Exhibit 10.1
HEALTHCARE RECEIVABLES PURCHASE AGREEMENT
Dated as of July 31, 1996
UNILAB CORPORATION, a Delaware corporation
(together with its successors and assigns, the "Provider) and
DAIWA HEALTHCO-2 LLC, a Delaware limited liability
company (together with its successors and assigns, the
"Purchaser"), agree as follows:
PRELIMINARY STATEMENTS. Certain terms
that are capitalized and used throughout this Agreement are
defined in Exhibit I to this Agreement. References herein and in
the Exhibits and Schedules hereto to the "Agreement" refer to this
Agreement, as amended, modified or supplemented from time to
time in accordance with its terms.
The Provider wishes to sell to the Purchaser on a
continuing basis certain of its healthcare receivables. The
Purchaser is prepared to purchase such healthcare receivables on
the terms and subject to the conditions set forth herein.
Accordingly, the parties agree as follows:
ARTICLE I
COMMITMENTS; AMOUNTS AND TERMS OF THE PURCHASES
SECTION 1.01. Sale and Purchase. On the terms
and conditions set forth herein, the Provider agrees to sell to the
Purchaser on the Initial Purchase Date and each Purchase Date
thereafter until the Facility Termination Date, and the Purchaser
agrees to purchase from the Provider on each Purchase Date until
the Facility Termination Date, the Provider's Designated
Receivables. Under no circumstances shall the Purchaser make a
purchase of Receivables on any Purchase Date if, after giving
effect to such purchase, the aggregate Outstanding Purchase Price
of all Purchased Batches would exceed $20,000,000 (the "Purchase
Limit").
SECTION 1.02. Receivable Information and
Purchased Batch Determination. (a) On each Business Day after
the Initial Purchase Date, the Provider shall provide the Master
Servicer by Transmission the information listed on Exhibit VI
hereto (as such Exhibit may be modified by the Purchaser in
consultation with the Provider from time to time, the "Receivable
Information") with respect to all of its new Accounts, including,
without limitation, new Receivables of Designated Obligors that it
has determined constitute Eligible Receivables (the "Proposed
Eligible Receivables").
(b) On or prior to the Batching Time, the Provider
shall inform the Program Manager of the Proposed Purchase
Amount of Eligible Receivables with respect to the following
Purchase Date. All Proposed Eligible Receivables for which
Receivable Information has been received by the Master Servicer
between the prior Batching Time and the current Batching Time
shall be reviewed by the Purchaser Group to determine whether
they constitute Eligible Receivables. The Program Manager shall
determine by Selection those Eligible Receivables in an aggregate
amount equal to the Proposed Purchase Amount that shall become
Designated Receivables on the Purchase Date. On the Purchase
Date the Purchaser shall purchase from the Provider the
Designated Receivables (a "Purchased Batch"). On or prior to
each Purchase Date, the Purchaser or the Program Manager shall
send to the Provider a list of the Designated Receivables to be
purchased on such date.
SECTION 1.03. The Purchases. (a) On each
Purchase Date, subject to satisfaction of the applicable conditions
set forth in Exhibit II hereto, the Purchaser shall make available to
the Provider in same day funds, at the Provider Account, an
amount equal to the Initial Disbursement of the Purchased Batch.
The Initial Disbursement for such Purchased Batch plus the
Residual Amounts (representing the deferred purchase price with
respect thereto) payable on the dates set forth in Section 1.04(c),
shall constitute the "Purchase Price" with respect to such
Purchased Batch. Reference is made to Exhibit XIII hereto for a
numerical example (for illustrative purposes only) of the manner of
calculation of the Initial Disbursement and the Residual Amounts
for a Purchased Batch.
(b) Effective on each Purchase Date, in
consideration of payment of the Purchase Price, the Provider
hereby sells and assigns to the Purchaser, as absolute owner, the
Purchased Batch purchased on such Purchase Date.
SECTION 1.04. Collection and Payment
Procedures. (a) Collections on the Purchased Batch. The
Purchaser shall be entitled with respect to each Purchased Batch,
(i) to receive all Collections on such Purchased Batch, and (ii) to
have and to exercise any and all rights (x) to collect, record, track
and take all actions to obtain Collections with respect to each
Purchased Receivable payable by Insurers, and (y) in a manner
consistent with all applicable laws and regulations, to collect,
record, track and take all actions to obtain Collections with respect
to each Purchased Receivable payable by Governmental Entities.
The parties acknowledge that the Purchaser is assigning certain of
these rights to the Master Servicer and the Primary Servicer in
accordance with the terms of Section 1.05 hereof.
(b) Collections Not Part of Purchased Batch. As
soon as practicable (based on the reasonable efforts of the
Purchaser to effectuate distributions on each Business Day), but
subject to the rights of the Purchaser pursuant to Section 4.03
hereof, the Purchaser shall turn over to the Provider any cash
collections or other cash proceeds received by the Purchaser since
the prior distribution under this Section 1.04(b) with respect to
Redirected Receivables and other Accounts that are not part of any
Purchased Batch.
(c) Distributions on each Settlement Date. On each
Settlement Date and with respect to each Purchased Batch, Total
Collections not distributed on any prior Settlement Date shall be
distributed as follows: FIRST, to the Provider an amount equal to
the Excess Default Amount, if any, with respect to any prior
Purchased Batch, until such amount has been paid in full;
SECOND, to the Purchaser an amount in cash equal to the
Aggregate Batch Discounts with respect to such Purchased Batch,
until such amount has been paid in full; THIRD, to the Provider, an
amount in cash equal to the Reserve Reduction Amount, until such
amount has been paid in full; FOURTH, to the Purchaser, an
amount in cash equal to the Initial Disbursement with respect to
such Purchased Batch, until such amount has been paid in full; and
FIFTH, to the Provider, an amount equal to any Residual Amount
with respect to such Purchased Batch.
(d) Distributions to the Provider Generally.
Distributions to the Provider on each Settlement Date shall be
deposited in an account designated by the Provider to the Program
Manager from time to time provided, that, upon the occurrence of
the Accumulation Date distributions to the Provider shall not be
made until the Provider shall have paid all amounts then due and
owing to the Purchaser under this Agreement.
SECTION 1.05. Allocation of Servicer
Responsibilities. (a) Tracking of purchases, Collections and other
transactions pertaining to each Purchased Batch shall be
administered by the Master Servicer in a manner consistent with
the terms of this Agreement. The responsibilities of the Provider
to the Master Servicer have been set forth in Exhibit XI attached
hereto. The Provider shall cooperate fully with the Master Servicer
in establishing and maintaining the Transmission of the Receivable
Information, including, without limitation, the matters described in
Exhibit XI, and shall provide promptly to the Master Servicer such
other information, to the extent available and otherwise permitted
to be provided under applicable law and regulation, that may be
necessary or desirable for the administration of Collections on the
Purchased Receivables as may be reasonably requested from time
to time.
(b) The Purchaser hereby appoints the Provider as
its agent for the administration and servicing obligations set forth
in Exhibit IX hereto (the "Primary Servicer Responsibilities"), and
the Provider hereby accepts such appointment and agrees to
perform the Primary Servicer Responsibilities. The Purchaser
may, at any time following the occurrence of a Servicer
Termination Event (and shall, without requirement of notice to any
party, upon a Servicer Termination Event resulting from the events
described in clauses (g) or (j) of Exhibit V hereto), designate the
Master Servicer or any other Person to succeed the Provider as its
agent for performance of the Primary Servicer Responsibilities. As
compensation for the performance of the Primary Servicer
Responsibilities, the Purchaser shall pay to the Provider (or any
successor to the Provider who performs such Primary Servicer
Responsibilities) an A/R Collection Fee with respect to each
Purchased Batch. The A/R Collection Fee with respect to each
Purchased Batch shall be payable to the Provider (so long as the
Provider is performing the Primary Servicer Responsibilities) on
the first Settlement Date on which the Aggregate Batch Discounts
for such Purchased Batch have been paid in full in accordance with
the provisions of Section 1.04(c) of this Agreement.
ARTICLE II
INSURER PAYMENT MECHANICS;
GOVERNMENTAL ENTITIES PAYMENT MECHANICS;
EOB'S; MISDIRECTED PAYMENTS
SECTION 2.01. Insurer Payment Mechanics.
(a) On or prior to the Initial Purchase Date, the Provider and the
Purchaser shall have entered into the Depositary Agreement and
shall have caused the Lockbox Bank to establish the Purchaser
Lockbox and Purchaser Lockbox Account. The Provider shall
prepare, execute and deliver on or prior to the Initial Purchase Date
to each Insurer who becomes an Obligor of Designated
Receivables from time to time, with copies to the Purchaser,
Notices to Insurers addressed to each such Insurer, which Notice to
Insurers shall provide that all checks and EOB's from such Insurers
on account of Receivables shall be sent to the Purchaser Lockbox
and all wire transfers on account of Eligible Receivables shall be
wired directly into the Purchaser Lockbox Account.
(b) On and after the Initial Purchase Date, the
Provider shall cause all invoices that are sent to Insurers who are
qualified to be Obligors of Designated Receivables from time to
time (and return envelopes, if provided by the Provider) to set forth
only the address of the Purchaser Lockbox as a return address for
payment of Receivables and delivery of EOB's, and only the
Purchaser Lockbox Account with respect to wire transfers for
payment of Receivables. The Provider hereby further covenants
and agrees to instruct and notify each of the members of the
Provider's accounting and collections staff to provide identical
information in communications with such Insurers with respect to
Collections, wire transfers and EOB's.
SECTION 2.02. Governmental Entities Payment
Mechanics. (a) On or prior to the Initial Purchase Date, the
Provider and the Purchaser shall have entered into the Depositary
Agreement, and the Provider shall have caused the Lockbox Bank
to establish the Provider Lockbox and the Provider Lockbox
Account. The Provider shall prepare, execute and deliver to the
Purchaser on or prior to the Initial Purchase Date, Notices to
Governmental Entities addressed to each Governmental Entity or
its fiscal intermediary who is an Obligor of Receivables, which
Notice to Governmental Entities shall provide that all checks and
EOB's from Governmental Entities on account of Receivables
shall be sent to the Provider Lockbox and all wire transfers on
account of Receivables shall be wired directly into the Provider
Lockbox Account.
(b) On and after the Initial Purchase Date, the
Provider shall cause all invoices that are sent to Governmental
Entities who are qualified to be Obligors of Designated
Receivables from time to time (and return envelopes, if provided
by the Provider) to set forth only the address of the Provider
Lockbox as a return address for payment of Receivables and
delivery of EOB's, and only the Provider Lockbox Account with
respect to wire transfers for payment of Receivables. The Provider
further covenants and agrees to instruct and notify each of the
members of the Provider's accounting and collections staff to
provide identical information in communications with
Governmental Entities with respect to Collections, wire transfers
and EOB's.
SECTION 2.03. Misdirected Payments; EOB's. (a)
In the event that the Provider receives an EOB or a Misdirected
Payment from an Insurer in the form of a check, the Provider shall
send to the Purchaser Lockbox such Misdirected Payment, together
with the EOB and the envelope in which such payment was
received, by messenger, courier or overnight mail, duly indorsed
over to the Purchaser. In the event that the Provider receives a
Misdirected Payment from a Governmental Entity in the form of
cash or a check, the Provider shall send to the Provider Lockbox
such Misdirected Payment by messenger, courier or overnight mail
together with the EOB. In the event the Provider receives a
Misdirected Payment in the form of a wire transfer, the Provider
shall immediately wire transfer the amount of such Misdirected
Payment directly into the Purchaser Lockbox Account. All such
Misdirected Payments and EOB's shall be sent promptly upon
receipt thereof, and in no event later than 11:00 A.M., local time,
on the first Business Day after receipt thereof.
(b) If a Misdirected Payment in the form of a check
is received by the Purchaser more than six days after the postmark
date on the envelope enclosing a check from the Obligor (or, if no
such envelope is sent to the Purchaser Lockbox Account by the
Provider, more than six days after the date of such check or wire
transfer with respect thereto), then the Provider shall pay interest
on such Misdirected Payment to the Purchaser from such sixth
subsequent day to and including the date such check is received in
the Purchaser Lockbox Account, at the Annual Yield then in effect.
(c) The Provider hereby agrees and consents to the
Purchaser directing the Primary Servicer to take such actions as are
reasonably necessary to ensure that future payments from the
Obligor of a Misdirected Payment shall be made in accordance
with the intent of Article II hereof and any Notice previously
delivered to such Obligor, including, without limitation, (i)
executing on the Provider's behalf and delivering to such Obligor a
new Notice, and (ii) contacting such Obligor by telephone to
confirm the instructions previously set forth in the Notice to such
Obligor. Upon the Purchaser's request, the Provider shall
promptly (and in any event, within two Business Days from such
request) take such similar actions as the Purchaser may reasonably
request.
SECTION 2.04. Unidentified Payments;
Purchaser's Right of Presumption. The Provider agrees and
consents that the Purchaser Group may apply any payment it
receives from an Obligor against a Purchased Batch if the
Purchaser Group is unable in good faith (after utilizing reasonable
efforts to consult with the Provider) to determine from the
information in the EOB whether such payment from an Obligor
relates to a Purchased Receivable.
SECTION 2.05. No Rights of Withdrawal. The
Provider shall have no rights of direction or withdrawal with
respect to amounts held in the Purchaser Lockbox Account.
ARTICLE III
REPRESENTATIONS AND WARRANTIES; COVENANTS;
EVENTS OF TERMINATION
SECTION 3.01. Representations and Warranties;
Covenants. (a) The Provider hereby makes on the Closing Date,
the Initial Purchase Date and each subsequent Purchase Date the
representations and warranties, and hereby agrees to perform and
observe the covenants, set forth in Exhibits III(1) and IV,
respectively, hereto.
(b) The Purchaser hereby makes the representations
and warranties set forth in Exhibit III(2) hereto.
SECTION 3.02. Events of Termination; Servicer
Termination Events. (a) If any Event of Termination shall occur
and be continuing, the Purchaser may, by notice to the Provider,
take either or both of the following actions: (x) declare the Facility
Termination Date to have occurred (except with respect to the
Event of Termination in clause (g) of Exhibit V, in which case the
Facility Termination Date shall be deemed to have occurred
automatically and without notice), and (y) without limiting any
rights hereunder, terminate the appointment of the Provider to
perform any or all of the Primary Servicer Responsibilities. Upon
any such declaration or designation, the Purchaser shall have, in
addition to the rights and remedies which it may have under this
Agreement, all other rights and remedies provided after default
under the UCC and under other applicable law, which rights and
remedies shall be cumulative.
(b) If a Servicer Termination Event shall occur and
be continuing, the Purchaser, by writtten notice to the Provider
(except for a Servicer Termination Event described in clause (a) of
Exhibit X, which shall not require independent notice under this
Section 3.02(b)), may terminate the appointment of the Provider to
perform any or all of the Primary Servicer Responsibilities.
ARTICLE IV
REPURCHASE; SETOFF; INDEMNIFICATION;
GRANT OF SECURITY INTEREST
SECTION 4.01. Indemnification and Set-Off
Rights for Repurchase Receivables. (a) If any Purchased
Receivable ceases to be an Eligible Receivable as a result of either
(x) such Purchased Receivable becoming a Redirected Receivable,
or (y) the material inaccuracy as at the relevant Purchase Date of
any other representation or warranty contained herein relating to a
Purchased Receivable (each, a "Repurchase Receivable"), then the
Provider shall, on the next Settlement Date, repurchase such
Repurchase Receivable from the Purchaser (effectuated pursuant to
the Purchaser's set-off rights as set forth in Section 4.03, unless
the Provider elects to repurchase the Repurchase Receivable in
cash) at a repurchase price (the "Repurchase Price") equal to (x)
the Initial Disbursement with respect to such Repurchase
Receivable, minus (y) any cash proceeds theretofore received by
the Purchaser with respect to such Repurchase Receivable, plus (z)
interest equal to the Annual Yield on the average outstanding
difference between clauses (x) and (y) from and including the fifth
Business Day following the Purchase Date of such Repurchase
Receivable to the date the Repurchase Price is received by the
Purchaser.
(b) For ease of administration, the Purchaser shall
be entitled to presume that the failure of any Purchased Receivable
(or portion thereof) to be paid in full on or after the 180th day
following the Last Service Date thereof is the result of a material
inaccuracy of a representation or warranty contained herein with
respect to such Purchased Receivable, unless the Purchaser shall
have actual knowledge or otherwise receive notice to the contrary
(such as, by way of example, actual knowledge of the financial
inability of an Obligor to pay its obligations represented by a
Receivable). In the event the Purchaser receives the Repurchase
Price for any such Purchased Receivable and it is thereafter
determined that the failure of such Purchased Receivable to be paid
in full was not the result of a material inaccuracy of a
representation or warranty contained herein, the parties hereto shall
make an appropriate adjustment in the payments due hereunder on
the next Settlement Date.
(c) Upon receipt by the Purchaser of the
Repurchase Price with respect to any Repurchase Receivable, the
Purchaser automatically and without further action shall be deemed
to have sold, transferred and assigned to the Provider all of the
ownership rights of the Purchaser in such Repurchase Receivable
without any representation, warranty or recourse whatsoever, and
thereafter no member of the Purchaser Group shall have any
further servicing or other obligation to the Provider with respect to
such Repurchase Receivable.
SECTION 4.02. Indemnities by the Provider.
Without limiting any other rights that the Purchaser, the Program
Manager, the Master Servicer or any of their respective Affiliates
(together with their respective officers, directors, shareholders and
lenders, each, an "Indemnified Party") may have hereunder or
under applicable law (but only to the extent that the rights of
repurchase and setoff set forth in Sections 4.01 and 4.03 hereof do
not satisfy a below-described claim of any Indemnified Party), the
Provider hereby agrees to indemnify each Indemnified Party from
and against any and all claims, losses and liabilities (including,
without limitation, reasonable attorneys' fees) (all of the foregoing
being collectively referred to as "Indemnified Amounts") arising
out of or resulting from any of the following:
(a) the sale of any Designated Receivable
which purports to be part of a Purchased Batch but which is
not, at the date of such sale, the type of Receivable
described in subsection (i) of Exhibit III to this Agreement;
(b) any representation or warranty or
statement made or deemed made by the Provider (or any of
its officers) under or in connection with this Agreement
which shall have been incorrect in any material respect
when made;
(c) the failure by the Provider or any
Purchased Receivable to comply with any applicable law,
rule or regulation with respect to such Purchased
Receivable;
(d) any dispute, claim, set-off or defense to
the payment, in whole or in part, of any Purchased
Receivable (including, without limitation, a defense based
on such Purchased Receivable not being a legal, valid and
binding obligation) or any other claim resulting from the
services or merchandise related to such Purchased
Receivable or the furnishing or failure to furnish such
services or merchandise or relating to collection activities
with respect to such Purchased Receivable (if such
collection activities were performed by the Provider or any
of its Affiliates acting as Servicer), provided, however, this
clause (d) shall not be deemed to include any dispute,
claim, set-off or defense to the payment of any Purchased
Receivable (i) arising out of the financial inability of an
Obligor to pay its obligations represented by such
Purchased Receivable, or (ii) arising after the sale of such
Receivable to the Purchaser hereunder and arising directly
as a result of actions or omissions by any member of the
Purchaser Group; or
(e) the commingling by the Provider of
Collections of Purchased Receivables at any time with
other funds of the Provider.
SECTION 4.03. Right of Set-Off. Unless the
Provider notifies the Purchaser in writing that it desires to pay on
the date when due the Repurchase Price under Section 4.01 or any
Indemnified Amounts under Section 4.02 and the Provider makes
such payment to the Purchaser in immediately available funds on
such date, the Provider hereby irrevocably instructs the Purchaser
to set-off the full amount of the Repurchase Price or the
Indemnified Amounts or any fees due to outside servicers pursuant
to subsection (e) of Exhibit IX of this Agreement, as the case may
be, against (i) any amounts required to be remitted to the Provider
pursuant to Sections 1.04 or 1.05 hereof or otherwise, or (ii) the
Initial Disbursements with respect to Designated Receivables to be
purchased on or after such date. No further notification, act or
consent of any nature whatsoever is required prior to the right of
the Purchaser to exercise such right of set-off, provided, however,
a member of the Purchaser Group shall notify the Provider that a
set-off pursuant to this Section 4.03 occurred, the amount of such
set-off and a description of the Repurchase Receivable,
Indemnified Amounts or fees due to outside servicers, as the case
may be.
ARTICLE V
MISCELLANEOUS
SECTION 5.01. Amendments, etc. No amendment
or waiver of any provision of this Agreement or consent to any
departure therefrom by a party hereto shall be effective unless in a
writing signed by the Purchaser and the Provider and then such
amendment, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given. No
failure on the part of the Purchaser or the Provider to exercise, and
no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the
exercise of any other right.
SECTION 5.02. Notices, etc. All notices and other
communications hereunder shall, unless otherwise stated herein, be
in writing (which may include facsimile communication) and shall
be faxed or delivered, (i) to each party hereto, at its address set
forth under its name on the signature pages hereof or at such other
address as shall be designated by such party in a written notice to
the other party hereto, and (ii) to the Program Manager and the
Master Servicer at the addresses set forth on Schedule I attached
hereto. Notices and communications by facsimile shall be
effective when sent (and shall be followed by hard copy sent by
regular mail), and notices and communications sent by other means
shall be effective when received.
SECTION 5.03. Assignability. (a) This
Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns.
(b) This Agreement and the Purchaser's rights and
obligations hereunder (including ownership of the Purchased
Receivables in each Purchased Batch) shall be assignable by the
Purchaser and its successors and assigns. The Provider hereby
acknowledges that the Purchaser is granting Daiwa Finance
Corporation a security interest in this Agreement and all of the
Purchaser's rights, title and interests hereunder (including the
Purchased Receivables).
(c) The Provider may not assign its rights or
obligations hereunder or any interest herein without the prior
written consent of the Purchaser, which consent shall not be
unreasonably withheld.
SECTION 5.04. Further Assurance. The Provider
shall, at its cost and expense, upon the request of the Purchaser,
duly execute and deliver, or cause to be duly executed and
delivered, to the Purchaser such further instruments and do and
cause to be done such further acts as may be necessary or proper in
the reasonable opinion of the Purchaser to carry out more
effectively the provisions and purposes of this Agreement.
SECTION 5.05. Costs and Expenses. In addition
to the rights of indemnification granted under Section 4.02 hereof,
the Provider agrees to pay on demand all costs and expenses in
connection with the preparation, execution and delivery of this
Agreement and any waiver, modification, supplement or
amendment hereto, including, without limitation, the reasonable
fees and out-of-pocket expenses of counsel for the Purchaser and
all costs and expenses, if any (including reasonable counsel fees
and expenses), of the Purchaser and its Affiliates in connection
with the enforcement of this Agreement. The Provider further
agrees to pay on demand (a) all documented costs and expenses
incurred by the Purchaser or its agent in connection with periodic
audits performed as provided in paragraph (h) of Exhibit IV hereto,
(b) all documented costs and expenses incurred by the Master
Servicer or the Program Manager to accommodate any significant
coding or data system changes made by the Provider that would
affect the transmission or interpretation of data received through
the interface, and (c) all documented costs and expenses incurred
by the Purchaser for additional time (calculated at a rate of $85 per
hour) and material expenses of the Master Servicer resulting from a
lack of cooperation or responsiveness of the Provider to agreed-
upon protocol and schedules with the Master Servicer; provided,
that the Provider has been informed of the alleged lack of
cooperation or responsiveness and has been provided the
opportunity to correct such problems. The Provider (w) has
delivered to the Purchaser in connection with this Agreement
$25,000 in payment or reimbursement for legal fees and receivable
evaluation services rendered by the Purchaser or its agent, (x) is
hereby delivering $2,000 in reimbursement for the cost of
establishing the interface with the Master Servicer, (y) is hereby
delivering to the Purchaser $3,500 in reimbursement of out-of-
pocket expenses, and (z) is hereby delivering to the Purchaser in
immediately available funds by wire transfer $45,000 for legal and
receivable evaluation services rendered by the Purchaser or its
agent. The Provider is hereby delivering to the Purchaser on the
Closing Date $150,000 in payment of 50% of the $300,000
Advisory Fee due to the Purchaser, and the Provider hereby agrees
that it shall pay to the Provider the remaining 50% of the Advisory
Fee on or prior to the earliest to occur of (x) the first anniversary of
the Closing Date, (y) the Facility Termination Date, and (z) the
Business Day on which the Outstanding Purchase Price of all
Purchased Batches equals or exceeds $10,000,000.
SECTION 5.06. Confidentiality. (a) The Provider
and the Purchaser each acknowledge that this Agreement contains
confidential and proprietary information. Unless otherwise
required by applicable law, the Provider and the Purchaser each
hereby agree to maintain the confidentiality of this Agreement (and
all drafts and other documents delivered in connection therewith)
in communications with third parties and otherwise and to take all
reasonable action to prevent the unauthorized use or disclosure of
and to protect the confidentiality of such information; provided,
that, this Agreement may be disclosed to each of the Provider's
and the Purchaser's financial advisers, banks, investors, legal
counsel and auditors and rating agencies rating the Provider.
(b) Each of the Provider and the Purchaser
understands and agrees that the Provider or the Purchaser, as the
case may be, may suffer irreparable harm if the Provider or the
Purchaser, as the case may be, breaches its obligations under this
Section 5.06 and that monetary damages shall be inadequate to
compensate the Provider or the Purchaser, as the case may be, for
such breach. Accordingly, the Provider and the Purchaser each
agree that, in the event of a breach by the Provider or the
Purchaser, as the case may be, of this Section 5.06 the Provider or
the Purchaser, as the case may be, in addition and not in limitation
of its rights and remedies under law, shall be entitled to a
temporary restraining order, preliminary injunction and permanent
injunction to prevent or restrain any such breach by the Provider or
the Purchaser, as the case may be.
SECTION 5.07. Term and Termination; Early
Termination Fee. (a) This Agreement shall continue in full force
and effect from the Closing Date until the Final Payment Date;
provided, however, that the occurrence of the Final Payment Date
shall not terminate any security interest of the Purchaser or relieve
or discharge the Provider or the Purchaser of their respective
duties, obligations or covenants hereunder with respect to any
Purchased Receivables purchased prior to the Final Payment Date,
and all the terms, provisions and conditions of this Agreement
shall remain in effect for such purpose until such obligations have
been satisfied and performed in full.
(b) If the Facility Termination Date shall occur
prior to July 31, 1999 for any reason, the Provider shall pay to the
Purchaser an Early Termination Fee of $200,000.
SECTION 5.08. Sale Treatment. The Provider and
the Purchaser have structured the transactions contemplated by this
Agreement with respect to each Purchased Batch as a sale, and the
Provider and the Purchaser agree to treat each such transaction as a
sale for all purposes, including, without limitation, in their
respective books, records, computer files, tax returns (federal, state
and local), regulatory and governmental filings (and shall reflect
such sale in their respective financial statements). The Provider
will advise all persons inquiring about the ownership of the
Purchased Receivables that all Purchased Receivables have been
sold to the Purchaser. The parties hereto hereby acknowledge and
agree that, except as otherwise expressly provided herein
(including, without limitation, pursuant to Exhibits III and VII and
Article IV hereof), all sales of Purchased Receivables by the
Provider hereby shall be and are without recourse or representation
or warranty of any kind, express or implied. The Provider will pay
all taxes (other than taxes directly relating to the income of the
Purchaser), if any, relating to the transactions contemplated under
this Agreement, including, without limitation, the purchase and
transfer of each Purchased Batch to the Purchaser.
SECTION 5.09. Grant of Security Interest. In the
event that, contrary to the mutual intent of the Provider and the
Purchaser, a court of competent jurisdiction determines that the
purchase of a Purchased Batch should not be characterized as a
sale, the Provider shall, effective as of the Initial Purchase Date, be
deemed to have granted (and the Provider hereby does grant) to the
Purchaser a first priority security interest in and to any and all
Purchased Receivables and the proceeds thereof to secure the
repayment of all amounts advanced to the Provider hereunder with
accrued interest thereon, and this Agreement shall be deemed to be
a security agreement. With respect to such grant of a security
interest, the Purchaser may at its option exercise from time to time
any and all rights and remedies available to it under the UCC or
otherwise. The Provider agrees that five days shall be reasonable
prior notice of the date of any public or private sale or other
disposition of all or any of the Purchased Receivables.
SECTION 5.10. No Liability of Purchaser. (a)
Neither this Agreement nor any document executed in connection
herewith shall constitute an assumption by the Purchaser of any
obligation to an Obligor.
(b) Notwithstanding any other provision herein, no
recourse under any obligation, covenant, agreement or instrument
of the Purchaser contained herein or with respect hereto shall be
had against any Related Person whether arising by breach of
contract, or otherwise at law or in equity (including any claim in
tort), whether express or implied, it being understood that the
agreements and other obligations of the Purchaser herein and with
respect hereto are solely its corporate obligations; provided,
however, nothing herein above shall operate as a release of any
liability which may arise as a result of such Related Person's gross
negligence or willful misconduct. The provisions of this Section
5.10 shall survive the termination of this Agreement.
SECTION 5.11. Attorney-in-Fact. The Provider
hereby irrevocably designates and appoints the Purchaser, the
Master Servicer and each other Person in the Purchaser Group, to
the extent permitted by applicable law and regulation, as its
attorneys-in-fact with respect to all Purchased Receivables, which
irrevocable power of attorney is coupled with an interest, with
authority, upon the occurrence and continuance of an Event of
Termination or Servicer Termination Event, to (i) endorse or sign
the Provider's name to financing statements, remittances, invoices,
assignments, checks (other than payments from Governmental
Entities), drafts or other instruments or documents in respect of the
Purchased Receivables, (ii) notify Insurers to make payments on
the Purchased Receivables directly to the Purchaser, and (iii) bring
suit in the Provider's name and settle or compromise such
Purchased Receivables as the Purchaser or the Master Servicer
may, in its discretion, deem appropriate.
SECTION 5.12. Entire Agreement; Severability.
(a) This Agreement, including all exhibits hereto, embodies the
entire agreement and understanding of the parties concerning the
subject matter contained herein. This Agreement supersedes any
and all prior agreements and understandings between the parties,
whether written or oral.
(b) If any provision of this Agreement shall be
declared invalid or unenforceable, the parties hereto agree that the
remaining provisions of this Agreement shall continue in full force
and effect.
SECTION 5.13. GOVERNING LAW. THIS
AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS PRINCIPLES THEREOF EXCEPT TO
THE EXTENT THAT ISSUES OF PERFECTION ARE
GOVERNED BY THE LAWS OF ANOTHER JURISDICTION).
SECTION 5.14. WAIVER OF JURY TRIAL,
JURISDICTION AND VENUE. EACH PARTY HERETO
HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ALL RIGHTS TO A TRIAL BY JURY
IN THE EVENT OF ANY LITIGATION WITH RESPECT TO
ANY MATTER RELATED TO THIS AGREEMENT, AND
HEREBY IRREVOCABLY CONSENTS TO THE
JURISDICTION OF THE STATE AND FEDERAL COURTS
LOCATED IN NEW YORK COUNTY, NEW YORK CITY,
NEW YORK IN CONNECTION WITH ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT. IN ANY SUCH LITIGATION, EACH PARTY
HERETO WAIVES PERSONAL SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER PROCESS AND
AGREES THAT SERVICE THEREOF MAY BE MADE BY
CERTIFIED OR REGISTERED MAIL DIRECTED TO SUCH
PARTY AT ITS ADDRESS SET FORTH ON THE SIGNATURE
PAGES HEREOF. EACH PARTY HERETO SHALL APPEAR
IN ANSWER TO SUCH SUMMONS, COMPLAINT OR OTHER
PROCESS WITHIN THE TIME PRESCRIBED BY LAW,
FAILING WHICH SUCH PARTY SHALL BE DEEMED IN
DEFAULT AND JUDGMENT MAY BE ENTERED BY THE
OTHER PARTY FOR THE AMOUNT OF THE CLAIM AND
OTHER RELIEF REQUESTED THEREIN.
SECTION 5.15. Execution in Counterparts. This
Agreement may be executed in counterparts, each of which when
so executed shall be deemed to be an original and all of which
when taken together shall constitute one and the same agreement.
SECTION 5.16. No Proceedings. The Provider
hereby agrees that it will not institute against the Purchaser any
proceeding of the type referred to in paragraph (g) of Exhibit V so
long as any senior indebtedness issued by the Purchaser shall be
outstanding or there shall not have elapsed one year plus one day
since the last day on which any such senior indebtedness shall have
been outstanding.
SECTION 5.17. Survival of Termination. The
provisions of Article IV (and the representations and warranties
with respect thereto) and Sections 5.05, 5.06 and 5.16 shall survive
any termination of this Agreement.
IN WITNESS WHEREOF, the parties have caused
this Agreement to be executed by their respective officers
thereunto duly authorized, as of the date first above written.
PROVIDER: UNILAB CORPORATION
By:
Name:
Title:
00000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Facsimile Number: (000) 000-0000
Trade names:
Prior names: MetCal Inc.
PURCHASER: DAIWA HEALTHCO-2 LLC
By:
Title:
c/o Lord Securities Corporation
Xxx Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Facsimile Number: (000) 000-0000
