payments After Event of Default.

          Notwithstanding any other provisions of this Credit Agreement, after
the exercise of any remedies by the Administrative Agent or the Lenders pursuant
to Section 9.2 (or after any Event of Default that all of the Credit Party
Obligations to be due hereunder), all amounts collected or received by the
Administrative Agent or any Lender on account of amounts outstanding under any
of the Credit Documents shall be paid over or delivered as follows:

 

 

 

          FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable Attorney Costs) of the
Administrative Agent or any of the Lenders in connection with enforcing the
rights of the Lenders under the Credit Documents, pro rata as set forth below;

 

 

 

          SECOND, to payment of any fees owed to the Administrative Agent or any
Lender, pro rata as set forth below;

 

 

 

          THIRD, to the payment of all accrued interest payable to the Lenders
hereunder, pro rata as set forth below;

 

 

 

          FOURTH, to the payment of the outstanding principal amount of the
Loans, pro rata as set forth below;

 

 

 

          FIFTH, to all other obligations which shall have become due and
payable under the Credit Documents and not repaid pursuant to clauses “FIRST”
through “FOURTH” above; and

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          SIXTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.

In carrying out the foregoing, (a) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category and (b) each of the Lenders shall receive an amount equal to
its pro rata share (based on the proportion that the then outstanding Loans held
by such Lender bears to the aggregate then outstanding Loans of amounts
available to be applied.

SECTION 10

AGENCY PROVISIONS

 

 

 

          10.1 Appointment.

 

 

 

          (a) Each Lender hereby irrevocably appoints, designates and authorizes
the Administrative Agent to take such action on its behalf under the provisions
of this Credit Agreement and each other Credit Document and to exercise such
powers and perform such duties as are expressly delegated to it by the terms of
this Credit Agreement or any other Credit Document, together with such powers as
are reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Credit Document, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall the Administrative Agent have or be deemed to have any
fiduciary or trustee relationship with any Lender or participant, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Credit Agreement or any other Credit Document or otherwise
exist against the Administrative Agent. Without limiting the generality of the
foregoing sentence, the use of the term “agent” herein and in the other Credit
Documents with reference to the Administrative Agent is not intended to connote
any fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable law. Instead, such term is used merely as a matter of
market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties.

 

 

 

          (b) Each of (i) Morgan Stanley in its capacity as Syndication Agent
and (ii) Barclays Bank PLC, JPMorgan Chase Bank, N.A., Merrill Lynch Bank, USA
and Wachovia Bank, National Association in their capacities as Co-Documentation
Agents shall have no duties or obligations whatsoever under this Credit
Agreement or the other Credit Documents.

 

 

 

          10.2 Delegation of Duties.

          The Administrative Agent may execute any of its duties under this
Credit Agreement or any other Credit Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel and other
consultants or experts concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agent or attorney-in-fact that it selects with reasonable care.

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          10.3 Exculpatory Provisions.

          No Agent-Related Person shall (a) be liable for any action taken or
omitted to be taken by any of them under or in connection with this Credit
Agreement or any other Credit Document or the transactions contemplated hereby
(except for its own gross negligence or willful misconduct in connection with
its duties expressly set forth herein), or (b) be responsible in any manner to
any Lender or participant for any recital, statement, representation or warranty
made by any Credit Party or any officer thereof, contained herein or in any
other Credit Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Administrative Agent
under or in connection with, this Credit Agreement or any other Credit Document,
or the validity, effectiveness, genuineness, enforceability or sufficiency of
this Credit Agreement or any other Credit Document, or for any failure of any
Credit Party or any other party to any Credit Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Lender or participant to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Credit Agreement or any other Credit Document, or to inspect the
properties, books or records of any Credit Party or any Affiliate thereof.

 

 

 

          10.4 Reliance on Communications.

 

 

 

          (a) The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex or telephone message, statement 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 counsel to any Credit Party), independent accountants
and other experts selected by the Administrative Agent. The Administrative Agent
may deem and treat each Lender as the owner of its interests hereunder for all
purposes unless a written notice of assignment, negotiation or transfer thereof
shall have been delivered to the Administrative Agent in accordance with Section
11.3(b). The Administrative Agent shall be fully justified in failing or
refusing to take any action under any Credit Document unless it shall first
receive such advice or concurrence of the Required Lenders as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Credit Agreement or any other Credit Document
in accordance with a request or consent of the Required Lenders or all the
Lenders, if required hereunder, and such request and any action taken or failure
to act pursuant thereto shall be binding upon all the Lenders and participants,
and their respective successors and assigns. Where this Credit Agreement
expressly permits or prohibits an action unless the Required Lenders otherwise
determine, the Administrative Agent shall, and in all other instances, the
Administrative Agent may, but shall not be required to, initiate any
solicitation for the consent or a vote of the Lenders.

 

 

 

          (b) For purposes of determining compliance with the conditions
specified in Section 5.1, each Lender that has signed this Credit Agreement
shall be deemed to have

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consented to, approved or accepted or to be satisfied with, each document or
other matter either sent by the Administrative Agent to such Lender for consent,
approval, acceptance or satisfaction, or required thereunder to be consented to
or approved by or acceptable or satisfactory to a Lender.

 

 

 

          10.5 Notice of Default.

          The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default, except with respect
to defaults in the payment of principal, interest and fees required to be paid
to the Administrative Agent for the account of the Lenders, unless the
Administrative Agent shall have received written notice from a Lender or the
Borrower referring to this Credit Agreement, describing such Default or Event of
Default and stating that such notice is a “notice of default.” The
Administrative Agent will notify the Lenders of its receipt of any such notice.
The Administrative Agent shall take such action with respect to such Default or
Event of Default as may be reasonably directed by the Required Lenders in
accordance with Section 9.2; provided, however, that unless and until the
Administrative Agent has received any such direction, the Administrative Agent
may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of Default as it shall deem
advisable or in the best interest of the Lenders.

 

 

 

          10.6 Non-Reliance on Administrative Agent and Other Lenders.

          Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative Agent
hereinafter taken, including any consent to and acceptance of any assignment or
review of the affairs of any Credit Party or any Affiliate thereof, shall be
deemed to constitute any representation or warranty by any Agent-Related Person
to any Lender as to any matter, including whether Agent-Related Persons have
disclosed material information in their possession. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
any Agent-Related Person or any other Lender and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, Property, financial and
other condition and creditworthiness of the Credit Parties and their respective
Affiliates, and all applicable bank or other regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Credit Agreement and to extend credit to the Borrower hereunder. Each Lender
also represents that it will, independently and without reliance upon any
Agent-Related Person or any other 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 Credit Agreement and the other Credit Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, Property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent herein, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, Property, financial and other
condition or creditworthiness of any of the Credit Parties or any of their
respective Affiliates which may come into the possession of any Agent-Related
Person.

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                    10.7 Indemnification.

          To the extent that the Borrower for any reason fails to indefeasibly
pay any amount required under Section 11.5 to be paid by it to the
Administrative Agent (or any sub-agent thereof), the Issuing Lender or any
Agent-Related Person of any of the foregoing, each Lender severally agrees to
pay to the Administrative Agent (or any such sub-agent), the Issuing Lender or
such Agent-Related Person, as the case may be, such Lender’s Revolving Loan
Commitment Percentage and/or Term Loan Commitment Loan Percentage, as
applicable, (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount, provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the
Administrative Agent (or any such sub-agent) or the Issuing Lender in its
capacity as such, or against any Agent-Related Person of any of the foregoing
acting for the Administrative Agent (or any such sub-agent) or Issuing Lender in
connection with such capacity.

                    10.8 Administrative Agent in Its Individual Capacity.

          Bank of America and its Affiliates may make loans to, issue letters of
credit for the account of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial advisory, underwriting
or other business with each of the Credit Parties and their respective
Affiliates as though Bank of America were not the Administrative Agent hereunder
and without notice to or consent of the Lenders. The Lenders acknowledge that,
pursuant to such activities, Bank of America or its Affiliates may receive
information regarding any Credit Party or its Affiliates (including information
that may be subject to confidentiality obligations in favor of such Credit Party
or such Affiliate) and that the Administrative Agent shall be under no
obligation to provide such information to them. With respect to its Loans, Bank
of America shall have the same rights and powers under this Credit Agreement as
any other Lender and may exercise such rights and powers as though it were not
the Administrative Agent, and the terms “Lender” and “Lenders” include Bank of
America in its individual capacity.

                    10.9 Successor Agent.

          The Administrative Agent may resign as Administrative Agent upon 30
days’ notice to the Lenders. If the Administrative Agent resigns under this
Credit Agreement, the Required Lenders shall appoint from among the Lenders a
successor administrative agent for the Lenders which successor administrative
agent (such appointment, absent the existence of an Event of Default, to be
subject to the consent of the Borrower, which consent of the Borrower shall not
be unreasonably withheld or delayed). If no successor administrative agent is
appointed prior to the effective date of the resignation of the Administrative
Agent, the Administrative Agent may appoint, after consulting with the Lenders
and the Borrower, a successor administrative agent from among the Lenders. Upon
the acceptance of its appointment as successor administrative agent hereunder,
such successor administrative agent shall succeed to all the rights, powers and
duties of the retiring Administrative Agent and the term “Administrative Agent”
shall mean such successor administrative agent and the retiring Administrative
Agent’s appointment, powers and duties as Administrative Agent shall be
terminated. After any retiring Administrative Agent’s resignation hereunder as
Administrative Agent, the provisions of this Section 10 and Sections 11.5 and
11.10 shall continue to inure to its benefit as to any actions taken or omitted
to be taken

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by it while it was Administrative Agent under this Credit Agreement. If no
successor administrative agent has accepted appointment as Administrative Agent
by the date which is 30 days following a retiring Administrative Agent’s notice
of resignation, the retiring Administrative Agent’s resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of the
duties of the Administrative Agent hereunder until such time, if any, as the
Required Lenders appoint a successor agent as provided for above.

                    10.10 Agent May File Proofs of Claim.

          In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Borrower or any of its Subsidiaries, the
Administrative Agent (irrespective of whether the principal of any Loan shall
then be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Administrative Agent shall have made any demand on
the Borrower) shall be entitled and empowered, by intervention in such
proceeding or otherwise:

 

 

 

          (a) to file and prove a claim for the whole amount of the principal
and interest owing and unpaid in respect of the Loans and all other Credit Party
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Lenders and the
Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders and the Administrative Agent
and their respective agents and counsel and all other amounts due the Lenders
and the Administrative Agent) allowed in such judicial proceeding; and

 

 

 

          (b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under the Credit Documents.

          Nothing contained herein shall be deemed to authorize the
Administrative Agent to authorize or consent to or accept or adopt on behalf of
any Lender any plan of reorganization, arrangement, adjustment or composition
affecting the Credit Party Obligations or the rights of any Lender or to
authorize the Administrative Agent to vote in respect of the claim of any Lender
in any such proceeding.

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SECTION 11

MISCELLANEOUS

 

 

 

 

          11.1 Notices, Etc.

 

 

 

 

          (a) General. Unless otherwise expressly provided herein, all notices
and other communications provided for hereunder shall be in writing (including
by facsimile transmission). All such written notices shall be mailed certified
or registered mail, faxed or delivered to the applicable address, facsimile
number or (subject to subsection (c) below) electronic mail address, and all
notices and other communications expressly permitted hereunder to be given by
telephone shall be made to the applicable telephone number, as follows:

 

 

 

 

 

          (i) if to a Credit Party or the Administrative Agent to the address,
facsimile number, electronic mail address or telephone number specified for such
Person on Schedule 11.1 or to such other address, facsimile number, electronic
mail address or telephone number as shall be designated by such party in a
notice to the other parties; and

 

 

 

 

 

          (ii) if to any other Lender, to the address, facsimile number,
electronic mail address or telephone number specified in its administrative
questionnaire provided by the Administrative Agent or to such other address,
facsimile number, electronic mail address or telephone number as shall be
designated by such party in a notice to such Credit Party and the Administrative
Agent.

 

 

 

 

          Notices sent by hand or overnight courier service, or mailed by
certified or registered mail, shall be deemed to have been given when received;
notices sent by facsimile shall be deemed to have been given when sent (except
that, if not given during normal business hours for the recipient, shall be
deemed to have been given at the opening of business on the next business day
for the recipient). Notices delivered through electronic communications to the
extent provided in subsection (b) below, shall be effective as provided in such
subsection (b).

 

 

 

 

          (b) Electronic Communications. Notices and other communications to the
Lenders hereunder may be delivered or furnished by electronic communication
(including e-mail and Internet or intranet websites) pursuant to procedures
approved by the Administrative Agent, provided that the foregoing shall not
apply to notices to any Lender pursuant to Section 2 if such Lender has notified
the Administrative Agent that it is incapable of receiving notices under such
Section 2 by electronic communication. The Administrative Agent or the Borrower
may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it,
provided that approval of such procedures may be limited to particular notices
or communications. Unless the Administrative Agent otherwise prescribes, (i)
notices and other communications sent to an e-mail address shall be deemed
received upon the sender’s receipt of an acknowledgement from the intended
recipient (such as by the “return receipt requested” function, as available,
return e-mail or

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other written acknowledgement), provided that if such notice or other
communication is not sent during the normal business hours of the recipient,
such notice or communication shall be deemed to have been sent at the opening of
business on the next business day for the recipient, and (ii) notices or
communications posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient at its e-mail address
as described in the foregoing clause (i) of notification that such notice or
communication is available and identifying the website address therefor.

 

 

 

          (c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.”
THE AGENT-RELATED PERSONS DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE
BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF
ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY
AGENT-RELATED PERSON IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM.
In no event shall the Agent-Related Persons have any liability to the Borrower,
any Lender or any other Person for losses, claims, damages, liabilities or
expenses of any kind (whether in tort, contract or otherwise) arising out of the
Borrower’s or the Administrative Agent’s transmission of Borrower Materials
through the Internet, except to the extent that such losses, claims, damages,
liabilities or expenses are determined by a court of competent jurisdiction by a
final and nonappealable judgment to have resulted from the gross negligence or
willful misconduct of such Agent-Related Person; provided, however, that in no
event shall any Agent-Related Person have any liability to the Borrower, any
Lender or any other Person for indirect, special, incidental, consequential or
punitive damages (as opposed to direct or actual damages).

 

 

 

          (d) Effectiveness of Facsimile Documents and Signatures. Credit
Documents may be transmitted and/or signed by facsimile. The effectiveness of
any such documents and signatures shall, subject to applicable law, have the
same force and effect as manually-signed originals and shall be binding on the
Borrower, the Administrative Agent and the Lenders. The Administrative Agent may
also require that any such documents and signatures be confirmed by a
manually-signed original thereof; provided, however, that the failure to request
or deliver the same shall not limit the effectiveness of any facsimile document
or signature.

 

 

 

          (e) Reliance by Administrative Agent and Lenders. The Administrative
Agent and the Lenders shall be entitled to rely and act upon any notices
(including telephonic notices) purportedly given by or on behalf of a Credit
Party even if (i) such notices were not made in a manner specified herein, were
incomplete or were not preceded or followed by any other form of notice
specified herein, or (ii) the terms thereof, as understood by the recipient,
varied from any confirmation thereof. The Credit Parties shall indemnify each
Agent-Related Person and each Lender from all losses, costs, expenses and
liabilities resulting from the reliance by such Person on each notice

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purportedly given by or on behalf of a Credit Party. All telephonic notices to
and other communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording.

 

 

 

          (f) Change of Address, Etc. Each of the Borrower, the Administrative
Agent, the Issuing Lender and the Swing Line Lender may change its address,
telecopier or telephone number for notices and other communications hereunder by
notice to the other parties hereto. Each other Lender may change its address,
telecopier or telephone number for notices and other communications hereunder by
notice to the Borrower, the Administrative Agent, the Issuing Lender and the
Swing Line Lender. In addition, each Lender agrees to notify the Administrative
Agent from time to time to ensure that the Administrative Agent has on record
(i) an effective address, contact name, telephone number, telecopier number and
electronic mail address to which notices and other communications may be sent
and (ii) accurate wire instructions for such Lender. Furthermore, each Public
Lender agrees to cause at least one individual at or on behalf of such Public
Lender to at all times have selected the “Private Side Information” or similar
designation on the content declaration screen of the Platform in order to enable
such Public Lender or its delegate, in accordance with such Public Lender’s
compliance procedures and applicable Law, including United States Federal and
state securities Laws, to make reference to Borrower Materials that are not made
available through the “Public Side Information” portion of the Platform and that
may contain material non-public information with respect to the Borrower or its
securities for purposes of United States Federal or state securities laws.

 

 

 

          11.2 Right of Set-Off.

          In addition to any rights now or hereafter granted under applicable
law or otherwise, and not by way of limitation of any such rights, upon the
occurrence of an Event of Default and the commencement of remedies described in
Section 9.2, each Lender is authorized at any time and from time to time,
without presentment, demand, protest or other notice of any kind (all of which
rights being hereby expressly waived), to set-off and to appropriate and apply
any and all deposits (general or special) and any other indebtedness at any time
held or owing by such Lender (including, without limitation, branches, agencies
or Affiliates of such Lender wherever located) to or for the credit or the
account of any Credit Party against obligations and liabilities of such Credit
Party to the Lenders hereunder, under the Notes, the other Credit Documents or
otherwise, irrespective of whether the Administrative Agent or the Lenders shall
have made any demand hereunder and although such obligations, liabilities or
claims, or any of them, may be contingent or unmatured, and any such set-off
shall be deemed to have been made immediately upon the occurrence of an Event of
Default even though such charge is made or entered on the books of such Lender
subsequent thereto. The Credit Parties hereby agree that any Person purchasing a
participation in the Loans and Commitments hereunder pursuant to Sections
11.3(e) or 3.8 may exercise all rights of set-off with respect to its
participation interest as fully as if such Person were a Lender hereunder.

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          11.3 Benefit of Agreement.

 

 

 

          (a) Generally. The provisions of this Credit Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that the Borrower may not assign
or otherwise transfer any of its rights or obligations hereunder without the
prior written consent of each Lender and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an Eligible
Assignee in accordance with the provisions of subsection (b) of this Section,
(ii) by way of participation in accordance with the provisions of subsection (d)
of this Section, (iii) by way of pledge or assignment of a security interest
subject to the restrictions of subsection (f) of this Section or (iv) to an SPC
in accordance with the provisions of subsection (g) of this Section (and any
other attempted assignment or transfer by any party hereto shall be null and
void). Nothing in this Credit Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby, Loan Participants to the
extent provided in subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Indemnitees) any legal or equitable right, remedy or
claim under or by reason of this Credit Agreement.

 

 

 

          (b) Assignments by Lenders. Any Lender may at any time assign to one
or more assignees all or a portion of its rights and obligations under this
Credit Agreement (including all or a portion of its Commitment and the Loans at
the time owing to it); provided that any such assignment shall be subject to the
following conditions:

 

 

 

 

(i) Minimum Amounts.

 

 

 

 

 

(A) in the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment and the Loans at the time owing to it or in the case of an
assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum
amount need be assigned; and

 

 

 

 

 

(B) in any case not described in subsection (b)(i)(A) of this Section, the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or if the Commitment is not then in effect, the
principal outstanding balance of the Loans of the Assigning Lender subject to
each such assignment, determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Administrative Agent or, if
“Trade Date” is specified in the Assignment and Assumption, as of the Trade
Date, shall not be less than $5,000,000 unless each of the Administrative Agent
and, so long as no Event of Default has occurred and is continuing, the Borrower
otherwise consents (each such consent not to be unreasonably withheld or
delayed); provided, however, that concurrent assignments to members of an
Assignee Group and concurrent assignments from members of an Assignee Group to a

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single Eligible Assignee (or to an Eligible Assignee and members of its Assignee
Group) will be treated as a single assignment for purposes of determining
whether such minimum amount has been met.

 

 

 

 

          (ii) Proportionate Amounts. Each partial assignment shall be made as
an assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loans or the Commitment
assigned.

 

 

 

 

          (iii) Required Consents. No consent shall be required for any
assignment except to the extent required by subsection (b)(i)(B) of this Section
and as set forth below:

 

 

 

 

 

(A) the consent of the Borrower (such consent not to be unreasonably withheld or
delayed) shall be required unless (1) an Event of Default has occurred and is
continuing at the time of such assignment or (2) such assignment is to a Lender,
an Affiliate of a Lender or an Approved Fund; and

 

 

 

 

 

(B) the consent of the Administrative Agent (such consent not to be unreasonably
withheld or delayed) shall be required for assignments in respect of any Bridge
Loan to a Person that is not a Lender, an Affiliate of a Lender or an Approved
Fund.

 

 

 

 

          (iv) Assignment and Assumption. The parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Assumption,
together with a processing and recordation fee in the amount of $3,500;
provided, however, that the Administrative Agent may, in its sole discretion,
elect to waive such processing and recordation fee in the case of any
assignment. The assignee, if it is not a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.

 

 

 

 

          (v) No Assignment to Borrower. No such assignment shall be made to the
Borrower or any of the Borrower’s Affiliates or Subsidiaries.

 

 

 

 

          (vi) No Assignment to Natural Persons. No such assignment shall be
made to a natural person.

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the assignee thereunder shall be a party to
this Agreement and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 3.9, 3.12, 3.13, 3.14 and 11.5 with
respect to facts and circumstances

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occurring prior to the effective date of such assignment). Upon request, the
Borrower (at its expense) shall execute and deliver a Note to the assignee
Lender. Any assignment or transfer by a Lender of rights or obligations under
this Agreement that does not comply with this subsection shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with subsection (d) of this Section.

 

 

 

          (c) Register. The Administrative Agent, acting solely for this purpose
as an agent of the Borrower, shall maintain at the Agency Service Address a copy
of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”). The entries in the Register shall be
conclusive (absent manifest error), and the Borrower, the Administrative Agent
and the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Credit Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower, at any reasonable time and from time
to time upon reasonable prior notice. In addition, at any time that a request
for a consent for a material or other substantive change to the Credit Documents
is pending, any Lender wishing to consult with other Lenders in connection
therewith may request and receive from the Administrative Agent a copy of the
Register.

 

 

 

          (d) Participations. Any Lender may at any time, without the consent
of, or notice to, the Borrower or the Administrative Agent, sell participations
to any Person (other than a natural person or the Borrower or any of the
Borrower’s Affiliates or Subsidiaries or any competitor of the Borrower or any
affiliate of a competitor of the Borrower) (each, a “Loan Participant”) in all
or a portion of such Lender’s rights and/or obligations under this Credit
Agreement (including all or a portion of its Commitments and/or the Loans;
provided that (i) such Lender’s obligations under this Credit Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the Borrower,
the Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Credit Agreement. Any agreement or instrument pursuant to
which a Lender sells such a participation shall provide that such Lender shall
retain the sole right to enforce this Credit Agreement and to approve any
amendment, modification or waiver of any provision of this Credit Agreement;
provided that such agreement or instrument may provide that such Lender will
not, without the consent of the Loan Participant, agree to any amendment, waiver
or other modification that would change the amount, interest rate or maturity of
the Loans or any other matter that requires unanimous consent of all of the
Lenders. Subject to subsection (e) of this Section, the Borrower agrees that
each Loan Participant shall be entitled to the benefits of Sections 3.9, 3.13
and 3.14 to the same extent as if it were a Lender and had acquired its interest
by assignment pursuant to subsection (b) of this Section. To the extent
permitted by law, each Loan Participant also shall be entitled to the benefits
of Section 11.2 as though it were a Lender, provided such Loan Participant
agrees to be subject to Section 3.8 as though it were a Lender.

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          (e) Loan Participant’s Rights. A Loan Participant shall not be
entitled to receive any greater payment under Section 3.9 or 3.14 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Loan Participant, unless the sale of the
participation to such Loan Participant is made with the Borrower’s prior written
consent. A Loan Participant that would be a foreign Lender if it were a Lender
shall not be entitled to the benefits of Section 3.13 unless the Borrower is
notified of the participation sold to such Loan Participant and such Loan
Participant agrees, for the benefit of the Borrower, to comply with Section 3.13
as though it were a Lender.

 

 

 

          (f) Unrestricted Assignments. Any Lender may at any time pledge or
assign a security interest in all or any portion of its rights under this Credit
Agreement (including under its Note(s), if any) to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank; provided that no such pledge or assignment shall release such
Lender from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.

 

 

 

          (g) Special Purpose Entities. Notwithstanding anything to the contrary
contained herein, so long as any action in accordance with this Section 11.3(g)
does not cause increased costs or expenses for the Borrower, any Lender (a
“Granting Lender”) may grant to a special purpose funding vehicle (an “SPC”) the
option to fund all or any part of any Loan that such Granting Lender would
otherwise be obligated to fund pursuant to this Credit Agreement; provided that
(i) nothing herein shall constitute a commitment by any SPC to fund any Loan,
(ii) if an SPC elects not to exercise such option or otherwise fails to fund all
or any part of such Loan, the Granting Lender shall be obligated to fund such
Loan pursuant to the terms hereof, (iii) no SPC shall have any voting rights
pursuant to Section 11.6 and (iv) with respect to notices, payments and other
matters hereunder, the Borrower, the Administrative Agent and the Lenders shall
not be obligated to deal with an SPC, but may limit their communications and
other dealings relevant to such SPC to the applicable Granting Lender. The
funding of a Loan by an SPC hereunder shall utilize the Commitment of the
Granting Lender to the same extent that, and as if, such Loan were funded by
such Granting Lender. Each party hereto hereby agrees that no SPC shall be
liable for any indemnity or payment under this Credit Agreement for which a
Lender would otherwise be liable for so long as, and to the extent, the Granting
Lender provides such indemnity or makes such payment. Notwithstanding anything
to the contrary contained in this Credit Agreement, any SPC may disclose any
non-public information relating to its funding of Loans to any rating agency,
commercial paper dealer or provider of any surety or guarantee to such SPC so
long as such disclosure is clearly designated as being made on a confidential
basis. This Section 11.3(g) may not be amended without the prior written consent
of each Granting Lender, all or any part of whose Loan is being funded by an SPC
at the time of such amendment.

 

 

 

          (h) Electronic Execution of Assignments. The words “execution,”
“signed,” “signature,” and words of like import in any Assignment and Assumption
shall be deemed to include electronic signatures or the keeping of records in
electronic form, each of which shall be of the same legal effect, validity or
enforceability as a manually

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executed signature or the use of a paper-based recordkeeping system, as the case
may be, to the extent and as provided for in any applicable law, including the
Federal Electronic Signatures in Global and National Commerce Act, the New York
State Electronic Signatures and Records Act, or any other similar state laws
based on the Uniform Electronic Transactions Act.

 

 

 

 

          11.4 No Waiver; Remedies Cumulative.

 

 

 

          No failure or delay on the part of the Administrative Agent or any
Lender in exercising any right, power or privilege hereunder or under any other
Credit Document and no course of dealing between the Borrower or any Credit
Party and the Administrative Agent or any Lender shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights and remedies provided herein are cumulative
and not exclusive of any rights or remedies which the Administrative Agent or
any Lender would otherwise have. No notice to or demand on any Credit Party in
any case shall entitle any Credit Party to any other or further notice or demand
in similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent or the Lenders to any other or further action in any
circumstances without notice or demand.

 

 

 

 

          11.5 Payment of Expenses; Indemnification.

 

 

 

 

          (a) The Borrower shall pay on demand:

 

 

 

 

 

          (i) any and all attorneys’ fees and disbursements and out-of-pocket
costs and expenses incurred by the Administrative Agent in connection with the
development, drafting, negotiation and administration of the Credit Documents,
any amendments thereto and the syndication and closing of the transactions
contemplated thereby; and

 

 

 

 

 

          (ii) all costs and expenses (including fees and disbursements of
in-house and other attorneys, appraisers and consultants) incurred by the Agents
or the Lenders in any workout, restructuring or similar arrangements or, after
an Event of Default, in connection with the protection, preservation, exercise
or enforcement of any of the terms of the Credit Documents or in connection with
any foreclosure, collection or bankruptcy proceedings.

 

 

 

          The foregoing costs and expenses shall include all out-of-pocket
expenses incurred by the Administrative Agent and the cost of independent public
accountants and other outside experts retained by the Administrative Agent or
any Lender. If requested by the Borrower, the Administrative Agent or a Lender,
as applicable, will furnish to the Borrower, within ten Business Days of such
request, a certificate setting forth the basis in reasonable detail with respect
to any amounts requested under this Section 11.5(a). All amounts due under this
Section 11.5(a) shall be payable within twenty Business Days after demand
therefor. The agreements in this Section shall survive the termination of the
Commitments and repayment of all Credit Party Obligations.

 

 

 

 

          (b) Indemnification.

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          (i) Whether or not the transactions contemplated hereby are
consummated, the Borrower shall indemnify and hold harmless each Agent-Related
Person, each Lender and their respective Affiliates, directors, officers,
employees, counsel, agents and attorneys-in-fact (collectively the
“Indemnitees”) from and against any and all liabilities, obligations, losses,
damages, penalties, claims, demands, actions, judgments, suits, costs, expenses
and disbursements (including attorney costs) of any kind or nature whatsoever
which may at any time be imposed on, incurred by or asserted against any such
Indemnitee in any way relating to or arising out of or in connection with (A)
the execution, delivery, enforcement, performance or administration of any
Credit Document or any other agreement, letter or instrument delivered in
connection with the transactions contemplated thereby or the consummation of the
transactions contemplated thereby, (B) any Commitment or Loan or the use or
proposed use of the proceeds therefrom, (C) any actual or alleged presence or
release of hazardous materials on or from any property currently or formerly
owned or operated by the Borrower or any of its Subsidiaries or any
environmental liability related in any way to the Borrower or any of its
Subsidiaries or (D) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory (including any investigation of, preparation for, or defense
of any pending or threatened claim, investigation, litigation or proceeding) and
regardless of whether any Indemnitee is a party thereto (all the foregoing,
collectively, the “Indemnified Liabilities”); provided that such indemnity shall
not, as to any Indemnitee, be available to the extent that such liabilities,
obligations, losses, damages, penalties, claims, demands, actions, judgments,
suits, costs, expenses or disbursements are determined by a final nonappealable
judgment of a court of competent jurisdiction to have resulted from the gross
negligence, willful misconduct or bad faith of such Indemnitee. No Indemnitee
shall be liable for any damages arising from the use by others of any
information or other materials obtained through IntraLinks or other similar
information transmission systems in connection with this Credit Agreement, nor
shall any Indemnitee have any liability for any indirect or consequential
damages relating to this Credit Agreement or any other Credit Document or
arising out of its activities in connection herewith or therewith (whether
before or after the Closing Date). All amounts due under this Section 11.5(b)
shall be payable within ten Business Days after demand therefor. The agreements
in this Section shall survive the resignation of the Administrative Agent, the
replacement of any Lender, the termination of the Commitments and the repayment,
satisfaction or discharge of all the Credit Party Obligations.

 

 

 

          (ii) To the extent that the undertaking to indemnify and hold harmless
set forth in Section 11.5(b)(i) may be unenforceable as violative of any
applicable law or public policy, the Borrower shall make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities that is permissible under applicable law.

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          11.6 Amendments, Waivers and Consents.

 

 

          Neither this Credit Agreement nor any other Credit Document nor any of
the terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing and signed by the Required Lenders and the then Credit Parties; provided
that no such amendment, change, waiver, discharge or termination shall without
the consent of each Lender affected thereby:

 

 

 

          (a) extend the Maturity Date or extend or postpone the time for any
payment or prepayment of principal of any Loan;

 

 

 

          (b) reduce the rate or amount or extend the time of payment of
interest (other than as a result of waiving the applicability of any
post-default increase in interest rates) thereon or fees hereunder;

 

 

 

          (c) reduce or waive the principal amount of any Loan;

 

 

 

          (d) increase or extend the Commitment of a Lender (it being understood
and agreed that a waiver of any Default or Event of Default or a waiver of any
mandatory reduction in the Commitments shall not constitute a change in the
terms of any Commitment of any Lender);

 

 

 

          (e) release the Borrower from its obligations or consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under (or in respect of) the Credit Documents or release (i) all or
substantially all of the Guarantors from their respective obligations under the
Credit Documents or (ii) any material Guaranty;

 

 

 

          (f) amend, modify or waive any provision of this Section 11.6 or
Section 3.4(a), 3.4(b)(i), 3.7 (or any other provision providing for the pro
rata nature of payments or disbursements to Lenders), 3.8, 9.1(a), 11.2, 11.3 or
11.5; or

 

 

 

          (g) reduce any percentage specified in, or otherwise modify, the
definition of Required Lenders.

Notwithstanding the above, no provisions of Section 10 may be amended or
modified without the consent of the Administrative Agent.

Notwithstanding the fact that the consent of all the Lenders is required in
certain circumstances as set forth above, (x) each Lender is entitled to vote as
such Lender sees fit on any reorganization plan that affects the Loans, and each
Lender acknowledges that the provisions of Section 1126(c) of the Bankruptcy
Code supersedes the unanimous consent provisions set forth herein and (y) the
Required Lenders may consent to allow a Credit Party to use cash collateral in
the context of a bankruptcy or insolvency proceeding.

If, in connection with any proposed amendment, waiver or consent requiring the
consent of a greater percentage of the Lenders than the Required Lenders and the
consent of the Required Lenders is obtained, but the consent of one or more
other Lenders is not obtained (any such Lender which declares in writing that it
will not provide such consent or whose consent is not obtained within the

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applicable period prescribed for such amendment, waiver or consent being
referred to herein as a “Non-Consenting Lender”), then, so long as the
Administrative Agent is not a Non-Consenting Lender, the Borrower may within 45
days of such Lender becoming a Non-Consenting Lender, give notice in writing to
the Administrative Agent and such Non-Consenting Lender of the Borrower’s
intention to cause such Non-Consenting Lender to sell all of such Non-Consenting
Lenders’ interests in its Commitments for an amount equal to the principal
balances thereof and all accrued interest and fees with respect thereto through
the date of sale pursuant to one or more Assignment and Acceptance Agreements,
such sale being without premium or discount. In the event of any such notice,
such Non-Consenting Lender shall be required to sell and assign such interests
(including all related rights and obligations ) as provided in this Section. Any
such sale of a Non-Consenting Lender’s Commitments must be to an Eligible
Assignee and, unless otherwise agreed to by the Administrative Agent, the
Borrower shall be solely responsible for sourcing such Eligible Assignee, at no
cost or expense to the Administrative Agent or any Lender. Any such assignment
to an Eligible Assignee pursuant to this Section shall be in accordance with
clause (b)(iv) of Section 11.3. At any time during or after the period during
which a proposed amendment, waiver or consent was pending, upon the request of
the Borrower the Administrative Agent shall promptly provide (but in any event
within one Business Day) the Borrower with the names, contact information,
Commitment percentages, principal balances and any other information reasonably
requested for each Lender which, at the time of such request, was either a
Non-Consenting Lender or had not yet decided whether or not to approve or
consent to such amendment, waiver or consent.

                    11.7 Counterparts.

          This Credit Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall constitute one and the same instrument.

                    11.8 Headings.

          The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.

                    11.9 Defaulting Lender.

          Each Lender understands and agrees that if such Lender is a Defaulting
Lender then notwithstanding the provisions of Section 11.6 it shall not be
entitled to vote on any matter requiring the consent of the Required Lenders or
to object to any matter requiring the consent of all the Lenders; provided,
however, that all other benefits and obligations under the Credit Documents
shall apply to such Defaulting Lender.

                    11.10 Survival of Indemnification.

          All indemnities set forth herein shall survive the execution and
delivery of this Credit Agreement, the making of the Loans and the repayment of
the Loans and other obligations and the termination of the Commitments
hereunder. All representations and warranties made hereunder and in any other
Credit Document or other document delivered pursuant hereto or thereto or in
connection herewith or therewith shall survive the execution and delivery hereof
and thereof. Such representations and warranties have been or will be relied
upon by the Administrative Agent and

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each Lender, regardless of any investigation made by the Administrative Agent or
any Lender or on their behalf and notwithstanding that the Administrative Agent
or any Lender may have had notice or knowledge of any Default at the time of any
Extension of Credit, and shall continue in full force and effect as long as any
Loan or any other Credit Party Obligation hereunder shall remain unpaid or
unsatisfied.

                    11.11 Governing Law; Venue; Jurisdiction.

 

 

 

          (a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED
BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK. Any legal action or proceeding with respect to this Credit Agreement or
any other Credit Document may be brought in the courts of the State of New York
or of the United States sitting in New York City, and, by execution and delivery
of this Credit Agreement, each Credit Party hereby irrevocably accepts for
itself and in respect of its Property, generally and unconditionally, the
jurisdiction of such courts. Each Credit Party irrevocably consents to the
service of process in any action or proceeding with respect to this Credit
Agreement or any other Credit Document by the mailing of copies thereof by
registered or certified mail, postage prepaid, to it at the address for notices
pursuant to Section 11.1, such service to become effective 10 days after such
mailing. Nothing herein shall affect the right of a Lender to serve process in
any other manner permitted by law or to commence legal proceedings or otherwise
proceed against a Credit Party in any other jurisdiction. Each Credit Party
agrees that a final judgment in any action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law; provided that nothing in this Section 11.11(a) is
intended to impair a Credit Party’s right under applicable law to appeal or seek
a stay of any judgment.

 

 

 

          (b) Each Credit Party hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid actions
or proceedings arising out of or in connection with this Credit Agreement or any
other Credit Document in the courts referred to in subsection (a) hereof and
hereby further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.

                    11.12 Waiver of Jury Trial; Waiver of Consequential Damages.

          EACH OF THE PARTIES TO THIS CREDIT AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED

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TO ENTER INTO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. Each Credit Party
agrees not to assert any claim against the Administrative Agent, the Issuing
Lenders, any Lender, any of their Affiliates, or any of their respective
directors, officers, employees, attorneys or agents, on any theory of liability,
for special, indirect, consequential or punitive damages arising out of or
otherwise relating to any of the transactions contemplated herein.

                    11.13 Severability.

          If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.

                    11.14 Further Assurances.

          The Credit Parties agree, upon the request of the Administrative
Agent, to promptly take such actions, as reasonably requested, as is necessary
to carry out the intent of this Credit Agreement and the other Credit Documents.

                    11.15 Confidentiality.

          Each of the Administrative Agent and the Lenders agrees to maintain
the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its Affiliates and to its and its
Affiliates’ respective partners, directors, officers, employees, agents,
advisors and representatives, excluding equity security departments and their
members (it being understood that the Persons to whom such disclosure is made
will be informed of the confidential nature of such Information and instructed
to keep such Information confidential), (b) to the extent requested by any
regulatory authority purporting to have jurisdiction over it (including any
self-regulatory authority, such as the National Association of Insurance
Commissioners), (c) to the extent required by applicable laws or regulations or
by any subpoena or similar legal process, (d) to any other party hereto, (e) in
connection with the exercise of any remedies hereunder or under any other Credit
Document or any action or proceeding relating to this Credit Agreement or any
other Credit Document or the enforcement of rights hereunder or thereunder, (f)
subject to an agreement containing provisions substantially the same as those of
this Section, to (i) any assignee of or Loan Participant in, or any prospective
assignee of or Loan Participant in, any of its rights or obligations under this
Credit Agreement or (ii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to a Credit Party and
its obligations, (g) with the consent of the Borrower or (h) to the extent such
Information (x) becomes publicly available other than as a result of a breach of
this Section or (y) becomes available to the Administrative Agent, any Lender or
any of their respective Affiliates on a nonconfidential basis from a source
other than the Borrower. In addition, the Administrative Agent and the Lenders
may disclose the existence of this Credit Agreement and information about this
Credit Agreement to market data collectors, similar service providers to the
lending industry and service providers to the Administrative Agent and the
Lenders in connection with the administration and management of this Credit
Agreement, the other Credit Documents and the Loans.

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For purposes of this Section, “Information” means all information received from
the Borrower or any of its Subsidiaries relating to the Borrower or any
Subsidiary or any of their respective businesses, other than any such
information that is available to the Administrative Agent or any Lender on a
nonconfidential basis prior to disclosure by the Borrower or any Subsidiary,
provided that, in the case of information received from the Borrower or any
Subsidiary after the date hereof, such information is clearly identified in
writing at the time of delivery as confidential. Any Person required to maintain
the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information. In
addition, the Administrative Agent may disclose to any agency or organization
that assigns standard identification numbers to loan facilities such basic
information describing the facilities provided hereunder as is necessary to
assign unique identifiers (and, if requested, supply a copy of this Credit
Agreement), it being understood that the Person to whom such disclosure is made
will be informed of the confidential nature of such Information and instructed
to make available to the public only such Information as such person normally
makes available in the course of its business of assigning identification
numbers. Each of the Administrative Agent and the Lenders acknowledges that (a)
the Information may include material non-public information concerning the
Borrower or a Subsidiary, as the case may be, (b) it has developed compliance
procedures regarding the use of material non-public information and (c) it will
handle such material non-public information in accordance with applicable law,
including federal and state securities laws.

                    11.16 Entirety.

          This Credit Agreement together with the other Credit Documents and the
Fee Letter represent the entire agreement of the parties hereto and thereto, and
supersede all prior agreements and understandings, oral or written, if any,
including any commitment letters or correspondence relating to the Credit
Documents or the transactions contemplated herein and therein.

                    11.17 Binding Effect; Continuing Agreement.

 

 

 

          (a) This Credit Agreement shall become effective at such time when all
of the conditions set forth in Section 5.1 have been satisfied or waived by the
Lenders and it shall have been executed by the Borrower, the Guarantors and the
Administrative Agent, and the Administrative Agent shall have received copies
hereof (telefaxed or otherwise) which, when taken together, bear the signatures
of each Lender, and thereafter this Credit Agreement shall be binding upon and
inure to the benefit of the Borrower, the Guarantors, the Administrative Agent
and each Lender and their respective successors and assigns.

 

 

 

          (b) This Credit Agreement shall be a continuing agreement and shall
remain in full force and effect until all Loans, interest, fees and other Credit
Party Obligations have been paid in full and all Commitments have been
terminated. Upon termination, the Credit Parties shall have no further
obligations (other than the indemnification provisions that survive) under the
Credit Documents; provided that should any payment, in whole or in part, of the
Credit Party Obligations be rescinded or otherwise required to be restored or
returned by the Administrative Agent or any Lender, whether as a result of any

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proceedings in bankruptcy or reorganization or otherwise, then the Credit
Documents shall automatically be reinstated and all amounts required to be
restored or returned and all costs and expenses incurred by the Administrative
Agent or any Lender in connection therewith shall be deemed included as part of
the Credit Party Obligations.

                    11.18 USA Patriot Act Notice.

          Each Lender that is subject to the Act (as hereinafter defined) and
the Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies the Borrower that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it
is required to obtain, verify and record information that identifies the
Borrower, which information includes the name and address of the Borrower and
other information that will allow such Lender or the Administrative Agent, as
applicable, to identify the Borrower in accordance with the Act.

                    11.19 No Advisory or Fiduciary Responsibility.

          In connection with all aspects of each transaction contemplated hereby
(including in connection with any amendment, waiver or other modification hereof
or of any other Credit Document), the Borrower and each Guarantor acknowledges
and agrees, and acknowledges its Affiliates’ understanding, that: (i) (A) the
arranging and other services regarding this Agreement provided by the
Administrative Agent and the Lead Arrangers are arm’s-length commercial
transactions between the Borrower, each Guarantor and their respective
Affiliates, on the one hand, and the Administrative Agent and the Lead
Arrangers, on the other hand, (B) each of the Borrower and the Guarantors has
consulted its own legal, accounting, regulatory and tax advisors to the extent
it has deemed appropriate, and (C) the Borrower and each Guarantor is capable of
evaluating, and understands and accepts, the terms, risks and conditions of the
transactions contemplated hereby and by the other Credit Documents; (ii) (A)
each of the Administrative Agent and the Lead Arrangers is and has been acting
solely as a principal and, except as expressly agreed in writing by the relevant
parties, has not been, is not, and will not be acting as an advisor, agent or
fiduciary for the Borrower, any Guarantor or any of their respective Affiliates,
or any other Person and (B) neither the Administrative Agent nor either Lead
Arranger has any obligation to the Borrower, the Guarantors or any of their
respective Affiliates with respect to the transactions contemplated hereby
except those obligations expressly set forth herein and in the other Credit
Documents; and (iii) the Administrative Agent and the Lead Arrangers and their
respective Affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of the Borrower, the Guarantors and
their respective Affiliates, and neither the Administrative Agent either Lead
Arranger has any obligation to disclose any of such interests to the Borrower,
any Guarantor or any of their respective Affiliates, it being understood that
nothing in the Credit Documents is in any way intended to limit the scope of the
engagement of Morgan Stanley & Co. Incorporated or the obligations of Morgan
Stanley & Co. Incorporated pursuant to its engagement by you as financial
advisor in connection with the Acquisition, or your rights and remedies in
connection therewith.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

87

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          Each of the parties hereto has caused a counterpart of this Bridge
Credit Agreement to be duly executed and delivered as of the date first above
written.

BORROWER:

 

 

 

 

 

QUEST DIAGNOSTICS INCORPORATED,
a Delaware corporation

 

 

 

 

 

By:

/s/ Joseph P. Manory

 

 

 

--------------------------------------------------------------------------------

 

 

Name:

Joseph P. Manory

 

 

Title:

Vice President and Treasurer

 

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Signature Page to Bridge Credit Agreement
Quest Diagnostics Incorporated

GUARANTORS:

 

 

 

AMERICAN MEDICAL LABORATORIES, INCORPORATED,

 

a Delaware corporation

 

 

 

AML INC.,

 

a Delaware corporation

 

 

 

APL PROPERTIES LIMITED LIABILITY COMPANY,

 

a Nevada limited liability company

 

 

 

CENTRAL PLAINS HOLDINGS, INC.,

 

a Kansas corporation

 

 

 

CENTRAL PLAINS LABORATORIES, LLC,

 

a Kansas limited liability company

 

 

 

DIAGNOSTIC REFERENCE SERVICES INC.,

 

a Maryland corporation

 

 

 

DPD HOLDINGS INC.,

 

a Delaware corporation

 

 

 

ENTERIX INC.,

 

a Delaware corporation

 

 

 

EXAMONE WORLD WIDE, INC.,

 

a Pennsylvania corporation

 

 

 

EXAMONE WORLD WIDE OF NJ, INC.,

 

a New Jersey corporation

 

 

 

FNA CLINICS OF AMERICA, INC.,

 

a Delaware corporation

 

 

 

FOCUS DIAGNOSTICS, INC.,

 

a Delaware corporation

 

 

 

FOCUS TECHNOLOGIES HOLDINGS COMPANY,

 

a Delaware corporation

 

 

 

LABONE, INC.,

 

a Missouri corporation

 

 

 

LABONE OF OHIO, INC.,

 

a Delaware corporation

--------------------------------------------------------------------------------

Signature Page to Bridge Credit Agreement
Quest Diagnostics Incorporated

 

 

 

MEDPLUS, INC.,

 

an Ohio corporation

 

 

 

METWEST INC.,

 

a Delaware corporation

 

 

 

NICHOLS INSTITUTE DIAGNOSTICS,

 

a California corporation

 

 

 

OSBORN GROUP INC.,

 

a Delaware corporation

 

 

 

QUEST DIAGNOSTICS CLINICAL LABORATORIES, INC.,

 

a Delaware corporation

 

 

 

QUEST DIAGNOSTICS HOLDINGS INCORPORATED,

 

a Delaware corporation

 

 

 

QUEST DIAGNOSTICS NICHOLS INSTITUTE,

 

a California corporation

 

 

 

QUEST DIAGNOSTICS INCORPORATED,

 

a Maryland corporation

 

 

 

QUEST DIAGNOSTICS INCORPORATED,

 

a Michigan corporation

 

 

 

QUEST DIAGNOSTICS INCORPORATED,

 

a Nevada corporation

 

 

 

QUEST DIAGNOSTICS LLC,

 

a Connecticut limited liability company

 

 

 

QUEST DIAGNOSTICS LLC,

 

an Illinois limited liability company

 

 

 

QUEST DIAGNOSTICS LLC,

 

a Massachusetts limited liability company

 

 

 

QUEST DIAGNOSTICS NICHOLS INSTITUTE, INC.,

 

a Virginia corporation

--------------------------------------------------------------------------------

Signature Page to Bridge Credit Agreement
Quest Diagnostics Incorporated

 

 

 

 

QUEST DIAGNOSTICS OF PENNSYLVANIA, INC.,

 

a Delaware corporation

 

 

 

SYSTEMATIC BUSINESS SERVICES, INC.,

 

a Missouri corporation

 

 

 

UNILAB CORPORATION,

 

a Delaware corporation

 

 

 

By:

/s/ Joseph P. Manory

 

 

--------------------------------------------------------------------------------

 

Name:

Joseph P. Manory

 

Title:

Vice President and Treasurer
of each of the above Guarantors

 

 

 

 

PATHOLOGY BUILDING PARTNERSHIP,
a Maryland general partnership

 

 

 

 

By:

Quest Diagnostics Incorporated, a Maryland
corporation, its general partner

 

 

 

 

By:

/s/ Joseph P. Manory

 

 

--------------------------------------------------------------------------------

 

Name:

Joseph P. Manory

 

Title:

Vice President and Treasurer

 

 

 

 

By:

Diagnostic Reference Services Inc., a Maryland
corporation, its general partner

 

 

 

 

By:

/s/ Joseph P. Manory

 

 

--------------------------------------------------------------------------------

 

Name:

Joseph P. Manory

 

Title:

Vice President and Treasurer

 

 

 

 

QUEST DIAGNOSTICS INVESTMENTS INCORPORATED,

 

a Delaware corporation

 

 

 

 

By:

/s/ Stephen A. Calamari

 

 

--------------------------------------------------------------------------------

 

Name:

Stephen A. Calamari

 

Title:

Treasurer

 

 

 

 

QUEST DIAGNOSTICS FINANCE INCORPORATED,
a Delaware corporation

 

 

 

 

By:

/s/ Stephen A. Calamari

 

 

--------------------------------------------------------------------------------

 

Name:

Stephen A. Calamari

 

Title:

Treasurer

--------------------------------------------------------------------------------

Signature Page to Bridge Credit Agreement
Quest Diagnostics Incorporated

LENDERS:

 

 

 

 

BANK OF AMERICA, N.A.,
individually in its capacity as Administrative Agent

 

 

 

 

By:

/s/ Craig Murlless

 

 

--------------------------------------------------------------------------------

 

Name:

Craig Murlless

 

Title:

Senior Vice President

 

 

 

 

BANK OF AMERICA, N.A.,
individually in its capacity as a Lender

 

 

 

 

By:

/s/ Craig Murlless

 

 

--------------------------------------------------------------------------------

 

Name:

Craig Murlless

 

Title:

Senior Vice President

 

 

 

 

MORGAN STANLEY SENIOR FUNDING, INC.
as a Lender,

 

 

 

 

By:

/s/ Anish Shah

 

 

--------------------------------------------------------------------------------

 

Name:

Anish Shah

 

Title:

Vice President

 

 

 

 

MERRILL LYNCH BANK USA

 

 

 

 

By:

/s/ Louis Alder

 

 

--------------------------------------------------------------------------------

 

Name:

Louis Alder

 

Title:

Director

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