Exhibit 10.27
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QUEST DIAGNOSTICS INCORPORATED
AS ISSUER
THE BANK OF NEW YORK
AS TRUSTEE
THE SUBSIDIARY GUARANTORS NAMED HEREIN
AS SUBSIDIARY GUARANTORS
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Fourth Supplemental Indenture
Dated as of July 21, 2000
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$150,000,000
10 3/4 % Senior Subordinated Notes due 2006
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FOURTH SUPPLEMENTAL INDENTURE
Fourth Supplemental Indenture (this "Supplemental Indenture")
dated as of July 21, 2000 between QUEST DIAGNOSTICS INCORPORATED, a Delaware
corporation (the "Company") and THE BANK OF NEW YORK, as Trustee (the
"Trustee").
WITNESSETH:
WHEREAS, in accordance with Section 902 of the Indenture
relating to the 10 3/4% Senior Subordinated Notes due 2006 of the Company (the
"Securities"), dated as of December 16, 1996 (the "Indenture"), the Trustee, the
Company and the Holders of at least a majority in principal amount at maturity
of the Securities outstanding as of the date hereof desire to amend certain
terms of the Indenture as described below;
WHEREAS, the Company intends to effect a receivables financing
transaction whereby the Company's wholly owned subsidiary, Quest Diagnostics
Receivables, Inc., a Delaware corporation, shall acquire accounts receivable
from the Company and some Restricted Subsidiaries from time to time;
WHEREAS, in accordance with the terms of the Indenture,
Holders of in excess of a majority in aggregate principal amount of the
outstanding Securities have consented to the amendments set forth herein;
WHEREAS, the execution and delivery of this Supplemental
Indenture has been duly authorized by the parties hereto and the Trustee has
received an Opinion of Counsel pursuant to Section 903 of the Indenture, and all
other acts necessary to make this Supplemental Indenture a valid and binding
supplement to the Indenture and effectively amending the Indenture as set forth
herein have been duly taken;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 101. DEFINITIONS.
All capitalized terms used and not defined herein shall have
the meanings ascribed thereto in the Indenture.
SECTION 201. AMENDMENTS TO THE INDENTURE.
Subject to Section 3 hereof, the Indenture is hereby amended
as follows:
(a) AMENDMENT TO SECTION 101. (1) Section 101 of the Indenture
is hereby amended by adding the following definitions:
"Quest Diagnostics Receivables" means Quest Diagnostics
Receivables Inc., the entity carrying out the transactions contemplated under
the Receivables Credit Facility and the Sale Agreement or any successor entity
thereof.
"Receivables Credit Facility" means the Revolving Credit
Facility among the Company, as initial servicer, Quest Diagnostics Receivables,
Blue Ridge Asset Funding Corporation and Wachovia Bank, N.A., as amended from
time to time, which shall be entered into on or before September 30, 2000,
including any and all renewals, refinancings, refundings, replacements thereof
and renewals of such facility or any successor facility.
"Receivables Financing" means the receivables financing
transaction contemplated by the Receivables Credit Facility, PROVIDED, HOWEVER,
that:
(i) All accounts receivable and certain related rights
acquired by Quest Diagnostics Receivables from the Company and
the Restricted Subsidiaries from time to time shall be
acquired on arms-length and commercially reasonable terms
pursuant to the Sale Agreement;
(ii) The receivables shall be transferred to Quest
Diagnostics Receivables by one or more of the following
methods:
- by the Company or the Restricted Subsidiaries in
exchange for cash collected by Quest Diagnostics
Receivables from receivables previously
transferred to it;
- by the Company or the Restricted Subsidiaries in
exchange for cash borrowed by Quest Diagnostics
Receivables under the Receivables Credit
Facility;
- by the Company or the Restricted Subsidiaries in
exchange for subordinated loans from the Company
or the Restricted Subsidiaries, as the case may
be, to Quest Diagnostics Receivables, each such
subordinated loan to be evidenced by a promissory
note; or
- by the Company as a capital contribution of
receivables to Quest Diagnostics Receivables;
(iii) Any loans or advances from Quest Diagnostics
Receivables to the Company shall be in the form of demand
loans or advances bearing market interest rates to be agreed
by the parties from time to time as permitted under the
Receivables Credit Facility; and
(iv) Quest Diagnostics Receivables shall grant a security
interest in the receivables, its demand advances to the
Company and its rights under the Sale Agreement to the lenders
under the Receivables Credit Facility to secure the
performance of its obligations under the Receivables Credit
Facility.
"Sale Agreement" means the Receivables Sale Agreement among
Quest Diagnostics Receivables, the Company and certain Subsidiary Guarantors
relating to the sale of accounts receivable by the Company and certain
Subsidiary Guarantors to Quest Diagnostics Receivables, as amended from time to
time, including any and all renewals and replacements of such agreement or any
successor agreement.
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(2) Section 101 of the Indenture is hereby further amended by
replacing the definition of "Permitted Investment" in its entirety with the
following:
"Permitted Investment" means (i) any Investment in a Wholly
Owned Subsidiary of such Person, (ii) securities either issued directly or fully
guaranteed or insured by the government of the United States of America or any
agency or instrumentality thereof (provided that the full faith and credit of
the United States is pledged in support thereof) having maturities of not more
than thirteen months from the date of acquisition thereof by such Person; (iii)
time deposits and certificates of deposit, having maturities of not more than
one year from the date of deposit, of any bank or trust company organized under
the laws of the United States of America or any state thereof having capital and
surplus in excess of $500 million and having peer group rating of B or better
(or the equivalent thereof) by Xxxxxxxx BankWatch, Inc. or outstanding long-term
debt rated BBB or better (or the equivalent thereof) by S&P or Baa or better (or
the equivalent thereof) by Moody's, (iv) repurchase obligations with a term of
not more than 30 days for underlying securities of the types described in
Clauses (ii) and (iii) above entered into with any bank meeting the
qualifications specified in Clause (iii) above, (v) commercial paper or master
notes issued or guaranteed by an entity (other than commercial paper or master
notes issued or guaranteed by an Affiliate or Related Person) rated A-1 or the
equivalent thereof by S&P or P-1 (or the equivalent thereof) by Moody's, and in
each case maturing within 180 days, (vi) securities with maturities of six
months or less from the date of acquisition issued or fully guaranteed by any
state, commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof and rated at least A by S&P or
MIG 2 by Moody's, (vii) money market funds rated AAm (or the equivalent thereof)
by S&P or Aa (or the equivalent thereof) by Moody's or bond funds rated AAf (or
the equivalent thereof) by S&P or Aa (or the equivalent thereof) by Moody's that
invest in the foregoing items, (viii) any Investment in a Person that, as a
consequence of such Investment, becomes a Restricted Subsidiary and that is
engaged in a Permitted Business if (A) the Company would, at the time of such
Investment and after giving pro forma effect thereto as if such Investment had
been made at the beginning of the most recently ended four full fiscal quarter
period for which internal financial statements are available immediately
preceding the date of such Investment, have been permitted to Incur at least
$1.00 of additional Debt pursuant to the Consolidated EBITDA Coverage Ratio test
set forth in the first paragraph of Section 1008 and (B) immediately after
giving effect to such Investment, the Company would have a Consolidated Net
Worth not less than 95% of the Consolidated Net Worth of the Company immediately
prior to such Investment, (ix) receivables owing to the Company or a Subsidiary
of the Company if created or acquired in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms, (x)
extensions of trade credit made in the ordinary course of business and on
customary terms, (xi) the letter of credit issued pursuant to the Credit
Facility in favor of Xxxxxxx X. Xxxxxxx to secure his pension benefits in an
amount not to exceed $10 million, (xii) any Investment by the Company or a
Restricted Subsidiary in Quest Diagnostics Receivables pursuant to the
Receivables Financing; (xiii) any Investment in addition to Investments
permitted to be made by Clauses (i) through (xii) above if the aggregate amount
(including cash and the fair value of property other than cash, as determined by
the Board of Directors) of such Investment, together with all other investments
made pursuant to this Clause (xiii) and then held by the Company and its
Restricted Subsidiaries (determined as of the time made), does not exceed $5
million.
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(b) AMENDMENT TO SECTION 1008. Section 1008 of the Indenture
is hereby amended by replacing clause (iv) of this section in its entirety with
the following:
(iv) Debt owed by the Company to any Wholly Owned
Restricted Subsidiary or Quest Diagnostics Receivables
pursuant to the Receivables Financing or Debt owed by a Wholly
Owned Restricted Subsidiary to the Company; PROVIDED, HOWEVER,
that (a) any such Debt owing by the Company to a Wholly Owned
Restricted Subsidiary shall be Subordinated Debt and (b) upon
either (1) the transfer or other disposition by such Wholly
Owned Restricted Subsidiary, Quest Diagnostics Receivables or
the Company of any Debt so permitted to a Person other than
the Company or another Wholly Owned Restricted Subsidiary or
(2) the issuance (other than directors' qualifying shares),
sale, lease, transfer or other disposition of shares of
Capital Stock (including by consolidation or merger) of such
Wholly Owned Restricted Subsidiary or Quest Diagnostics
Receivables to a Person other than the Company or another such
Wholly Owned Restricted Subsidiary or, in the case of Quest
Diagnostics Receivables, other than a Wholly Owned Subsidiary
in accordance with Section 1022(d)(iv), the provisions of this
Clause (iv) shall no longer be applicable to such Debt and
such Debt shall be deemed to have been Incurred at the time of
such transfer or other disposition or such issuance, sale,
lease, transfer or other disposition;
(c) AMENDMENT OF SECTION 1015. Section 1015 of the Indenture
is hereby amended by inserting the phrase "or (vii) such transaction is entered
into pursuant to the Receivables Financing;" after "and (c) if the Consideration
is greater than $15 million, then the determinations referred to in Clause (a)
above, in addition to the action required by Clause (b) above, must also be
confirmed by a nationally recognized investment banking firm (which may not be
an Affiliate or Related Person of the Company), in a written opinion delivered
to the Board of Directors of the Company prior to consummation of such
transaction (or series of transactions);"
(d) AMENDMENT OF SECTION 1019. Section 1019 of the Indenture
is hereby amended by:
a. inserting the phrase "PROVIDED, HOWEVER, that
notwithstanding the foregoing, Quest Diagnostics
Receivables may be designated as an Unrestricted
Subsidiary on the date of the Supplemental
Indenture; PROVIDED, FURTHER, that if Quest
Diagnostics Receivables is so designated, it
shall remain an Unrestricted Subsidiary for as
long as the Receivables Credit Facility remains
outstanding." after "and (iii) such change would
not otherwise result (after the giving of notice
or the lapse of time, or both) in an Event of
Default" and
b. inserting the phrase "provided that the
Receivables Credit Facility shall not be
Unpermitted Debt" at the end of the section after
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"(y) such Debt is secured by a Lien on any
property or other assets of the Company and any
of its Restricted Subsidiaries."
(e) ADDITION OF NEW SECTION. The following Section 1022 shall
be inserted:
SECTION 1022. RESTRICTIONS RELATING TO RECEIVABLES FINANCING.
(a) The Company shall cause Quest Diagnostics
Receivables to pay a dividend to the Company on
the date of the Supplemental Indenture in an
amount equal to the initial amount borrowed by
Quest Diagnostics Receivables under the
Receivables Credit Facility on the date of the
Receivables Credit Facility (such amount is
estimated to be approximately $256 million). The
Company shall use all of the dividend it receives
from Quest Diagnostics Receivables on the date of
the Supplemental Indenture to permanently pay
down Debt under the term loan portion (but not
the revolving portion) of the Credit Agreement
dated as of August 16, 1999, as amended from time
to time, among the Company; the guarantors party
thereto; the banks named therein; Xxxxxxx Xxxxx &
Co.; Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, as joint lead arranger and
syndication agent; Banc of America Securities
LLC, as joint lead arranger; Bank of America,
N.A., as administrative agent; Wachovia Bank,
N.A., as co-documentation agent and The Bank of
New York, as co-documentation agent, which term
loan was Incurred pursuant to the first paragraph
of Section 1008.
(b) The Company shall permanently reduce the amount
of term loans borrowed under the credit agreement
described in subsection (a) or any and all
renewals of, refinancings, refundings and
replacements of such facility or any successor
facility by an amount equal to the excess of (x)
the total amount borrowed by Quest Diagnostics
Receivables under the Receivables Credit Facility
over (y) the initial amount borrowed by Quest
Diagnostics Receivables under the Receivables
Credit Facility on the date of the Receivables
Credit Facility.
(c) The Company shall not sell, transfer or otherwise
dispose of its shares in Quest Diagnostics
Receivables to any Person other than to a
Restricted Subsidiary and except as permitted
under paragraph (d)(iv) below.
(d) The Company shall cause Quest Diagnostics
Receivables to comply with the following
covenants:
(i) Quest Diagnostics Receivables will be a
limited purpose entity whose primary
activities are
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restricted to purchasing or otherwise
acquiring accounts receivable from the
Company and any of its Subsidiaries,
entering into agreements for the financing
and servicing of the account receivables,
and conducting such other activities as it
deems necessary or appropriate to carry out
its primary activities contemplated by the
Receivables Credit Facility and the Sale
Agreement.
(ii) Quest Diagnostics Receivables will not incur
or permit to exist any Debt except: (x) Debt
under the Receivables Credit Facility and
(y) Debt owing to the Company or any Wholly
Owned Subsidiary of the Company.
(iii) Quests Diagnostics Receivables will not
Incur any Liens other than the Liens under
the Receivables Credit Facility and Liens
permitted under clause (ix) of the
definition of Permitted Liens.
(iv) Quest Diagnostics Receivables will not merge
into or consolidate with any other Person,
or permit any other Person to merge into or
consolidate with it, or purchase, lease or
otherwise acquire (in one transaction or a
series of transactions) assets that would be
material to Quest Diagnostics Receivables
(whether directly by purchase, lease or
other acquisition of the assets of such
Person or indirectly by purchase or other
acquisition of the capital stock of such
other Person) other than (x) the acquisition
of the receivables and other assets pursuant
to the Sale Agreement and (y) any
transaction, including a merger or
consolidation with a Wholly Owned Subsidiary
of the Company that has no Debt outstanding
other than Debt owing to the Company or
another Wholly Owned Subsidiary of the
Company and whose activities are restricted
to the same extent as Quest Diagnostics
Receivables as set forth in this Section
1022(d), provided that the Company shall be
bound by the same restriction as set forth
in Section 1022(c) with respect to such
Wholly Owned Subsidiary.
SECTION 301. CONFIRMATION; EFFECTIVENESS. As amended by this
Supplemental Indenture, the Indenture and the Securities are ratified and
confirmed in all respects and the Indenture as so amended shall be read, taken
and construed as one and the same instrument. The provisions of this
Supplemental Indenture shall become operative as of the date of this
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Supplemental Indenture. This Supplemental Indenture may be executed in any
number of counterparts, each of which counterparts together shall constitute but
one and the same instrument.
SECTION 401. TRUST INDENTURE ACT. If and to the extent that
any provision of this Supplemental Indenture limits, qualifies or conflicts with
another provision included in this Supplemental Indenture or in the Indenture,
which is required to be included in this Supplemental Indenture or the Indenture
by the Trust Indenture Act of 1939, as amended (the "TIA"), such required
provision of the TIA shall control.
SECTION 501. GOVERNING LAW. This Supplemental Indenture shall
be deemed governed by, and construed in accordance with, the internal laws of
the State of New York, but without giving effect to applicable principles of
conflicts of law thereof to the extent that the application of the laws of
another jurisdiction would be required thereby.
SECTION 601. RIGHTS OF TRUSTEE. Without limiting any other
protections or rights afforded the Trustee at law, by contract or otherwise, the
Trustee will be entitled to the full benefits afforded by Sections 6.03 and 6.04
of the Indenture in connection with its execution and delivery of this
Supplemental Indenture.
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed as of the date first written above.
QUEST DIAGNOSTICS INCORPORATED
By /s/ Xxxxxxx X. Xxxxxxxx
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Title: Vice President
THE BANK OF NEW YORK, as Trustee
By
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Title:
QUEST DIAGNOSTICS
INVESTMENTS INCORPORATED
QUEST DIAGNOSTICS
FINANCE INCORPORATED
By /s/ Xxxxx X. Xxxxxxxxx
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Title: President
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QUEST DIAGNOSTICS INCORPORATED (CA)
QUEST DIAGNOSTICS INCORPORATED (CT)
QUEST DIAGNOSTICS INCORPORATED (OH)
QUEST DIAGNOSTICS INCORPORATED (MA)
QUEST DIAGNOSTICS INCORPORATED (MD)
QUEST DIAGNOSTICS INCORPORATED (MI)
QUEST DIAGNOSTICS LLC (IL)
QUEST DIAGNOSTICS OF PENNSYLVANIA INC.
QUEST MRL, INC.
LABORATORY HOLDINGS INCORPORATED
DIAGNOSTIC REFERENCE SERVICES, INC.
DPD HOLDINGS, INC.
METWEST INC.
XXXXXXX INSTITUTE DIAGNOSTICS
QUEST HOLDINGS INCORPORATED (DE)
QUEST HOLDINGS INCORPORATED (MD)
QUEST HOLDINGS INCORPORATED (MI)
QUEST DIAGNOSTICS HOLDINGS
INCORPORATED (DE)
QUEST DIAGNOSTICS CLINICAL
LABORATORIES, INC. (DE)
By /s/ Xxxxxxx X. Xxxxxxxx
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Title: Vice President
PATHOLOGY BUILDING PARTNERSHIP
By Quest Diagnostics Incorporated (MD)
as General Partner
By: /s/ Xxxxxxx X. Xxxxxxxx
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Title: Vice President
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