<SUBMISSION>
<ACCESSION-NUMBER>0000950117-04-001657
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>10
<PERIOD>20040331
<FILING-DATE>20040430
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>QUEST DIAGNOSTICS INC
<CIK>0001022079
<ASSIGNED-SIC>8071
<IRS-NUMBER>161387862
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>001-12215
<FILM-NUMBER>04769953
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>ONE MALCOLM AVE
<CITY>TETERBORO
<STATE>NJ
<ZIP>07608
<PHONE>2013935000
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>ONE MALCOLM AVE
<CITY>TETERBORO
<STATE>NJ
<ZIP>07601
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>CORNING CLINICAL LABORATORIES INC
<DATE-CHANGED>19960903
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>a37551.txt
<DESCRIPTION>QUEST DIAGNOSTICS INCORPORATED
<TEXT>

<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

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

                                    FORM 10-Q

               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                      For the Quarter ended March 31, 2004
                         Commission file number 1-12215

                         Quest Diagnostics Incorporated

                               One Malcolm Avenue
                               Teterboro, NJ 07608
                                 (201) 393-5000

                                    Delaware
                            (State of Incorporation)

                                   16-1387862
                     (I.R.S. Employer Identification Number)

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

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [_]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [X] No [_]

As of April 23, 2004, there were outstanding 103,467,426 shares of the
registrant's common stock, $.01 par value.




<PAGE>

                         PART I - FINANCIAL INFORMATION

<TABLE>
<CAPTION>
                                                                                   Page
                                                                                   ----
<S>                                                                                 <C>
Item 1. Financial Statements

        Index to consolidated financial statements filed as part of this report:

        Consolidated Statements of Operations for the
           Three Months Ended March 31, 2004 and 2003                                2

        Consolidated Balance Sheets as of
           March 31, 2004 and December 31, 2003                                      3

        Consolidated Statements of Cash Flows for the
           Three Months Ended March 31, 2004 and 2003                                4

        Notes to Consolidated Financial Statements                                   5

Item 2. Management's Discussion and Analysis of Financial Condition
           and Results of Operations

        Management's Discussion and Analysis of Financial Condition
           and Results of Operations                                                17

Item 3. Quantitative and Qualitative Disclosures About Market Risk

        See Item 2. "Management's Discussion and Analysis of Financial
           Condition and Results of Operations"                                     22

Item 4. Controls and Procedures

        Controls and Procedures                                                     22
</TABLE>


                                       1




<PAGE>

                 QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
               FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
                      (in thousands, except per share data)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                             Three Months Ended
                                                                  March 31,
                                                           -----------------------
                                                              2004         2003
                                                           ----------   ----------
<S>                                                        <C>          <C>
Net revenues ...........................................   $1,255,742   $1,092,797
                                                           ----------   ----------
Operating costs and expenses:
Cost of services .......................................      737,281      648,097
Selling, general and administrative ....................      307,545      279,199
Amortization of intangible assets ......................        2,064        2,023
Other operating (income) expense, net ..................          (27)         223
                                                           ----------   ----------
   Total operating costs and expenses ..................    1,046,863      929,542
                                                           ----------   ----------

Operating income .......................................      208,879      163,255

Other income (expense):
Interest expense, net ..................................      (14,644)     (13,909)
Minority share of income ...............................       (4,454)      (3,803)
Equity earnings in unconsolidated joint ventures .......        4,557        4,056
Other income (expense), net ............................        1,199         (805)
                                                           ----------   ----------
   Total non-operating expenses, net ...................      (13,342)     (14,461)
                                                           ----------   ----------

Income before taxes ....................................      195,537      148,794
Income tax expense .....................................       79,388       60,758
                                                           ----------   ----------
Net income .............................................   $  116,149   $   88,036
                                                           ==========   ==========
Basic earnings per common share:
Net income .............................................   $     1.13   $     0.88
Weighted average common shares outstanding - basic .....      103,142      100,037

Diluted earnings per common share:
Net income .............................................   $     1.10   $     0.86
Weighted average common shares outstanding - diluted ...      105,742      102,455
</TABLE>

        The accompanying notes are an integral part of these statements.


                                       2




<PAGE>

                 QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                      MARCH 31, 2004 AND DECEMBER 31, 2003
                      (in thousands, except per share data)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                             March 31,   December 31,
                                                                               2004          2003
                                                                            ----------   ------------
<S>                                                                         <C>           <C>
Assets
Current assets:
Cash and cash equivalents................................................   $  190,075    $  154,958
Accounts receivable, net of allowance of $207,210 and $211,739 at
   March 31, 2004 and December 31, 2003, respectively....................      650,511       609,187
Inventories..............................................................       72,625        72,484
Deferred income taxes....................................................       98,114       108,975
Prepaid expenses and other current assets................................       62,296        50,182
                                                                            ----------    ----------
   Total current assets..................................................    1,073,621       995,786
Property, plant and equipment, net.......................................      609,765       607,305
Goodwill, net............................................................    2,517,338     2,518,875
Intangible assets, net...................................................       15,013        16,978
Deferred income taxes....................................................       50,829        49,635
Other assets.............................................................      113,491       112,839
                                                                            ----------    ----------
Total assets.............................................................   $4,380,057    $4,301,418
                                                                            ==========    ==========

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses....................................   $  617,399    $  649,850
Short-term borrowings and current portion of long-term debt..............       44,597        73,950
                                                                            ----------    ----------
   Total current liabilities.............................................      661,996       723,800
Long-term debt...........................................................    1,057,749     1,028,707
Other liabilities........................................................      155,857       154,217
Commitments and contingencies
Common stockholders' equity:
Common stock, par value $0.01 per share; 300,000 shares authorized;
   106,819 and 106,804 shares issued at March 31, 2004 and December
   31, 2003, respectively................................................        1,068         1,068
Additional paid-in capital...............................................    2,252,801     2,267,014
Retained earnings  ......................................................      481,151       380,559
Unearned compensation....................................................       (1,798)       (2,346)
Accumulated other comprehensive income...................................        3,549         5,947
Treasury stock, at cost; 3,453 and 3,990 shares at March 31, 2004 and
   December 31, 2003, respectively.......................................     (232,316)     (257,548)
                                                                            ----------    ----------
   Total common stockholders' equity.....................................    2,504,455     2,394,694
                                                                            ----------    ----------
Total liabilities and stockholders' equity...............................   $4,380,057    $4,301,418
                                                                            ==========    ==========
</TABLE>

        The accompanying notes are an integral part of these statements.


                                       3




<PAGE>

                QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
                                 (in thousands)
                                  (unaudited)

<TABLE>
<CAPTION>
                                                                             2004        2003
                                                                           --------   ---------
<S>                                                                        <C>        <C>
Cash flows from operating activities:
Net income..............................................................   $116,149   $  88,036
Adjustments to reconcile net income to net cash provided by operating
   activities:
Depreciation and amortization...........................................     41,070      36,701
Provision for doubtful accounts.........................................     56,626      54,629
Deferred income tax provision...........................................     11,419      10,046
Minority share of income................................................      4,454       3,803
Stock compensation expense..............................................        548       1,536
Tax benefits associated with stock-based compensation plans.............     24,447       5,637
Other, net..............................................................     (1,080)     (1,027)
Changes in operating assets and liabilities:
   Accounts receivable..................................................    (97,950)    (84,316)
   Accounts payable and accrued expenses................................    (63,895)    (96,236)
   Integration, settlement and other special charges....................    (13,975)     (4,898)
   Income taxes payable.................................................     41,544      40,038
   Other assets and liabilities, net....................................     (8,666)      4,352
                                                                           --------   ---------
Net cash provided by operating activities...............................    110,691      58,301
                                                                           --------   ---------

Cash flows from investing activities:
Business acquisitions, net of cash acquired.............................         --    (236,396)
Capital expenditures....................................................    (45,137)    (37,481)
Increase in investments and other assets................................     (3,614)     (2,628)
Proceeds from disposition of assets.....................................      3,293           9
                                                                           --------   ---------
Net cash used in investing activities...................................    (45,458)   (276,496)
                                                                           --------   ---------

Cash flows from financing activities:
Proceeds from borrowings................................................     75,000     450,000
Repayments of debt......................................................    (75,359)   (268,987)
Purchases of treasury stock.............................................    (44,871)         --
Exercise of stock options...............................................     34,483       2,799
Dividends paid..........................................................    (15,429)         --
Distributions to minority partners......................................     (3,940)     (3,002)
Financing costs paid....................................................         --      (4,224)
Other ..................................................................         --         429
                                                                           --------   ---------
Net cash (used in) provided by financing activities.....................    (30,116)    177,015
                                                                           --------   ---------

Net change in cash and cash equivalents.................................     35,117     (41,180)

Cash and cash equivalents, beginning of period..........................    154,958      96,777
                                                                           --------   ---------

Cash and cash equivalents, end of period................................   $190,075   $  55,597
                                                                           ========   =========
</TABLE>

        The accompanying notes are an integral part of these statements.


                                       4




<PAGE>

                 QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (in thousands, unless otherwise indicated)
                                   (unaudited)

1.   BASIS OF PRESENTATION

     Background

     Quest Diagnostics Incorporated and its subsidiaries ("Quest Diagnostics" or
the "Company") is the largest clinical laboratory testing business in the United
States. As the nation's leading provider of diagnostic testing and related
services for the healthcare industry, Quest Diagnostics offers a broad range of
clinical laboratory testing services to physicians, hospitals, managed care
organizations, employers, governmental institutions and other commercial
clinical laboratories. Quest Diagnostics is the leading provider of esoteric
testing, including gene-based testing, and testing for drugs of abuse. The
Company is also a leading provider of anatomic pathology services and testing to
support clinical trials of new pharmaceuticals worldwide. Through the Company's
national network of laboratories and patient service centers, and its esoteric
testing laboratory and development facilities, Quest Diagnostics offers
comprehensive and innovative diagnostic testing, information and related
services used by physicians and other healthcare customers to diagnose, treat
and monitor diseases and other medical conditions.

     On an annualized basis, Quest Diagnostics processes over 130 million
requisitions for testing through its extensive network of laboratories and
patient service centers in virtually every major metropolitan area throughout
the United States.

     Basis of Presentation

     The interim consolidated financial statements reflect all adjustments,
which in the opinion of management are necessary for a fair statement of
financial condition and results of operations for the periods presented. Except
as otherwise disclosed, all such adjustments are of a normal recurring nature.
The interim consolidated financial statements have been compiled without audit.
Operating results for the interim periods are not necessarily indicative of the
results that may be expected for the full year. These interim consolidated
financial statements should be read in conjunction with the audited consolidated
financial statements included in the Company's 2003 Annual Report on Form 10-K.
Certain amounts reported in the Company's consolidated statements of operations
for the three months ended March 31, 2003 have been reclassified to conform to
the 2004 presentation, which reports operating income on the face of the
consolidated statements of operations.

     Earnings Per Share

     Basic earnings per common share is calculated by dividing net income by the
weighted average common shares outstanding. Diluted earnings per common share is
calculated by dividing net income by the weighted average common shares
outstanding after giving effect to all potentially dilutive common shares
outstanding during the period. The if-converted method is used in determining
the dilutive effect of the Company's 1 3/4% contingent convertible debentures in
periods when the holders of such securities are permitted to exercise their
conversion rights. Potentially dilutive common shares include outstanding stock
options and restricted common shares granted under the Company's Employee Equity
Participation Program. These dilutive securities increased the weighted average
common shares outstanding by 2.6 million shares and 2.4 million shares for the
three months ended March 31, 2004 and 2003, respectively.

     Stock-Based Compensation

     The Company has chosen to adopt the disclosure only provisions of Statement
of Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based
Compensation" ("SFAS 123"), as amended by SFAS No. 148, "Accounting for
Stock-Based Compensation - Transition and Disclosure - an amendment of FASB
Statement No. 123" ("SFAS 148"), and continue to account for stock-based
compensation using the intrinsic value method prescribed in Accounting
Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to
Employees" ("APB 25"), and related interpretations. Under this approach, the
cost of restricted stock awards is expensed over their vesting period, while the
imputed cost of stock option grants and discounts offered under the Company's
Employee Stock Purchase Plan ("ESPP") is disclosed, based on the vesting
provisions of the individual grants, but not charged to expense. Stock-based
compensation expense recorded in accordance with APB 25, related to restricted
stock awards, was $0.5 million and $1.5 million for the three months ended March
31, 2004 and 2003, respectively.

           The following table presents net income and basic and diluted
earnings per common share, had the Company elected to recognize compensation
cost based on the fair value at the grant dates for stock option awards and
discounts


                                       5




<PAGE>

                 QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                   (in thousands, unless otherwise indicated)
                                   (unaudited)

granted for stock purchases under the Company's ESPP, consistent with the method
prescribed by SFAS 123, as amended by SFAS 148:

<TABLE>
<CAPTION>
                                                Three Months Ended
                                                     March 31,
                                                -------------------
                                                  2004       2003
                                                --------   --------
<S>                                             <C>        <C>
Net income:
Net income, as reported .....................   $116,149   $ 88,036
Add: Stock-based compensation under APB 25...        548      1,536
Deduct: Total stock-based compensation
   expense determined under fair value
   method for all awards, net of related tax
   effects ..................................    (10,962)   (14,805)
                                                --------   --------
Pro forma net income ........................   $105,735   $ 74,767
                                                ========   ========

Earnings per common share:
Basic - as reported .........................   $   1.13   $   0.88
                                                --------   --------
Basic - pro forma ...........................   $   1.03   $   0.75
                                                --------   --------

Diluted - as reported .......................   $   1.10   $   0.86
                                                --------   --------
Diluted - pro forma .........................   $   1.01   $   0.74
                                                --------   --------
</TABLE>

     The fair value of each option grant was estimated on the date of grant
currently calculated using the Black-Scholes option-pricing model with the
following weighted average assumptions:

<TABLE>
<CAPTION>
                                               Three Months Ended
                                                    March 31,
                                               ------------------
                                                 2004       2003
                                               --------   -------
<S>                                              <C>       <C>
Dividend yield..............................      0.7%      0.0%
Risk-free interest rate.....................      3.0%      2.9%
Expected volatility.........................     47.3%     48.1%
Expected holding period, in years...........        5         5
</TABLE>

     New Accounting Standard

     In January 2003, the FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities", as revised in December 2003 ("FIN 46"). FIN 46
requires a variable interest entity to be consolidated by a company if that
company is subject to a majority of the risk of loss from the variable interest
entity's activities or entitled to receive a majority of the entity's residual
returns or both. Historically, entities generally were not consolidated unless
the entity was controlled through voting interests. FIN 46 also requires
disclosures about variable interest entities that a company is not required to
consolidate but in which it has a significant variable interest. The adoption
of FIN 46 did not have an impact on the Company's consolidated financial
statements.

2.   BUSINESS ACQUISITION

     On February 28, 2003, the Company completed the acquisition of Unilab
Corporation ("Unilab"), the leading commercial clinical laboratory in
California. In connection with the acquisition of Unilab, the Company entered
into an agreement to sell to Laboratory Corporation of America Holdings, Inc.,
certain assets in northern California (the "Divestiture"). During the fourth
quarter of 2003, the Company finalized its plan related to the integration of
Unilab into the Company's laboratory network. As part of the plan, and following
the Divestiture, the Company closed its previously owned clinical laboratory in
the San Francisco Bay area and completed the integration of remaining customers
in the northern California area to Unilab's laboratories in San Jose and
Sacramento. The Company currently operates two laboratories in the Los Angeles
metropolitan area. The Company plans to open a new regional laboratory in the
Los Angeles metropolitan area


                                       6




<PAGE>

                 QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                   (in thousands, unless otherwise indicated)
                                   (unaudited)

and then integrate its business in the Los Angeles metropolitan area into the
new facility. As of March 31, 2004 and December 31, 2003, accruals related to
the Unilab integration plan totaled approximately $6 million and $7 million,
respectively. While the majority of the accrued costs at March 31, 2004 are
expected to be paid during the remainder of 2004, there are certain severance
costs that have payment terms extending into 2005.

     The following unaudited pro forma combined financial information for the
three months ended March 31, 2003, assumes that the acquisition of Unilab and
the related Divestiture were completed on January 1, 2003 (in thousands, except
per share data):

<TABLE>
<CAPTION>
                                                              Three Months Ended
                                                                March 31, 2003
                                                              ------------------
                                                                   Pro forma
                                                              ------------------
<S>                                                               <C>
Net revenues ..............................................       $1,163,023
Net income ................................................           96,715

Basic earnings per common share:
Net income ................................................       $     0.92
Weighted average common shares outstanding - basic ........          104,583

Diluted earnings per common share:
Net income ................................................       $     0.90
Weighted average common shares outstanding - diluted ......          107,036
</TABLE>

     The unaudited pro forma combined financial information presented above
reflects certain reclassifications to the historical financial statements of
Unilab to conform the acquired company's accounting policies and classification
of certain costs and expenses to that of Quest Diagnostics. These adjustments
had no impact on pro forma net income. Pro forma results for the three months
ended March 31, 2003 exclude $14.5 million of direct transaction costs, which
were incurred and expensed by Unilab immediately prior to the closing of the
Unilab acquisition.

3.   GOODWILL AND INTANGIBLE ASSETS

     Goodwill at March 31, 2004 and December 31, 2003 consisted of the
following:

<TABLE>
<CAPTION>
                                                        March 31,   December 31,
                                                          2004          2003
                                                       ----------   ------------
<S>                                                    <C>           <C>
Goodwill ...........................................   $2,705,391    $2,706,928
Less: accumulated amortization .....................     (188,053)     (188,053)
                                                       ----------    ----------
Goodwill, net ......................................   $2,517,338    $2,518,875
                                                       ==========    ==========
</TABLE>


                                       7



<PAGE>

                 QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                   (in thousands, unless otherwise indicated)
                                   (unaudited)

     The changes in the gross carrying amount of goodwill for the period ended
March 31, 2004 and for the year ended December 31, 2003 are as follows:

<TABLE>
<CAPTION>
                                                        March 31,   December 31,
                                                          2004          2003
                                                       ----------   ------------
<S>                                                    <C>           <C>
Balance at beginning of period......................   $2,706,928    $1,976,903
Goodwill acquired during the period.................           --       730,025
Other...............................................       (1,537)           --
                                                       ----------    ----------
Balance at end of period............................   $2,705,391    $2,706,928
                                                       ==========    ==========
</TABLE>

     Intangible assets at March 31, 2004 and December 31, 2003 consisted of the
following:

<TABLE>
<CAPTION>
                               Weighted              March 31, 2004                    December 31, 2003
                                Average     --------------------------------   --------------------------------
                             Amortization              Accumulated                        Accumulated
                                Period        Cost    Amortization     Net       Cost    Amortization     Net
                             ------------   -------   ------------   -------   -------   ------------   -------
<S>                            <C>          <C>         <C>          <C>       <C>         <C>          <C>
Non-compete agreements....      5 years     $44,942     $(39,381)    $ 5,561   $44,942     $(37,947)    $ 6,995
Customer lists............     15 years      42,225      (36,023)      6,202    42,225      (35,568)      6,657
Other.....................     10 years       5,895       (2,645)      3,250     5,895       (2,569)      3,326
                                            -------     --------     -------    ------     --------     -------
   Total..................     10 years     $93,062     $(78,049)    $15,013   $93,062     $(76,084)    $16,978
                                            =======     ========     =======   =======     ========     =======
</TABLE>

     Amortization expense related to intangible assets was $2,064 and $2,023 for
the three months ended March 31, 2004 and 2003, respectively.

     The estimated amortization expense related to intangible assets for each of
the five succeeding fiscal years and thereafter as of March 31, 2004 is as
follows:

<TABLE>
<CAPTION>
    Fiscal Year Ending
       December 31,
----------------------
<S>                          <C>
Remainder of 2004.........   $ 4,404
2005......................     3,168
2006......................     1,891
2007......................     1,057
2008......................       867
2009......................       769
Thereafter................     2,857
                             -------
   Total..................   $15,013
                             =======
</TABLE>


                                       8




<PAGE>

                 QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                   (in thousands, unless otherwise indicated)
                                   (unaudited)

4.   DEBT

     Term Loan due December 2008

     On December 19, 2003, the Company entered into a new $75 million amortizing
term loan facility (the "term loan due December 2008"), which was funded on
January 12, 2004 and the proceeds of which were used to repay $75 million of
outstanding principal under the Company's term loan due June 2007. Interest is
based on LIBOR plus an applicable margin that can fluctuate over a range of up
to 119 basis points, based on changes in the Company's public debt rating. As of
March 31, 2004, the Company's borrowing rate for LIBOR-based loans was LIBOR
plus 0.55%. The term loan due December 2008 requires principal repayments of the
initial amount borrowed equal to 20% on each of the third and fourth anniversary
dates of the funding and the remainder of the outstanding balance on December
31, 2008. The term loan due December 2008 is guaranteed by the Company's wholly
owned subsidiaries that operate clinical laboratories in the United States
(the "Subsidiary Guarantors").

     2004 Debt Refinancings

     On April 20, 2004, the Company entered into a new $500 million senior
unsecured revolving credit facility to replace its existing $325 million
unsecured revolving credit facility. Under the new $500 million senior unsecured
revolving credit facility (the "Credit Facility"), which matures in April 2009,
interest is based on certain published rates plus an applicable margin that will
vary over an approximate range of 90 basis points based on changes in the
Company's credit ratings. At the option of the Company, it may elect to enter
into LIBOR-based interest rate contracts for periods up to 180 days. Interest on
any outstanding amounts not covered under the LIBOR-based interest rate
contracts is based on an alternate base rate, which is calculated by reference
to the prime rate or federal funds rate. As of April 30, 2004, the Company's
borrowing rate for LIBOR-based loans was LIBOR plus 0.625%. The Credit Facility
is guaranteed by the Subsidiary Guarantors. The Credit Facility contains various
covenants, including the maintenance of certain financial ratios, which could
impact the Company's ability to, among other things, incur additional
indebtedness.

     In addition, on April 20, 2004, the Company entered into a new $300 million
receivables securitization facility to replace its existing $250 million
receivables securitization facility which matured in April 2004. The new $300
million receivables securitization facility (the "secured receivables credit
facility") matures in April 2007. Interest on the $300 million secured
receivables credit facility is based on rates that are intended to approximate
commercial paper rates for highly rated issuers. The secured receivables credit
facility is supported by one-year back-up facilities provided by two banks on a
committed basis. Borrowings outstanding under the secured receivables credit
facility, if any, are classified as a current liability on our consolidated
balance sheet since the lenders fund the borrowings through the issuance of
commercial paper which matures at various dates within one year from the date of
issuance and the term of the one-year back-up facilities described above.

     On April 30, 2004, the Company repaid the remaining $230 million of
principal outstanding under its term loan due June 2007 with $100 million of
borrowings under its new $500 million unsecured revolving credit facility and
$130 million of borrowings under its new $300 million secured receivables credit
facility.

     In conjunction with the debt refinancings outlined above, the Company is
expected to record a charge to earnings of approximately $3 million in the
second quarter of 2004, representing the write-off of deferred financing costs
associated with the Company's debt and credit facilities which were refinanced.


                                       9




<PAGE>

                 QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                   (in thousands, unless otherwise indicated)
                                   (unaudited)

5.   COMMITMENTS AND CONTINGENCIES

     The Company has standby letters of credit issued under its $68 million
letter of credit lines to ensure its performance or payment to third parties,
which amounted to $61 million at March 31, 2004. The letters of credit, which
are renewed annually, primarily represent collateral for current and future
automobile liability and workers' compensation loss payments.

     The Company has entered into several settlement agreements with various
government and private payers during recent years relating to industry-wide
billing and marketing practices that had been substantially discontinued by the
mid-1990s. The Company is aware of certain pending lawsuits filed under the qui
tam provisions of the civil False Claims Act. Some of the proceedings against
the Company involve claims that are substantial in amount.

     Although management believes that established reserves for billing-related
claims are sufficient, including qui tam cases of which management is aware, it
is possible that additional information (such as the indication by the
government of criminal activity, additional tests being questioned or other
changes in the government's or private claimants' theories of wrongdoing) may
become available which may cause the final resolution of these matters to exceed
established reserves by an amount which could be material to the Company's
results of operations and cash flows in the period in which such claims are
settled. The Company does not believe that these issues will have a material
adverse effect on its overall financial position. However, the Company
understands that there may be pending qui tam claims brought by former employees
or other "whistle blowers" as to which it has not been provided with a copy of
the complaint and accordingly cannot determine the extent of any potential
liability.

     In addition to the billing-related settlement reserves discussed above, the
Company is involved in various legal proceedings arising in the ordinary course
of business. Some of the proceedings against the Company involve claims that are
substantial in amount. Although management cannot predict the outcome of such
proceedings or any claims made against the Company, management does not
anticipate that the ultimate outcome of the various proceedings or claims will
have a material adverse effect on the Company's financial position but may be
material to the Company's results of operations and cash flows in the period in
which such proceedings or claims are resolved.

     As a general matter, providers of clinical laboratory testing services may
be subject to lawsuits alleging negligence or other similar legal claims. These
suits could involve claims for substantial damages. Any professional liability
litigation could also have an adverse impact on the Company's client base and
reputation. The Company maintains various liability insurance programs for
claims that could result from providing or failing to provide clinical
laboratory testing services, including inaccurate testing results and other
exposures. The Company's insurance coverage limits its maximum exposure on
individual claims; however, the Company is essentially self-insured for a
significant portion of these claims. The basis for claims reserves incorporates
actuarially determined losses based upon the Company's historical and projected
loss experience. Management believes that present insurance coverage and
reserves are sufficient to cover currently estimated exposures. Although
management cannot predict the outcome of any claims made against the Company,
management does not anticipate that the ultimate outcome of any such proceedings
or claims will have a material adverse effect on the Company's financial
position but may be material to the Company's results of operations and cash
flows in the period in which such claims are resolved.


                                       10




<PAGE>

                 QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                   (in thousands, unless otherwise indicated)
                                   (unaudited)

6.   STOCKHOLDERS' EQUITY

     Changes in stockholders' equity for the three months ended March 31, 2004
were as follows:

<TABLE>
<CAPTION>
                                                                                         Accumulated
                                 Shares of                                                  Other
                                  Common             Additional                            Compre-     Treasury   Compre-
                                   Stock     Common   Paid-In    Retained    Unearned      hensive      Stock,    hensive
                                Outstanding   Stock    Capital   Earnings  Compensation    Income      at Cost    Income
                                -----------  ------  ----------  --------  ------------  -----------  ---------  --------
<S>                               <C>        <C>     <C>         <C>          <C>          <C>        <C>        <C>
Balance,
   December 31, 2003..........    102,814    $1,068  $2,267,014  $380,559     $(2,346)     $ 5,947    $(257,548)
Net income....................                                    116,149                                        $116,149
Other comprehensive
   loss.......................                                                              (2,398)                (2,398)
                                                                                                                 --------
   Comprehensive income.......                                                                                   $113,751
                                                                                                                 ========
Dividend declared ............                                    (15,557)
Issuance of common stock
   under benefit plans........         49         1       3,065
Exercise of stock options.....      1,124              (35,620)                                         70,103
Shares to cover employee
   payroll tax withholdings
   on stock issued under
   benefit plans..............        (74)       (1)     (6,105)
Tax benefits associated
   with stock-based
   compensation plans ........                           24,447
Amortization of unearned
   compensation...............                                                    548
Purchases of treasury stock...       (547)                                                              (44,871)
                                  -------    ------  ----------  --------     -------      ------     ---------
Balance,
   March 31, 2004.............    103,366    $1,068  $2,252,801  $481,151     $(1,798)     $3,549     $(232,316)
                                  =======    ======  ==========  ========     =======      ======     =========
</TABLE>

     In 2003, the Company's Board of Directors authorized a share repurchase
program, which permits the Company to purchase up to $600 million of its common
stock. For the quarter ended March 31, 2004, the Company repurchased 0.5 million
shares of its common stock at an average price of $81.97 per share for a total
of $45 million. Since the inception of the share repurchase program, the Company
has repurchased approximately 4.5 million shares of its common stock at an
average price of $66.64 per share for a total of $303 million. For the quarter
ended March 31, 2004, the Company reissued 1.0 million of these shares held in
treasury in connection with employee benefit plans. At March 31, 2004, $297
million of the share repurchase authorization remains available.

     During the first quarter of 2004, the Company's Board of Directors declared
a quarterly cash dividend of $0.15 per common share payable on April 21, 2004 to
shareholders of record on April 7, 2004.


                                       11




<PAGE>

                 QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                   (in thousands, unless otherwise indicated)
                                   (unaudited)

     Changes in stockholders' equity for the three months ended March 31, 2003
were as follows:

<TABLE>
<CAPTION>
                                                                                             Accumulated
                                 Shares of                         Retained                     Other
                                  Common             Additional    Earnings                    Compre-      Compre-
                                   Stock     Common   Paid-In    (Accumulated    Unearned      hensive      hensive
                                Outstanding   Stock    Capital     Deficit)    Compensation  Income (Loss)   Income
                                -----------  ------  ----------  ------------  ------------  -------------  -------
<S>                               <C>        <C>     <C>           <C>            <C>           <C>         <C>
Balance,
   December 31, 2002..........     97,963    $  980  $1,817,511    $(40,772)      $(3,332)      $(5,524)
Net income....................                                       88,036                                 $88,036
Other comprehensive income....                                                                      744         744
                                                                                                            -------
   Comprehensive income.......                                                                              $88,780
                                                                                                            =======
Shares issued to acquire
   Unilab.....................      7,055        71     372,393
Fair value of Unilab
   converted options..........                            8,452
Issuance of common stock
   under benefit plans........        205         2       8,095                    (5,041)
Exercise of stock options.....        197         2       2,797
Shares to cover employee
   payroll tax withholdings
   on stock issued under
   benefit plans..............       (163)       (2)     (8,661)
Tax benefits associated with
   stock-based compensation
   plans......................                            5,637
Amortization of unearned
   compensation...............                                                      1,687
                                  -------    ------  ----------    --------       -------       -------
Balance,
   March 31, 2003.............    105,257    $1,053  $2,206,224    $ 47,264       $(6,686)      $(4,780)
                                  =======    ======  ==========    ========       =======       =======
</TABLE>

7.   SUPPLEMENTAL CASH FLOW & OTHER DATA

<TABLE>
<CAPTION>
                                                                Three Months Ended
                                                                    March 31,
                                                               --------   --------
                                                                 2004       2003
                                                               --------   --------
<S>                                                            <C>        <C>
Depreciation expense........................................   $ 39,006   $ 34,678

Interest expense............................................    (15,050)   (14,185)
Interest income.............................................        406        276
                                                               --------   --------
Interest expense, net.......................................    (14,644)   (13,909)

Interest paid...............................................     21,903     27,111
Income taxes paid...........................................      3,571      7,198

Businesses acquired:
Fair value of assets acquired...............................   $     --   $972,764
Fair value of liabilities assumed...........................         --    275,349

Non-cash financing activities:
Fair value of common stock issued to acquire Unilab.........   $     --   $372,464
Fair value of converted options issued in conjunction with
   the Unilab acquisition...................................         --      8,452
</TABLE>


                                       12




<PAGE>

                 QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                   (in thousands, unless otherwise indicated)
                                   (unaudited)

8.   SUMMARIZED FINANCIAL INFORMATION

     The Company's 6 3/4% senior notes due 2006, 7 1/2% senior notes due 2011
and 1 3/4% contingent convertible debentures due 2021 are guaranteed by the
Subsidiary Guarantors. With the exception of Quest Diagnostics Receivables
Incorporated (see paragraph below), the non-guarantor subsidiaries are primarily
foreign and less than wholly owned subsidiaries.

     In conjunction with the receivables securitization, the Company formed a
new wholly owned non-guarantor subsidiary, Quest Diagnostics Receivables
Incorporated ("QDRI"). Through March 31, 2004, the Company and the Subsidiary
Guarantors, with the exception of American Medical Laboratories, Incorporated
("AML") and Unilab, transfer all private domestic receivables (principally
excluding receivables due from Medicare, Medicaid and other federal programs,
and receivables due from customers of its joint ventures) to QDRI. In
conjunction with the Company's new $300 million secured receivables credit
facility in April 2004, effective in the second quarter of 2004, the Company and
the Subsidiary Guarantors, including AML and Unilab, will transfer all private
domestic receivables to QDRI. QDRI utilizes the transferred receivables to
collateralize the Company's secured receivables credit facility. The Company and
the Subsidiary Guarantors provide collection services to QDRI. QDRI uses cash
collections principally to purchase new receivables from the Company and the
Subsidiary Guarantors.

     The following condensed consolidating financial data illustrates the
composition of the combined guarantors. Investments in subsidiaries are
accounted for by the parent using the equity method for purposes of the
supplemental consolidating presentation. Earnings (losses) of subsidiaries are
therefore reflected in the parent's investment accounts and earnings. The
principal elimination entries relate to investments in subsidiaries and
intercompany balances and transactions. On February 28, 2003, Quest Diagnostics
acquired Unilab, which has been included in the accompanying condensed
consolidating financial data, subsequent to the closing of the acquisition, as a
Subsidiary Guarantor.


                                       13




<PAGE>

                 QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                   (in thousands, unless otherwise indicated)
                                   (unaudited)

Condensed Consolidating Statement of Operations
Three Months Ended March 31, 2004

<TABLE>
<CAPTION>
                                                           Subsidiary   Non-Guarantor
                                                 Parent    Guarantors    Subsidiaries   Eliminations   Consolidated
                                                --------   ----------   -------------   ------------   ------------
<S>                                             <C>         <C>           <C>             <C>           <C>
Net revenues.................................   $200,225    $992,321      $121,658        $(58,462)     $1,255,742

Operating costs and expenses:
   Cost of services .........................    120,820     573,835        42,626              --         737,281
   Selling, general and administrative ......     27,916     225,625        58,335          (4,331)        307,545
   Amortization of intangible assets ........        523       1,532             9              --           2,064
   Royalty (income) expense .................    (80,999)     80,999            --              --              --
   Other operating (income) expense, net ....       (736)         19           690              --             (27)
                                                --------    --------      --------        --------      ----------
      Total operating costs and expenses ....     67,524     882,010       101,660          (4,331)      1,046,863
                                                --------    --------      --------        --------      ----------
Operating income ............................    132,701     110,311        19,998         (54,131)        208,879
Non-operating expenses, net .................    (14,696)    (51,719)       (1,058)         54,131         (13,342)
                                                --------    --------      --------        --------      ----------
Income before taxes .........................    118,005      58,592        18,940              --         195,537
Income tax expense ..........................     49,705      23,437         6,246              --          79,388
                                                --------    --------      --------        --------      ----------
Income before equity earnings ...............     68,300      35,155        12,694              --         116,149
Equity earnings from subsidiaries ...........     47,849          --            --         (47,849)             --
                                                --------    --------      --------        --------      ----------
Net income ..................................   $116,149    $ 35,155      $ 12,694        $(47,849)     $  116,149
                                                ========    ========      ========        ========      ==========
</TABLE>

Condensed Consolidating Statement of Operations
Three Months Ended March 31, 2003

<TABLE>
<CAPTION>
                                                           Subsidiary   Non-Guarantor
                                                 Parent    Guarantors    Subsidiaries   Eliminations   Consolidated
                                                --------   ----------   -------------   ------------   ------------
<S>                                             <C>         <C>            <C>            <C>           <C>
Net revenues ................................   $191,631    $849,370       $112,980       $(61,184)     $1,092,797

Operating costs and expenses:
   Cost of services .........................    115,506     495,786         36,805             --         648,097
   Selling, general and administrative ......     19,227     207,039         56,757         (3,824)        279,199
   Amortization of intangible assets ........        289       1,734             --             --           2,023
   Royalty (income) expense .................    (69,304)     69,304             --             --              --
   Other operating (income) expense, net ....         --          (3)           226             --             223
                                                --------    --------       --------       --------      ----------
      Total operating costs and expenses ....     65,718     773,860         93,788         (3,824)        929,542
                                                --------    --------       --------       --------      ----------
Operating income ............................    125,913      75,510         19,192        (57,360)        163,255
Non-operating expenses, net .................    (17,300)    (53,104)        (1,417)        57,360         (14,461)
                                                --------    --------       --------       --------      ----------
Income before taxes .........................    108,613      22,406         17,775             --         148,794
Income tax expense ..........................     44,191       8,963          7,604             --          60,758
                                                --------    --------       --------       --------      ----------
Income before equity earnings ...............     64,422      13,443         10,171             --          88,036
Equity earnings from subsidiaries ...........     23,614          --             --        (23,614)             --
                                                --------    --------       --------       --------      ----------
Net income ..................................   $ 88,036    $ 13,443       $ 10,171       $(23,614)     $   88,036
                                                ========    ========       ========       ========      ==========
</TABLE>


                                       14




<PAGE>

                 QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                   (in thousands, unless otherwise indicated)
                                   (unaudited)

Condensed Consolidating Balance Sheet
March 31, 2004

<TABLE>
<CAPTION>
                                                             Subsidiary   Non-Guarantor
                                                  Parent     Guarantors    Subsidiaries   Eliminations   Consolidated
                                                ----------   ----------   -------------   ------------   ------------
<S>                                             <C>          <C>            <C>           <C>             <C>
Assets
Current assets:
Cash and cash equivalents ...................   $  177,215   $    1,195     $  11,665     $        --     $  190,075
Accounts receivable, net ....................       20,420       85,378       544,713              --        650,511
Other current assets ........................       39,058      101,404        92,573              --        233,035
                                                ----------   ----------     ---------     -----------     ----------
   Total current assets .....................      236,693      187,977       648,951              --      1,073,621
Property, plant and equipment, net ..........      222,626      358,808        28,331              --        609,765
Goodwill and intangible assets, net .........      157,954    2,328,995        45,402              --      2,532,351
Intercompany receivable (payable) ...........      602,976      (72,147)     (530,829)             --             --
Investment in subsidiaries ..................    1,970,807           --            --      (1,970,807)            --
Other assets ................................       51,770       71,425        41,125              --        164,320
                                                ----------   ----------     ---------     -----------     ----------
   Total assets .............................   $3,242,826   $2,875,058     $ 232,980     $(1,970,807)    $4,380,057
                                                ==========   ==========     =========     ===========     ==========

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses .......   $  373,073   $  214,820     $  29,506     $        --     $  617,399
Current portion of long-term debt ...........           --       44,597            --              --         44,597
                                                ----------   ----------     ---------     -----------     ----------
   Total current liabilities ................      373,073      259,417        29,506              --        661,996
Long-term debt ..............................      315,916      739,877         1,956              --      1,057,749
Other liabilities ...........................       49,382       83,687        22,788              --        155,857
Common stockholders' equity .................    2,504,455    1,792,077       178,730      (1,970,807)     2,504,455
                                                ----------   ----------     ---------     -----------     ----------
   Total liabilities and stockholders' equity   $3,242,826   $2,875,058     $ 232,980     $(1,970,807)    $4,380,057
                                                ==========   ==========     =========     ===========     ==========
</TABLE>

Condensed Consolidating Balance Sheet
December 31, 2003

<TABLE>
<CAPTION>
                                                             Subsidiary   Non-Guarantor
                                                  Parent     Guarantors    Subsidiaries   Eliminations   Consolidated
                                                ----------   ----------   -------------   ------------   ------------
<S>                                             <C>          <C>            <C>           <C>             <C>
Assets
Current assets:
Cash and cash equivalents ...................   $  141,588   $    1,991     $  11,379     $        --     $  154,958
Accounts receivable, net ....................       17,919      164,247       427,021              --        609,187
Other current assets ........................       36,576      114,758        80,307              --        231,641
                                                ----------   ----------     ---------     -----------     ----------
   Total current assets .....................      196,083      280,996       518,707              --        995,786
Property, plant and equipment, net ..........      228,109      350,196        29,000              --        607,305
Goodwill and intangible assets, net .........      158,295    2,332,147        45,411              --      2,535,853
Intercompany receivable (payable) ...........      510,958     (106,078)     (404,880)             --             --
Investment in subsidiaries ..................    1,929,235           --            --      (1,929,235)            --
Other assets ................................       73,398       50,053        39,023              --        162,474
                                                ----------   ----------     ---------     -----------     ----------
   Total assets .............................   $3,096,078   $2,907,314     $ 227,261     $(1,929,235)    $4,301,418
                                                ==========   ==========     =========     ===========     ==========

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses .......   $  337,635   $  281,753     $  30,462     $        --     $  649,850
Current portion of long-term debt ...........           --       73,950            --              --         73,950
                                                ----------   ----------     ---------     -----------     ----------
   Total current liabilities ................      337,635      355,703        30,462              --        723,800
Long-term debt ..............................      315,844      710,908         1,955              --      1,028,707
Other liabilities ...........................       47,905       83,781        22,531              --        154,217
Common stockholders' equity .................    2,394,694    1,756,922       172,313      (1,929,235)     2,394,694
                                                ----------   ----------     ---------     -----------     ----------
   Total liabilities and stockholders' equity   $3,096,078   $2,907,314     $ 227,261     $(1,929,235)    $4,301,418
                                                ==========   ==========     =========     ===========     ==========
</TABLE>


                                       15




<PAGE>

                 QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                   (in thousands, unless otherwise indicated)
                                   (unaudited)

Condensed Consolidating Statement of Cash Flows
Three Months Ended March 31, 2004

<TABLE>
<CAPTION>
                                                                      Subsidiary   Non-Guarantor
                                                            Parent    Guarantors    Subsidiaries   Eliminations   Consolidated
                                                          ---------   ----------   -------------   ------------   ------------
<S>                                                       <C>         <C>            <C>             <C>            <C>
Cash flows from operating activities:
Net income ............................................   $116,149    $  35,155      $  12,694       $(47,849)     $ 116,149
Adjustments to reconcile net income to net cash
   provided by (used in) operating activities:
   Depreciation and amortization ......................     13,803       24,848          2,419             --         41,070
   Provision for doubtful accounts ....................      1,148       15,510         39,968             --         56,626
   Other, net .........................................      9,342       (7,805)        (9,598)        47,849         39,788
   Changes in operating assets and liabilities ........    (68,855)      59,399       (133,486)            --       (142,942)
                                                          --------    ---------      ---------       --------      ---------
Net cash provided by (used in) operating activities ...     71,587      127,107        (88,003)            --        110,691
Net cash used in investing activities .................    (10,169)     (23,914)        (1,983)        (9,392)       (45,458)
Net cash (used in) provided by financing activities ...    (25,791)    (103,989)        90,272          9,392        (30,116)
                                                          --------    ---------      ---------       --------      ---------
Net change in cash and cash equivalents ...............     35,627         (796)           286             --         35,117
Cash and cash equivalents, beginning of period ........    141,588        1,991         11,379             --        154,958
                                                          --------    ---------      ---------       --------      ---------
Cash and cash equivalents, end of period ..............   $177,215    $   1,195      $  11,665       $     --      $ 190,075
                                                          ========    =========      =========       ========      =========
</TABLE>

Condensed Consolidating Statement of Cash Flows
Three Months Ended March 31, 2003

<TABLE>
<CAPTION>
                                                                      Subsidiary   Non-Guarantor
                                                            Parent    Guarantors    Subsidiaries   Eliminations   Consolidated
                                                          ---------   ----------   -------------   ------------   ------------
<S>                                                       <C>          <C>           <C>            <C>            <C>
Cash flows from operating activities:
Net income ............................................   $  88,036    $ 13,443      $ 10,171       $ (23,614)     $  88,036
Adjustments to reconcile net income to net cash
   provided by (used in) operating activities:
   Depreciation and amortization ......................      13,417      21,306         1,978              --         36,701
   Provision for doubtful accounts ....................       1,757      11,184        41,688              --         54,629
   Other, net .........................................      (7,421)     (5,913)        9,715          23,614         19,995
   Changes in operating assets and liabilities ........       7,536     (85,134)      (63,462)             --       (141,060)
                                                          ---------    --------      --------       ---------      ---------
Net cash provided by (used in) operating activities ...     103,325     (45,114)           90              --         58,301
Net cash used in investing activities .................    (546,659)    (20,633)       (4,334)        295,130       (276,496)
Net cash provided by financing activities .............     407,287      63,211         1,647        (295,130)       177,015
                                                          ---------    --------      --------       ---------      ---------
Net change in cash and cash equivalents ...............     (36,047)     (2,536)       (2,597)             --        (41,180)
Cash and cash equivalents, beginning of period ........      79,015       7,377        10,385              --         96,777
                                                          ---------    --------      --------       ---------      ---------
Cash and cash equivalents, end of period ..............   $  42,968    $  4,841      $  7,788       $      --      $  55,597
                                                          =========    ========      ========       =========      =========
</TABLE>


                                       16




<PAGE>

Item 2. Management's Discussion and Analysis of Financial Condition and Results
        of Operations

Critical Accounting Policies

     The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires us to make estimates
and assumptions and select accounting policies that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements, as well as the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.

     While many operational aspects of our business are subject to complex
federal, state and local regulations, the accounting for it is generally
straightforward with net revenues primarily recognized upon completion of the
testing process. Our revenues are primarily comprised of a high volume of
relatively low dollar transactions, and about one-half of total operating costs
and expenses consist of employee compensation and benefits. Due to the nature of
our business, several of our accounting policies involve significant estimates
and judgments. These accounting policies have been described in our 2003 Annual
Report on Form 10-K.

Integration of Unilab Corporation

     On February 28, 2003, we completed the acquisition of Unilab Corporation,
or Unilab, the leading commercial clinical laboratory in California. In
connection with the acquisition of Unilab, we entered into an agreement to sell
to Laboratory Corporation of America Holdings, Inc., certain assets in northern
California, or the Divestiture. During the fourth quarter of 2003, we finalized
our plan related to the integration of Unilab into our laboratory network. As
part of the plan, and following the Divestiture, we closed our previously owned
clinical laboratory in the San Francisco Bay area and completed the integration
of remaining customers in the northern California area to Unilab's laboratories
in San Jose and Sacramento. We currently operate two laboratories in the Los
Angeles metropolitan area. We plan to open a new regional laboratory in the Los
Angeles metropolitan area and then integrate our business in the Los Angeles
metropolitan area into the new facility.

     As of March 31, 2004 and December 31, 2003, accruals related to the Unilab
integration plan totaled approximately $6 million and $7 million, respectively.
While the majority of the accrued costs at March 31, 2004 are expected to be
paid during the remainder of 2004, there are certain severance costs that have
payment terms extending into 2005.

Results of Operations

     Three Months Ended March 31, 2004 Compared with Three Months Ended March
31, 2003

     Net income for the three months ended March 31, 2004 increased to $116
million from $88 million for the prior year period. This increase in earnings
was primarily attributable to revenue growth and improved efficiencies generated
from our Six Sigma and standardization initiatives.

     Net Revenues

     Net revenues for the three months ended March 31, 2004 grew by 14.9% over
the prior year level and include three months of results of Unilab, which was
acquired on February 28, 2003, compared to one month of Unilab results in the
prior year. Pro forma revenue growth, assuming that the Unilab acquisition and
the related Divestiture had been completed on January 1, 2003, was 8.0% for the
three months ended March 31, 2004.

     For the three months ended March 31, 2004, clinical testing volume,
measured by the number of requisitions, increased 11.1% compared to the prior
year period. On a pro forma basis, assuming that the Unilab acquisition and the
Divestiture had been completed on January 1, 2003, testing volume increased
2.9%. Approximately 2% of the improved volume is due to an extra day in the
current quarter caused by Leap Year and less severe weather than the year
before.

     For the three months ended March 31, 2004, average revenue per requisition
improved 3.1%, or 4.4% on a pro forma basis, assuming that the Unilab
acquisition and the Divestiture had been completed on January 1, 2003. The
improvement in average revenue per requisition was primarily attributable to a
continuing shift in test mix to higher value testing, including gene-based and
esoteric testing. The inclusion of Unilab's results subsequent to February 28,
2003 served to reduce average revenue per requisition, reflecting Unilab's lower
revenue per requisition.


                                       17




<PAGE>

     Drugs of abuse testing, which is among our lowest priced services and
accounts for approximately 6% of our volume and 3% of our consolidated net
revenues, showed modest growth during the quarter, the first reported growth in
several years.

     Our businesses, other than clinical laboratory testing, which represent
approximately 4% of our consolidated net revenues, grew over 20% during the
three months ended March 31, 2004 and contributed approximately one-half of a
percent to reported revenue growth.

     Operating Costs and Expenses

     Total operating costs and expenses for the three months ended March 31,
2004 increased $117 million from the prior year period primarily due to
increases in our clinical testing volume (largely as a result of the Unilab
acquisition). The increased costs were primarily in the areas of employee
compensation and benefits and testing supplies. While our cost structure has
been favorably impacted by the improved efficiencies generated from our Six
Sigma and standardization initiatives, we continue to make investments to
enhance our infrastructure to pursue our overall business strategy.

     Cost of services, which includes the costs of obtaining, transporting and
testing specimens, was 58.7% of net revenues for the three months ended March
31, 2004, compared to 59.3% in the prior year period. This improvement was
primarily the result of the increase in average revenue per requisition and
efficiency gains resulting from our Six Sigma and standardization initiatives.
This improvement was partially offset by initial installation costs of deploying
our Internet-based orders and results systems in physicians' offices and our
patient service centers. The increase in the number of orders and test results
reported via our Internet-based systems is improving the initial collection of
billing information which is reducing the cost of billing and bad debt expense,
both of which are components of selling, general and administrative expenses. At
March 31, 2004, approximately 30% of our orders and approximately 40% of our
test results were being transmitted via the Internet. Additionally, we believe
that the number of physicians who no longer draw blood in their office continues
to increase, which is resulting in an increase in the number of blood draws in
our patient service centers or by our phlebotomists placed in physicians'
offices. This shift has increased our operating costs associated with our blood
draws, but is reducing costs in accessioning and other parts of our operations
due to improved billing information and a reduction in the number of inadequate
patient samples obtained by our trained phlebotomists compared to samples
collected by physician employed phlebotomists.

     Selling, general and administrative expenses, which include the costs of
the sales force, billing operations, bad debt expense and general management and
administrative support, decreased during the three months ended March 31, 2004,
as a percentage of net revenues, to 24.5% from 25.5% in the prior year period.
This improvement was primarily due to efficiencies from our Six Sigma and
standardization initiatives and the improvement in average revenue per
requisition. During the first quarter of 2004, bad debt expense improved to 4.5%
of net revenues, compared to 5.0% in the prior year period. The reduction in bad
debt expense as a percentage of net revenues occurred despite the addition of
Unilab, which has higher levels of bad debt than the rest of Quest Diagnostics.
This improvement primarily relates to the collection of diagnosis, patient and
insurance information necessary to more effectively bill for services performed.
We believe that our Six Sigma and standardization initiatives and the increased
use of electronic ordering by our customers will provide additional
opportunities to further improve our overall collection experience and cost
structure.

     Operating Income

     Operating income for the three months ended March 31, 2004 improved to $209
million, or 16.6% of net revenues, from $163 million, or 14.9% of net revenues,
in the prior year period. The increase in operating income was driven by revenue
growth and continuing efficiencies generated from our Six Sigma and
standardization efforts, which have reduced both the cost of services and
selling, general and administrative expenses as a percentage of net revenues.

     Other Income (Expense)

     Other income (expense), net represents miscellaneous income and expense
items related to non-operating activities such as gains and losses associated
with investments and other non-operating assets.


                                       18




<PAGE>

Impact of Contingent Convertible Debentures on Diluted Earnings per Common Share

     The if-converted method is used in determining the dilutive effect of our 1
3/4% contingent convertible debentures due 2021 (the "Debentures") in periods
when the holders of such securities are permitted to exercise their conversion
rights. As of and for the three months ended March 31, 2004, the holders of the
Debentures did not have the ability to exercise their conversion rights. Had the
requirements to allow the holders to exercise their conversion rights been met
and the Debentures remained outstanding for the entire period, diluted earnings
per common share would have been reduced by approximately 2% during the three
months ended March 31, 2004. See Note 11 to the Consolidated Financial
Statements contained in our 2003 Annual Report on Form 10-K for a further
discussion of the Debentures.

Quantitative and Qualitative Disclosures About Market Risk

     We address our exposure to market risks, principally the market risk of
changes in interest rates, through a controlled program of risk management that
may include the use of derivative financial instruments. We do not hold or issue
derivative financial instruments for trading purposes. We do not believe that
our foreign exchange exposure is material to our financial position or results
of operations. See Note 2 to the Consolidated Financial Statements contained in
our 2003 Annual Report on Form 10-K for additional discussion of our financial
instruments and hedging activities.

     At both March 31, 2004 and December 31, 2003, the fair value of our debt
was estimated at approximately $1.2 billion, using quoted market prices and
yields for the same or similar types of borrowings, taking into account the
underlying terms of the debt instruments. At March 31, 2004 and December 31,
2003, the estimated fair value exceeded the carrying value of the debt by
approximately $100 million and $86 million, respectively. An assumed 10%
increase in interest rates (representing approximately 50 basis points at both
March 31, 2004 and December 31, 2003) would potentially reduce the estimated
fair value of our debt by approximately $23 million and $17 million at March 31,
2004 and December 31, 2003, respectively.

     The Debentures have a contingent interest component that will require us to
pay contingent interest based on certain thresholds, as outlined in the
indenture governing the Debentures. The contingent interest component, which is
more fully described in Note 11 to the Consolidated Financial Statements
contained in our 2003 Annual Report on Form 10-K, is considered to be a
derivative instrument subject to Statement of Financial Accounting Standards No.
133, "Accounting for Derivative Instruments and Hedging Activities", as amended.
As such, the derivative was recorded at its fair value in the consolidated
balance sheet and was not material at March 31, 2004 and December 31, 2003.

     Borrowings under our $325 million unsecured revolving credit facility, our
term loan facilities and our $250 million secured receivables credit facility
are subject to variable interest rates. Interest rates on our $325 million
unsecured revolving credit facility and term loans are subject to a pricing
schedule that can fluctuate based on changes in our credit rating. As such, our
borrowing cost under these credit arrangements will be subject to both
fluctuations in interest rates and changes in our credit rating. As of March 31,
2004, our borrowing rate for LIBOR-based loans was principally LIBOR plus
1.1875%. At March 31, 2004, there was $230 million outstanding under our term
loan due June 2007, $75 million outstanding under our term loan due December
2008, and there were no borrowings outstanding under our $325 million unsecured
revolving credit facility or our $250 million secured receivables credit
facility. See Note 4 to the interim consolidated financial statements for
details regarding the 2004 debt refinancings.

     Based on our net exposure to interest rate changes, an assumed 10% change
in interest rates on our variable rate indebtedness (representing approximately
11 basis points) would impact annual net interest expense by approximately $0.3
million, assuming no changes to the debt outstanding at March 31, 2004.

Liquidity and Capital Resources

     Cash and Cash Equivalents

     Cash and cash equivalents at March 31, 2004 totaled $190 million, compared
to $155 million at December 31, 2003. Cash flows from operating activities in
2004 provided cash of $111 million, which together with cash on-hand were used
to fund investing and financing activities, which required cash of $45 million
and $30 million, respectively. Cash and cash equivalents at March 31, 2003
totaled $56 million, compared to $97 million at December 31, 2002. Cash flows
from operating activities in the first quarter of 2003 were $58 million, which
along with cash flows from financing activities of $177 million and cash
on-hand, were used to fund investing activities, which required cash of $276
million.


                                       19




<PAGE>

     Cash Flows From Operating Activities

     Net cash provided by operating activities for the three months ended March
31, 2004 was $111 million compared to $58 million in the prior year period. This
increase was primarily due to improved operating performance and increased tax
benefits associated with stock-based compensation plans, partially offset by an
increase in accounts receivable associated with growth in net revenues. Days
sales outstanding, a measure of billing and collection efficiency, improved to
45 days at March 31, 2004 from 48 days at December 31, 2003.

     Cash Flows From Investing Activities

     Net cash used in investing activities for the three months ended March 31,
2004 was $45 million, consisting primarily of capital expenditures of $45
million.

     Net cash used in investing activities was $276 million for the first
quarter of 2003, consisting primarily of acquisition and related transaction
costs of $236 million to acquire the outstanding capital stock of Unilab, and
capital expenditures of $37 million. The acquisition and related transaction
costs included the cash portion of the Unilab purchase price of $297 million and
approximately $11 million of transaction costs paid in the first quarter of
2003, partially offset by $72 million of cash acquired from Unilab.

     Cash Flows From Financing Activities

     Net cash used in financing activities in the three months ended March 31,
2004 was $30 million, consisting primarily of purchases of treasury stock
totaling $45 million and a $15 million dividend payment, partially offset by $34
million received from the exercise of stock options. In addition, $75 million of
borrowings under our term loan due December 2008 were used to repay $75 million
under our term loan due June 2007. The $45 million in treasury stock purchases
represents 547 thousand shares of our common stock repurchased at an average
price of $81.97 per share.

     Net cash provided by financing activities in 2003 was $177 million,
consisting primarily of $450 million of borrowings under our term loan due June
2007, partially offset by debt repayments totaling $269 million. Borrowings
under our term loan due June 2007 were used to finance the cash portion of the
purchase price and related transaction costs associated with the acquisition of
Unilab, and to repay $220 million of debt, representing substantially all of
Unilab's then existing outstanding debt, and related accrued interest. Of the
$220 million, $124 million represents payments related to our cash tender offer
on March 7, 2003, for all of the outstanding $100.8 million principal amount of
Unilab's 12 3/4% Senior Subordinated Notes due 2009 and $23 million of related
tender premium and associated tender offer costs. The remaining debt repayments
in the first quarter of 2003 consisted primarily of a $42 million repayment
under our term loan due June 2007 and a $6 million capital lease repayment.

     Dividend Policy

     On October 21, 2003, our Board of Directors declared the payment of a
quarterly cash dividend of $0.15 per common share. The quarterly dividend was
paid on January 23, 2004 to shareholders of record on January 8, 2004 and
totaled $15.4 million. During the first quarter of 2004, our Board of Directors
declared a quarterly cash dividend of $0.15 per common share payable on April
21, 2004 to shareholders of record on April 7, 2004. The quarterly dividend was
paid on April 21, 2004 and totaled approximately $15.5 million. We expect to
fund future dividend payments with cash flows from operations, and do not expect
the dividend to have a material impact on our ability to finance future growth.

     Share Repurchase Plan

     In 2003, our Board of Directors authorized a share repurchase program,
which permits us to purchase up to $600 million of our common stock. During the
three months ended March 31, 2004, we repurchased 547 thousand shares of our
common stock at an average price of $81.97 per share for a total of $45 million.
Since the inception of the share repurchase program, we have repurchased
approximately 4.5 million shares of our common stock at an average price of
$66.64 per share for a total of $303 million. During the first quarter of 2004,
we reissued 1.0 million of these shares held in treasury in connection with
employee benefit plans. At March 31, 2004, $297 million of the share repurchase
authorization remains available. We expect to fund the share repurchase program
with cash flows from operations and do not expect the share repurchase program
to have a material impact on our ability to finance future growth.


                                       20




<PAGE>

     Contractual Obligations and Commitments

     A description of the terms of our indebtedness, related debt service
requirements and our future payments under certain of our contractual
obligations is contained in Note 11 to the Consolidated Financial Statements in
our 2003 Annual Report on Form 10-K. A discussion of our debt refinancings in
April 2004 is contained in Note 4 to the interim consolidated financial
statements. A discussion and analysis regarding our minimum rental commitments
under noncancelable operating leases and noncancelable commitments to purchase
products or services at December 31, 2003 is contained in Note 15 to the
Consolidated Financial Statements in our 2003 Annual Report on Form 10-K. See
Note 5 to the interim consolidated financial statements for information
regarding the status of our remaining contractual obligations and commitments.

     Our credit agreements relating to our unsecured revolving credit facility
and our term loan facilities contain various covenants and conditions, including
the maintenance of certain financial ratios, that could impact our ability to,
among other things, incur additional indebtedness, repurchase shares of our
outstanding common stock, make additional investments and consummate
acquisitions. We do not expect these covenants to adversely impact our ability
to execute our growth strategy or conduct normal business operations.

     Unconsolidated Joint Ventures

     We have investments in unconsolidated joint ventures in Phoenix, Arizona;
Indianapolis, Indiana; and Dayton, Ohio, which are accounted for under the
equity method of accounting. We believe that our transactions with our joint
ventures are conducted at arm's length, reflecting current market conditions and
pricing. Total net revenues of our unconsolidated joint ventures, on a combined
basis, are less than 6% of our consolidated net revenues. Total assets
associated with our unconsolidated joint ventures are less than 3% of our
consolidated total assets. We have no material unconditional obligations or
guarantees to, or in support of, our unconsolidated joint ventures and their
operations.

     Requirements and Capital Resources

     We estimate that we will invest approximately $180 million to $190 million
during 2004 for capital expenditures to support and expand our existing
operations, principally related to investments in information technology,
equipment, and facility upgrades.

     In April 2004, we entered into a new $500 million senior unsecured
revolving credit facility to replace our existing $325 million unsecured
revolving credit facility. In addition, we entered into a new $300 million
secured receivables credit facility to replace our existing $250 million secured
receivables credit facility, which matured in April 2004. On April 30, 2004, we
repaid the remaining $230 million of principal outstanding under our term loan
due June 2007 with $100 million of borrowings under our new $500 million senior
unsecured revolving credit facility and $130 million of borrowings under our new
$300 million secured receivables credit facility. The refinancings were done to
take advantage of the improved lending environment and our improved credit
profile. See Note 4 to the interim consolidated financial statements for further
details regarding the refinancings. As of April 30, 2004, $400 million of our
new $500 million senior unsecured revolving credit facility and $170 million of
our new $300 million secured receivables credit facility remained available to
us for future borrowing.

     We believe that cash from operations and our borrowing capacity under our
credit facilities will provide sufficient financial flexibility to meet seasonal
working capital requirements and to fund capital expenditures, debt service
requirements, cash dividends on common shares, share repurchases and additional
growth opportunities for the foreseeable future. Our investment grade credit
ratings have had a favorable impact on our cost of and access to capital, and we
believe that our improved financial performance should provide us with access to
additional financing, if necessary, to fund growth opportunities that cannot be
funded from existing sources.

Impact of New Accounting Standard

     In January 2003, the FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities", as revised in December 2003. The impact of this
accounting standard is discussed in Note 1 to the interim consolidated financial
statements.


                                       21




<PAGE>

Forward-Looking Statements

     Some statements and disclosures in this document are forward-looking
statements. Forward-looking statements include all statements that do not relate
solely to historical or current facts and can be identified by the use of words
such as "may", "believe", "will", "expect", "project", "estimate", "anticipate",
"plan" or "continue". These forward-looking statements are based on our current
plans and expectations and are subject to a number of risks and uncertainties
that could significantly cause our plans and expectations, including actual
results, to differ materially from the forward-looking statements. The Private
Securities Litigation Reform Act of 1995 (the "Litigation Reform Act") provides
a "safe harbor" for forward-looking statements to encourage companies to provide
prospective information about their companies without fear of litigation.

     We would like to take advantage of the "safe harbor" provisions of the
Litigation Reform Act in connection with the forward-looking statements included
in this document. The risks and other factors that could cause our actual
financial results to differ materially from those projected, forecasted or
estimated by us in forward-looking statements may include, but are not limited
to, unanticipated expenditures, changing relationships with customers, payers,
suppliers and strategic partners, competitive environment, changes in government
regulations, conditions of the economy and other factors described in our 2003
Annual Report on Form 10-K and subsequent filings.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

     See Item 2. "Management's Discussion and Analysis of Financial Condition
and Results of Operations."

Item 4. Controls and Procedures

(a)  Our Chief Executive Officer and Chief Financial Officer have evaluated the
     effectiveness of the design and operation of our disclosure controls and
     procedures (as defined under Rules 13a-15(e) and 15d-15(e) of the
     Securities Exchange Act of 1934, as amended) as of the end of the period
     covered by this report. Based upon that evaluation, our Chief Executive
     Officer and Chief Financial Officer have concluded that our disclosure
     controls and procedures are adequate and effective.

(b)  During the quarterly period covered by this report, there were no changes
     in our internal control over financial reporting that have materially
     affected, or are reasonably likely to materially affect, our internal
     control over financial reporting.


                                       22




<PAGE>

                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings

     See Note 5 to the interim consolidated financial statements for information
regarding the status of government investigations and private claims.

Item 2. Changes in Securities and Use of Proceeds

                      ISSUER PURCHASES OF EQUITY SECURITIES

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
                                                                                  (d) Approximate Dollar Value of
                     (a) Total                       (c) Total Number of Shares        Shares that May Yet Be
                     Number of                          Purchased as Part of        Purchased Under the Plans or
                       Shares    (b) Average Price    Publicly Announced Plans                Programs
     Period          Purchased     Paid per Share            or Programs                   (in thousands)
-----------------------------------------------------------------------------------------------------------------
<S>                   <C>              <C>                     <C>                            <C>
January 1, 2004 -
January 31, 2004           --              --                       --                        $342,452
-----------------------------------------------------------------------------------------------------------------
February 1, 2004 -
February 29, 2004          --              --                       --                        $342,452
-----------------------------------------------------------------------------------------------------------------
March 1, 2004 -
March 31, 2004        547,400          $81.97                  547,400                        $297,580
-----------------------------------------------------------------------------------------------------------------
Total                 547,400          $81.97                  547,400                        $297,580
-----------------------------------------------------------------------------------------------------------------
</TABLE>

     In 2003, our Board of Directors authorized a share repurchase program,
which permits us to purchase up to $600 million of our common stock.


                                       23




<PAGE>

Item 6. Exhibits and Reports on Form 8-K

<TABLE>
<S>              <C>
(a)  Exhibits:

        10.1     Fifth Supplemental Indenture dated as of April 16, 2004, among
                 Unilab Acquisition Corporation (d/b/a FNA Clinics of America),
                 Quest Diagnostics Incorporated, The Bank Of New York, and the
                 Subsidiary Guarantors

        10.2     Third Amended and Restated Credit and Security Agreement dated
                 as of April 20, 2004 among Quest Diagnostics Receivables Inc.,
                 as Borrower, Quest Diagnostics Incorporated, as Servicer, each
                 of the lenders party thereto and Wachovia Bank, National
                 Association, as Administrative Agent

        10.3     Second Amended and Restated Receivables Sale Agreement dated as
                 of April 20, 2004 among Quest Diagnostics Incorporated and each
                 of its direct or indirect wholly owned subsidiaries who is or
                 hereafter becomes a seller hereunder, as the Sellers, and Quest
                 Diagnostics Receivables Inc., as the Buyer

        10.4     Amended and Restated Credit Agreement dated as of April 20,
                 2004 among Quest Diagnostics Incorporated, the Subsidiary
                 Guarantors and the Banks

        10.5     Form of Supplemental Deferred Compensation Plan

        10.6     Letter Agreement dated April 21, 2004 between the Company and
                 Kenneth W. Freeman (filed as an Exhibit to the Company's
                 current report on Form 8-K (Date of Report: April 22, 2004) and
                 incorporated herein by reference)

        31.1     Certification of Chief Executive Officer Pursuant to Section
                 302 of the Sarbanes-Oxley Act of 2002

        31.2     Certification of Chief Financial Officer Pursuant to Section
                 302 of the Sarbanes-Oxley Act of 2002

        32.1     Certification of Chief Executive Officer Pursuant to 18
                 U.S.C. 'SS' 1350, as Adopted Pursuant to Section 906 of the
                 Sarbanes-Oxley Act of 2002

        32.2     Certification of Chief Financial Officer Pursuant to 18
                 U.S.C. 'SS' 1350, as Adopted Pursuant to Section 906 of the
                 Sarbanes-Oxley Act of 2002
</TABLE>

(b)  Report on Form 8-K filed during the first quarter of 2004:

     On January 27, 2004, the Company furnished a current report on Form 8-K
     reporting its press release of January 27, 2004 announcing, among other
     things, its results for the quarter and year ended December 31, 2003.


                              24




<PAGE>

                                   Signatures

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

April 30, 2004

Quest Diagnostics Incorporated


By /s/ Kenneth W. Freeman
   -----------------------------
       Kenneth W. Freeman
       Chairman of the Board and
       Chief Executive Officer


By /s/ Robert A. Hagemann
   -----------------------------
       Robert A. Hagemann
       Senior Vice President and
       Chief Financial Officer


                                       25





                      STATEMENT OF DIFFERENCES

The section symbol shall be expressed as............................'SS'
The greater-than-or-equal-to sign shall be expressed as................. >=


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>2
<FILENAME>ex10-1.txt
<DESCRIPTION>EXHIBIT 10.1
<TEXT>
<PAGE>

                                                                    Exhibit 10.1

                          FIFTH SUPPLEMENTAL INDENTURE

          SUPPLEMENTAL INDENTURE dated as of April 16, 2004, (this "Fifth
Supplemental Indenture"), among UNILAB ACQUISITION CORPORATION (d/b/a FNA
Clinics of America), (the "Additional Subsidiary Guarantor"), QUEST DIAGNOSTICS
INCORPORATED, a Delaware corporation (the "Company"), THE BANK OF NEW YORK, a
New York banking corporation as Trustee (the "Trustee"), and the Subsidiary
Guarantors (as defined in the Indenture referred to herein).

                             RECITALS OF THE COMPANY

          WHEREAS, the Company, the Trustee and the Initial Subsidiary
Guarantors executed and delivered an Indenture, dated as of June 27, 2001 (the
"Base Indenture"), as supplemented by the first Supplemental Indenture as of
June 27, 2001 (the "First Supplemental Indenture"), as further supplemented by
the second Supplemental Indenture as of November 26, 2001 (the "Second
Supplemental Indenture") as further supplemented by the third Supplemental
Indenture as of April 4, 2002 (the "Third Supplemental Indenture"), as further
supplemented by the fourth Supplemental Indenture as of March 19, 2003 (the
"Fourth Supplemental Indenture") and as further supplemented by this Fifth
Supplemental Indenture (collectively, the "Indenture"), to provide for the
issuance by the Company from time to time of Securities to be issued in one or
mores series as provided in the Indenture;

          WHEREAS, Additional Subsidiary Guarantor intends to guarantee the
Securities under the Indenture and the issuance of guarantees has been
authorized by resolutions adopted by the Board of Directors of Additional
Subsidiary Guarantor;

          WHEREAS, Section 901(11) of the Indenture provides that without the
consent of Holders of the Securities of any series issued under the Indenture,
the Company, when authorized by a Board Resolution, and the Trustee may enter
into one or more indentures supplemental to the Indenture to add a guarantor or
guarantors for any series or all series of the Securities;

          WHEREAS, pursuant to Sections 904, 1601, 1602 and 1604 of the
Indenture, by delivery of a Supplemental Indenture to the Trustee in accordance
with the terms of the Indenture, each Person that becomes a Subsidiary Guarantor
after the date of the Base Indenture will be deemed to have executed and
delivered the Subsidiary Guarantee for the benefit of the Holder of the Security
upon which the Subsidiary Guarantee is endorsed, with the same effect as if such
Subsidiary Guarantor had been named thereon and had executed and delivered the
Subsidiary Guarantee;

          WHEREAS, all things necessary to make this Fifth Supplemental
Indenture a valid supplement to the Indenture according to its terms and the
terms of the Indenture have been done.





<PAGE>

          NOW, THEREFORE, for and in consideration of the foregoing, the parties
hereto hereby enter into this Fifth Supplemental Indenture, for the equal and
proportionate benefit of all Holders of the Securities, as follows:

          SECTION 1 Certain Terms Defined in the Indenture.

          All capitalized terms used but not defined herein shall have the
meanings assigned to them in the Indenture.

          SECTION 2 Agreement to Guarantee.

          Additional Subsidiary Guarantor, by its signature below, agrees to
become an Additional Subsidiary Guarantor under the Indenture with the same
force and effect as if originally named therein as a Subsidiary Guarantor.
Additional Subsidiary Guarantor hereby agrees to all the terms and provisions of
the Indenture applicable to it as Additional Subsidiary Guarantor thereunder and
each reference to a "Subsidiary Guarantor" in the Indenture shall be deemed to
include Additional Subsidiary Guarantor.

          SECTION 3 Indenture remains in Full Force and Effect.

          Except as expressly supplemented by this Fifth Supplemental Indenture,
the Indenture shall remain in full force and effect in accordance with its
terms.

          SECTION 4 New York Law to Govern.

          THIS FIFTH SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS.

          SECTION 5 Separability.

          In case any one or more of the provisions contained in this Fifth
Supplemental Indenture should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and in the Indenture shall not in any way be affected or
impaired. The parties hereto shall endeavor in good faith negotiations to
replace any invalid, illegal or enforceable provisions herein with valid
provisions, the economic effect of which comes as close as possible to that of
the invalid, illegal or unenforceable provisions.

          SECTION 6 May be Executed in Counterparts.

          This Fifth Supplemental Indenture may be executed in counterparts,
each of which when taken together shall constitute one and the same instrument.
This Fifth Supplemental Indenture shall become effective when the Trustee shall
have received a counterpart thereof that bears the signature of the Additional
Subsidiary Guarantor.


                                        2





<PAGE>

          IN WITNESS WHEREOF, the Company, the Additional Subsidiary Guarantor,
and the Trustee have duly executed this Fifth Supplemental Indenture as of the
day and year first above written.

Attest:                                  QUEST DIAGNOSTICS INCORPORATED,
                                         a Delaware corporation, as Company


/s/ Leo C. Farrenkopf, Jr.                By: /s/ Joseph P. Manory
--------------------------------------        ----------------------------------
Leo C. Farrenkopf, Jr.                   Name: Joseph P. Manory
Assistant Secretary                      Title: Vice President and Treasurer


Attest:                                  UNILAB ACQUISITION CORPORATION,
                                         as Additional Subsidiary Guarantor


/s/ Leo C. Farrenkopf, Jr.
--------------------------------------
Leo C. Farrenkopf, Jr.                   By: /s/ Joseph P. Manory
Assistant Secretary                          -----------------------------------
                                         Name: Joseph P. Manory
                                         Title: Vice President and Treasurer


Attest:                                  THE BANK OF NEW YORK, as Trustee


/s/ Mary LaGumina                        By: /s/ Robert A. Massimillo
--------------------------------------       -----------------------------------
Vice President                           Title: Vice President

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>ex10-2.txt
<DESCRIPTION>EXHIBIT 10.2
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.2

            THIRD AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT

          THIS THIRD AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT is
entered into as of April 20, 2004, by and among:

               (1) QUEST DIAGNOSTICS RECEIVABLES INC., a Delaware corporation
     (together with its successors and permitted assigns, the "Borrower"),

               (2) QUEST DIAGNOSTICS INCORPORATED, a Delaware corporation
     (together with its successors, "Quest Diagnostics"), as initial servicer
     hereunder (in such capacity, together with any successor servicer or
     sub-servicer appointed pursuant to Section 8.1, the "Servicer"),

               (3) BLUE RIDGE ASSET FUNDING CORPORATION, a Delaware corporation
     (together with its successors, "Blue Ridge"), and WACHOVIA BANK, NATIONAL
     ASSOCIATION, in its capacity as a Liquidity Bank to Blue Ridge (together
     with its successors, "Wachovia" and together with Blue Ridge, the "Blue
     Ridge Group"),

               (4) ATLANTIC ASSET SECURITIZATION CORP., a Delaware corporation
     (together with its successors, "Atlantic" and together with Blue Ridge, the
     "Conduits"), and Credit Lyonnais New York Branch, in its capacity as a
     Liquidity Bank to Atlantic (together with its successors, "CLNY" and
     together with Atlantic, the "Atlantic Group"),

               (5) WACHOVIA BANK, NATIONAL ASSOCIATION, in its capacity as agent
     for the Blue Ridge Group (together with its successors in such capacity,
     the "Blue Ridge Agent" or a "Co-Agent"), and Credit Lyonnais New York
     Branch, in its capacity as agent for the Atlantic Group (together with its
     successors in such capacity, the "Atlantic Agent" or a "Co-Agent"), and

               (6) WACHOVIA BANK, NATIONAL ASSOCIATION, as administrative agent
     for the Blue Ridge Group, the Atlantic Group and the Co-Agents (in such
     capacity, together with any successors thereto in such capacity, the
     "Administrative Agent" and together with each of the Co-Agents, the
     "Agents"),

with respect to that certain Second Amended and Restated Credit and Security
Agreement dated as of September 30, 2003 originally by and among the Borrower,
the Servicer, Blue Ridge, La Fayette Asset Securitization LLC ("La Fayette"),
CLNY, individually and as a Co-Agent, Jupiter Securitization Corporation
("Jupiter"), Bank One, NA, individually and as a Co-Agent, and the
Administrative Agent, as amended from time to time prior to the date hereof (the
"Existing Agreement").

          Unless otherwise indicated, capitalized terms used in this Agreement
are defined in Annex A.





<PAGE>

                              W I T N E S S E T H :

          WHEREAS, the Borrower is a wholly-owned direct subsidiary of Quest
     Diagnostics;

          WHEREAS, Quest Diagnostics and certain of its Subsidiaries as
     Originators and the Borrower have entered into the Sale Agreement pursuant
     to which each of the Originators has sold and/or contributed, and hereafter
     will sell to the Borrower, all of such Originator's right, title and
     interest in and to its Receivables and certain related rights;

          WHEREAS, immediately prior to the effectiveness of this Agreement, (i)
     Bank One, NA and Jupiter assigned all of their rights and obligations under
     the Transaction Documents to La Fayette and Blue Ridge, on the one hand,
     and CLNY and Wachovia, on the other, and (ii) La Fayette assigned to
     Atlantic all of La Fayette's rights and obligations under the Transaction
     Documents, including those acquired from Jupiter under the foregoing clause
     (i);

          WHEREAS, pursuant to the Existing Agreement, the Groups committed to
     make loans to the Borrower from time to time, secured by the Collateral,
     and Quest Diagnostics agreed to act as Servicer; and

          WHEREAS, the Borrower, the Servicer, the Blue Ridge Group, the
     Atlantic Group and the Administrative Agent wish to amend and restate the
     Existing Agreement in its entirety, on the terms and subject to the
     conditions hereinafter set forth;

          NOW, THEREFORE, in consideration of the premises and the mutual
     agreements herein contained, the parties hereto agree as follows:

                                   ARTICLE I.
                                   THE CREDIT

          Section 1.1 The Facility. On the terms and subject to the conditions
set forth in this Agreement, the Borrower (or the Servicer on the Borrower's
behalf) may from time to time during the Revolving Period request Advances by
delivering a Borrowing Request to the Co-Agents in accordance with Section 2.1.
Upon receipt of a copy of each Borrowing Request from the Borrower or Servicer,
each of the Co-Agents shall determine whether its Conduit will fund a Loan in an
amount equal to the portion of the requested Advance specified in such Borrowing
Request, and

          (a) in the event that Blue Ridge elects not to make any such Loan to
     the Borrower, the Blue Ridge Agent shall promptly notify the Borrower and,
     unless the Borrower cancels its Borrowing Request, each of the Liquidity
     Banks of Blue Ridge severally agrees to make its Ratable Share of such Loan
     to the Borrower, on the terms and subject to the conditions hereof,
     provided that at no time may the aggregate principal amount of Blue Ridge's
     and its Liquidity Banks' Loans at any one time outstanding exceed the
     lesser of (i) the aggregate amount of the Blue Ridge Liquidity Banks'
     Commitments, and


                                       2





<PAGE>

     (ii) the Blue Ridge Group's Percentage of the Borrowing Base (such lesser
     amount, the "Blue Ridge Allocation Limit");

          (b) in the event that Atlantic elects not to make any such Loan to the
     Borrower, the Atlantic Agent shall promptly notify the Borrower and, unless
     the Borrower cancels its Borrowing Request, each of the Liquidity Banks of
     Atlantic severally agrees to make its Ratable Share of such Loan to the
     Borrower, on the terms and subject to the conditions hereof, provided that
     at no time may the aggregate principal amount of Atlantic's and its
     Liquidity Banks' Loans at any one time outstanding exceed the lesser of (i)
     the aggregate amount of the Atlantic Liquidity Banks' Commitments, and (ii)
     the Atlantic Group's Percentage of the Borrowing Base (such lesser amount,
     the "Atlantic Allocation Limit").

Each Loan shall be in the minimum amount of $1,000,000 or a larger integral
multiple of $500,000. In no event may the aggregate principal amount of the
Advances hereunder exceed the lesser of (x) the Aggregate Commitment, or (y) the
Borrowing Base. Each Liquidity Bank's Commitment under this Agreement shall
terminate on the earlier to occur of such Liquidity Bank's Scheduled Termination
Date and the Termination Date. Each of the Loans, and all other Obligations of
the Borrower, shall be secured by the Collateral as provided in Article IX.

          Section 1.2 Funding Mechanics; Liquidity Fundings.

          (a) Each Advance hereunder shall consist of Loans made by (i) Atlantic
and/or its Liquidity Banks, and/or (ii) Blue Ridge and/or its Liquidity Banks,
and which (except for any Advance which does not increase the aggregate
principal amount of the Loans outstanding) shall be made in such proportions by
each Group such that, after giving effect thereto, the aggregate outstanding
principal balance of the Loans outstanding from each Group shall be in
proportion to such Group's Commitment Percentage. Any Advance which does not
increase the aggregate principal amount outstanding may be funded solely by one
or more of the members of each Group.

          (b) Each Lender funding any Loan (or portion thereof) shall wire
transfer the principal amount thereof to its applicable Co-Agent in immediately
available funds not later than 12:00 noon (New York City time) on the applicable
Borrowing Date and, subject to its receipt of such Loan proceeds, such Co-Agent
shall wire transfer such funds to the account specified by the Borrower in its
Borrowing Request not later than 2:00 p.m. (New York City time) on such
Borrowing Date.

          (c) While it is the intent of each of the Conduits to fund its
respective Loans through the issuance of Commercial Paper Notes, the parties
acknowledge that if either of the Conduits is unable, or determines that it is
undesirable, to issue Commercial Paper Notes to fund all or any portion of its
Loans at a CP Rate, or is unable to repay such Commercial Paper Notes upon the
maturity thereof, such Conduit may sell all or any portion of its Loans (or
interests therein) to its Liquidity Banks at any time pursuant to its Liquidity
Agreement to finance or refinance the necessary portion of its Loans through a
Liquidity Funding to the extent available. The Liquidity Fundings may be
Alternate Base Rate Loans or Eurodollar Loans, or a combination thereof,
selected by the Borrower in accordance with Article II. In addition, the parties
acknowledge that Commercial Paper Notes are issued at a discount and at varying


                                       3





<PAGE>

discount rates; accordingly, it may not be possible for all CP Rate Loans to be
made in amounts precisely equal to the amounts specified in a Borrowing Request.
Regardless of whether a Liquidity Funding constitutes an assignment of a Loan or
the sale of one or more participations therein, each Liquidity Bank
participating in a Liquidity Funding shall have the rights of a "Lender"
hereunder with the same force and effect as if it had directly made a Loan to
the Borrower in the amount of its Liquidity Funding.

          (d) Nothing herein shall be deemed to commit any Lender to make CP
Rate Loans.

          Section 1.3 Interest Rates.

          (a) Each CP Rate Loan shall bear interest on the outstanding principal
amount thereof from and including the first day of the CP Tranche Period
applicable thereto selected in accordance with Article II of this Agreement to
(but not including) the last day of such CP Tranche Period at the applicable CP
Rate. On the 5th Business Day immediately preceding each Settlement Date, Blue
Ridge shall calculate the aggregate amount of CP Costs for the applicable
Accrual Period and shall notify the Borrower of its aggregate amount of such CP
Costs which shall be payable on such Settlement Date.

          (b) Each Eurodollar Loan shall bear interest on the outstanding
principal amount thereof from and including the first day of the Interest Period
applicable thereto selected in accordance with Article II of this Agreement to
(but not including) the last day of such Interest Period at a rate per annum
equal to the sum of (i) the applicable Eurodollar Rate (Reserve Adjusted) for
such Interest Period plus (ii) the Applicable Percentage per annum.

          (c) Each Alternate Base Rate Loan shall bear interest on the
outstanding principal amount thereof, for each day from and including the date
such Loan is made to but excluding the date it is paid at a rate per annum equal
to the Alternate Base Rate for such day. Changes in the rate of interest on
Alternate Base Rate Loans will take effect simultaneously with each change in
the Alternate Base Rate.

          (d) Notwithstanding anything to the contrary contained in Sections
1.3(a), (b) or (c), upon the occurrence of an Event of Default, and during the
continuance thereof, all Obligations shall bear interest, payable upon demand,
at the Default Rate.

          (e) Interest shall be payable for the day a Loan is made but not for
the day of any payment on the amount paid if payment is received prior to 1:00
p.m. (local time) at the place of payment. If any payment of principal of or
interest on a Loan shall become due on a day which is not a Business Day, such
payment shall be made on the next succeeding Business Day and, in the case of a
principal payment, such extension of time shall be included in computing
interest in connection with such payment.

          Section 1.4 Payment Dates; Absence of Notes to Evidence Loans.

          (a) The Borrower promises to pay the principal of each CP Rate Loan on
the last day of its CP Tranche Period.


                                       4





<PAGE>

          (b) The Borrower promises to pay the principal of each Eurodollar Loan
on the last day of its Interest Period.

          (c) The Borrower promises to pay the principal of each Alternate Base
Rate Loan on or before the earliest to occur of (i) the Termination Date, (ii)
the applicable Liquidity Bank's Scheduled Termination Date, and (iii) the
refinancing of such Loan with a CP Rate Loan or a Eurodollar Rate Loan.

          (d) The Borrower promises to pay all accrued and unpaid interest on
each Loan on its applicable Interest Payment Date.

          (e) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Borrower to such
Lender resulting from each Loan made by such Lender from time to time, including
the amounts of principal and interest payable and paid to such Lender from time
to time hereunder. Upon request of the Borrower, such Lender's Co-Agent or the
Administrative Agent, such Lender will confirm the outstanding principal
balances of its Loans and the amount of any accrued and unpaid interest thereon.
The entries maintained in the accounts maintained pursuant to this Section shall
be prima facie evidence of the existence and amounts of the Obligations therein
recorded; provided, however, that the failure of any Lender to maintain such
accounts or any error therein shall not in any manner affect the obligation of
the Borrower to repay the Obligations in accordance with their terms.

          Section 1.5 Prepayments. Subject, in the case of CP Rate Loans and
Eurodollar Loans, to the funding indemnification provisions of Section 4.3:

          (a) The Borrower may from time to time voluntarily prepay, without
penalty or premium, all outstanding Advances, or, in a minimum aggregate amount
of $2,000,000 (or a larger integral multiple of $1,000,000), any portion of the
outstanding Advances by written notice to the Co-Agents (each, a "Prepayment
Notice") given within the Required Notice Period; provided that each such
prepayment of principal is accompanied by a payment of all accrued and unpaid
interest on the amount prepaid, together with all amounts (if any) due under
Section 4.3, and except as provided in Sections 1.8(c) and Section 14.1(c) and
in the definitions of "Approved Amendment" and "Termination Date," is made
between the Groups in such proportions so that after giving effect thereto, the
aggregate outstanding principal balance of the Loans outstanding from each Group
shall be in proportion to the Groups' respective Commitment Percentages.

          (b) If, on any Business Day, the aggregate outstanding principal
amount of the Loans from the Blue Ridge Group exceeds the Blue Ridge Allocation
Limit, or the aggregate principal amount of the Loans outstanding from Blue
Ridge exceeds the Blue Ridge Liquidity Banks' Liquidity Commitments divided by
102%, the Borrower shall prepay such Loans by wire transfer to the Blue Ridge
Agent received not later than 12:00 noon (New York City time) on the first
Business Day thereafter of an amount sufficient to eliminate such excess,
together with accrued and unpaid interest on the amount prepaid.


                                       5





<PAGE>

          (c) If, on any Business Day, the aggregate outstanding principal
amount of the Loans from the Atlantic Group exceeds the Atlantic Allocation
Limit, or the aggregate principal amount of the Loans outstanding from Atlantic
exceeds the Atlantic Liquidity Banks' aggregate Liquidity Commitments divided by
102%, the Borrower shall prepay such Loans by wire transfer to the Atlantic
Agent received not later than 12:00 noon (New York City time) on the first
Business Day thereafter of an amount sufficient to eliminate such excess,
together with accrued and unpaid interest on the amount prepaid.

          (d) Upon receipt of any wire transfer pursuant to Section 1.5(a), (b)
or (c), the applicable Co-Agent shall wire transfer to each of its Constituent
Lenders their respective shares thereof not later than 1:00 p.m. (New York City
time) on the date when received. Any prepayment required pursuant to Section
1.5(b) or (c) shall be applied first, to the ratable reduction of the applicable
Group's Alternate Base Rate Loans outstanding, second, to the ratable reduction
of the applicable Group's Eurodollar Loans outstanding, and lastly, to the
reduction of the applicable Group's CP Rate Loans selected by the Borrower (or
the Servicer, on the Borrower's behalf).

          (e) Unless each of the Co-Agents in its sole discretion shall
otherwise agree, not more than three (3) Advances and/or prepayments pursuant to
this Section 1.5 may occur, in the aggregate, in any calendar week.

          Section 1.6 Reductions in Aggregate Commitment. The Borrower may
permanently reduce the Aggregate Commitment in whole, or ratably between the
Groups in part, in a minimum amount of $10,000,000 (or a larger integral
multiple of $1,000,000), upon at least fifteen (15) Business Days' written
notice to the Co-Agents (each, a "Commitment Reduction Notice"), which notice
shall specify the aggregate amount of any such reduction and the Blue Ridge
Liquidity Banks' and the Atlantic Liquidity Banks' respective Commitment
Percentages thereof, provided, however, that (a) the amount of the Aggregate
Commitment may not be reduced below the aggregate principal amount of the
outstanding Advances, and (b) the amount of the Aggregate Commitment may not be
reduced below $100,000,000 unless the Aggregate Commitment is terminated in
full. All accrued and unpaid fees shall be payable on the effective date of any
termination of the Aggregate Commitment. Each Commitment Reduction Notice shall
be irrevocable once delivered to the Co-Agents.

          Section 1.7 Requests for Increases in Aggregate Commitment. The
Borrower may from time to time request increases in the Aggregate Commitment in
a minimum amount of $10,000,000 (or a larger integral multiple of $1,000,000),
upon at least 30 days' prior written notice to the Co-Agents, which notice shall
specify the aggregate amount of and proposed effective date for any such
requested increase as well as each Group's Commitment Percentage of the
requested increase (each, a "Commitment Increase Request"). If each Co-Agent
agrees to the requested increase by notifying the Borrower in writing of their
concurrence, such increase shall be made to the Commitments of the Blue Ridge
Liquidity Banks and the Atlantic Liquidity Banks, ratably in accordance with
their respective Commitment Percentages and Ratable Shares as of the effective
date specified in the Commitment Increase Request. If either Co-Agent declines
such request, the other Co-Agents may elect to increase the Commitments of their
Constituent Liquidity Banks by all or any portion of the entire amount
requested, in which case the Commitment Percentages shall be adjusted to reflect
such increase on the effective date


                                       6





<PAGE>

specified in the Commitment Increase Request. If no Co-Agent agrees to such
increase, the amount of the Aggregate Commitment shall remain unchanged. The
Atlantic Co-Agent shall notify each rating agency that is then rating Atlantic's
Commercial Paper Notes of any increase in the Atlantic Liquidity Banks'
Commitments.

          Section 1.8 Extension of the Scheduled Termination Date.

          (a) Provided that no Unmatured Default or Event of Default exists and
is continuing, the Borrower may request one or more Liquidity Bank(s) to extend
its Scheduled Termination Date by submitting a request for an extension (each,
an "Extension Request") to the Co-Agents no more than 210 days prior to each
such Liquidity Bank's respective Scheduled Termination Date then in effect (it
being understood that no such request may be made with respect to CLNY's
Scheduled Termination Date more than 90 days prior to such Liquidity Bank's
existing Scheduled Termination Date). Each Extension Request must specify the
new Scheduled Termination Date requested by the Borrower for such Liquidity
Bank(s) and the date (which must be at least 30 days after the Extension Request
is delivered to the Co-Agents and, in the case of CLNY, not more than 60 days
prior to their respective existing Scheduled Termination Dates) as of which the
applicable Liquidity Bank(s) must respond to the Extension Request (the
"Response Date"). The new Scheduled Termination Date for each applicable
Liquidity Bank shall be no more than 364 days after its existing Scheduled
Termination Date, including such existing Scheduled Termination Date as one of
the days in the calculation of the days elapsed, and the extension of the
Scheduled Termination Date shall not become effective until the existing
Scheduled Termination Date.

          (b) Promptly upon receipt of an Extension Request, the Blue Ridge
Agent shall notify the Blue Ridge Group of the contents thereof and shall
request each applicable Blue Ridge Liquidity Bank to approve such Extension
Request, and the Atlantic Agent shall notify the Atlantic Group of the contents
thereof and shall request each applicable Atlantic Liquidity Bank to approve
such Extension Request. Each applicable Liquidity Bank approving such Extension
Request shall deliver its written approval to its Co-Agent no later than the
Response Date, whereupon such Co-Agent shall notify the other Co-Agents and the
Borrower within one Business Day thereafter as to which (if any) of such
Co-Agent's applicable Constituent Liquidity Banks have approved such Extension
Request subject to their receipt of their applicable Extension Fee.

          (c) If any applicable Liquidity Bank does not approve the Extension
Request, its Co-Agent shall promptly notify its Conduit, the other Co-Agents and
the Borrower of such fact, and the Borrower shall have the right to (i) require
such Non-Approving Lender to assign all, but not less than all, of its
Commitment and outstanding Obligations by entering into written assignments with
one or more Eligible Assignees not later than the 5th Business Day prior to the
applicable Non-Approving Group's existing Scheduled Termination Date, (ii)
require the applicable Non-Approving Group to assign all, but not less than all,
of its respective Commitments (as applicable) and outstanding Obligations by
entering into written assignments with one or more Eligible Assignees not later
than the 5th Business Day prior to such Non-Approving Group's existing Scheduled
Termination Date, or (iii) to pay in full of all Obligations (if any) owing to
such Non-Approving Lender or such Non-Approving Group and terminate its
Commitment(s) (as applicable) no later than such Non-Approving Group's existing
Scheduled


                                       7





<PAGE>

Termination Date. Each assignment pursuant to clause (i) or (ii) above to an
Eligible Assignee (which may include a Constituent of the other Co-Agent) shall
become effective on the existing Scheduled Termination Date and, subject to
receipt of payment in full on such existing Scheduled Termination Date for all
Obligations, if any, owing to such Non-Approving Lender or its Group, as
applicable, such Non-Approving Lender or its Group shall make the requested
assignment; provided that any expenses or other amounts which would be owing to
such Non-Approving Lender or its Group pursuant to any indemnification provision
hereof shall be payable by the Borrower as if the Borrower had prepaid the Loans
of the assigning Lenders rather than such assigning Lenders having assigned
their respective interests hereunder. If no assignment of a Non-Approving
Lender's Commitment and Obligations to an Eligible Assignee is executed by the
5th Business Day prior to its existing Scheduled Termination Date, the Scheduled
Termination Date for all Lenders shall remain unchanged. If all applicable
Liquidity Banks approve an Extension Request by the Response Date, the Scheduled
Termination Date specified in such Extension Request shall become effective on
such Response Date as to the approving Liquidity Banks provided they each
receive payment of their respective Extension Fees, and each of the Co-Agents
shall promptly notify the Borrower and the other Co-Agent of the applicable
Liquidity Banks' new Scheduled Termination Date.

          Section 1.9 Distribution of Certain Notices; Notification of Interest
Rates. Promptly after receipt thereof, the Blue Ridge Agent will notify the Blue
Ridge Group and the Atlantic Agent will notify the Atlantic Group, of the
contents of each Monthly Report, Weekly Report, Borrowing Request, Extension
Request, Commitment Reduction Notice, Prepayment Notice, Commitment Increase
Request or notice of default received by it from the Borrower or the Servicer
hereunder. In addition, each of the Co-Agents shall promptly notify its
Constituent Lenders and the Borrower of each determination of and change in
Interest Rates.

                                  ARTICLE II.
              BORROWING AND PAYMENT MECHANICS; CERTAIN COMPUTATIONS

          Section 2.1 Method of Borrowing. The Borrower (or the Servicer, on the
Borrower's behalf) shall give the Co-Agents irrevocable notice in the form of
Exhibit 2.1 hereto (each, a "Borrowing Request") not later than 12:00 noon (New
York City time) at least two (2) Business Days before the Borrowing Date of each
Advance. On each Borrowing Date, each applicable Lender shall make available its
Loan or Loans in immediately available funds to its Co-Agent by wire transfer of
such amount received not later than 1:00 p.m. (New York City time). Subject to
its receipt of such wire transfers, each Co-Agent will wire transfer the funds
so received from its Constituent Lenders to the Borrower at the account
specified in its Borrowing Request not later than 2:00 p.m. (New York City time)
on the applicable Borrowing Date. Unless each of the Co-Agents in its sole
discretion shall otherwise agree, not more than three (3) Advances and/or
prepayments pursuant to Section 1.5 may occur, in the aggregate, in any calendar
week.

          Section 2.2 Selection of CP Tranche Periods and Interest Periods.

          (a) Except upon the occurrence and during the continuance of an Event
of Default, the Borrower (or the Servicer, on the Borrower's behalf) in its
Borrowing Request may request CP Tranche Periods from time to time to apply to
Atlantic's CP Rate Loans; provided,


                                       8





<PAGE>

however, that (i) at any time while Atlantic has CP Rate Loans outstanding, at
least one CP Tranche Period of Atlantic shall mature on each Settlement Date and
(ii) no CP Tranche Period of Atlantic may extend beyond the latest Scheduled
Termination Date of any Atlantic Liquidity Bank. In addition to the foregoing,
except upon the occurrence and during the continuance of an Event of Default,
the Borrower (or the Servicer, on the Borrower's behalf) in its Borrowing
Request may request Interest Periods from time to time to apply to the
Eurodollar Loans; provided, however, that (x) at any time while any Lender has
Eurodollar Loans outstanding, at least one Interest Period of such Lender shall
mature on each Settlement Date and (y) no Interest Period of any Lender which
began prior to its Scheduled Termination Date shall extend beyond such Scheduled
Termination Date.

          (b) While the Atlantic Agent will use reasonable efforts to
accommodate the Borrower's or the Servicer's requests for CP Tranche Periods
except during the continuance of an Event of Default, the Atlantic Agent shall
have the right to subdivide any requested CP Rate Loan into one or more CP Rate
Loans of different CP Tranche Periods, or, if the requested period is not
feasible, to suggest an alternative CP Tranche Period. While each of the
Co-Agents will use reasonable efforts to accommodate the Borrower's or the
Servicer's requests for Interest Periods for Eurodollar Loans except during the
continuance of an Event of Default, each of the Co-Agents shall have the right
to subdivide any requested Eurodollar Loan into one or more Eurodollar Loans
with different Interest Periods, or, if the requested period is not feasible, to
suggest an alternative Interest Period. Notwithstanding the foregoing, not less
than $1,000,000 of principal may be allocated to any CP Tranche Period or
Interest Period of any Lender, and no Alternate Base Rate Loan may have a
principal amount of less than $1,000,000.

          (c) The Borrower (or the Servicer, on the Borrower's behalf) may not
request an Interest Period for a Eurodollar Loan unless it shall have given each
of the applicable Co-Agent(s) written notice of its desire therefor not later
than 12:00 noon (New York City time) at least three (3) Business Days prior to
the first day of the desired Interest Period. Accordingly, all Liquidity
Fundings shall initially be Alternate Base Rate Loans.

          (d) Unless each Co-Agent shall have received written notice by 12:00
noon (New York City time) on the Required Day prior to the last day of a CP
Tranche Period that the Borrower intends to reduce the aggregate principal
amount of the CP Rate Loans outstanding, each of the Co-Agents and the Conduits
shall be entitled to assume that the Borrower desires to refinance the principal
and interest of each maturing CP Rate Loan on the last day of its CP Tranche
Period with new CP Rate Loans having substantially similar CP Tranche Periods;
provided, however, that the Borrower shall remain liable to pay in cash any
portion of the principal or interest on the maturing CP Rate Loan when due to
the extent that the applicable Conduit cannot issue Commercial Paper Notes or
avail itself of a Liquidity Funding, in either case, in the precise amount
necessary to refinance the maturing CP Rate Loan and the accrued and unpaid
interest thereon.

          (e) Unless the Co-Agents shall have received written notice by 12:00
noon (New York City time) on the third (3rd) Business Day prior to the last day
of an Interest Period that the Borrower intends to reduce the aggregate
principal amount of the Eurodollar Loans outstanding from the Liquidity Banks,
each of the Liquidity Banks shall be entitled to assume that the


                                       9





<PAGE>

Borrower desires to refinance its maturing Eurodollar Loans on the last day of
such Interest Period with Alternate Base Rate Loans.

          Section 2.3 Computation of Concentration Limits and Unpaid Net
Balance. The Obligor Concentration Limits and the aggregate Unpaid Net Balance
of Receivables of each Obligor and its Affiliated Obligors (if any) shall be
calculated as if each such Obligor and its Affiliated Obligors were one Obligor.

          Section 2.4 Maximum Interest Rate. No provision of this Agreement
shall require the payment or permit the collection of interest in excess of the
maximum permitted by applicable law.

          Section 2.5 Payments and Computations, Etc.

          (a) Payments. All amounts to be paid or deposited by the Borrower or
the Servicer (on the Borrower's behalf) to any of the Agents or Lenders (other
than amounts payable under Section 4.2) shall be paid by wire or electronic
transfer of immediately available funds received not later than 1:00 p.m. (New
York City time) on the day when due in lawful money of the United States of
America to the applicable Co-Agent at its address specified in Schedule 14.2,
and, to the extent such payment is for the account of any Lender, the applicable
Co-Agent shall promptly disburse such funds to the appropriate Lender(s) in its
Group.

          (b) Late Payments. To the extent permitted by law, upon demand, the
Borrower or the Servicer (on the Borrower's behalf), as applicable, shall pay to
the applicable Co-Agent for the account of each Person in its Group to whom
payment of any Obligation is due, interest on all amounts not paid or deposited
by 1:00 p.m. (New York City time) on the date when due (without taking into
account any applicable grace period) at the Default Rate.

          (c) Method of Computation. All computations of interest at the
Alternate Base Rate or the Default Rate shall be made on the basis of a year of
365 (or, when appropriate, 366) days for the actual number of days (including
the first day but excluding the last day) elapsed. All other computations of
interest, and all computations of Servicer's Fee, any per annum fees payable
under Section 4.1 and any other per annum fees payable by the Borrower to the
Lenders, the Servicer or any of the Agents under the Loan Documents shall be
made on the basis of a year of 360 days for the actual number of days (including
the first day but excluding the last day) elapsed.

          (d) Avoidance or Rescission of Payments. To the maximum extent
permitted by applicable law, no payment of any Obligation shall be considered to
have been paid if at any time such payment is rescinded or must be returned for
any reason.

          Section 2.6 Non-Receipt of Funds by the Co Agents. Unless a Lender
notifies its Co-Agent prior to the date and time on which it is scheduled to
fund a Loan that it does not intend to fund, such Co-Agent may assume that such
funding will be made and may, but shall not be obligated to, make the amount of
such Loan available to the intended recipient in reliance upon such assumption.
If such Lender has not in fact funded its Loan proceeds to the applicable
Co-Agent, the recipient of such payment shall, on demand by such Co-Agent, repay
to such Co-Agent the amount so made available together with interest thereon in
respect of each day during


                                       10





<PAGE>

the period commencing on the date such amount was so made available by such
Co-Agent until the date such Co-Agent recovers such amount at a rate per annum
equal to the Federal Funds Rate for such day.

                                  ARTICLE III.
                                  SETTLEMENTS

          Section 3.1 Reporting.

          (a) Monthly Reports. Not later than the Monthly Reporting Date in each
calendar month hereafter, the Servicer shall deliver to each of the Co-Agents, a
Monthly Report accompanied by an electronic file in a form reasonably
satisfactory to each of the Co-Agents; provided, however, that if an Unmatured
Default or an Event of Default shall exist and be continuing, each of the
Co-Agents may request that a computation of the Borrowing Base also be made on a
date that is not a Monthly Reporting Date and, so long as such request is not
made on or within 5 Business Days prior to the last day of any calendar month,
the Servicer agrees to provide such computation within 3 Business Days after
such request.

          (b) Weekly Reports; Right to Request Cash Collateral Payment. Upon
written request of the Administrative Agent, not later than each Weekly
Reporting Date occurring at least 14 days after the Servicer's receipt of such
request and continuing until the Administrative Agent gives written notice that
it no longer desires Weekly Reports, the Servicer shall deliver to each of the
Co-Agents, a Weekly Report of the dollar amount of cash collections and the
number of requisitions, in each case, for the second preceding week (the "Report
Week"). If the dollar amount of cash Collections or the number of requisitions
for the Report Week is less than 50% of the arithmetic average of the
corresponding figures for the four immediately preceding Report Weeks, upon
request of either of the Co-Agents, the Servicer shall provide a written
computation of the Cash Collateral Payment within 3 Business Days after such
request.

          (c) Interest; Other Amounts Due. At or before 12:00 noon (New York
City time) on the Business Day before each Settlement Date, each of the
Co-Agents shall notify the Borrower and the Servicer of (i) the aggregate
principal balance of all Loans that are then outstanding from its Constituents,
and (ii) the aggregate amount of all principal, interest and fees that will be
due and payable by the Borrower to such Co-Agent for the account of such
Co-Agent or its Constituents on such Settlement Date.

          Section 3.2 Turnover of Collections. Without limiting any Agent's or
Lender's recourse to the Borrower for payment of any and all Obligations:

          (a) If any Monthly Report reveals that a mandatory prepayment is
     required under Section 1.5(b), (c) or (d), not later than the 1:00 p.m.
     (New York City time) on the next succeeding Settlement Date, the Servicer
     shall turn over to each applicable Co-Agent, for distribution to its
     Constituents, a portion of the Collections equal to the amount of such
     required mandatory prepayment;

          (b) If, on any Settlement Date, any Loans are to be voluntarily
     prepaid in accordance with Section 1.5(a), or if the aggregate principal
     amount of the Advances


                                       11





<PAGE>

     outstanding is to be reduced, the Servicer shall turn over to each of the
     Co-Agents, for distribution to its Constituents, a portion of the
     Collections equal to the Groups' respective Percentages of the aggregate
     amount of such voluntary prepayment or reduction; and

          (c) In addition to, but without duplication of, the foregoing, on (i)
     each Settlement Date and (ii) each other date on which any principal of or
     interest on any of the Loans becomes due (whether by acceleration or
     otherwise) and, in the case of principal, has not been reborrowed pursuant
     to Section 1.1, the Servicer shall turn over to each of the Co-Agents, for
     distribution to their respective Constituents, the Groups' respective
     Percentages of a portion of the Collections equal to the aggregate amount
     of all other Obligations that are due and owing on such date. If the
     Collections and proceeds of new Loans are insufficient to make all payments
     required under clauses (a), (b) and (c) and to pay the Servicer's Fees and,
     if applicable, all expenses due and owing to any replacement Servicer under
     Section 8.1(d) (all of the foregoing, collectively, the "Required Amounts")
     and the Borrower has made any Demand Advances, the Borrower shall make
     demand upon Quest Diagnostics for payment of the Demand Advances in an
     amount equal to the lesser of the Required Amounts or the aggregate
     outstanding principal balance of such Demand Advances (plus any accrued and
     unpaid interest thereon) and, upon receipt of any such amounts, the
     Borrower shall pay them to each of the Co-Agents, ratably in accordance
     with their respective Groups' Percentages, for distribution in accordance
     with this Section 3.2.

          (d) If the aggregate amount of Collections and payments on Demand
     Advances received by the Co-Agents on any Settlement Date are insufficient
     to pay all Required Amounts, the aggregate amount received shall be applied
     to the items specified in the subclauses below, in the order of priority of
     such subclauses:

          (i) to any accrued and unpaid interest on the Loans that is then due
and owing, including any previously accrued interest which was not paid on its
applicable due date;

          (ii) if the Servicer is not the Borrower or an Affiliate thereof, to
any accrued and unpaid Servicer's Fee that is then due and owing to such
Servicer, together with any invoiced expenses of the Servicer due and owing
pursuant to Section 8.1(d);

          (iii) to the Unused Fee and the Usage Fee accrued during such
Settlement Period, plus any previously accrued Unused Fee and Usage Fee not paid
on a prior Settlement Date;

          (iv) to the payment of the principal of any Loans that are then due
and owing;

          (v) to other Obligations that are then due and owing;

          (vi) if the Servicer is the Borrower, Quest Diagnostics or one of
their respective Affiliates, to the accrued and unpaid Servicer's Fee; and

          (vii) the balance, if any, to the Borrower.


                                       12





<PAGE>

          (e) If the Servicer is ever required to deliver a computation of the
     Cash Collateral Payment pursuant to Section 3.1(b), not later than one (1)
     Business Day after delivery of such computation, the Borrower shall pay to
     the applicable Co-Agent an amount equal to its Group's Percentage of the
     Cash Collateral Payment to be invested in Permitted Investments selected by
     such Co-Agent but held as Collateral for the Obligations until the next
     Settlement Date pending distribution in accordance with Section 3.2(d). If
     the Borrower lacks sufficient funds to make any such Cash Collateral
     Payment, in whole or in part, the Borrower shall make immediate demand upon
     Quest Diagnostics for payment of any Demand Advances that are then
     outstanding, and, upon receipt of any such shortfall amount, the Borrower
     shall pay each Group's Percentage of such shortfall amount to the
     applicable Co-Agent for deposit into a cash collateral account to be
     invested in Permitted Investments selected by the applicable Co-Agent but
     held as Collateral for the Obligations until the next Settlement Date
     pending distribution in accordance with Section 3.2(d).

          (f) In addition to, but without duplication of, the foregoing, on (i)
     each Settlement Date and (ii) each other date on which any principal of or
     interest on any of the Loans becomes due (whether by acceleration pursuant
     to Section 10.2(a) or 10.2(b) or otherwise), the Servicer shall turn over
     to each of the Co-Agents, for distribution to the Lenders, a portion of the
     Collections equal to the aggregate amount of all Obligations that are due
     and owing on such date.

          Section 3.3 Non-Distribution of Servicer's Fee. Each of the Agents and
the other Secured Parties hereby consents to the retention by the Servicer of a
portion of the Collections equal to the Servicer's Fee (and, if applicable, any
invoiced expenses of such Servicer that are due and owing pursuant to Section
8.1(d)) so long as the Collections received by the Servicer are sufficient to
pay all amounts pursuant to Section 3.2 of a higher priority as specified in
such Section.

          Section 3.4 Deemed Collections. If as of the last day of any
Settlement Period:


          (a) the outstanding aggregate balance of the Net Receivables as
reflected in the preceding Monthly Report (net of any positive adjustments) has
been reduced for any of the following reasons:

          (i) as a result of any rejected services, any cash discount or any
other adjustment by the applicable Originator or any Affiliate thereof
(regardless of whether the same is treated by such Originator or Affiliate as a
write-off), or as a result of any surcharge or other governmental or regulatory
action, or

          (ii) as a result of any setoff or breach of the underlying agreement
in respect of any claim by the Obligor thereof (whether such claim arises out of
the same or a related or an unrelated transaction), or

          (iii) on account of the obligation of the applicable Originator or any
Affiliate thereof to pay to the related Obligor any rebate or refund, or


                                       13





<PAGE>

          (iv) the Unpaid Net Balance of any Receivable is less than the amount
included in calculating the Net Pool Balance for purposes of any Monthly Report
(for any reason other than such Receivable becoming a Defaulted Receivable), or

          (b) any of the representations or warranties of the Borrower set forth
in Section 6.1(j), (l) or (p) was not true when made with respect to any
Receivable, or any of the representations or warranties of the Borrower set
forth in Section 6.1(l) is no longer true with respect to any Receivable,

then, in such event, the Borrower shall be deemed to have received a Collection
in an amount equal to (A) the amount of such reduction, cancellation or
overstatement, in the case of the preceding clauses (a)(i), (a)(ii), (a)(iii)
and (a)(iv), and (B) in the full amount of the Unpaid Net Balance of such
Receivable in the case of the preceding clause (b).

                                   ARTICLE IV.
                            FEES AND YIELD PROTECTION

          Section 4.1 Fees. Quest Diagnostics or the Borrower, as applicable,
shall pay to each of the Agents and the Lenders certain fees from time to time
in amounts and payable on such dates as are set forth in the Fee Letters.

          Section 4.2 Yield Protection.

          (a) If any Regulatory Change occurring after the date hereof:

          (i) shall subject an Affected Party to any Tax, duty or other charge
with respect to its Obligations or, as applicable, its Commitment or its
Liquidity Commitment, or shall change the basis of taxation of payments to the
Affected Party of any Obligations, owed to or funded in whole or in part by it
or any other amounts due under this Agreement in respect of its Obligations or,
as applicable, its Commitment or its Liquidity Commitment except for (A) Taxes
based on, or measured by, net income or net profits, or changes in the rate of
Tax on or determined by reference to the overall net income or net profits, of
such Affected Party imposed by the United States of America, by the jurisdiction
in which such Affected Party's principal executive office and/or its applicable
lending office is located and, if such Affected Party's principal executive
office or its applicable lending office is not in the United States of America,
by the jurisdiction where such Affected Party's principal office or applicable
lending office is located, (B) franchise Taxes, Taxes on, or in the nature of,
doing business Taxes or capital Taxes, or (C) withholding Taxes required for
payments made to any foreign entity (other than withholding Taxes imposed by the
United States as a result of a change in law after the date hereof and before
such foreign entity issues its Commitment or Liquidity Commitment or becomes an
assignee of a Lender hereunder), unless such foreign entity fails to deliver to
each of the Co-Agents and the Borrower an accurate IRS Form W-8BEN or W-8ECI (or
the applicable successor form), as applicable; or

          (ii) shall impose, modify or deem applicable any reserve that was not
included in the computation of the applicable Interest Rate, or any special
deposit or similar requirement against assets of any Affected Party, deposits or
obligations with or for the account of any Affected Party or with or for the
account of any affiliate (or entity deemed by the Federal


                                       14





<PAGE>

Reserve Board to be an affiliate) of any Affected Party, or credit extended by
any Affected Party; or

          (iii) shall affect the amount of capital required or expected to be
maintained by any Affected Party; or

          (iv) shall impose any other condition affecting any Obligation owned
or funded in whole or in part by any Affected Party, or its rights or
obligations, if any, to make Loans or Liquidity Fundings; or

          (v) shall change the rate for, or the manner in which the Federal
Deposit Insurance Corporation (or a successor thereto) assesses deposit
insurance premiums or similar charges; or

          (vi) shall require any Conduit to be consolidated for financial
accounting purposes with any other Person;

and the result of any of the foregoing is or would be:

          (x) to increase the cost to or to impose a cost on (I) an Affected
     Party funding or making or maintaining any Loan, any Liquidity Funding, or
     any commitment of such Affected Party with respect to any of the foregoing,
     or (II) any of the Agents for continuing its or the Borrower's relationship
     with any Affected Party, in each case, in an amount deemed to be material
     by such Affected Party,

          (y) to reduce the amount of any sum received or receivable by an
     Affected Party under this Agreement or under the Liquidity Agreement, or

          (z) to reduce the rate of return on such Affected Party's capital as a
     consequence of its Commitment, its Liquidity Commitment or the Loans made
     by it to a level below that which such Affected Party could have achieved
     but for the occurrence of such circumstances,

then, within thirty days after demand by such Affected Party (which demand shall
be made not more than 90 days after the date on which the Affected Party becomes
aware of such Regulatory Change and shall be accompanied by a certificate
setting forth, in reasonable detail, the basis of such demand and the
methodology for calculating, and the calculation of, the amounts claimed by the
Affected Party), the Borrower shall pay directly to such Affected Party such
additional amount or amounts as will compensate such Affected Party for such
actual additional cost, actual increased cost or actual reduction.

          (b) Each Affected Party will promptly notify the Borrower, the
Administrative Agent and the applicable Co-Agent of any event of which it has
knowledge (including any future event that, in the judgment of such Affected
Party, is reasonably certain to occur) which will entitle such Affected Party to
compensation pursuant to this Section 4.2; provided, however, no failure to give
or delay in giving such notification shall adversely affect the rights of any
Affected Party to such compensation unless such notification is given more than
90 days after the Affected Party becomes aware of such Regulatory Change.


                                       15





<PAGE>

          (c) In determining any amount provided for or referred to in this
Section 4.2, an Affected Party may use any reasonable averaging and attribution
methods (consistent with its ordinary business practices) that it (in its
reasonable discretion) shall deem applicable. Any Affected Party when making a
claim under this Section 4.2 shall submit to the Borrower the above-referenced
certificate as to such actual increased cost or actual reduced return (including
calculation thereof in reasonable detail), which statement shall, in the absence
of demonstrable error, be conclusive and binding upon the Borrower.

          (d) Each of the Lenders agrees, and to require each Affected Party to
agree that, with reasonable promptness after an officer of such Lender or such
Affected Party responsible for administering the Transaction Documents becomes
aware that it has become an Affected Party under this Section 4.2, is entitled
to receive payments under this Section 4.2, or is or has become subject to U.S.
withholding Taxes payable by any Loan Party in respect of its investment
hereunder, it will, to the extent not inconsistent with any internal policy of
such Person or any applicable legal or regulatory restriction, (i) use all
reasonable efforts to make, fund or maintain its commitment or investment
hereunder through another branch or office of such Affected Party, or (ii) take
such other reasonable measures, if, as a result thereof, the circumstances which
would cause such Person to be an Affected Party under this Section 4.2 would
cease to exist, or the additional amounts which would otherwise be required to
be paid to such Person pursuant to this Section 4.2 would be reduced, or such
withholding Taxes would be reduced, and if the making, funding or maintaining of
such commitment or investment through such other office or in accordance with
such other measures, as the case may be, would not otherwise adversely affect
such commitment or investment or the interests of such Person; provided that
such Person will not be obligated to utilize such other lending office pursuant
to this Section 4.2 unless the Borrower agrees to pay all incremental expenses
incurred by such Person as a result of utilizing such other office as described
in clause (i) above.

          (e) If any Lender makes a claim for compensation under this Section
4.2, the Borrower may propose an Eligible Assignee to the applicable Co-Agent
who is willing to accept an assignment of such Lender's Commitment, Liquidity
Commitment and outstanding Loans, as applicable, together with each of its other
rights and obligations under the Transaction Documents; provided that any
expenses or other amounts which would be owing to such Lender pursuant to any
indemnification provision hereof (including, if applicable, Section 4.3) shall
be payable by the Borrower as if the Borrower had prepaid the Loans of the
assigning Lenders rather than such assigning Lenders having assigned their
respective interests hereunder. If such proposed Eligible Assignee is acceptable
to the applicable Co-Agent (who shall not unreasonably withhold or delay its
approval), the claiming Lender will be obligated to assign all of its rights and
obligations to such proposed Eligible Assignee within ten (10) Business Days
after such Co-Agent gives its consent to such proposed Eligible Assignee. In
addition, if one or more Affected Parties in one of the Groups (but not both of
the Groups) requests compensation under Section 4.2(a), the Borrower shall have
the right to (i) require all members of the Group to which such claiming part to
assign all, but not less than all, of their Commitment(s) and outstanding
Obligations, as applicable, by entering into written assignments with one or
more Eligible Assignees identified by the Borrower, or (ii) to pay in full of
all Obligations (if any) owing to such Group and terminate its Commitment(s) (as
applicable). Each assignment pursuant to clause (i) above to an Eligible
Assignee (which may include a Constituent of the other Co-Agent) shall become
effective on the date specified therein subject to receipt of payment in full


                                       16





<PAGE>

on such date for all Obligations, if any, owing to the Group being replaced, and
the Group being replaced shall make the requested assignments; provided that any
expenses or other amounts which would be owing to such Group pursuant to any
indemnification provision hereof shall be payable by the Borrower as if the
Borrower had prepaid the Loans of the assigning Group rather than the members of
such Group having assigned their respective interests hereunder

          Section 4.3 Funding Losses. In the event that any Lender shall
actually incur any actual loss or expense (including any actual loss or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to make or maintain any Loan or Liquidity Funding) as a
result of (i) any payment of principal with respect to such Lender's Loan or
Liquidity Funding being made on any day other than the scheduled last day of an
applicable CP Tranche Period or Interest Period with respect thereto, including,
without limitation, because of a prepayment required by Section 1.5(b), (c) or
(d) (it being understood that the foregoing shall not apply to any Alternate
Base Rate Loans), or (ii) any Loan not being made in accordance with a request
therefor under Section 2.1, then, upon written notice from the applicable
Co-Agent to the Administrative Agent, the Borrower and the Servicer, the
Borrower shall pay to the Servicer, and the Servicer shall pay to the applicable
Co-Agent for the account of such Lender, the amount of such actual loss or
expense; provided, however, that in the case of Blue Ridge, nothing in this
Section 4.3 shall duplicate any amount paid to it as Broken Funding Costs. Such
written notice (which shall include the methodology for calculating, and the
calculation of, the amount of such actual loss or expense, in reasonable detail)
shall, in the absence of demonstrable error, be conclusive and binding upon the
Borrower and the Servicer.

                                   ARTICLE V.
                             CONDITIONS OF ADVANCES

          Section 5.1 Conditions Precedent to Restatement Effectiveness.
Effectiveness of this Agreement shall be subject to the conditions precedent
that on such date: (a) each of the statements contained in Sections 5.2(a), (b)
and (c) shall be true, and (b) the Administrative Agent shall have received not
less than two (2) originals (except in the case of item (xi) below) of each of
the following documents dated the date hereof:

          (i) This Agreement, duly executed by the parties hereto;

          (ii) A certificate of the Secretary or Assistant Secretary of each
Loan Party certifying (A) the names and true signatures of the officers
authorized on its behalf to sign this Agreement and the other Transaction
Documents to be delivered by it hereunder (on which certificate the Agents and
the Lenders may conclusively rely until such time as the Administrative Agent
shall receive from such Loan Party a revised certificate meeting the
requirements of this subsection (ii)), (B) (x) an attached copy of the Organic
Documents of such Loan Party, or (y) that there has been no change in the
Organic Documents of such Loan Party since the date of the Existing Agreement,
and (C) an attached copy of resolutions of such Loan Party's board of directors
authorizing its execution and delivery of this Agreement;

          (iii) Opinions dated the date hereof addressed to each of the Agents
and the Lenders addressing (1) the existence of a "true sale" or "true
contribution" of the Receivables


                                       17





<PAGE>

from each of the Originators to the Borrower under the Sale Agreement, and (2)
the inapplicability of the doctrine of substantive consolidation to the Borrower
with respect to each of the Originators in connection with any bankruptcy
proceeding involving any of the Originators or the Borrower;

          (iv) One or more favorable opinions of counsel or reliance letters to
Loan Parties covering the matters set forth in of Exhibit 5.1(h);

          (v) Copies in form suitable for filing of any and all financing
statement amendments necessary to ensure that the Borrower continues to have a
perfected ownership interest or perfected first priority security interest in
the Receivables and Related Assets conveyed to it under the Sale Agreement and
the Administrative Agent, for the benefit of the Secured Parties, continues to
have a perfected first priority security interest in the Collateral hereunder;

          (vi) A Monthly Report, prepared as of the Cut-Off Date of March 31,
2004;

          (vii) An amendment to the Blue Ridge Liquidity Agreement, in form and
substance satisfactory to the Blue Ridge Agent, duly executed by the parties
thereto, increasing the Liquidity Commitments thereunder to $204,000,000, and
the Atlantic Liquidity Agreement, in form and substance satisfactory to the
Atlantic Agent, duly executed by the parties thereto;

          (viii) The Atlantic Fee Letter and the Blue Ridge Fee Letter, together
with payment of any and all fees due on or prior to the date hereof; and

          (ix) A certificate of an Authorized Officer of each of the Loan
Parties certifying that as of the date hereof, no Event of Default or Unmatured
Event of Default exists and is continuing.

          Section 5.2 Conditions Precedent to All Advances. Each Advance
(including the initial Advance under this Agreement) shall be subject to the
further conditions precedent that on the applicable Borrowing Date, each of the
following statements shall be true (and the Borrower, by accepting the amount of
such Advances or by receiving the proceeds of any Loan comprising such Advance,
and each other Loan Party, upon such acceptance or receipt by the Borrower,
shall be deemed to have certified that):

          (a) the representations and warranties contained in Section 6.1 are
correct in all respects on and as of the date of such Advance as though made on
and as of such day and shall be deemed to have been made on such day (except for
such representations which speak only as of an earlier date),

          (b) no event has occurred and is continuing, or would result from such
Advance, that constitutes an Event of Default or Unmatured Default,

          (c) the Termination Date shall not have occurred,

          (d) if such Advance is to be funded, in whole or in part, by either
Conduit's Liquidity Banks, such Conduit shall have Liquidity Banks in its Group
whose Scheduled


                                       18





<PAGE>

Termination Dates have not occurred with sufficient undrawn Commitments in an
aggregate amount sufficient to fund the requisite portion of such Advance, and

          (e) each of the Co-Agents shall have received (with such receipt to be
determined in accordance with Section 14.2 of this Agreement) a timely Borrowing
Request in accordance with Section 2.1;

provided, however, the absence of the occurrence and continuance of an Unmatured
Default shall not be a condition precedent to any Advance which does not
increase the aggregate principal amount of all Advances outstanding over the
aggregate outstanding principal balance of the Advances as of the opening of
business on such day.

                                  ARTICLE VI.
                         REPRESENTATIONS AND WARRANTIES

          Section 6.1 Representations and Warranties of Loan Parties. Each Loan
Party, as to itself, represents and warrants to the Agents and the Lenders as
follows:

          (a) Ownership of the Borrower. Quest Diagnostics owns, directly or
indirectly, all the issued and outstanding Equity Interests of the Borrower, and
all of such Equity Interests are fully paid and non-assessable and are free and
clear of any Liens.

          (b) Existence; Due Qualification; Permits. Each of the Loan Parties:
(i) is a corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization; (ii) has all requisite
corporate power and authority necessary to own its Property and carry on its
business as now being conducted; (iii) is qualified to do business and is in
good standing in all jurisdictions in which the nature of the business conducted
by it makes such qualification necessary; and (iv) is in compliance with all
Requirements of Law, except in the case of clauses (i), (ii), (iii) and (iv)
where the failure thereof individually or in the aggregate could not reasonably
be expected to have a Material Adverse Effect. The Loan Parties hold all
governmental permits, licenses, authorizations, consents and approvals necessary
for the Loan Parties to own, lease, and operate their respective Properties and
to operate their respective businesses as now being conducted (collectively, the
"Permits"), except for Permits the failure to obtain which would not have a
Material Adverse Effect. None of the Permits has been modified in any way that
is reasonably likely to have a Material Adverse Effect. All Permits are in full
force and effect except where the failure of such to be in full force and effect
would not have a Material Adverse Effect.

          (c) Action. Each Loan Party has all necessary corporate or other
entity power, authority and legal right to execute, deliver and perform its
obligations under each Transaction Document to which it is a party and to
consummate the transactions herein and therein contemplated; the execution,
delivery and performance by each Loan Party of each Transaction Document to
which it is a party and the consummation of the transactions herein and therein
contemplated have been duly authorized by all necessary corporate action on its
part; and this Agreement has been duly and validly executed and delivered by
each Loan Party and constitutes, and each of the other Transaction Documents to
which it is a party when executed and delivered by such Loan Party will
constitute, its legal, valid and binding obligation, enforceable against


                                       19





<PAGE>

each Loan Party in accordance with its terms, except as such enforceability may
be limited by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws of general applicability from time to time in effect
affecting the enforcement of creditors' rights and remedies and (ii) the
application of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

          (d) Absence of Default. No Unmatured Default or Event of Default has
occurred and is continuing.

          (e) Noncontravention.

          (i) None of the execution, delivery and performance by a Loan Party of
any Transaction Document to which it is a party nor the consummation of the
transactions herein and therein contemplated will (A) conflict with or result in
a breach of, or require any consent (which has not been obtained and is in full
force and effect) under, an Organic Document of such Loan Party or any
applicable Requirement of Law or any order, writ, injunction or decree of any
Governmental Authority binding on such Loan Party, or any term or provision of
any Contractual Obligation of such Loan Party or (B) constitute (with due notice
or lapse of time or both) a default under any such Contractual Obligation, or
(C) result in the creation or imposition of any Lien (except for the Liens
created pursuant to the Transaction Documents) upon any Property of such Loan
Party pursuant to the terms of any such Contractual Obligation, except with
respect to each of the foregoing which could not reasonably be expected to have
a Material Adverse Effect and which would not subject any Lender to any material
risk of damages or liability to third parties.

          (ii) No Loan Party is in default under any material contract or
agreement to which it is a party or by which it is bound, nor, to such Loan
Party's knowledge, does any condition exist that, with notice or lapse of time
or both, would constitute such default, excluding in any case such defaults that
are not reasonably likely to have a Material Adverse Effect.

          (f) No Proceedings. Except as described in Quest Diagnostics' Form
10-K for the fiscal year ended December 31, 2003 and all filings made with the
SEC under the Exchange Act by any Loan Party subsequent thereto prior to the
date of this Agreement (copies of which have been provided to each of the
Co-Agents or made available on EDGAR):

          (i) There is no Proceeding (other than any qui tam Proceeding, to
which this Section is limited to the best of each Loan Party's knowledge)
pending against, or, to the knowledge of either Loan Party, threatened in
writing against or affecting, any Loan Party or any of its respective Properties
before any Governmental Authority that, if determined or resolved adversely to
such Loan Party, could reasonably be expected to have a Material Adverse Effect.

          (ii) There is (A) no unfair labor practice complaint pending against
any Loan Party or, to the best knowledge of each Loan Party, threatened against
such Loan Party, before the National Labor Relations Board or any other
Governmental Authority, and no grievance or arbitration proceeding arising out
of or under any collective bargaining agreement is so pending against such Loan
Party or, to the best knowledge of such Loan Party after due inquiry, threatened
against such Loan Party, (B) no strike, labor dispute, slowdown or stoppage
pending


                                       20





<PAGE>

against such Loan Party or, to the best knowledge of Borrower, after due
inquiry, threatened against such Loan Party and (C) to the best knowledge of
Borrower after due inquiry, no union representation question existing with
respect to the employees of such Loan Party and, to the best knowledge of such
Loan Party, no union organizing activities are taking place, except such as
would not, with respect to any matter specified in clause (A), (B) or (C) above,
individually or in the aggregate, have a Material Adverse Effect.

          (g) Taxes.

          (i) Except as would not have a Material Adverse Effect: (A) all tax
returns, statements, reports and forms (including estimated Tax or information
returns) (collectively, the "Tax Returns") required to be filed with any taxing
authority by, or with respect to, each Loan Party have been timely filed in
accordance with all applicable laws; (B) each Loan Party has timely paid or made
adequate provision for payment of all Taxes shown as due and payable on Tax
Returns that have been so filed, and, as of the time of filing, each Tax Return
was accurate and complete and correctly reflected the facts regarding income,
business, assets, operations, activities and the status of each Loan Party
(other than Taxes which are being contested in good faith and for which adequate
reserves are reflected on the financial statements delivered hereunder); and (C)
each Loan Party has made adequate provision for all Taxes payable by such Loan
Party for which no Tax Return has yet been filed.

          (ii) Except as set forth in Quest Diagnostics' Annual Report on Form
10-K for the year ended December 31, 2003: (A) as of the date hereof no Loan
Party is a member of an affiliated group of corporations within the meaning of
Section 1504 of the Code other than an affiliated group of corporations of which
Quest Diagnostics is the common parent; and (B) there are no material tax
sharing or tax indemnification agreements under which Borrower is required to
indemnify another party for a material amount of Taxes other than, in the case
of Quest Diagnostics, the tax indemnity contained in the Merger Agreement dated
as of August 16,1999, between Glaxo Smith Kline (formerly known as Smith Kline
Beecham) and Quest Diagnostics.

          (h) Government Approvals. No authorizations, approvals or consents of,
and no filings or registrations with, any Governmental Authority or any
securities exchange are necessary for the execution, delivery or performance by
any Loan Party of the Transaction Documents to which it is a party or for the
legality, validity or enforceability hereof or thereof or for the consummation
of the transactions herein and therein contemplated, except for filings and
recordings in respect of the Liens created pursuant to the Transaction Documents
(all of which have been duly made or delivered to the Administrative Agent's
counsel for filing or may be prepared by the Administrative Agent for filing in
accordance with the terms of this Agreement) and except for consents,
authorizations and filings that have been obtained or made and are in full force
and effect or the failure of which to obtain would not have a Material Adverse
Effect.

          (i) Financial Statements and Absence of Certain Material Adverse
Changes.

          (i) The information, reports, financial statements, exhibits and
schedules furnished in writing by either of the Loan Parties to each of the
Co-Agents or Lenders in connection with the negotiation, preparation or delivery
of the Transaction Documents, including Quest Diagnostics' Annual Report on Form
10-K for the year ended December 31, 2003, but in


                                       21





<PAGE>

each case excluding all projections, whether prior to or after the date of this
Agreement, when taken as a whole, do not, as of the date such information was
furnished, contain any untrue statement of material fact or omit to state a
material fact necessary in order to make the statements herein or therein, in
light of the circumstances under which they were made, not materially
misleading; it being understood that certain financial information so furnished,
including without limitation information contained in the Weekly Reports and
Monthly Reports, has not been prepared in accordance with GAAP and might vary
materially from information prepared and presented in accordance with GAAP on
the same subject matter. Each Loan Party understands that all such statements,
representations and warranties shall be deemed to have been relied upon by the
Lenders as a material inducement to make each extension of credit hereunder.

          (ii) From December 31, 2003 through and including the date hereof,
there has been no material adverse change in Quest Diagnostics' consolidated
financial condition, business or operations. Since December 31, 2003, there has
been no material adverse change in Quest Diagnostics' consolidated financial
condition, business or operations that has had, or would reasonably be expected
to have, a material adverse effect upon its ability to perform its obligations,
as an Originator or as Servicer, under the Transaction Documents when and as
required, and no material adverse effect on the collectibility of any material
portion of the Receivables.

          (iii) Since the date hereof, no event has occurred which would have a
Material Adverse Effect.

          (j) Nature of Receivables. Each Receivable constitutes an Account or a
Payment Intangible.

          (k) Margin Regulations. The use of all funds obtained by such Loan
Party under this Agreement or any other Transaction Document will not conflict
with or contravene any of Regulation T, U or X.

          (l) Title to Receivables and Quality of Title.

          (i) Each Receivable has been acquired by the Borrower from an
Originator in accordance with the terms of the Sale Agreement, and the Borrower
has thereby irrevocably obtained good title to such Receivable and its Related
Assets, free and clear of all Adverse Claims (except as created under the
Transaction Documents), and the Borrower has the legal right to sell and
encumber, such Receivable and the Related Assets. Without limiting the
foregoing, there have been duly filed or delivered to the Administrative Agent's
counsel in form suitable for filing, all financing statements and financing
statements amendments or other similar instruments or documents necessary under
the UCC of all appropriate jurisdictions to perfect the Borrower's ownership
interest in such Receivable.

          (ii) This Agreement creates a valid security interest in the
Collateral in favor of the Administrative Agent, for the benefit of the Secured
Parties, and, upon filing of the financing statements and amendments described
in clause (i), together with UCC termination statements delivered under the
Receivables Sale Agreement, such security interest will be a first priority
perfected security interest.


                                       22





<PAGE>

          (iii) No financing statement executed or otherwise authorized by any
Originator or Loan Party or other instrument similar in effect covering any
portion of the Collateral is on file in any recording office except such as may
be filed (A) in favor of an Originator in accordance with the Contracts, (B) in
favor of the Borrower and its assigns in connection with the Sale Agreement, (C)
in favor of the Administrative Agent in accordance with this Agreement, (D) in
connection with any Lien arising solely as the result of any action taken by the
Administrative Agent or one of the Secured Parties, or (E) which shall have been
terminated or amended pursuant to UCC financing statements delivered to or
prepared by the Administrative Agent hereunder in form suitable for filing in
all applicable jurisdictions.

          (m) Accurate Reports. No Monthly Report, Weekly Report or computation
of Cash Collateral Payment (in each case, if prepared by such Loan Party, or to
the extent information therein was supplied by such Loan Party), no other
information, exhibit, schedule or information concerning the Collateral
furnished or to be furnished verbally or in writing before or after the date of
this Agreement, by or on behalf of such Loan Party to each of the Co-Agents or
Lenders pursuant to this Agreement was inaccurate in any material respect as of
the date it was dated or (except as otherwise disclosed to each of the Co-Agents
or the Lenders at such time) as of the date so furnished, or contained or (in
the case of information or other materials to be furnished in the future) will
contain any material misstatement of fact or omitted or (in the case of
information or other materials to be furnished in the future) will omit to state
a material fact or any fact necessary to make the statements contained therein
not materially misleading in light of the circumstances made or presented (it
being understood that the Monthly Reports and Weekly Reports are not prepared in
accordance with GAAP and that reports prepared in accordance with GAAP on the
same subject matter might vary materially; and certain reconciling information
with respect to Receivables will be set forth in the Monthly Report).

          (n) Jurisdiction of Organization; Offices. Each Loan Party's
jurisdiction of organization is correctly set forth after its name in the
preamble to this Agreement. The principal places of business and chief executive
office of the Borrower is located at the addresses set forth on Schedule 6.1(n),
and the offices where the Servicer and the Borrower keep all their Records and
material Contracts are located at the addresses specified in Schedule 6.1(n) (or
at such other locations, notified to each of the Co-Agents in accordance with
Section 7.1(f), in jurisdictions where all action required by Section 8.5 has
been taken and completed).

          (o) Lockboxes and Collection Accounts.

          (i) One of the Loan Parties or the applicable Originator has
instructed all Obligors of all Receivables to pay all Collections thereon either
(A) by mail addressed to a Lockbox or (B) by wire transfer or other electronic
funds transfer directly to a Collection Account in the name of the applicable
Originator, as sub-servicer, or in the name of the Borrower. Items received in
the Lockboxes are deposited for collection each Business Day into a Collection
Account in the name of the applicable Originator or the Borrower, and all
collected and available funds from time to time in each Collection Account in
the name of any Originator are swept each day to a Collection Account in the
name of the Borrower. Each of the agreements establishing and governing the
maintenance of the Lockboxes and Collections Accounts is in full force and
effect, and each of the Lockboxes and Collections Accounts is subject to a
Collection Account Agreement that is in full force and effect.


                                       23





<PAGE>

          (ii) The Borrower has not granted any Person other than the
Administrative Agent, dominion and control over any Collection Account or any
Lockbox, or the right to take dominion and control of any of the foregoing at a
future time or upon the occurrence of a future event.

          (iii) Except as otherwise provided in Section 7.3(d), each Collection
Account Agreement, and the name and address of each Collection Bank (together
with the account numbers of all Collection Accounts maintained with it and the
address of each Lockbox maintained with it) are set forth on Schedule 6.1(o).

          (p) Eligible Receivables. Each Receivable included as an Eligible
Receivable in the Net Pool Balance in connection with any computation or
recomputation of the Borrowing Base is an Eligible Receivable on such date.

          (q) ERISA. No ERISA Event has occurred or is reasonably expected to
occur which could have a Material Adverse Effect. The present value of all
accumulated benefit obligations of all underfunded Pension Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards No.
87) did not, as of the date of the most recent financial statements reflecting
such amounts, exceed by more than $20.0 million the fair market value of the
assets of all such underfunded Pension Plans. Each ERISA Entity is in compliance
in all material respects with the presently applicable provisions of ERISA and
the Code with respect to each Employee Benefit Plan. Using actuarial assumptions
and computation methods consistent with subpart 1 of subtitle E of Title IV of
ERISA, the aggregate liabilities of any of each ERISA Entity to all
Multiemployer Plans in the event of a complete withdrawal therefrom, as of the
close of the most recent fiscal year of each such Multiemployer Plan, would not
result in a Material Adverse Effect. All Foreign Plans are in substantial
compliance with all Requirements of Law (other than to the extent such failure
to comply would not reasonably be expected to have a Material Adverse Effect).

          (r) Names. Since its incorporation, the Borrower has not used any
legal names, trade names or assumed names other than (i) the name in which it
has executed this Agreement, and (ii) any other name to which the Administrative
Agent gives its prior written consent (which consent will not be unreasonably
withheld or delayed).

          (s) Credit and Collection Policy. With respect to the Receivables
originated by each of the Originators, each of the applicable Originator, the
Borrower and the Servicer has complied in all material respects with the
applicable Credit and Collection Policy, and no change has been made to such
Credit and Collection Policy since the date of this Agreement which would be
reasonably likely to materially and adversely affect the collectibility of the
Receivables or decrease the credit quality of any newly created Receivables
except for such changes as to which each of the Co-Agents has received the
notice required under Section 7.2(h) and has given its prior written consent
thereto (which consent shall not be unreasonably withheld or delayed).

          (t) Payments to Applicable Originator. With respect to each Receivable
sold or contributed to the Borrower by any Originator under the Sale Agreement,
the Borrower has given reasonably equivalent value to such Originator in
consideration for such Receivable and


                                       24





<PAGE>

the Related Assets with respect thereto and no such transfer is or may be
voidable under any section of the Bankruptcy Reform Act of 1978 (11 U.S.C.
Sections 101 et seq.), as amended.

          (u) Investment Company Act; Public Utility Holding Company Act; Other
Restrictions. No Loan Party is an "investment company", or a company
"controlled" by an "investment company", within the meaning of the United States
Investment Company Act of 1940, as amended. No Loan Party is a "holding
company", or an "affiliate" of a "holding company" or a "subsidiary company" of
a "holding company", within the meaning of the United States Public Utility
Holding Company Act of 1935, as amended. No Loan Party is subject to regulation
under any law or regulation which limits its ability to incur Indebtedness,
other than Regulation X of the Board of Governors of the Federal Reserve System.

          (v) Borrowing Base; Solvency. The Borrowing Base is at all times at
least equal to the aggregate outstanding principal balance of the Advances. As
of each Borrowing Date, after giving effect to any Loans to be borrowed on such
date, the Borrower is and will be Solvent.

                                  ARTICLE VII.
                        GENERAL COVENANTS OF LOAN PARTIES

          Section 7.1 Affirmative Covenants of Loan Parties. From the date
hereof until the Final Payout Date, unless each of the Co-Agents shall otherwise
consent in writing:

          (a) Compliance With Laws, Etc. Each Loan Party will comply with all
applicable laws, rules, regulations and orders, including those with respect to
the Receivables and related Contracts and Invoices, except, in each of the
foregoing cases, where the failure to so comply would not individually or in the
aggregate have a Material Adverse Effect.

          (b) Preservation of Existence. Each Loan Party will preserve and
maintain its existence, rights, franchises and privileges in the jurisdiction of
its incorporation, and qualify and remain qualified in good standing as a
foreign corporation in each jurisdiction where the failure to preserve and
maintain such existence, rights, franchises, privileges and qualification would
have a Material Adverse Effect.

          (c) Audits. Each Loan Party will, subject to compliance with
applicable law: (i) at any time and from time to time upon not less than ten
(10) Business Days' notice (unless an Unmatured Default or Event of Default has
occurred and is continuing, in which case, not more than one (1) Business Day's
notice shall be required) during regular business hours, permit each of the
Agents or any of its agents or representatives: (A) to examine and make copies
of and abstracts from all Records, Contracts and Invoices in the possession or
under the control of such Loan Party, and (B) to visit the offices and
properties of such Loan Party for the purpose of examining such Records,
Contracts and Invoices and to discuss matters relating to Receivables or such
Loan Party's performance hereunder with any of the officers or employees of such
Loan Party having knowledge of such matters; and (ii) without limiting the
provisions of clause (i) above, from time to time, at the expense of such Loan
Party, permit certified public accountants or auditors acceptable to each of the
Co-Agents to conduct a review of such Loan Party's Contracts, Invoices and
Records (each, a "Review"); provided, however, that (x) so long as no


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<PAGE>

Event of Default has occurred and is continuing, the Loan Parties shall only be
responsible for the costs and expenses of two (2) such Reviews under this
Section or under Section 7.2(i) in 2004 and one (1) such Review in any calendar
year thereafter unless the first such Review in such subsequent calendar year
resulted in negative findings (in which case the Loan Parties shall be
responsible for the costs and expenses of two (2) such Reviews in such
subsequent calendar year). Notwithstanding the foregoing, if (x) any Loan Party
requests the approval of a new Eligible Originator who is a Material Proposed
Addition or (y) any Material Acquisition is consummated, the Loan Parties shall
be responsible for the costs and expenses of one additional Review per proposed
Material Proposed Addition or per Material Acquisition in the calendar year in
which such Material Proposed Addition is expected to occur or such Material
Acquisition is expected to be consummated if such additional Review is requested
by either of the Co-Agents.

          (d) Keeping of Records and Books of Account. The Servicer will
maintain and implement administrative and operating procedures (including,
without limitation, an ability to recreate essential Records evidencing the
Receivables in the event of the destruction of the originals thereof), and keep
and maintain, all Contracts, Records and other information necessary or
reasonably advisable for the collection of all Receivables (including, without
limitation, Records adequate to permit the identification as of any Business Day
when required of outstanding Unpaid Net Balances by Obligor and related debit
and credit details of the Receivables). Each of the Borrower and the Servicer
shall post all Demand Advances to its respective books in accordance with GAAP
on or before each Settlement Date.

          (e) Performance and Compliance with Receivables, Invoices and
Contracts. Each Loan Party will, at its expense, timely and fully perform and
comply with all provisions, covenants and other promises, if any, required to be
observed by it under the Contracts and/or Invoices related to the Receivables
except for such failures to fully perform and comply as would not, individually
or in the aggregate, have a Material Adverse Effect.

          (f) Jurisdiction of Organization; Location of Records. Each Loan Party
will keep its jurisdiction of organization, chief place of business and (at any
time while the location of its chief executive office remains germane to
perfection of any of the security interests or ownership interests purported to
be conveyed pursuant to the Transaction Documents) its chief executive office,
and the offices where it keeps its Records and material Contracts (and, to the
extent that any of the foregoing constitute instruments, chattel paper or
negotiable documents, all originals thereof), at the address(es) of the Servicer
and the Borrower referred to in Section 6.1(n) or, upon 15 days' prior written
notice to the Administrative Agent, at such other locations in jurisdictions
where all action required by Section 8.5 shall have been taken and completed.

          (g) Credit and Collection Policies. Each Loan Party will comply in all
material respects with its Credit and Collection Policy in regard to the
Receivables and the related Contracts and Invoices.

          (h) Sale Agreement. The Borrower will perform and comply in all
material respects with all of its covenants and agreements set forth in the Sale
Agreement, and will enforce the performance by each Originator of its respective
obligations thereunder.


                                       26





<PAGE>

          (i) Collections.

          (i) In accordance with Section 6.1(o)(i), each of the Loan Parties
will instruct all Obligors to make all payments on Receivables directly to a
Lockbox or Collection Account in the name of the applicable Originator (as
sub-servicer for the Borrower and the Secured Parties), the Borrower or the
Administrative Agent or its designee, which is subject to a Collection Account
Agreement and, if such Collection Account is in the name of an Originator, it is
swept on a daily basis into a Collection Account in the name of the Borrower (or
the Administrative Agent or its designee) which is subject to a Collection
Account Agreement. The Borrower will cause each of the Collection Accounts that
is currently in the name of an Originator to be transferred to it and into its
own name within a reasonable period of time after the initial Advance hereunder.

          (ii) If, notwithstanding the foregoing clause (i) above, any
Collections are paid directly to any Loan Party, such Loan Party shall deposit
the same (with any necessary indorsements) to a Collection Account within one
(1) Business Day after receipt thereof.

          (iii) Upon demand of any of the Agents at any time following the
occurrence of any Unmatured Default or Event of Default, the Borrower or the
Servicer shall establish a segregated account at Wachovia Bank, National
Association which is subject to a perfected security interest in favor of the
Administrative Agent, for the benefit of the Secured Parties (the "Collateral
Account"), into which all deposits from time to time in the Collection Accounts,
and all other Collections, are concentrated pending application in accordance
with the terms of this Agreement to the Obligations.

          (j) Further Assurances. Each of the Loan Parties shall take all
necessary action to establish and maintain (i) in favor of the Borrower, a valid
and perfected ownership interest in the Receivables and Related Assets, and (ii)
in favor of the Administrative Agent for the benefit of the Secured Parties, a
valid and perfected first priority security interest in the Collateral,
including, without limitation, taking such action to perfect, protect or more
fully evidence the security interests of the Administrative Agent as the
Administrative Agent may reasonably request.

          Section 7.2 Reporting Requirements of Loan Parties. From the date
hereof until the Final Payout Date, unless each of the Co-Agents shall otherwise
consent in writing:

          (a) Quarterly Financial Statements. (i) Quest Diagnostics will furnish
to each of the Co-Agents or make publicly available through EDGAR, as soon as
available and in any event within 60 days after the end of each of the first
three quarters of each of its fiscal years, copies of its report on SEC Form
10-Q as of the close of such fiscal quarter, and (ii) the Borrower will furnish
to each of the Co-Agents as soon as available and in any event within 60 days
after the end of each of the first three quarters of each of its fiscal years an
unaudited balance sheet and income statement of the Borrower as of the close of
such fiscal quarter, prepared in accordance with GAAP and certified in a manner
reasonably acceptable to each of the Co-Agents by the Borrower's chief executive
officer, chief financial officer or treasurer (or an officer acting in a similar
capacity to any of the foregoing);


                                       27





<PAGE>

          (b) Annual Financial Statements. Quest Diagnostics will furnish to
each of the Co-Agents or make publicly available through EDGAR, as soon as
available and in any event within 120 days after the end of each fiscal year of
Quest Diagnostics, copies of its annual report on SEC Form 10-K for such year,
and the Borrower will furnish to each of the Co-Agents as soon as available and
in any event within 120 days after the end of each fiscal year of the Borrower,
an unaudited balance sheet and income statement of the Borrower as of the close
of such fiscal year, prepared in accordance with GAAP and certified in a manner
reasonably acceptable to each of the Co-Agents by the Borrower's chief executive
officer, chief financial officer or treasurer (or an officer acting in a similar
capacity to any of the foregoing)

          (c) Reports to SEC and Exchanges. In addition to the reports required
by subsections (a) and (b) next above, promptly upon filing any report on SEC
Form 8-K with the SEC, Quest Diagnostics shall deliver copies thereof to each of
the Co-Agents or make them publicly available through EDGAR;

          (d) ERISA. Promptly after the filing or receiving thereof, each Loan
Party will furnish to each of the Co-Agents copies of all reports and notices
with respect to any Reportable Event which any Loan Party files under ERISA with
the Internal Revenue Service, the PBGC or the U.S. Department of Labor or which
such Loan Party receives from the PBGC;

          (e) Events of Default, etc. As soon as possible and in any event
within five (5) Business Days after any Authorized Officer of either Loan Party
obtains knowledge of the occurrence of any Event of Default or any Unmatured
Default, each Loan Party will furnish to each of the Co-Agents a written
statement of an Authorized Officer of such Loan Party setting forth details of
such event and the action that such Loan Party will take with respect thereto;

          (f) Litigation. As soon as possible and in any event within ten
Business Days after any Authorized Officer of either Loan Party obtains
knowledge thereof, such Loan Party will furnish to each of the Co-Agents notice
of (i) any litigation, investigation or proceeding which may exist at any time
which would reasonably be expected to have a Material Adverse Effect and (ii)
any development in previously disclosed litigation which development would
reasonably be expected to have a Material Adverse Effect;

          (g) Reviews of Receivables. As soon as available and in any event
within 30 days after each Review referenced in Section 7.1(c), the Borrower will
deliver to each of the Co-Agents a written report on the results of such Review
prepared by accountants or auditors selected as specified therein and reasonably
acceptable to each of the Co-Agents, substantially in the form of the report
delivered for the prior Review, and covering such other matters as any of the
Agents may reasonably request in order to protect the interests of the
Administrative Agent, for the benefit of the Secured Parties, under or as
contemplated by this Agreement;

          (h) Change in Business or Credit and Collection Policy. Each Loan
Party will furnish to each of the Co-Agents prompt written notice of any
material change in the character of such Loan Party's business prior to the
occurrence of such change, and each Loan Party will provide each of the
Co-Agents with not less than 15 Business Days' prior written notice of any
material change in the Credit and Collection Policy (together with a copy of
such proposed change); and


                                       28





<PAGE>

          (i) Downgrade. Promptly after receipt of notice of any downgrade of
any Indebtedness of Quest Diagnostics by Moody's or S&P, Quest Diagnostics shall
furnish to each of the Co-Agents a notice of such downgrade setting forth the
Indebtedness affected and the nature of such change in rating.

          (j) Other. Promptly, from time to time, each Loan Party will furnish
to each of the Agents such other information, documents, Records or reports
respecting the Receivables or the condition or operations, financial or
otherwise, of such Loan Party as any of the Agents may from time to time
reasonably request in order to protect the interests of the Administrative
Agent, for the benefit of the Secured Parties, under or as contemplated by this
Agreement.

          Section 7.3 Negative Covenants of Loan Parties. From the date hereof
until the Final Payout Date, without the prior written consent of each of the
Co-Agents:

          (a) Sales, Liens, Etc. (i) The Borrower will not, except as otherwise
provided herein and in the other Transaction Documents, sell, assign (by
operation of law or otherwise) or otherwise dispose of, or create or suffer to
exist any Lien upon or with respect to, any Collateral, or any account to which
any Collections are sent, or any right to receive income or proceeds from or in
respect of any of the foregoing (except, prior to the execution of Collection
Account Agreements, set-off rights of any bank at which any such account is
maintained), and (ii) the Servicer will not assert any interest in the
Receivables, except as the Servicer.

          (b) Extension or Amendment of Receivables. No Loan Party will, except
as otherwise permitted in Section 8.2(c), extend, amend or otherwise modify the
terms of any Receivable, or amend, modify or waive any term or condition of any
Contract or Invoice related thereto in any way that adversely affects the
collectibility of the Receivables originated by any Originator (taken as a
whole), or any material part thereof, or the rights of the Borrower or the
Administrative Agent (for the benefit of the Secured Parties) therein.

          (c) Change in Business or Credit and Collection Policy. No Loan Party
will make or permit to be made any change in the character of its business or
Credit and Collection Policy, which change would, in either case, impair the
collectibility of any significant portion of the Receivables or otherwise
materially and adversely affect the interests or remedies of Lender under this
Agreement or any other Transaction Document.

          (d) Change in Payment Instructions to Obligors. No Loan Party will add
or terminate any bank as a Collection Bank from those listed in Schedule 6.1(o)
or, after the Collateral Account has been established pursuant to Section
7.1(i), make any change in its instructions to Obligors regarding payments to be
made to any Collection Account or Lockbox (except for a change in instructions
solely for the purpose of directing Obligors to make such payments to another
existing Collection Account or Lockbox, as applicable, and where such change is
immaterial and does not adversely affect the interests of the Administrative
Agent, on behalf of the Secured Parties, in any respect), unless (i) the
Co-Agents shall have received prior written notice of such addition, termination
or change and (ii) the Administrative Agent shall have received duly executed
copies of appropriate Collection Account Agreements, in a form reasonably
acceptable to the Administrative Agent with each new Collection Bank.


                                       29





<PAGE>

          (e) Deposits to Accounts. Each Loan Party will establish reasonable
procedures designed to ensure that no Loan Party will deposit or authorize the
deposit to any Collection Account of any cash or cash proceeds other than
Collections of Receivables and of certain of the Excluded JV Receivables.

          (f) Changes to Other Documents. The Borrower will not enter into any
amendment or modification of, or supplement to, the Borrower's Organic Documents
without the prior written consent of the Administrative Agent. Neither the
Borrower nor Quest Diagnostics will permit or enter into any amendment to or
modification of, or supplement to, the Sale Agreement or the Subordinated Notes,
except that they may enter into Joinder Agreements to add Eligible Originators
as sellers thereunder.

          (g) Restricted Payments by the Borrower. The Borrower will not:

          (i) Purchase or redeem any shares of the capital stock of the
Borrower, declare or pay any dividends thereon (other than stock dividends),
make any distribution to stockholders or set aside any funds for any such
purpose, unless, in each of the foregoing cases: (A) such purchase, redemption,
payment or distribution is made on, or immediately following, a Settlement Date
after payment of all Obligations due and owing on such Settlement Date, and (B)
after giving effect to such purchase, redemption, payment or distribution, the
Borrower's net worth (determined in accordance with GAAP) will at all times be
at least 10% of the greater of the Aggregate Commitment or the aggregate
outstanding principal amount of the Advances; or

          (ii) Make any payment of principal or interest on the Subordinated
Notes if any Event of Default exists or would result therefrom or if such
payment would result in the Borrower's having insufficient cash on hand to pay
all Obligations that will be due and owing on the next succeeding Settlement
Date.

          (h) Borrower Indebtedness. The Borrower will not incur or permit to
exist any Indebtedness or liability on account of deposits except: (A) as
provided in the Transaction Documents and (B) other current accounts payable
arising in the ordinary course of business and not overdue in any material
respect.

          (i) Prohibition on Additional Negative Pledges. No Loan Party will
enter into or assume any agreement (other than this Agreement and the other
Transaction Documents) prohibiting the creation or assumption of any Lien upon
the Receivables or Related Assets, whether now owned or hereafter acquired,
except as contemplated by the Transaction Documents, or otherwise prohibiting or
restricting any transaction contemplated hereby or by the other Transaction
Documents, and no Loan Party will enter into or assume any agreement creating
any Lien upon the Subordinated Notes.

          (j) Name Change, Offices, Records and Books of Accounts. The Borrower
will not change its name, identity or structure (within the meaning of Article 9
of any applicable enactment of the UCC) or relocate its chief executive office
or any office where Records are kept unless it shall have: (i) given the
Co-Agents at least 15 days' prior notice thereof and (ii) prior to effectiveness
of such change, delivered to the Administrative Agent all financing statements,


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<PAGE>

instruments and other documents requested by the Administrative Agent in
connection with such change or relocation.

          (k) Mergers, Consolidations and Acquisitions. The Borrower will not
merge into or consolidate with any other Person, or permit any other Person to
merge into or consolidate with it, or purchase, lease or otherwise acquire (in
one transaction or a series of transactions) all or substantially all of the
assets of any other Person (whether directly by purchase, lease or other
acquisition of all or substantially all of the assets of such Person or
indirectly by purchase or other acquisition of all or substantially all of the
capital stock of such other Person) other than the acquisition of the
Receivables and Related Assets pursuant to the Sale Agreement.

          (l) Disposition of Receivables and Related Assets. Except pursuant to
this Agreement, the Borrower will not sell, lease, transfer, assign, pledge or
otherwise dispose of or encumber (in one transaction or in a series of
transactions) any Receivables and Related Assets.

          (m) Borrowing Base. The Borrower will not request any Advance if,
after giving effect thereto, the aggregate outstanding principal balance of the
Loans would exceed the Borrowing Base.

          Section 7.4 Separate Existence of the Borrower. Each Loan Party hereby
acknowledges that Lenders and the Agents are entering into the transactions
contemplated hereby in reliance upon the Borrower's identity as a legal entity
separate from the Servicer and its other Affiliates. Therefore, each Loan Party
shall take all steps specifically required by this Agreement or reasonably
required by any of the Agents to continue the Borrower's identity as a separate
legal entity and to make it apparent to third Persons that the Borrower is an
entity with assets and liabilities distinct from those of its Affiliates, and is
not a division of Quest Diagnostics or any other Person. Without limiting the
foregoing, each Loan Party will take such actions as shall be required in order
that:

          (a) The Borrower will be a limited purpose corporation whose primary
     activities are restricted in its Certificate of Incorporation to purchasing
     or otherwise acquiring from the Originators and owning, holding, granting
     security interests in the Collateral, entering into agreements for the
     financing and servicing of the Receivables, and conducting such other
     activities as it deems necessary or appropriate to carry out its primary
     activities;

          (b) Not less than one member of the Borrower's Board of Directors (the
     "Independent Director") shall be an individual who is not, and never has
     been, a direct, indirect or beneficial stockholder, officer, director,
     employee, affiliate, associate, material supplier or material customer of
     Quest Diagnostics or any of its Affiliates (other than an Affiliate
     organized with a limited purpose charter for the purpose of acquiring
     receivables or other financial assets or intangible property). The
     certificate of incorporation of the Borrower shall provide that (i) at
     least one member of the Borrower's Board of Directors shall be an
     Independent Director, (ii) the Borrower's Board of Directors shall not
     approve, or take any other action to cause the filing of, a voluntary
     bankruptcy petition with respect to the Borrower unless the Independent
     Director shall approve the taking of such action in writing prior to the
     taking of such action and (iii) the provisions requiring an independent
     director and the provision described in clauses (i) and (ii) of this


                                       31





<PAGE>

     paragraph (b) cannot be amended without the prior written consent of the
     Independent Director;

          (c) The Independent Director shall not at any time serve as a trustee
     in bankruptcy for the Borrower or any Affiliate thereof;

          (d) Any director, employee, consultant or agent of the Borrower will
     be compensated from the Borrower's funds for services provided to the
     Borrower. The Borrower will not engage any agents (other than its
     attorneys, auditors and other professionals) and will not engage any Person
     other than the Servicer to deal with the Collateral as contemplated by the
     Transaction Documents;

          (e) The Borrower will contract with the Servicer to perform for the
     Borrower all operations required on a daily basis to service the
     Collateral. The Borrower will pay the Servicer the Servicer's Fee pursuant
     hereto. The Borrower will not incur any material indirect or overhead
     expenses for items shared with Quest Diagnostics (or any other Affiliate
     thereof) which are not reflected in the Servicer's Fee. To the extent, if
     any, that the Borrower (or any other Affiliate thereof) shares items of
     expenses not reflected in the Servicer's Fee, for legal, auditing and other
     professional services and directors' fees, such expenses will be allocated
     to the extent practical on the basis of actual use or the value of services
     rendered, and otherwise on a basis reasonably related to the actual use or
     the value of services rendered, it being understood that Quest Diagnostics
     shall pay all expenses of the Borrower and, to the extent provided in this
     Agreement, the Agents relating to the preparation, negotiation, execution
     and delivery of the Transaction Documents, including, without limitation,
     legal, rating agency and other fees;

          (f) The Borrower's operating expenses will not be paid by any other
     Loan Party or other Affiliate of the Borrower;

          (g) The Borrower will have its own stationery;

          (h) The books of account, financial reports and records of the
     Borrower will be maintained separately from those of Quest Diagnostics and
     each other Affiliate of the Borrower although they may appear in Quest
     Diagnostics' consolidated general ledger;

          (i) Any financial statements of any Loan Party or Affiliate thereof
     which are consolidated to include the Borrower will contain detailed notes
     clearly stating that (A) all of the Borrower's assets are owned by the
     Borrower, and (B) the Borrower is a separate legal entity with its own
     separate creditors that will be entitled to be satisfied out of the
     Borrower's assets prior to any value in the Borrower becoming available to
     the Borrower's equity holders; and the accounting records and any published
     financial statements of each of the Originators will clearly show that, for
     accounting purposes, the Receivables and Related Assets have been sold by
     such Originator to the Borrower;

          (j) The Borrower's assets will be maintained in a manner that
     facilitates their identification and segregation from those of the Servicer
     and the other Affiliates;


                                       32





<PAGE>

          (k) Each Affiliate of the Borrower will strictly observe
     organizational formalities in its dealings with the Borrower, and, except
     as permitted pursuant to this Agreement with respect to Collections, funds
     or other assets of the Borrower will not be commingled with those of any of
     its Affiliates;

          (l) No Affiliate of the Borrower will maintain joint bank accounts
     with the Borrower or other depository accounts with the Borrower to which
     any such Affiliate (other than in the Borrower's or such Affiliate's
     existing or future capacity as the Servicer hereunder or under the Sale
     Agreement) has independent access, provided that prior to demand by any of
     the Agents pursuant to Section 7.1(i) to establish a segregated Collateral
     Account, Collections may be deposited into general accounts of Quest
     Diagnostics, subject to the obligations of the Servicer hereunder;

          (m) Each Affiliate of the Borrower will maintain arm's length
     relationships with the Borrower, and each Affiliate of the Borrower that
     renders or otherwise furnishes services or merchandise to the Borrower will
     be compensated by the Borrower at market rates for such services or
     merchandise;

          (n) No Affiliate of the Borrower will be, nor will it hold itself out
     to be, responsible for the debts of the Borrower or the decisions or
     actions in respect of the daily business and affairs of the Borrower. Quest
     Diagnostics and the Borrower will immediately correct any known
     misrepresentation with respect to the foregoing and they will not operate
     or purport to operate as an integrated single economic unit with respect to
     each other or in their dealing with any other entity;

          (o) The Borrower will keep correct and complete books and records of
     account and minutes of the meetings and other proceedings of its
     stockholder and board of directors, as applicable, and the resolutions,
     agreements and other instruments of the Borrower will be continuously
     maintained as official records by the Borrower; and

          (p) The Borrower will conduct its business solely in its own legal
     name and in a manner separate from the Originators so as not to mislead
     others with whom they are dealing.

                                 ARTICLE VIII.
                          ADMINISTRATION AND COLLECTION

          Section 8.1 Designation of Servicer.

          (a) Quest Diagnostics as Initial Servicer. The servicing,
administering and collection of the Receivables shall be conducted by the Person
designated as Servicer hereunder from time to time in accordance with this
Section 8.1. Until both of the Co-Agents give to Quest Diagnostics a Successor
Notice (as defined in Section 8.1(b)), Quest Diagnostics is hereby designated
as, and hereby agrees to perform the duties and obligations of, Servicer
pursuant to the terms hereof.

          (b) Successor Notice; Servicer Transfer Events. Upon Quest
Diagnostics' receipt of a notice from both of the Co-Agents following a Servicer
Transfer Event of the designation of


                                       33





<PAGE>

a new Servicer (a "Successor Notice"), Quest Diagnostics agrees that it will
terminate its activities as Servicer hereunder in a manner that will facilitate
the transition of the performance of such activities to the new Servicer, and,
after agreeing in writing to be bound by the terms of this Agreement (including,
without limitation, the provisions of Section 14.14), the Co-Agents' designee
shall assume each and all of Quest Diagnostics' obligations to service and
administer such Receivables, on the terms and subject to the conditions herein
set forth, and Quest Diagnostics shall use its reasonable best efforts to assist
the Co-Agents' designee in assuming such obligations. Without limiting the
foregoing, Quest Diagnostics agrees, at its expense, to take all actions
necessary to provide the new Servicer with access to all computer software
necessary to generate reports useful in collecting or billing Receivables,
solely for use in collecting and billing Receivables. If Quest Diagnostics
disputes the occurrence of a Servicer Transfer Event, Quest Diagnostics may take
appropriate action to resolve such dispute; provided that Quest Diagnostics must
terminate its activities hereunder as Servicer and allow the newly designated
Servicer to perform such activities on the date specified by the Co-Agents as
described above, notwithstanding the commencement or continuation of any
proceeding to resolve the aforementioned dispute, if both of the Co-Agents
reasonably determines, in good faith, that such termination is necessary or
advisable to protect the Secured Parties' interests hereunder.

          (c) Subcontracts. So long as Quest Diagnostics (or any of its existing
or hereafter arising Affiliates approved by the Co-Agents at the request of
Quest Diagnostics or the Borrower subject to satisfaction of the Rating Agency
Condition) is acting as the Servicer, it may subcontract with any other
Originator or other direct or indirect Subsidiary of Quest Diagnostics, for
servicing, administering or collecting all or any portion of the Receivables,
provided, however, that no such subcontract shall relieve Quest Diagnostics (or
such approved affiliated substitute Servicer, if such approval is not
conditioned upon Quest Diagnostics' issuance of a performance guaranty with
respect to such affiliated substitute Servicer) of its primary liability for
performance of its duties as Servicer pursuant to the terms hereof and any such
sub-servicing arrangement may be terminated at the request of any of the Agents
at any time after a Successor Notice has been given. In addition to the
foregoing, with the prior written consent of the Co-Agents (which consent shall
not be unreasonably withheld or delayed), any Servicer may subcontract with
other Persons for servicing, administering or collecting all or any portion of
the Receivables, provided, however, that no such subcontract shall relieve such
Servicer of its primary liability for performance of its duties as Servicer
pursuant to the terms hereof and any such sub-servicing arrangement may be
terminated at the request of any of the Agents at any time that the Co-Agents
reasonably determine that such sub-servicer is not performing adequately.

          (d) Expense Indemnity after a Servicer Transfer Event. In addition to,
and not in lieu of the Servicer's Fee, if Quest Diagnostics or one of its
Affiliates is replaced as Servicer following a Servicer Transfer Event, the
Borrower shall reimburse the Servicer within 10 Business Days after receipt of a
written invoice, any and all reasonable costs and expenses of the Servicer
incurred in connection with its servicing of the Receivables for the benefit of
the Secured Parties.


                                       34





<PAGE>

          Section 8.2 Duties of Servicer.

          (a) Appointment; Duties in General. Each of the Borrower, the Lenders
and the Agents hereby appoints as its agent, the Servicer, as from time to time
designated pursuant to Section 8.1, to enforce its rights and interests in and
under the Collateral. The Servicer shall take or cause to be taken all such
actions as may be necessary or advisable to collect each Receivable from time to
time, all in accordance with applicable laws, rules and regulations, with
reasonable care and diligence, and in accordance with the Credit and Collection
Policy.

          (b) Segregation of Collections. The Servicer shall not be required
(unless otherwise requested by any of the Agents) to segregate the funds
constituting Collections prior to the remittance thereof in accordance with
Article III. If instructed by any of the Agents, the Servicer shall segregate
Collections and deposit them into the Collateral Account not later than the
first Business Day following receipt by the Servicer of such Collections in
immediately available funds.

          (c) Modification of Receivables. Quest Diagnostics, while it is the
Servicer, may, in accordance with the Credit and Collection Policy, so long as
no Event of Default shall have occurred and be continuing, extend the maturity
or adjust the Unpaid Net Balance of any Receivable as Quest Diagnostics may
reasonably determine to be appropriate to maximize Collections of the
Receivables taken as a whole in a manner consistent with the Credit and
Collection Policy (although no such extension or adjustment shall alter the
status of such Receivable as a Defaulted Receivable or a Delinquent Receivable
or, in the case of an adjustment, limit the rights of the Agents or the Lenders
under Section 3.4).

          (d) Contracts and Records. Each Loan Party shall deliver to the
Servicer, and the Servicer shall, or shall direct the Originators as
sub-servicers to, hold in trust for the Borrower and the Secured Parties, all
Contracts and Records.

          (e) Certain Duties to the Borrower. The Servicer shall, as soon as
practicable following receipt, turn over to the Borrower (i) that portion of the
Collections which are not required to be turned over to each of the Co-Agents,
less the Servicer's Fee and all reasonable and appropriate out-of-pocket costs
and expenses of the Servicer of servicing, collecting and administering the
Receivables to the extent not covered by the Servicer's Fee received by it, and
(ii) the Collections of any receivable which is not a Receivable. The Servicer,
if other than Quest Diagnostics or any other Loan Party or Affiliate thereof,
shall, as soon as practicable upon demand, deliver to the Borrower all Contracts
and other Records in its possession that evidence or relate to receivables of
the Borrower other than Receivables, and copies of all Contracts and other
Records in its possession that evidence or relate to Receivables, Obligors or
Related Assets.

          (f) Termination. The Servicer's authorization under this Agreement
shall terminate upon the Final Payout Date.

          (g) Power of Attorney. The Borrower hereby grants to the Servicer an
irrevocable power of attorney, with full power of substitution, coupled with an
interest, to take in the name of the Borrower all steps which are necessary or
advisable to endorse, negotiate or otherwise


                                       35





<PAGE>

realize on any writing or other right of any kind held or transmitted by the
Borrower or transmitted or received by Lender in connection with any Receivable.
This power of attorney shall automatically terminate as to any Servicer replaced
in accordance with Section 8.1(b) and shall automatically transfer to its
successor.

          Section 8.3 Rights of the Agents.

          (a) Notice to Obligors. At any time when an Event of Default has
occurred and is continuing, any of the Agents may notify the Obligors of
Receivables, or any of them, of the Borrower's ownership of the Receivables, and
the Administrative Agent's security interest, for the benefit of the Secured
Parties, in the Collateral.

          (b) Notice to Collection Banks. At any time, the Administrative Agent
is hereby authorized to give notice to the Collection Banks, as provided in the
Collection Account Agreements, of the transfer to the Administrative Agent of
dominion and control over the Lockboxes and the Collection Accounts, and the
Administrative Agent hereby agrees to give such notice upon request of either of
the Co-Agents. The Borrower and the Servicer hereby transfer to the
Administrative Agent, effective when the Administrative Agent shall give notice
to the Collection Banks as provided in the Collection Account Agreements, the
exclusive dominion and control over the Lockboxes and the Collection Accounts,
and shall take any further action that the Administrative Agent may reasonably
request to effect such transfer.

          (c) Rights on Servicer Transfer Event. At any time following the
designation of a Servicer other than Quest Diagnostics (or one of its approved
Affiliates) pursuant to Section 8.1:

          (i) Any of the Agents may direct the Obligors of Receivables, or any
of them, to pay all amounts payable under any Receivable directly to the
Administrative Agent or its designee.

          (ii) Any Loan Party shall, at any Agent's request and at such Loan
Party's expense, give notice of the Administrative Agent's security interest in
the Collateral to each Obligor of Receivables and direct that payments be made
directly to the Administrative Agent or its designee.

          (iii) Each Loan Party shall, at any Agent's request: (A) assemble and
make available all of the Contracts and Records which are necessary or
reasonably desirable to collect the Collateral, and make the same available to
the successor Servicer at such place or places as the Administrative Agent may
reasonably request, and (B) segregate all cash, checks and other instruments
received by it from time to time constituting Collections in a manner acceptable
to the Agents and promptly upon receipt, remit all such cash, checks and
instruments, duly endorsed or with duly executed instruments of transfer, to the
successor Servicer.

          (iv) Each of the Loan Parties, the Co-Agents and the Lenders hereby
authorizes the Administrative Agent and grants to the Administrative Agent an
irrevocable power of attorney (which shall terminate on the Final Payout Date),
to take any and all steps in such Person's name and on behalf of such Person
which are necessary or desirable, in the determination of the Administrative
Agent, to collect all amounts due under any and all Receivables, including,
without limitation, endorsing any Loan Party's name on checks and other


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<PAGE>

instruments representing Collections and enforcing such Receivables and the
related Contracts and Invoices.

          Section 8.4 Responsibilities of Loan Parties. Anything herein to the
contrary notwithstanding:

          (a) Contracts. Each Originator shall remain responsible for performing
all of its obligations (if any) under each Contract to the same extent as if no
ownership interest or security interests had been conveyed under the
Transactions Documents, and the exercise by the Administrative Agent or its
designee of its rights and remedies hereunder shall not relieve such Originator
from such obligations.

          (b) Limitation of Liability. The Secured Parties shall not have any
obligation or liability with respect to any Receivables, Invoices or Contracts,
nor shall any of them be obligated to perform any of the obligations of any Loan
Party or any Originator thereunder.

          Section 8.5 Further Action Evidencing the Security Interest. Each
Loan Party agrees that from time to time, at its expense, it will promptly
execute (if legally required) and deliver all further instruments and documents,
and take all further action that the Administrative Agent or its designee may
reasonably request in order to perfect, protect or more fully evidence the
Administrative Agent's security interest, on behalf of the Secured Parties, in
the Collateral, or to enable the Administrative Agent or its designee to
exercise or enforce any of the Secured Parties' respective rights hereunder or
under any Transaction Document in respect thereof. In furtherance of the
foregoing, to the maximum extent permitted by applicable law, each Loan Party
(i) authorizes the Agent to execute any such agreements, instruments or other
documents in such Loan Party's name and to file such agreements, instruments or
other documents in any appropriate filing office, (ii) authorizes the
Administrative Agent to file any financing statement required hereunder or under
any other Loan Document, and any continuation statement or amendment with
respect thereto, in any appropriate filing office without the signature of such
Loan Party (including, without limitation, in the case of the Borrower, any such
financing statements that indicate the Collateral as "all assets" or words of
similar import), and (iii) ratifies the filing of any financing statement, and
any continuation statement or amendment with respect thereto, filed without the
signature of such Loan Party prior to the date hereof; provided that the
Administrative Agent shall provide prompt written notice to such Loan Party
after filing any such record without the signature of such Loan Party.

          Section 8.6 Application of Collections. Except as otherwise specified
by such Obligor or required by the underlying Contract or law, any payment by an
Obligor in respect of any indebtedness owed by it to an Originator or to the
Borrower shall be applied first, as a Collection of any Receivable or
Receivables then outstanding of such Obligor in the order of the age of such
Receivables, starting with the oldest of such Receivables (unless another
reasonable basis for allocation of such payments to the Receivables of such
Obligor exists), and second, to any other indebtedness of such Obligor.


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<PAGE>

                                  ARTICLE IX.
                                SECURITY INTEREST

          Section 9.1 Grant of Security Interest. To secure the due and punctual
payment of the Obligations, whether now or hereafter existing, due or to become
due, direct or indirect, or absolute or contingent, including, without
limitation, all Indemnified Amounts, in each case pro rata according to the
respective amounts thereof, the Borrower hereby pledges to the Administrative
Agent, for the benefit of the Secured Parties, and hereby grants to the
Administrative Agent, for the benefit of the Secured Parties, a security
interest in, all of the Borrower's right, title and interest now or hereafter
existing in, to and under (a) all the Receivables and Related Assets, (b) the
Sale Agreement, (c) the rights to demand and receive payment of the Demand
Advances, and (d) all proceeds of any of the foregoing (collectively, the
"Collateral").

          Section 9.2 Termination after Final Payout Date. Each of the Secured
Parties hereby authorizes the Administrative Agent, and the Administrative Agent
hereby agrees, promptly after the Final Payout Date to execute and deliver to
the Borrower such UCC-3 termination statements as may be necessary to terminate
the Administrative Agent's security interest in and Lien upon the Collateral,
all at the Borrower's expense. Upon the Final Payout Date, all right, title and
interest of the Administrative Agent and the other Secured Parties in and to the
Collateral shall terminate.

          Section 9.3 Limitation on Rights to Collateral Proceeds. Nothing in
this Agreement shall entitle the Secured Parties to receive or retain proceeds
of the Collateral in excess of the aggregate amount of the Obligations owing to
such Secured Party (or to any Indemnified Party claiming through such Secured
Party).

                                   ARTICLE X.
                                EVENTS OF DEFAULT

          Section 10.1 Events of Default. The occurrence of any of the following
events shall constitute an "Event of Default" hereunder:

          (a) The Servicer or the Borrower shall fail to make (i) when and as
     required to be made by it herein, any payment, prepayment or deposit of any
     amount of principal of any Loan, or (ii) within three (3) days after the
     same becomes due, any payment of any amount of interest, fees or other
     Obligations payable hereunder or under any other Transaction Document;
     provided that any interest, fees or other amounts which are not paid on the
     due date shall bear interest at the Default Rate after such due date.

          (b) Any representation or warranty made or deemed to be made by any
     Loan Party (or any of its officers) under this Agreement or any other
     Transaction Document or in any Monthly Report, Weekly Report, computation
     of Cash Collateral Payment or other information or report delivered
     pursuant hereto shall prove to have been false or incorrect in any material
     adverse respect when made, provided that the materiality threshold in this
     subsection shall not be applicable with respect to any representation or
     warranty which itself contains a materiality threshold.


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<PAGE>

          (c) Any Loan Party fails to perform or observe any other term or
     covenant contained in this Agreement or any other Transaction Document, and
     such default shall continue unremedied for a period of 5 days (in the case
     of nonperformance or nonobservance by the Servicer) or 10 days (in the case
     of nonperformance or nonobservance by the Borrower) after the earlier to
     occur of (i) the date upon which written notice thereof is given to such
     Loan Party by the Administrative Agent and (ii) the date the applicable
     Loan Party becomes aware thereof.

          (d) (i)The Borrower shall (A) fail to pay any principal or interest,
     regardless of amount, due in respect of any Indebtedness of which the
     aggregate unpaid principal amount is in excess of $11,600, when and as the
     same shall become due and payable (after expiration of any applicable grace
     period) or (B) fail to observe or perform any other term, covenant,
     condition or agreement (after expiration of any applicable grace period)
     contained in any agreement or instrument evidencing or governing any such
     Indebtedness if the effect of any failure referred to in this clause (B) is
     to cause, or permit the holder or holders of such Indebtedness or a trustee
     on its or their behalf (with or without the giving of notice, the lapse of
     time or both) to cause, such Indebtedness to become due prior to its stated
     maturity; or (ii) any of the Originators (A) shall fail to pay any
     principal or interest, regardless of amount, due in respect of any
     Indebtedness of which the aggregate unpaid principal amount is in excess of
     $100,000,000 (or such other amount as may be set forth in the comparable
     provision of the Credit Agreement), when and as the same shall become due
     and payable (after expiration of any applicable grace period) or (B) shall
     fail to observe or perform any other term, covenant, condition or agreement
     (after expiration of any applicable grace period) contained in any
     agreement or instrument evidencing or governing any Indebtedness in excess
     of $100,000,000 (or such other amount as may be set forth in the comparable
     provision of the Credit Agreement), in aggregate principal amount of the
     Originators if, as a result of such failure, the holder or holders of the
     Indebtedness outstanding thereunder (or an agent or a trustee on their
     behalf) cause the holder or holders of such Indebtedness or an agent or a
     trustee on its or their behalf to cause such Indebtedness to become due
     prior to its stated maturity.

          (e) An Event of Bankruptcy shall have occurred and remain continuing
     with respect to the Borrower or the Servicer.

          (f) The three-calendar month rolling average Dilution Ratio at any
     Cut-Off Date exceeds 6.00%.

          (g) The three-calendar month rolling average Default Trigger Ratio at
     any Cut-Off Date exceeds 15.40%.

          (h) The three-calendar month rolling average Delinquency Ratio at any
     Cut-Off Date exceeds 8.25%.

          (i) The occurrence of any Missing Information Trigger Event.

          (j) The three-calendar month rolling average Collections Ratio at any
     Cut-Off Date is less than 32.00%.


                                       39





<PAGE>

          (k) On any Settlement Date, after giving effect to the payments made
     under Article II or Article III, the aggregate outstanding principal
     balances of the Advances exceed the Allocation Limit.

          (l) A Change in Control shall occur.

          (m) The Internal Revenue Service shall file notice of a lien pursuant
     to Section 6323 of the Internal Revenue Code with regard to any of the
     Receivables or Related Assets and such lien shall not have been released
     within seven (7) days, or the PBGC shall, or shall indicate its intention
     to, file notice of a lien pursuant to Section 4068 of ERISA with regard to
     any of the Receivables or Related Assets.

          (n) The Administrative Agent, on behalf of the Secured Parties, for
     any reason, does not have a valid, perfected first priority security
     interest in the Receivables and the Related Assets.

          (o) (i)A final judgment or judgments for the payment of money in
     excess of $11,600 in the aggregate (exclusive of judgment amounts to the
     extent covered by insurance or indemnity payments) shall be rendered by one
     or more courts, administrative tribunals or other bodies having
     jurisdiction against the Borrower and the same shall not be discharged (or
     provision which results in a stay of execution shall not be made for such
     discharge), vacated or bonded pending appeal, or a stay of execution
     thereof shall not be procured, within 60 days from the date of entry
     thereof and the Borrower shall not, within said period of 60 days, or such
     longer period during which execution of the same shall have been stayed,
     appeal therefrom and cause the execution thereof to be stayed during such
     appeal; or (ii) a final judgment or judgments for the payment of money in
     excess of $100,000,000 (or such other amount as may be set forth in the
     comparable provision of the Credit Agreement) in the aggregate (exclusive
     of judgment amounts to the extent covered by insurance or indemnity
     payments) shall be rendered by one or more courts, administrative tribunals
     or other bodies having jurisdiction against any Originator and the same
     shall not be discharged (or provision which results in a stay of execution
     shall not be made for such discharge), vacated or bonded pending appeal, or
     a stay of execution thereof shall not be procured, within 60 days from the
     date of entry thereof and such Originator shall not, within said period of
     60 days, or such longer period during which execution of the same shall
     have been stayed, appeal therefrom and cause the execution thereof to be
     stayed during such appeal.

          (p) An ERISA Event or noncompliance with respect to Foreign Plans
     shall have occurred that when taken together with all other ERISA Events
     and noncompliance with respect to Foreign Plans that have occurred, is
     reasonably likely to result in liability of any Originator or Loan Party in
     an aggregate amount exceeding$100,000,000 (or such other amount as may be
     set forth in the comparable provision of the Credit Agreement).

          (q) Quest Diagnostics shall fail to comply with any of the financial
     covenants set forth in Sections 7.2(a) and (b) (or analogous successor
     provisions) of the Credit Agreement.


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<PAGE>

          (r) The occurrence of the Sale Termination Date under and as defined
     in the Sale Agreement.

          (s) Any other event occurs that (i) could reasonably be expected to
     have a Material Adverse Effect of the type described in clause (d) of the
     definition thereof, or (ii) has had a Material Adverse Effect of the type
     described in any clause of the definition thereof.

          Section 10.2 Remedies.

          (a) Optional Acceleration. Upon the occurrence of an Event of Default
(other than an Event of Default described in Section 10.1(e) with respect to the
Borrower), the Administrative Agent may by notice to the Borrower, declare the
Termination Date to have occurred and the Obligations to be immediately due and
payable, whereupon the Aggregate Commitment shall terminate and all Obligations
shall become immediately due and payable.

          (b) Automatic Acceleration. Upon the occurrence of an Event of Default
described in Section 10.1(e) with respect to the Borrower, the Termination Date
shall automatically occur and the Obligations shall be immediately due and
payable.

          (c) Additional Remedies. Upon the Termination Date pursuant to this
Section 10.2, the Aggregate Commitment will terminate, no Loans or Advances
thereafter will be made, and the Administrative Agent, on behalf of the Secured
Parties, shall have, in addition to all other rights and remedies under this
Agreement or otherwise, all other rights and remedies provided to a secured
party upon default under the UCC of each applicable jurisdiction and other
applicable laws, which rights shall be cumulative.

                                  ARTICLE XI.
                                   THE AGENTS

          Section 11.1 Appointment.

          (a) Each member of the Blue Ridge Group hereby irrevocably designates
and appoints Wachovia Bank, National Association as Blue Ridge Agent hereunder
and under the other Transaction Documents to which the Blue Ridge Agent is a
party, and authorizes the Blue Ridge Agent to take such action on its behalf
under the provisions of the Transaction Documents and to exercise such powers
and perform such duties as are expressly delegated to the Blue Ridge Agent by
the terms of the Transaction Documents, together with such other powers as are
reasonably incidental thereto. Each member of the Atlantic Group hereby
irrevocably designates and appoints CLNY as Atlantic Agent hereunder and under
the other Transaction Documents to which the Atlantic Agent is a party, and
authorizes the Atlantic Agent to take such action on its behalf under the
provisions of the Transaction Documents and to exercise such powers and perform
such duties as are expressly delegated to the Atlantic Agent by the terms of the
Transaction Documents, together with such other powers as are reasonably
incidental thereto. Each of the Lenders and the Co-Agents hereby irrevocably
designates and appoints Wachovia Bank, National Association as Administrative
Agent hereunder and under the Transaction Documents to which the Administrative
Agent is a party, and authorizes the Administrative Agent to take such action on
its behalf under the provisions of the Transaction Documents and to


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<PAGE>

exercise such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of the Transaction Documents, together with
such other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in this Agreement, none of the Agents shall
have any duties or responsibilities, except those expressly set forth in the
Transaction Documents to which it is a party, or any fiduciary relationship with
any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities on the part of such Agent shall be read into any
Transaction Document or otherwise exist against such Agent.

          (b) The provisions of this Article XI are solely for the benefit of
the Agents and the Lenders, and neither of the Loan Parties shall have any
rights as a third-party beneficiary or otherwise under any of the provisions of
this Article XI, except that this Article XI shall not affect any obligations
which any of the Agents or Lenders may have to either of the Loan Parties under
the other provisions of this Agreement.

          (c) In performing its functions and duties hereunder, (i) the Blue
Ridge Agent shall act solely as the agent of the members of the Blue Ridge Group
and does not assume nor shall be deemed to have assumed any obligation or
relationship of trust or agency with or for either of the Loan Parties or any of
their respective successors and assigns, (ii) the Atlantic Agent shall act
solely as the agent of the members of the Atlantic Group and does not assume nor
shall be deemed to have assumed any obligation or relationship of trust or
agency with or for either of the Loan Parties or any of their respective
successors and assigns, and (iii) the Administrative Agent shall act solely as
the agent of the Secured Parties and does not assume nor shall be deemed to have
assumed any obligation or relationship of trust or agency with or for either of
the Loan Parties or any of their respective successors and assigns.

          Section 11.2 Delegation of Duties. Each Agent may execute any of its
duties under the applicable Transaction Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care except for agents and attorneys-in fact to which any Agent
delegates all or substantially all of its duties as an Agent which are not
approved by S&P, Moody's and, so long as applicable, Fitch. No Agent shall be
responsible for the negligence or misconduct of agents or attorneys-in-fact
selected by it with reasonable care for due diligence and audit matters and
attorneys selected with reasonable care for legal matters.

          Section 11.3 Exculpatory Provisions. None of the Agents nor any of its
directors, officers, agents or employees shall be (i) liable for any action
lawfully taken or omitted to be taken by it or them or any Person described in
Section 11.2 under or in connection with this Agreement (except for its, their
or such Person's own bad faith, gross negligence or willful misconduct), or (ii)
responsible in any manner to any of the Lenders or other Agents for any
recitals, statements, representations or warranties made by the Borrower
contained in this Agreement or in any certificate, report, statement or other
document referred to or provided for in, or received under or in connection
with, this Agreement or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other document furnished
in connection herewith, or for any failure of either of the Loan Parties to
perform its respective obligations hereunder, or for the satisfaction of any
condition specified in


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<PAGE>

Article V, except receipt of items required to be delivered to such Agent. None
of the Agents shall be under any obligation to any other Agent or any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements or covenants contained in, or conditions of, this Agreement, or to
inspect the properties, books or records of the Loan Parties. This Section 11.3
is intended solely to govern the relationship between the Agents, on the one
hand, and the Lenders and their respective Liquidity Banks, on the other.

          Section 11.4 Reliance by Agents.

          (a) Each of the Agents shall in all cases be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, telecopy or telex message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Loan Parties), independent accountants and other
experts selected by such Agent. Each of the Agents shall in all cases be fully
justified in failing or refusing to take any action under this Agreement or any
other document furnished in connection herewith unless it shall first receive
such advice or concurrence of such of its Lenders and Liquidity Banks, as it
shall determine to be appropriate under the relevant circumstances, or it shall
first be indemnified to its satisfaction by its Constituent Liquidity Banks
against any and all liability, cost and expense which may be incurred by it by
reason of taking or continuing to take any such action.

          (b) Any action taken by any of the Agents in accordance with Section
11.4(a) shall be binding upon all of the Agents and the Lenders.

          Section 11.5 Notice of Events of Default. None of the Agents shall be
deemed to have knowledge or notice of the occurrence of any Event of Default or
Unmatured Default unless such Agent has received notice from another Agent, a
Lender or a Loan Party referring to this Agreement, stating that an Event of
Default or Unmatured Default has occurred hereunder and describing such Event of
Default or Unmatured Default. In the event that any of the Agents receives such
a notice, it shall promptly give notice thereof to the Lenders and the other
Agents. The Administrative Agent shall take such action with respect to such
Event of Default or Unmatured Default as shall be directed by either of the
Co-Agents provided that the Administrative Agent is indemnified to its
satisfaction by such Co-Agent and its Constituent Liquidity Banks against any
and all liability, cost and expense which may be incurred by it by reason of
taking any such action.

          Section 11.6 Non-Reliance on Other Agents and Lenders. Each of the
Lenders expressly acknowledges that none of the Agents, nor any of the Agents'
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representations or warranties to it and that no act by
any of the Agents hereafter taken, including, without limitation, any review of
the affairs of the Loan Parties, shall be deemed to constitute any
representation or warranty by such Agent. Each of the Lenders also represents
and warrants to the Agents and the other Lenders that it has, independently and
without reliance upon any such Person (or any of their Affiliates) and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
prospects, financial and other conditions and creditworthiness of the Loan
Parties and made its


                                       43





<PAGE>

own decision to enter into this Agreement. Each of the Lenders also represents
that it will, independently and without reliance upon the Agents or any other
Liquidity Bank or Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, prospects, financial and other condition and
creditworthiness of the Loan Parties. The Agents, the Lenders and their
respective Affiliates, shall have no duty or responsibility to provide any party
to this Agreement with any credit or other information concerning the business,
operations, property, prospects, financial and other condition or
creditworthiness of the Loan Parties which may come into the possession of such
Person or any of its respective officers, directors, employees, agents,
attorneys-in-fact or affiliates, except that each of the Agents shall promptly
distribute to the other Agents and the Lenders, copies of financial and other
information expressly provided to it by either of the Loan Parties pursuant to
this Agreement.

          Section 11.7 Indemnification of Agents. Each Liquidity Bank agrees to
indemnify (a) its applicable Co-Agent, (b) the Administrative Agent, and (c) the
officers, directors, employees, representatives and agents of each of the
foregoing (to the extent not reimbursed by the Loan Parties and without limiting
the obligation of the Loan Parties to do so), ratably in accordance with their
respective Loans, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever (including, without limitation, the reasonable
fees and disbursements of counsel for such Co-Agent, the Administrative Agent or
such Person in connection with any investigative, administrative or judicial
proceeding commenced or threatened, whether or not such Co-Agent or the
Administrative Agent or such Person shall be designated a party thereto) that
may at any time be imposed on, incurred by or asserted against such Co-Agent,
the Administrative Agent or such Person as a result of, or arising out of, or in
any way related to or by reason of, any of the transactions contemplated
hereunder or the execution, delivery or performance of this Agreement or any
other document furnished in connection herewith (but excluding any such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the bad faith, gross
negligence or willful misconduct of such Co-Agent, the Administrative Agent or
such Person as finally determined by a court of competent jurisdiction).

          Section 11.8 Agents in their Individual Capacities. Each of the Agents
in its individual capacity and its affiliates may make loans to, accept deposits
from and generally engage in any kind of business with the Loan Parties and
their Affiliates as though such Agent were not an Agent hereunder. With respect
to its Loans, if any, pursuant to this Agreement, each of the Agents shall have
the same rights and powers under this Agreement as any Lender and may exercise
the same as though it were not an Agent, and the terms "Lender" and "Lenders"
shall include each of the Agents in their individual capacities.

          Section 11.9 [Reserved].


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<PAGE>

          Section 11.10 Conflict Waivers.

          (a) Wachovia acts, or may in the future act: (i) as administrative
agent for Blue Ridge, (ii) as issuing and paying agent for Blue Ridge's
Commercial Paper Notes, (iii) to provide credit or liquidity enhancement for the
timely payment for Blue Ridge's Commercial Paper Notes and (iv) to provide other
services from time to time for Blue Ridge (collectively, the "Wachovia Roles").
Without limiting the generality of Sections 11.1 and 11.8, each of the
Administrative Agent and the Lenders hereby acknowledges and consents to any and
all Wachovia Roles and agrees that in connection with any Wachovia Role,
Wachovia may take, or refrain from taking, any action which it, in its
discretion, deems appropriate, including, without limitation, in its role as
administrative agent for Blue Ridge, the giving of notice to the Liquidity Banks
of a mandatory purchase pursuant to the Blue Ridge Liquidity Agreement, and
hereby acknowledges that neither Wachovia nor any of its Affiliates has any
fiduciary duties hereunder to any Lender (other than Blue Ridge) arising out of
any Wachovia Roles.

          (b) CLNY acts, or may in the future act: (i) as administrator of
Atlantic, (ii) as issuing and paying agent for Atlantic's Commercial Paper
Notes, (iii) to provide credit or liquidity enhancement for the timely payment
for Atlantic's Commercial Paper Notes and (iv) to provide other services from
time to time for Atlantic (collectively, the "CLNY Roles"). Without limiting the
generality of Sections 11.1 and 11.8, each of the Agents and the Lenders hereby
acknowledges and consents to any and all CLNY Roles and agrees that in
connection with any CLNY Role, CLNY may take, or refrain from taking, any action
which it, in its discretion, deems appropriate, including, without limitation,
in its role as administrator of Atlantic, the giving of notice to the Liquidity
Banks of a mandatory purchase pursuant to the Atlantic Liquidity Agreement, and
hereby acknowledges that neither CLNY nor any of its Affiliates has any
fiduciary duties hereunder to any Lender (other than Atlantic) arising out of
any CLNY Roles.

          Section 11.11 UCC Filings. Each of the Secured Parties hereby
expressly recognizes and agrees that the Administrative Agent may be listed as
the assignee or secured party of record on the various UCC filings required to
be made under the Transaction Documents in order to perfect their respective
interests in the Collateral, that such listing shall be for administrative
convenience only in creating a record or nominee holder to take certain actions
hereunder on behalf of the Secured Parties and that such listing will not affect
in any way the status of the Secured Parties as the true parties in interest
with respect to the Collateral. In addition, such listing shall impose no duties
on the Administrative Agent other than those expressly and specifically
undertaken in accordance with this Article XI.

                                  ARTICLE XII.
                         ASSIGNMENTS AND PARTICIPATIONS

          Section 12.1 Restrictions on Assignments, etc.

          (a) No Loan Party may assign its rights, or delegate its duties
hereunder or any interest herein without the prior written consent of each of
the Agents and satisfaction of the Rating Agency Condition; provided, however,
that the foregoing shall not be deemed to restrict Quest Diagnostics' right,
prior to delivery of a Successor Notice, to request the Agents' consent


                                       45





<PAGE>

to the appointment of an Affiliate as replacement Servicer (subject to
satisfaction of the Rating Agency Condition) or to delegate all or any portion
of its duties as Servicer to other Originators, as sub-servicers, so long as
Quest Diagnostics remains primarily liable for the performance or
non-performance of such duties.

          (b) Each of the Conduits may, at any time, assign all or any portion
of any of its Loans, or sell participations therein, to its Constituent
Liquidity Banks (or to its Co-Agent for the ratable benefit of its Constituent
Liquidity Banks).

          (c) In addition to, and not in limitation of, assignments and
participations described in Section 12.1(b):

          (i) in the event that any of the Liquidity Banks becomes a Downgraded
Liquidity Bank, such Downgraded Liquidity Bank shall give prompt written notice
of its Downgrading Event to the applicable Co-Agent and the Borrower. Within 5
Business Days after the Borrower's receipt of such notice, the Borrower may
propose an Eligible Assignee who is willing to accept an assignment of, and to
assume, such Downgraded Liquidity Bank's rights and obligations under this
Agreement and under the Liquidity Agreement to which it is a party. In the event
that the Borrower fails to propose such an Eligible Assignee within such 5
Business Day period, or such Eligible Assignee does not execute and deliver
assignment and assumption documents reasonably acceptable to such Downgraded
Liquidity Bank and such Co-Agent, and pays the Downgraded Liquidity Bank's
Obligations in full, in each case, not later than 5:00 p.m. (New York City time)
on the 10th Business Day following the Borrower's receipt of notice of such
Downgrading Event, such Co-Agent may identify an Eligible Assignee without the
Borrower's consent, and the Downgraded Liquidity Bank shall promptly assign its
rights and obligations to the Eligible Assignee designated by such Co-Agent
against payment in full of its Obligations;

          (ii) each of the Lenders may assign all or any portion of its Loans
and, if applicable, its Commitment and Liquidity Commitment, to any Eligible
Assignee with the prior written consent of (A) the Borrower and (B) such
Lender's applicable Co-Agent, which consents shall not be unreasonably withheld
or delayed.

          (iii) each of the Lenders may, without the prior written consent of
the Borrower or any of the Agents, sell participations in all or any portion of
their respective rights and obligations in, to and under the Transaction
Documents and the Obligations in accordance with Sections 12.2 and 14.7.

          Section 12.2 Rights of Assignees and Participants.

          (a) Upon the assignment by a Lender in accordance with Section 12.1(b)
or (c), the Eligible Assignee(s) receiving such assignment shall have all of the
rights and obligations of such Lender with respect to the Transaction Documents
and the Obligations (or such portion thereof as has been assigned).

          (b) In no event will the sale of any participation interest in any
Lender's or any Eligible Assignee's rights under the Transaction Documents or in
the Obligations relieve the


                                       46





<PAGE>

seller of such participation interest of its obligations, if any, hereunder or,
if applicable, under the Liquidity Agreement to which it is a party.

          Section 12.3 Terms and Evidence of Assignment. Any assignment to any
Eligible Assignee(s) pursuant to Section 1.2(c), 12.1(b) or 12.1(c) shall be
upon such terms and conditions as the assigning Lender and the applicable
Co-Agent, on the one hand, and the Eligible Assignee, on the other, may mutually
agree, and shall be evidenced by such instrument(s) or document(s) as may be
satisfactory to such Lender, the applicable Co-Agent and the Eligible
Assignee(s). Any assignment made in accordance with the terms of this Article
XII shall relieve the assigning Lender of its obligations, if any, under this
Agreement (and, if applicable, the Liquidity Agreement to which it is a party)
to the extent assigned and no Lender may assign or otherwise transfer any of its
rights and obligations hereunder except in accordance with the terms of this
Article XII.

                                  ARTICLE XIII.
                                INDEMNIFICATION

          Section 13.1 Indemnities by the Borrower.

          (a) General Indemnity. Without limiting any other rights which any
such Person may have hereunder or under applicable law, the Borrower hereby
agrees to indemnify each of the Affected Parties, each of their respective
Affiliates, and all successors, transferees, participants and assigns and all
officers, directors, shareholders, controlling persons, employees and agents of
any of the foregoing (each, an "Indemnified Party"), forthwith on demand, from
and against any and all damages, losses, claims, liabilities and reasonable
related out-of-pocket costs and expenses, including reasonable attorneys' fees
and disbursements (all of the foregoing being collectively referred to as
"Indemnified Amounts") awarded against or incurred by any of them arising out of
or relating to the Transaction Documents, the Obligations or the Collateral,
excluding, however: (i) Indemnified Amounts to the extent determined by a court
of competent jurisdiction to have resulted from bad faith, gross negligence or
willful misconduct on the part of such Indemnified Party or (ii) recourse
(except as otherwise specifically provided in this Agreement) for Indemnified
Amounts to the extent the same includes losses in respect of Receivables which
are uncollectible on account of the insolvency, bankruptcy or lack of
creditworthiness of the related Obligor or the related Obligor's refusal to pay;
provided, however, that prior to the occurrence of an Event of Default, the
Indemnified Parties shall only be entitled to seek indemnity for the reasonable
fees and disbursements of a single law firm as special counsel to all such
Indemnified Parties (and, if required, a single law firm as local counsel to all
such Indemnified Parties in each relevant jurisdiction where the law firm acting
as special counsel is not licensed to practice). Without limiting the foregoing,
the Borrower shall indemnify each Indemnified Party for Indemnified Amounts
arising out of or relating to:

          (A) the creation of any Lien on, or transfer by any Loan Party of any
     interest in, the Collateral other than as provided in the Transaction
     Documents;

          (B) any representation or warranty made by any Originator or Loan
     Party (or any of its officers) under or in connection with any Transaction
     Document, any Monthly Report, Weekly Report, computation of Cash Collateral
     Payment or any other


                                       47





<PAGE>

     information or report delivered by or on behalf of any Originator or Loan
     Party pursuant thereto, which shall have been false, incorrect or
     misleading in any respect when made or deemed made or delivered, as the
     case may be;

          (C) the failure by any Loan Party to comply with any applicable law,
     rule or regulation with respect to any Receivable or the related Contract
     and/or Invoice, including, without limitation, any state or local
     assignment of claims act or similar legislation prohibiting or imposing
     notice and acknowledgement requirements or other limitations or conditions
     on the assignment of a Specified Government Receivable, or the
     nonconformity of any Receivable or the related Contract and/or Invoice with
     any such applicable law, rule or regulation;

          (D) the failure to vest and maintain vested in the Borrower a
     perfected ownership interest in all Collateral; or the failure to vest and
     maintain vested in the Administrative Agent, for the benefit of the Secured
     Parties, a valid and perfected first priority security interest in the
     Collateral, free and clear of any other Lien, other than a Lien arising
     solely as a result of an act of one of the Secured Parties, now or at any
     time thereafter;

          (E) unless the Borrower has actual knowledge that the Administrative
     Agent has prepared a financing statement, amendment or similar instrument
     or document under the UCC of any applicable jurisdiction or other
     applicable laws with respect to any Collateral, the failure to deliver to
     the Administrative Agent on a timely basis any such financing statement,
     amendment or similar instrument or document or to authorize its filing on a
     timely basis;

          (F) any dispute, claim, offset or defense (other than discharge in
     bankruptcy) of the Obligor to the payment of any Receivable (including,
     without limitation, a defense based on such Receivables or the related
     Contract and/or Invoice not being a legal, valid and binding obligation of
     such Obligor enforceable against it in accordance with its terms), or any
     other claim resulting from the sale of the services related to such
     Receivable or the furnishing or failure to furnish such services;

          (G) any matter described in Section 3.4;

          (H) any failure of any Loan Party, as the Borrower, the Servicer or
     otherwise, to perform its duties or obligations in accordance with the
     provisions of this Agreement or the other Transaction Documents to which it
     is a party;

          (I) any claim of breach by any Loan Party of any related Contract
     and/or Invoice with respect to any Receivable;

          (J) any Tax (but not including Taxes upon or measured by net income or
     net profits or franchise Taxes in lieu of net income or net profits Taxes),
     all interest and penalties thereon or with respect thereto, and all
     out-of-pocket costs and expenses, including the reasonable fees and
     expenses of counsel in defending against the same, which may arise by
     reason of the Administrative Agent's security interest in the Collateral;


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<PAGE>

          (K) the commingling of Collections of Receivables at any time with
     other funds;

          (L) any investigation, litigation or proceeding related to or arising
     from this Agreement or any other Transaction Document, the transactions
     contemplated hereby or thereby, the use of the proceeds of any Loan, the
     security interest in the Receivables and Related Assets or any other
     investigation, litigation or proceeding relating to the Borrower or any of
     the Originators in which any Indemnified Party becomes involved as a result
     of any of the transactions contemplated hereby or thereby (other than an
     investigation, litigation or proceeding (1) relating to a dispute solely
     amongst the Lenders (or certain Lenders) and the Administrative Agent or
     (2) excluded by Section 13.1(a));

          (M) any products or professional liability, personal injury or damage
     suit, or other similar claim arising out of or in connection with
     merchandise, insurance or services that are the subject of any Contract,
     Invoice or any Receivable;

          (N) any inability to litigate any claim against any Obligor in respect
     of any Receivable as a result of such Obligor being immune from civil and
     commercial law and suit on the grounds of sovereignty or otherwise from any
     legal action, suit or proceeding;

          (O) the occurrence of any Event of Default of the type described in
     Section 10.1(e);

          (P) any loss incurred by any of the Secured Parties as a result of the
     inclusion in the Borrowing Base of Receivables owing from any single
     Obligor and its Affiliated Obligors which causes the aggregate Unpaid Net
     Balance of all such Receivables to exceed the applicable Obligor
     Concentration Limit; or

          (Q) failure of any Specified Government Receivables to be recorded in
     the applicable Originator's or the Servicer's billing and accounting
     systems solely as a Client-Billed Receivable.

          (b) Contest of Tax Claim; After-Tax Basis. If any Indemnified Party
shall have notice of any attempt to impose or collect any Tax or governmental
fee or charge for which indemnification will be sought from any Loan Party under
Section 13.1(a)(J), such Indemnified Party shall give prompt and timely notice
of such attempt to the Borrower and the Borrower shall have the right, at its
expense, to participate in any proceedings resisting or objecting to the
imposition or collection of any such Tax, governmental fee or charge.
Indemnification hereunder shall be in an amount necessary to make the
Indemnified Party whole after taking into account any tax consequences when
actually realized by the Indemnified Party of the payment of any of the
aforesaid taxes or payments of amounts indemnified against hereunder (including
any deduction) and the receipt of the indemnity payment provided hereunder or of
any refund of any such tax previously indemnified hereunder, including the
effect of such tax, amount indemnified against, deduction or refund on the
amount of tax measured by net income or profits which is or was payable by the
Indemnified Party. For purposes of this Agreement, an Indemnified Party shall be
deemed to have "actually realized" tax consequences to the extent that, and at
such time as, the amount of Taxes payable (including Taxes payable on an
estimated basis) by such


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<PAGE>

Indemnified Party is increased above or reduced below, as the case may be, the
amount of Taxes that such Indemnified Party would be required to pay but for
receipt or accrual of the indemnity payment or the incurrence or payment of such
indemnified amount, as the case may be.

          (c) Contribution. If for any reason the indemnification provided above
in this Section 13.1 (and subject to the exceptions set forth therein) is
unavailable to an Indemnified Party or is insufficient to hold an Indemnified
Party harmless, then the Borrower shall contribute to the amount paid or payable
by such Indemnified Party as a result of such loss, claim, damage or liability
in such proportion as is appropriate to reflect not only the relative benefits
received by such Indemnified Party on the one hand and the Borrower on the other
hand but also the relative fault of such Indemnified Party as well as any other
relevant equitable considerations.

          Section 13.2 Indemnities by Servicer. Without limiting any other
rights which any Indemnified Party may have hereunder or under applicable law,
the Servicer hereby agrees to indemnify each of the Indemnified Parties
forthwith on demand, from and against any and all Indemnified Amounts awarded
against or incurred by any of them arising out of or relating to the Servicer's
performance of, or failure to perform, any of its obligations under or in
connection with any Transaction Document, or any representation or warranty made
by the Servicer (or any of its officers) under or in connection with any
Transaction Document, any Monthly Report, Weekly Report, computation of Cash
Collateral Payment or any other information or report delivered by or on behalf
of the Servicer, which shall have been false, incorrect or misleading in any
material respect when made or deemed made or delivered, as the case may be, or
the failure of the Servicer to comply with any applicable law, rule or
regulation with respect to any Receivable or the related Contract and Invoice.
Notwithstanding the foregoing, in no event shall any Indemnified Party be
awarded any Indemnified Amounts (a) to the extent determined by a court of
competent jurisdiction to have resulted from gross negligence or willful
misconduct on the part of such Indemnified Party or (b) as recourse for
Indemnified Amounts to the extent the same includes losses in respect of
Receivables which are uncollectible on account of the insolvency, bankruptcy or
lack of creditworthiness of the related Obligor.

          If for any reason the indemnification provided above in this Section
13.2 (and subject to the exceptions set forth therein) is unavailable to an
Indemnified Party or is insufficient to hold an Indemnified Party harmless, then
the Servicer shall contribute to the amount paid or payable by such Indemnified
Party as a result of such loss, claim, damage or liability in such proportion as
is appropriate to reflect not only the relative benefits received by such
Indemnified Party on the one hand and the Servicer on the other hand but also
the relative fault of such Indemnified Party as well as any other relevant
equitable considerations.

                                  ARTICLE XIV.
                                  MISCELLANEOUS

          Section 14.1 Amendments, Etc. No amendment or waiver of any provision
of this Agreement nor consent to any departure by any Loan Party therefrom shall
in any event be effective unless the same shall be in writing and signed by each
of the Loan Parties and the Co-Agents, and any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that:


                                       50





<PAGE>

          (a) before either of the Co-Agents enters into such an amendment or
     grants such a waiver or consent that is deemed to be material by S&P,
     Moody's or, at any time while it is rating either Conduit's Commercial
     Paper Notes, Fitch, the Rating Agency Condition must be satisfied with
     respect to each of the Conduits,

          (b) without the prior written consent of all Liquidity Banks in a
     Co-Agent's Group, such Co-Agent will not amend, modify or waive any
     provision of this Agreement which would (i) reduce the amount of any
     principal or interest that is payable on account of its Conduit's Loans or
     delay any scheduled date for payment thereof; (ii) decrease the Required
     Reserve, decrease the spread included in any Interest Rate or change the
     Servicer's Fee; (iii) modify this Section 14.1; or (iv) modify any yield
     protection or indemnity provision which expressly inures to the benefit of
     assignees or participants of such Co-Agent's Conduit,

          (c) if less than all of the Co-Agents decline to approve a requested
     amendment and within 90 days after the Borrower's request for approval of
     such amendment, and either (i) the Borrower prepays the Obligations of the
     dissenting Co-Agent's (or Co-Agents') Group in full or (ii) finds one or
     more Eligible Assignees to replace each such Co-Agent's Group, then the
     requested amendment shall become effective on the effective date of such
     prepayment or assignment as to the remaining Lenders (and, if applicable,
     as to any replacement Lenders), and

          (d) if less than all of the Co-Agents decline to approve a requested
     waiver and (i) the Borrower either (A) identifies one or more Eligible
     Assignee(s) to accept immediate written assignments of such Co-Agent's
     Group's Commitment(s) and outstanding Obligations, or (B) immediately pays
     all Obligations owing to the members of such Co-Agent's (or Co-Agents')
     Group(s) in full, and (ii) the Administrative Agent has not already
     declared the Termination Date to have occurred, such waiver shall become
     effective as to the remaining Lenders on the effective date of such
     assignment or repayment.

          Section 14.2 Notices, Etc. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including facsimile communication) and shall be personally delivered or sent by
express mail or courier or by certified mail, postage prepaid, or by facsimile,
to the intended party at the address or facsimile number of such party set forth
on Schedule 14.2 or at such other address or facsimile number as shall be
designated by such party in a written notice to the other parties hereto. All
such notices and communications shall be effective, (a) if personally delivered
or sent by express mail or courier or if sent by certified mail, when received,
and (b) if transmitted by facsimile, when sent, receipt confirmed by telephone
or electronic means.

          Section 14.3 No Waiver; Remedies. No failure on the part of the
Administrative Agent or any of the other Secured Parties to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law. Without limiting the foregoing, each of the Administrative Agent and the
Lenders is


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<PAGE>

hereby authorized by the Borrower at any time and from time to time, to the
fullest extent permitted by law, to set off and apply to payment of any
Obligations that are then due and owing any and all deposits (general or
special, time or demand provisional or final) at any time held and other
indebtedness at any time owing by such Person to or for the credit or the
account of the Borrower.

          Section 14.4 Binding Effect; Survival. This Agreement shall be binding
upon and inure to the benefit of each the Loan Parties, the Administrative
Agent, the Lenders and their respective successors and assigns, and the
provisions of Section 4.2 and Article XIII shall inure to the benefit of the
Affected Parties and the Indemnified Parties, respectively, and their respective
successors and assigns; provided, however, nothing in the foregoing shall be
deemed to authorize any assignment not permitted by Section 12.1. This Agreement
shall create and constitute the continuing obligations of the parties hereto in
accordance with its terms, and shall remain in full force and effect until the
Final Payout Date. The rights and remedies with respect to any breach of any
representation and warranty made by the Borrower pursuant to Article VI and the
indemnification and payment provisions of Article XIII and Sections 4.2, 14.5,
14.6, 14.7, 14.8, 14.14 and 14.16 shall be continuing and shall survive any
termination of this Agreement.

          Section 14.5 Costs, Expenses and Stamp Taxes. In addition to their
obligations under the other provisions of this Agreement, the Loan Parties
jointly and severally agree to pay:

          (a) within 30 days after receipt of a written invoice therefor: all
     reasonable out-of-pocket costs and expenses incurred by the Administrative
     Agent, in connection with (i) the negotiation, preparation, execution and
     delivery of this Agreement, the other Transaction Documents or the
     Liquidity Agreement (subject to the limitations set forth in the Fee
     Letters), or (ii) the administration of the Transaction Documents prior to
     an Event of Default including, without limitation, (A) the reasonable fees
     and expenses of a single law firm acting as counsel to the Administrative
     Agent and the Lenders incurred in connection with any of the foregoing, and
     (B) subject to the limitations set forth in the Fee Letters and in Section
     7.1(c), the reasonable fees and expenses of independent accountants
     incurred in connection with any review of any Loan Party's books and
     records either prior to or after the execution and delivery hereof;

          (b) within 30 days after receipt of a written invoice therefor: all
     reasonable out-of-pocket costs and expenses (including, without limitation,
     the reasonable fees and expenses of counsel and independent accountants)
     incurred by each of the Lenders, the Administrative Agent and the Liquidity
     Banks in connection with the negotiation, preparation, execution and
     delivery of any amendment or consent to, or waiver of, any provision of the
     Transaction Documents which is requested or proposed by any Loan Party
     (whether or not consummated), the administration of the Transaction
     Documents following an Event of Default (or following a waiver of or
     consent to any Event of Default), or the enforcement by any of the
     foregoing Persons of, or any actual or claimed breach of, this Agreement or
     any of the other Transaction Documents, including, without limitation, (i)
     the reasonable fees and expenses of counsel to any of such Persons incurred
     in connection with any of the foregoing or in advising such Persons as to
     their respective rights and remedies under any of the Transaction Documents
     in connection with any of


                                       52





<PAGE>

     the foregoing, and (ii) the reasonable fees and expenses of independent
     accountants incurred in connection with any review of any Loan Party's
     books and records or valuation of the Receivables and Related Assets; and

          (c) upon demand: all stamp and other similar or recording taxes and
     fees payable or determined to be payable in connection with the execution,
     delivery, filing and recording of this Agreement or the other Transaction
     Documents (and Loan Parties, jointly and severally agree to indemnify each
     Indemnified Party against any liabilities with respect to or resulting from
     any delay in paying or omission to pay such taxes and fees).

          Section 14.6 No Proceedings. Each of the parties hereto hereby agrees
that it will not institute against the Borrower, Atlantic or Blue Ridge, or join
any Person in instituting against the Borrower, Atlantic or Blue Ridge, any
insolvency proceeding (namely, any proceeding of the type referred to in the
definition of Event of Bankruptcy) so long as any Obligations (in the case of
the Borrower) or any Commercial Paper Notes or other senior Indebtedness issued
by Atlantic or Blue Ridge, as the case may be, shall be outstanding or there
shall not have elapsed one year plus one day since the last day on which any
such Obligations and Commercial Paper Notes or other senior Indebtedness shall
have been outstanding. The parties' obligations under this Section 14.6 shall
survive termination of this Agreement.

          Section 14.7 Confidentiality of Borrower Information. Each of the
Agents and the Lenders agrees to keep information obtained by it pursuant to the
Transaction Documents confidential in accordance with such Agent's or Lender's
customary practices and in accordance with applicable law and agrees that it
will only use such information in connection with the transactions contemplated
hereby and not disclose any of such information other than (a) to such Agent's
or Lender's employees, representatives, directors, attorneys, auditors, agents,
professional advisors, trustees or affiliates who are advised of the
confidential nature thereof it solely for the purposes of evaluating,
administering and enforcing the transactions contemplated by the Transaction
Documents and making any necessary business judgments with respect thereto, or
to any direct or indirect contractual counterparty in swap agreements or such
contractual counterparty's professional advisor (so long as such contractual
counterparty or professional advisor to such contractual counterparty agrees to
be bound by the provision of this Section 14.7, such Agent or Lender being
liable for any breach of confidentiality by any Person described in this clause
(a) and with respect to disclosures to an Affiliate to the extent disclosed by
such Agent or Lender to such Affiliate), (b) to the extent such information
presently is or hereafter becomes available to such Agent or Lender on a
non-confidential basis from a Person not an Affiliate of such Agent or Lender
not known to such Lender to be violating a confidentiality obligation by such
disclosure, (c) to the extent disclosure is required by any Law, subpoena or
judicial order or process (provided that notice of such requirement or order
shall be promptly furnished to the applicable Loan Party unless such notice is
legally prohibited) or requested or required by bank, securities, insurance or
investment company regulations or auditors or any administrative body or
commission to whose jurisdiction such Agent or Lender may be subject, (d) to any
rating agency to the extent required in connection with any rating to be
assigned to such Lender, (e) to assignees or participants or prospective
assignees or participants who agree to be bound by the provisions of this
Section 14.7, (f) to the extent required in connection with any litigation
between any Loan Party and any Lender with respect


                                       53





<PAGE>

to the Loans or any Transaction Document, (g) to any dealer or placement agent
for such party's Commercial Paper Notes, who (i) in the good faith belief of
such party, has a need to know such confidential information, (ii) is informed
by such party of the confidential nature of such information and the terms of
this Section 14.7 and (iii) has agreed in writing to be bound by the provisions
of this Section 14.7, (h) to any Liquidity Bank (whether or not on the date of
disclosure, such Liquidity Bank continues to be an Eligible Assignee), or to any
other actual or potential permitted assignee or participant permitted under
Section 12.1 who has agreed to be bound by the provisions of this Section 14.7,
(i) to any rating agency that maintains a rating for such party's Commercial
Paper Notes or is considering the issuance of such a rating, for the purposes of
reviewing the credit of any Lender in connection with such rating, (j) to any
other party to this Agreement (and any independent attorneys and auditors of
such party), for the purposes contemplated hereby, (k) to any entity that
provides a surety bond or other credit enhancement to either Conduit solely for
the purpose of providing such surety bond or other credit enhancement and not
for any other purpose, (l) in connection with the enforcement of this Agreement
or any other Transaction Document to the extent required to exercise rights
against the Collateral, or (m) with the applicable Loan Party's prior written
consent. In addition, each of the Lenders and the Agents may disclose on a "no
name" basis to any actual or potential investor in Commercial Paper Notes
information regarding the nature of this Agreement, the basic terms hereof
(including without limitation the amount and nature of the Aggregate Commitment
and the Advances), the nature, amount and status of the Receivables, and the
current and/or historical ratios of losses to liquidations and/or outstandings
with respect to the Receivables. This Section 14.7 shall survive termination of
this Agreement.

          Section 14.8 Confidentiality of Program Information.

          (a) Confidential Information. Each party hereto acknowledges that the
Conduits and the Agents regard the structure of the transactions contemplated by
this Agreement to be proprietary, and each such party agrees that:

          (i) it will not disclose without the prior consent of each Conduit or
each Agent (other than to the directors, employees, auditors, counsel or
affiliates (collectively, "representatives") of such party, each of whom shall
be informed by such party of the confidential nature of the Program Information
(as defined below) and of the terms of this Section 14.8): (A) any information
regarding the pricing in, or copies of, the Liquidity Agreements or the Fee
Letters, or (B) any information which is furnished by either Conduit or any
Agent to such party and which is designated by such Conduit or such Agent to
such party in writing or otherwise as confidential or not otherwise available to
the general public (the information referred to in clauses (A) and (B) is
collectively referred to as the "Program Information"); provided, however, that
such party may disclose any such Program Information (1) as may be required by
any municipal, state, federal or other regulatory body having or claiming to
have jurisdiction over such party, including, without limitation, the SEC, (2)
in order to comply with any law, order, regulation, regulatory request or ruling
applicable to such party, (3) subject to subsection (c) below, in the event such
party is legally compelled (by interrogatories, requests for information or
copies, subpoena, civil investigative demand or similar process) to disclose any
such Program Information, or (4) in financial statements as required by GAAP;


                                       54





<PAGE>

          (ii) it will use the Program Information solely for the purposes of
evaluating, administering and enforcing the transactions contemplated by the
Transaction Documents and making any necessary business judgments with respect
thereto; and

          (iii) it will, upon demand, return (and cause each of its
representatives to return) to the applicable Co-Agent, all documents or other
written material received from either Conduit in connection with (a)(i)(B) above
and all copies thereof made by such party which contain the Program Information.

          (b) Availability of Confidential Information. This Section 14.8 shall
be inoperative as to such portions of the Program Information which are or
become generally available to the public or such party on a nonconfidential
basis from a source other than the Administrative Agent or were known to such
party on a nonconfidential basis prior to its disclosure by the Administrative
Agent.

          (c) Legal Compulsion to Disclose. In the event that any party or
anyone to whom such party or its representatives transmits the Program
Information is requested or becomes legally compelled (by interrogatories,
requests for information or documents, subpoena, civil investigative demand or
similar process) to disclose any of the Program Information, such party will
provide the Administrative Agent with prompt written notice so that the
Administrative Agent may seek a protective order or other appropriate remedy
and/or, if it so chooses, agree that such party may disclose such Program
Information pursuant to such request or legal compulsion. In the event that such
protective order or other remedy is not obtained, or the Administrative Agent
agrees that such Program Information may be disclosed, such party will furnish
only that portion of the Program Information which (in such party's good faith
judgment) is legally required to be furnished and will exercise reasonable
efforts to obtain reliable assurance that confidential treatment will be
accorded the Program Information.

          (d) Survival. This Section 14.8 shall survive termination of this
Agreement.

          Section 14.9 Captions and Cross References. The various captions
(including, without limitation, the table of contents) in this Agreement are
provided solely for convenience of reference and shall not affect the meaning or
interpretation of any provision of this Agreement. Unless otherwise indicated,
references in this Agreement to any Section, Annex, Schedule or Exhibit are to
such Section of or Annex, Schedule or Exhibit to this Agreement, as the case may
be, and references in any Section, subsection, or clause to any subsection,
clause or subclause are to such subsection, clause or subclause of such Section,
subsection or clause.

          Section 14.10 Integration. This Agreement and the other Transaction
Documents contain a final and complete integration of all prior expressions by
the parties hereto with respect to the subject matter hereof and shall
constitute the entire understanding among the parties hereto with respect to the
subject matter hereof, superseding all prior oral or written understandings.

          Section 14.11 Governing Law. EACH TRANSACTION DOCUMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK,
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF OTHER THAN SECTION
5-1401 OF THE GENERAL OBLIGATIONS


                                       55





<PAGE>

LAW (EXCEPT IN THE CASE OF THE OTHER TRANSACTION DOCUMENTS, TO THE EXTENT
OTHERWISE EXPRESSLY STATED THEREIN) AND EXCEPT TO THE EXTENT THAT THE PERFECTION
OF THE OWNERSHIP INTERESTS OR SECURITY INTERESTS OF THE BORROWER OR THE
ADMINISTRATIVE AGENT, ON BEHALF OF THE SECURED PARTIES, IN ANY OF THE COLLATERAL
IS GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.

          Section 14.12 Waiver Of Jury Trial. EACH PARTY HERETO HEREBY EXPRESSLY
WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR
DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR UNDER
ANY AMENDMENT, INSTRUMENT OR DOCUMENT DELIVERED OR WHICH MAY IN THE FUTURE BE
DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY BANKING OR OTHER
RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION
DOCUMENT AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL NOT BE TRIED BEFORE
A JURY.

          Section 14.13 Consent To Jurisdiction; Waiver Of Immunities. EACH
PARTY HERETO HEREBY ACKNOWLEDGES AND AGREES THAT:

          (a) IT IRREVOCABLY (i) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION,
FIRST, OF ANY UNITED STATES FEDERAL COURT, AND SECOND, IF FEDERAL JURISDICTION
IS NOT AVAILABLE, OF ANY NEW YORK STATE COURT, IN EITHER CASE SITTING IN NEW
YORK COUNTY, NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT, AND (ii) WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO,
THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF AN ACTION OR
PROCEEDING IN SUCH COURTS.

          (b) TO THE EXTENT THAT IT HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY
FROM THE JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH
SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID TO EXECUTION,
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, IT HEREBY
IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER OR IN
CONNECTION WITH THIS AGREEMENT.

          Section 14.14 Business Associate Agreement; Health Care Data Privacy
and Security Requirements.

          (a) Definitions. "HIPAA" means the Health Insurance Portability and
Accountability Act of 1996. The terms "EDI Rule," "Privacy Regulations" and
"Security Regulations" refer to all of the rules and regulations in effect from
time to time issued pursuant to HIPAA and applicable to (respectively) the
electronic data interchange, privacy and security of Individually Identifiable
Health Information (found at Title 45, Code of Federal Regulations (CFR) Parts
160, 162, and 164). "Business Associate" refers to each of the Agents, the
Borrower and any successor Servicer to Quest Diagnostics appointed by the Agents
pursuant to


                                       56





<PAGE>

this Agreement, severally and not jointly. All other terms used, but not
otherwise defined in this Section, shall have the same meaning as those terms
defined in the Title 45 of the Code of Federal Regulations applicable to HIPAA
or any successor statute.

          (b) Privacy. In accordance with the purposes of this Agreement, Quest
Diagnostics will disclose to each Business Associate, and each Business
Associate will use, disclose, and/or create Protected Health Information
(hereinafter called "PHI") only on behalf of Quest Diagnostics for the specific
purposes set forth in this Agreement. Each Business Associate agrees not to use
or further disclose any PHI or Individually Identifiable Health Information
received from Quest Diagnostics or created by any Business Associate other than
as permitted by this Agreement or as required by applicable law or regulations,
including the Privacy Regulations and the Security Regulations. Each Business
Associate will only use or disclose the Minimum Necessary PHI to accomplish the
intended purpose of its uses or disclosures. Each Business Associate will
implement appropriate safeguards to prevent the use or disclosure of an
Individual's PHI other than as provided for by this Agreement or in accordance
with law and shall document its safeguards. Each Business Associate will provide
access to an Individual's PHI upon the reasonable request of Quest Diagnostics,
will make any amendments to an Individual's PHI as directed by Quest
Diagnostics, and will maintain a record of disclosures of PHI as required for
Quest Diagnostics to make an accounting to the Individual as required by the
Privacy Regulations. Each Business Associate will promptly report to Quest
Diagnostics any use or disclosure of an Individual's PHI not provided for by
this Agreement or any security incident (as that term is defined in the Security
Regulations) of which such Business Associate becomes aware. In the event any
Business Associate contracts with any sub-contractors or agents and provides
them with an Individual's PHI, such Business Associate shall include provisions
in its agreements whereby the sub-contractor or agent agrees to the same privacy
and security requirements and restrictions and conditions that apply to such
Business Associate with respect to the Individual's PHI. Each Business Associate
will, upon reasonable notice, make its internal practices, books, and records
relating to the use and disclosure of an Individual's PHI available to the
Secretary of Health and Human Services and to Quest Diagnostics to the extent
required for determining compliance with this Section, the Privacy Regulations,
and the Security Regulations. Notwithstanding the foregoing, no legal privilege
shall be deemed waived by any Business Associate or Quest Diagnostics by virtue
of this clause (b) of this Section. Quest Diagnostics may terminate this
Agreement without penalty or recourse if it determines that any Business
Associate has violated a material term of this Section or applicable law that is
not cured within thirty (30) calendar days after delivery of the notice of
violation to all of the Business Associates or, in lieu of termination, Quest
Diagnostics, in its sole discretion, may report the breach to the Secretary.
Upon termination of this Agreement for any reason, each Business Associate and
its sub-contractors or agents agree to return or to destroy all PHI and retain
no copies (and to certify to such actions) unless otherwise agreed by Quest
Diagnostics or such return or disclosure is not reasonably feasible (in which
case, at no additional cost to Quest Diagnostics, each Business Associate will
extend the protections of this Section to the PHI that such Business Associate
maintains and limit any further uses and disclosures of the PHI to the purposes
that make the return or destruction of the PHI not feasible).

          (c) Security. Each Business Associate shall adopt, implement and
maintain throughout the term of this Agreement security policies, procedures,
and practices,


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<PAGE>

administrative, physical and technical safeguards, and security mechanisms that
reasonably and adequately protect the confidentiality, integrity, and
availability of the PHI that it creates, receives, maintains, or transmits on
behalf of Quest Diagnostics ("Business Associate Safeguards"), and each Business
Associate shall require its sub-contractors or agents to adopt Business
Associate Safeguards that are equally appropriate and adequate. Quest
Diagnostics may terminate this Agreement at any time, without penalty, if it
determines, in its sole discretion, that the Business Associate Safeguards are
unsatisfactory.

          (d) EDI. If Business Associate conducts all or any portion of its
business or pays any claim in a transaction covered by the Electronic Data
Interchange ("EDI") Rule on behalf of Quest Diagnostics, then Business Associate
covenants and warrants that it shall and shall require its agents and/or
subcontractors to comply with the requirements of the EDI Rule that are
applicable to Quest Diagnostics.

          (e) Benefit. This Section is not intended to create any right in or
obligations to any Person that is not a party to this Agreement, including
Individuals.

          (f) Mitigation. In addition to any rights of indemnification contained
in this Agreement, each Business Associate will take commercially reasonable
steps to mitigate any harm caused by its breach of this Section and/or reimburse
Quest Diagnostics for the cost of commercially reasonable mitigation based upon,
arising out of or attributable to the acts or omissions of such Business
Associate, its employees, officers, directors, agents, or sub-contractors for
uses or disclosures in violation of this Section.

          (g) Amendment. Each of the Business Associates and Quest Diagnostics
agree to amend this Section in such manner as is reasonably necessary to comply
with any amendment of (i) HIPAA or other applicable law, (ii) the Privacy
Regulations, the Security Regulations, or other applicable regulations, or (iii)
any applicable court decision or binding governmental policy. If the parties are
unable to agree on an amendment within 30 days of notice from Quest Diagnostics
to each Business Associate of the requirement to amend this Section, Quest
Diagnostics may, at its option, terminate this Agreement upon written notice to
the Business Associates.

          (h) Survival. This Section and the confidentiality, privacy, security,
and other requirements established herein shall survive termination of this
Agreement.

          (i) Interpretation. Any ambiguity in this Section shall be resolved in
favor of a meaning that permits Quest Diagnostics to comply with the Privacy
Regulations, the Security Regulations and the EDI Rule.

          (j) Several Liability of Business Associates. No Business Associate
shall have any liability to Quest Diagnostics or any third party of any kind or
nature, whether such liability is asserted on the basis of contract, tort
(including negligence or strict liability), or otherwise, arising from the
failure of any other Business Associate to fulfill its obligations under this
Section.

          Section 14.15 Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by the different parties hereto in
separate counterparts, each of


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<PAGE>

which when so executed shall be deemed to be an original and all of which when
taken together shall constitute one and the same Agreement.

          Section 14.16 No Recourse Against Other Parties. The several
obligations of the Lenders under this Agreement are solely the corporate
obligations of such Lender. No recourse shall be had for the payment of any
amount owing by such Lender under this Agreement or for the payment by such
Lender of any fee in respect hereof or any other obligation or claim of or
against such Lender arising out of or based upon this Agreement, against any
employee, officer, director, incorporator or stockholder of such Lender. Each of
the Borrower, the Servicer and the Administrative Agent agrees that each of the
Conduits shall be liable for any claims that such party may have against such
Conduit only to the extent that such Conduit has excess funds and to the extent
such assets are insufficient to satisfy the obligations of such Conduit
hereunder, such Conduit shall have no liability with respect to any amount of
such obligations remaining unpaid and such unpaid amount shall not constitute a
claim against such Conduit. Any and all claims against either of the Conduits or
any of the Agents shall be subordinate to the claims against such Persons of the
holders of such Conduit's Commercial Paper Notes and its Liquidity Banks.

                            Signature pages follow


                                       59





<PAGE>

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

BORROWER:

                                         QUEST DIAGNOSTICS RECEIVABLES INC.


                                         By: /s/ Joseph P. Manory
                                             -----------------------------------
                                             Name:  Joseph P. Manory
                                             Title: Vice President and Treasurer


SERVICER:

                                         QUEST DIAGNOSTICS INCORPORATED


                                         By: /s/  Joseph P. Manory
                                             -----------------------------------
                                             Name:  Joseph P. Manory
                                             Title: Vice President and Treasurer


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<PAGE>

ADMINISTRATIVE AGENT:

                                         WACHOVIA BANK, NATIONAL ASSOCIATION, as
                                         Administrative Agent and as Blue Ridge
                                         Agent


                                         By: /s/ Gary G. Fleming, Jr.
                                             -----------------------------------
                                            Name:  Gary G. Fleming, Jr.
                                            Title: Director

LENDERS:

                                         BLUE RIDGE ASSET FUNDING CORPORATION

                                         BY: WACHOVIA CAPITAL MARKETS, LLC, ITS
                                             ATTORNEY-IN-FACT


                                         By: /s/ Douglas R. Wilson, Sr.
                                             -----------------------------------
                                             Name:  Douglas R. Wilson, Sr.
                                             Title: Vice President

                                         Initial Commitment: not applicable


                                         WACHOVIA BANK, NATIONAL ASSOCIATION


                                         By: /s/  Gary G. Fleming, Jr.
                                             -----------------------------------
                                             Name:   Gary G. Fleming, Jr.
                                             Title:  Director

                                         Initial Commitment: $200,000,000


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<PAGE>

                                         ATLANTIC ASSET SECURITIZATION CORP.

                                         By: CREDIT LYONNAIS NEW YORK BRANCH AS
                                             ATTORNEY-IN-FACT


                                         By:  /s/ Anthony Brown
                                             -----------------------------------
                                             Name: Anthony Brown
                                             Title: Vice President

                                             Initial Commitment: not applicable

                                         CREDIT LYONNAIS NEW YORK BRANCH


                                         By: /s/ Anthony Brown
                                             -----------------------------------
                                             Name: Anthony Brown
                                             Title: Vice President

                                             Initial Commitment: $100,000,000


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<PAGE>

                                     ANNEX A
                                   DEFINITIONS

          A. Certain Defined Terms. As used in this Agreement:

          "Account" shall have the meaning specified in Article 9 of the UCC.

          "Accrual Period" means each calendar month, provided that the initial
Accrual Period hereunder means the period from (and including) the date of the
initial Loan hereunder to (and including) the last day of the calendar month
thereafter.

          "Ad Hoc Reserve" means 0% or such higher percentage as the Servicer
and the Agents may agree upon in writing from time to time.

          "Administrative Agent" has the meaning provided in the preamble of
this Agreement.

          "Adjusted Dilution Ratio" means, at any time, the rolling average of
the Dilution Ratio for the 12 months then most recently ended.

          "Advance" means a borrowing hereunder consisting of the aggregate
amount of the several Loans made on the same Borrowing Date.

          "Affected Party" means each of the Conduits, the Liquidity Banks and
the Agents.

          "Affiliate" means, as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, membership interests, by contract,
or otherwise.

          "Affiliated Obligor" in relation to any Obligor means an Obligor that
is an Affiliate of such Obligor.

          "Agents" means the Administrative Agent and the Co-Agents.

          "Aggregate Commitment" means the aggregate of the Commitments of the
Liquidity Banks, as reduced or increased from time to time pursuant to the terms
hereof.

          "Agreement" means this Credit and Security Agreement, as it may be
amended or modified and in effect from time to time.

          "Allocation Limit" means the sum of the Blue Ridge Allocation Limit
and the Atlantic Allocation Limit.


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<PAGE>

          "Alternate Base Rate" means for any day, the rate per annum equal to
the higher as of such day of (i) the Prime Rate, or (ii) one-half of one percent
(0.50%) above the Federal Funds Rate. For purposes of determining the Alternate
Base Rate for any day, changes in the Prime Rate or the Federal Funds Rate shall
be effective on the date of each such change.

          "Alternate Base Rate Loan" means a Loan which bears interest at the
Alternate Base Rate or the Default Rate.

          "Applicable Percentage" means (a) if a Conduit puts a Loan to its
Liquidity Banks solely due to a problem issuing Commercial Paper and not because
of performance issues with the Collateral, credit issues with the Loan Parties
or the existence of an Event of Default or Unmatured Default, the percentage
representing the "margin" or "spread" for Eurodollar or LIBOR loans specified in
the Credit Agreement minus 10 basis points, and (b) at all other times, the
percentage representing the "margin" or "spread" for Eurodollar or LIBOR loans
specified in the Credit Agreement.

          "Approved Amendment" means any of the following amendments and
waivers, to the Credit Agreement, howsoever evidenced:

          (a) until such time (if any) that Quest Diagnostics' long-term senior
     unsecured debt rating from Moody's is raised above Ba1, and for so long as
     Quest Diagnostics' long-term senior unsecured debt ratings remain at BBB-
     or higher from S&P and at (but not below) Ba1 from Moody's, any amendment
     to or waiver of the Credit Agreement to which the requisite banks under the
     Credit Agreement consent,

          (b) after the time (if any) that Quest Diagnostics' long-term senior
     unsecured debt rating from Moody's is raised to Baa3 or higher, and for so
     long as Quest Diagnostics' long-term senior unsecured debt ratings remain
     at BBB- or higher from S&P and at Baa3 or higher from Moody's, any
     amendment to or waiver of the Credit Agreement to which the requisite banks
     under the Credit Agreement consent, and

          (c) at any time while Quest Diagnostics' long-term senior unsecured
     debt rating from either S&P or Moody's fails to meet the applicable minimum
     level set forth in (a) or (b) above or any such minimum rating is
     classified as being on "negative watch" or the equivalent, any amendment to
     or waiver of the Credit Agreement approved by the requisite banks under the
     Credit Agreement and to which either (x) each of the Co-Agents (acting in
     its capacity as such under this Agreement) gives its written consent on or
     within 30 days after receipt of a copy of the proposed amendment or waiver,
     or (y) one or two of the Co-Agents but not all of the Co-Agents gives its
     written consent on or within 30 days after receipt of a copy of the
     proposed amendment (but not waiver) and the Obligations owing each
     dissenting Co-Agent's Group are paid in full on or within 60 days after
     such 30th day.

          "Article" means an article of this Agreement unless another document
is specifically referenced.

          "Atlantic" has the meaning provided in the preamble of this Agreement.


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<PAGE>

          "Atlantic Agent" has the meaning provided in the preamble of this
Agreement.

          "Atlantic Allocation Limit" has the meaning set forth in Section
1.1(b).

          "Atlantic Fee Letter" means that certain Atlantic Fee Letter dated as
of April 20, 2004 by and among Quest Diagnostics, the Borrower, Atlantic and
CLNY, as Atlantic Agent.

          "Atlantic Group" has the meaning provided in the preamble of this
Agreement.

          "Atlantic Liquidity Agreement" means the Liquidity Asset Purchase
Agreement dated as of April 20, 2004 among Atlantic, the Atlantic Agent, and the
Liquidity Banks from time to time party thereto, as the same may be amended,
restated, supplemented, replaced or otherwise modified from time to time.

          "Atlantic Liquidity Bank" means any Liquidity Bank that now or
hereafter enters into this Agreement and the Atlantic Liquidity Agreement.

          "Authorized Officer" means with respect to either Loan Party, any of
the following, acting singly: its chief executive officer, its president, its
vice president-finance, its treasurer or its secretary.

          "Blue Ridge" has the meaning provided in the preamble of this
Agreement.

          "Blue Ridge Agent" has the meaning provided in the preamble of this
Agreement.

          "Blue Ridge Allocation Limit" has the meaning set forth in Section
1.1(a).

          "Blue Ridge Fee Letter" means that certain Blue Ridge Fee Letter dated
as of April 20, 2004 by and among Quest Diagnostics, the Borrower, Blue Ridge
and Wachovia, as Blue Ridge Agent and Administrative Agent.

          "Blue Ridge Group" has the meaning provided in the preamble of this
Agreement.

          "Blue Ridge Liquidity Agreement" means the Fourth Amended and Restated
Liquidity Asset Purchase Agreement dated as of April 20, 2004 among Blue Ridge,
the Blue Ridge Agent, and the Liquidity Banks from time to time party thereto,
as the same may be amended, restated, supplemented, replaced or otherwise
modified from time to time.

          "Blue Ridge Liquidity Bank" means any Liquidity Bank that enters into
this Agreement and the Blue Ridge Liquidity Agreement.

          "Borrower" has the meaning provided in the preamble of this Agreement.

          "Borrowing Base" means, on any date of determination, the Net Pool
Balance as of the last day of the period covered by the most recent Monthly
Report, minus the Required Reserve as of the last day of the period covered by
the most recent Monthly Report.


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<PAGE>

          "Borrowing Date" means a date on which an Advance is made hereunder.

          "Borrowing Request" is defined in Section 2.8.

          "Broken Funding Costs" means, for any CP Rate Loan of Blue Ridge
which: (i) has its principal reduced without compliance by the Borrower with the
notice requirements hereunder or (ii) is not prepaid in the amount specified in
a Prepayment Notice on the date specified therein or (iii) is assigned by Blue
Ridge to its Liquidity Banks under its Liquidity Agreement or terminated prior
to the date on which it was originally scheduled to end; an amount equal to the
excess, if any, of (A) the CP Costs that would have accrued during the remainder
of the applicable commercial paper tranche periods determined by the Blue Ridge
Agent to relate to such Loan subsequent to the date of such reduction,
assignment or termination (or in respect of clause (ii) above, the date such
prepayment was designated to occur pursuant to the applicable Prepayment Notice)
of the principal of such CP Rate Loan if such reduction, assignment or
termination had not occurred or such Prepayment Notice had not been delivered,
over (B) the sum of (x) to the extent all or a portion of such principal is
allocated to another CP Rate Loan, the amount of CP Costs actually accrued
during the remainder of such period on such principal for the new Loan, and (y)
to the extent such principal is not allocated to another CP Rate Loan, the
income, if any, actually received during the remainder of such period by the
holder of such Loan from investing the portion of such principal not so
allocated. All Broken Funding Costs shall be due and payable hereunder upon
demand.

          "Business Associate" has the meaning set forth in Section 14.14.

          "Business Associate Safeguards" has the meaning set forth in Section
14.14.

          "Business Day" means any day on which banks are not authorized or
required to close in New York, New York, Atlanta, Georgia, Chicago, Illinois or
Teterboro, New Jersey, and The Depository Trust Company of New York is open for
business, and if the applicable Business Day relates to any computation or
payment to be made with respect to the Eurodollar Rate (Reserve Adjusted), any
day on which dealings in dollar deposits are carried on in the London interbank
market.

          "Cash Collateral Payment" means, on any date of determination, the
dollar amount resulting from the product of (i) the arithmetic average of the
dollar amount of cash collections from the 4 immediately preceding Report Weeks
and (ii) the result of dividing (a) the then aggregate outstanding principal
balance of the Advances by (b) the aggregate Unpaid Net Balance of all
Receivables, as reflected on the most recent prior Monthly Report.

          "Change in Control" means:

          (a) the failure of Quest Diagnostics to own (directly or through one
     or more wholly-owned Subsidiaries of Quest Diagnostics) 100% of the issued
     and outstanding Equity Interests (including all Equity Rights) of the
     Borrower;

          (b) the failure of Quest Diagnostics to own (directly or through one
     or more wholly-owned Subsidiaries of Quest Diagnostics) 100%, on a
     fully-diluted basis, of the issued and outstanding Equity Interests
     (including all Equity Rights) of each of the other


                                       66





<PAGE>

     Originators; provided, however, that no Change in Control shall be deemed
     to have occurred under this clause (b) if, in any calendar year, Quest
     Diagnostics ceases to beneficially own (directly or through one or more
     wholly-owned Subsidiaries of Quest Diagnostics) 100%, on a fully diluted
     basis, of the issued and outstanding Equity Interests (including all Equity
     Rights) of any Originator or Originators whose Net Receivables as of the
     last day of the prior calendar year did not represent more than 10% of the
     Net Receivables of all Originators as of the last day of such prior
     calendar year; or

          (c) (i) any Person or any group shall (A) beneficially own (directly
     or indirectly) in the aggregate Equity Interests of Quest Diagnostics
     having 35% or more of the aggregate voting power of all Equity Interests of
     Quest Diagnostics at the time outstanding or (B) have the right or power to
     appoint a majority of the board of directors of Quest Diagnostics; or (ii)
     during any period of two consecutive years, individuals who at the
     beginning of such period constituted the board of directors of Quest
     Diagnostics (together with any new directors whose election by such board
     of directors or whose nomination for election by the shareholders of Quest
     Diagnostics was approved by a vote of a majority of the directors of Quest
     Diagnostics then still in office who were either directors at the beginning
     of such period or whose election or nomination for election was previously
     so approved) cease for any reason to constitute at least a majority of the
     board of directors of Quest Diagnostics then in office.

For purposes of this definition, the terms "beneficially own" and "group" shall
have the respective meanings ascribed to them pursuant to Section 13(d) of the
Exchange Act, except that a Person or group shall be deemed to "beneficially
own" all securities that such Person or group has the right to acquire, whether
such right is exercisable immediately or only after the passage of time.

          "Client-Billed Receivable" means a Receivable booked in the
"client-billed receivables" category of accounts receivable in the billing and
accounting process of the applicable Originator owing from a physician, hospital
or other institutional Obligor (including a Governmental Authority or affiliated
Obligor) which is billed monthly in arrears for the services provided with
pricing typically based on a negotiated fee schedule. For the avoidance of
doubt, no Client-Billed Receivable would be (a) a "Government Receivable" of the
type described in clause (i), (ii) or (iii) of the definition of such term, or
(b) owing from another payor type such as an individual "self-pay" patient or an
insurance company or managed care plan.

          "Client-Billed Receivables for the Reserve Computation" means, at any
time, an amount determined by multiplying the Client-Billed Receivables
Percentage by Net Receivables.

          "Client-Billed Receivables Percentage" means, at any time, the
percentage equal to (a) the Unpaid Net Balance of all Client-Billed Receivables,
divided by (b) the reported Unpaid Net Balance of all Receivables, in each of
the foregoing cases, determined as of the last day of the calendar month then
most recently ended.

          "Clinical Laboratory Services" means clinical laboratory, anatomic
pathology or other diagnostics testing services (including, without limitation,
routine and esoteric clinical laboratory services (including genetics testing),
clinical laboratory services involved with clinical


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<PAGE>

trials, point-of-care testing, clinical laboratory services involving corporate
healthcare and services involved with managing hospital laboratories) and
information services involving the provision of data or information programs,
services or products which substantially consists of laboratory or other medical
data.

          "CLNY" has the meaning provided in the preamble of this Agreement.

          "CLNY Roles" has the meaning set forth in Section 11.10(b).

          "Co-Agents" has the meaning provided in the preamble of this
Agreement.

          "Code" means the Internal Revenue Code of 1986, as the same may be
amended from time to time.

          "Collateral" has the meaning set forth in Section 9.1.

          "Collateral Account" has the meaning set forth in Section 7.1(i)(iv).

          "Collection Account" means each concentration account, depositary
account, lockbox account or similar account into which proceeds of Receivables
are deposited.

          "Collection Account Agreement" means an agreement in substantially the
form of Exhibit A hereto by and among a Collection Bank at which a Lockbox or
Collection Account is maintained, the applicable Originator (if such Lockbox or
Collection Account is in the name of an Originator), the Borrower and the
Administrative Agent.

          "Collection Bank" means any of the banks holding one or more
Collection Accounts or Lockboxes.

          "Collections" means, (a) with respect to any Receivable, all funds
which either (i) are received from or on behalf of the related Obligor in
payment of any amounts owed (including, without limitation, purchase prices,
finance charges, interest and all other charges) in respect of such Receivable,
or applied to such amounts owed by such Obligor (including, without limitation,
payments that the Borrower, any Originator or the Servicer receives from third
party payors and applies in the ordinary course of its business to amounts owed
in respect of such Receivable and net proceeds of sale or other disposition of
repossessed goods or other collateral or property of the Obligor or any other
party directly or indirectly liable for payment of such Receivable and available
to be applied thereon), or (ii) are Deemed Collections, and (b) with respect to
any Demand Advance, any payment of principal or interest in respect thereof and
any Permitted Investments and the proceeds thereof made with any such payment.

          "Collections Ratio" means Collections divided by the reported Unpaid
Net Balance of all Receivables determined as of the last day of the calendar
month then most recently ended.

          "Commercial Paper Notes" means the commercial paper promissory notes,
if any, issued by or on behalf of either of the Conduits to fund, in whole or in
part, any of its CP Rate Loans.


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<PAGE>

          "Commitment" means, for each Liquidity Bank, its obligation to make
Loans not exceeding the amount set forth opposite its signature to the
Agreement, as such amount may be modified from time to time pursuant to the
terms hereof.

          "Commitment Increase Request" has the meaning set forth in Section
1.7.

          "Commitment Percentage" means, for each Group on any date of
determination, the ratio which the sum the Commitments of the Liquidity Banks in
such Group bears to the Aggregate Commitment.

          "Commitment Reduction Notice" has the meaning set forth in Section
1.6.

          "Conduits" has the meaning provided in the preamble of this Agreement.

          "Constituent" means (a) as to the Atlantic Agent, any member of the
Atlantic Group from time to time party hereto, and (b) as to the Blue Ridge
Agent, any member of the Blue Ridge Group from time to time party hereto, and
when used as an adjective, "Constituent" shall have a correlative meaning.

          "Contract" means, with respect to any Receivable, any requisition,
purchase order, agreement, contract or other writing with respect to the
provision of services by an Originator to an Obligor other than (i) an Invoice,
and (ii) any confidential patient information including, without limitation,
test results.

          "Contractual Disallowance" means an amount which represents the amount
by which a Receivable is, consistent with usage and practices in the applicable
Originator's industry, expected to be reduced prior to payment by the Obligor
thereon.

          "Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of or other instrument, document or agreement to which
such Person is a party or by which it or any of its property is bound.

          "CP Costs" means, for each day for Blue Ridge, the sum of (i) discount
or interest accrued on such Conduit's Pooled Commercial Paper on such day, plus
(ii) any and all accrued commissions in respect of its placement agents and its
Commercial Paper dealers, and issuing and paying agent fees incurred, in respect
of such Conduit's Pooled Commercial Paper for such day, plus (iii) other costs
associated with funding small or odd-lot amounts with respect to all receivable
purchase or financing facilities which are funded by such Conduit's Pooled
Commercial Paper for such day, minus (iv) any accrual of income net of expenses
received by or on behalf of such Conduit on such day from investment of
collections received under all receivable purchase or financing facilities
funded substantially with such Conduit's Pooled Commercial Paper, minus (v) any
payment received on such day net of expenses in respect of such Conduit's Broken
Funding Costs related to the prepayment of any investment of Blue Ridge pursuant
to the terms of any receivable purchase or financing facilities funded
substantially with its Pooled Commercial Paper. In addition to the foregoing
costs, if the Borrower (or the Servicer, on the Borrower's behalf) shall request
any Advance during any period of time determined by the Blue Ridge Agent in its
sole discretion to result in incrementally higher CP


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<PAGE>

Costs applicable to Blue Ridge's Loan included in such Advance, the principal
associated with any such Loan of Blue Ridge shall, during such period, be deemed
to be funded by Blue Ridge in a special pool (which may include capital
associated with other receivable purchase or financing facilities) for purposes
of determining such additional CP Costs applicable only to such special pool and
charged each day during such period against such principal.

          "CP Rate" means:

          (a) with respect to Blue Ridge for any CP Tranche Period, the per
     annum interest rate that, when applied to the outstanding principal balance
     of Blue Ridge's CP Rate Loans for the actual number of days elapsed in such
     CP Tranche Period, would result in an amount of accrued interest equivalent
     to Blue Ridge's CP Costs for such CP Tranche Period; and

          (b) with respect to Atlantic for any CP Tranche Period, the per annum
     interest rate equivalent to the rate (or if more than one rate, the
     weighted average of the rates) at which Commercial Paper Notes of Atlantic
     having a term equal to such CP Tranche Period are sold plus (to the extent
     not already deducted from the Principal Amount of such Commercial Paper
     Notes) the amount of any placement agent or commercial paper dealer fees
     incurred in connection with such sale and other costs associated with
     funding small or odd-lot amounts.

          "CP Rate Loan" means a Loan made by either of the Conduits which bears
interest at a CP Rate.

          "CP Tranche Period" means:

          (a) with respect to Blue Ridge, an Accrual Period, and

          (b) with respect to Atlantic, a period of 7 to 90 days commencing on a
     Business Day selected by the Borrower (or by the Servicer, on the
     Borrower's behalf) and agreed to by the Atlantic Agent pursuant to Section
     2.2; provided, however, that if any such CP Tranche Period would end on a
     day which is not a Business Day, such CP Tranche Period shall end on the
     preceding Business Day.

          "Credit Agreement" means that certain Amended and Restated Credit
Agreement dated as of April 20, 2004 among Quest Diagnostics, as borrower,
certain of its Subsidiaries, as guarantors, the lenders from time to time party
thereto, and Bank of America, N.A., as administrative agent and issuing lender,
as modified from time to time by one or more Approved Amendments.

          "Credit and Collection Policy" means those credit and collection
policies and practices of the Originators relating to Contracts and Receivables,
copies or summaries of which are attached as Exhibit C to the Sale Agreement, as
the same may be modified from time to time without violating Section 7.3(c) of
this Agreement.

          "Cut-Off Date" means the last day of each calendar month.


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<PAGE>

          "Days Sales Outstanding" means, as of any day, an amount equal to the
product of (x) 91, multiplied by (y) the amount obtained by dividing (i) the
reported aggregate Unpaid Net Balance of Receivables as of the most recent
Cut-Off Date, by (ii) the aggregate Net Revenues generated by the Originators
during the three calendar months including and immediately preceding such
Cut-Off Date.

          "Deemed Collections" means Collections deemed received by the Borrower
under Section 3.4.

          "Default Rate" means a rate per annum equal to the sum of (i) the
Alternate Base Rate plus (ii) 2.00%, changing when and as the Alternate Base
Rate changes.

          "Default Horizon Ratio" means, as of any Cut-Off Date, the ratio
(expressed as a decimal) computed by dividing (i) the aggregate amount of Net
Revenues generated by the Originators during the five months ending on such
Cut-Off Date, by (ii) the Net Pool Balance as of such Cut-Off Date.

          "Default Ratio" means, as of any Cut-Off Date, the ratio (expressed as
a percentage) computed by dividing (i) the total amount of Receivables that
became Defaulted Receivables (151-180 days past invoice) during the month that
includes such Cut-Off Date, by (ii) the aggregate amount of Net Revenues
generated by the Originators during the month occurring five months prior to the
month ending on such Cut-Off Date.

          "Default Trigger Ratio" means, as of any Cut-Off Date, the ratio
(expressed as a percentage) computed by dividing (i)(a) the total amount of
receivables 151-180 days past invoice, (b) as to which the obligor thereof has
suffered an event of bankruptcy or (c) which, consistent with the Originators'
billing systems' procedures, should be written off as uncollectible, by (ii)the
aggregate amount of Net Revenues generated by the Originators during the month
occurring five months prior to the month ending on such Cut-Off Date.

          "Defaulted Receivable" means a Receivable: (i) as to which the obligor
thereof has suffered an event of bankruptcy; (ii) which, consistent with the
Originators' billing systems' procedures, should be written off as
uncollectible; or (iii) as to which any payment, or part thereof, remains unpaid
for 151 days or more from the original invoice date for such payment.

          "Delinquency Ratio" means, at any time, a percentage equal to (i)
Delinquent Receivables at such time divided by (ii) the reported aggregate
Unpaid Net Balance of Receivables at such time.

          "Delinquent Receivable" means a Receivable as to which any payment, or
part thereof, remains unpaid for 121-150 days from the original invoice date for
such payment.

          "Demand Advance" means an advance made by the Borrower to Quest
Diagnostics on any day during the Revolving Period other than a Settlement Date
on which no Event of Default or Unmatured Default exists and is continuing,
which advance (a) is payable upon demand, (b) is not evidenced by an instrument,
chattel paper or a certificated security, (c) bears interest at a market rate
determined by the Borrower and the Servicer from time to time, (d) is not
subordinated to any other Indebtedness or obligation of Quest Diagnostics, and
(e) may not


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<PAGE>

be offset by Quest Diagnostics against amounts due and owing from the Borrower
to Quest Diagnostics under its Subordinated Note.

          "Dilution" means, total Net Revenues multiplied by the three month
average calculated quarterly of (i)(a) for Originators on the QBS an amount
equal to the dollar amount of adjustments measured by QBS adjustment codes 66,
70, 71, 72, 74, 75, 76, 83, 85 for client and patient receivables, plus (b) an
amount equal to 0.30 times the dollar amount of adjustments measured by the QBS
adjustment codes 66, 70, 71, 72, 74, 75, 76, 83, 85 for third party receivables,
plus (c) 0.70 multiplied by the dollar amount of adjustments measured by QBS
adjustment code 68 for client and patient receivables divided by (ii) the Net
Revenues generated by Originators on QBS.

          "Dilution Horizon Ratio" means, as of any Cut-Off Date, a ratio
(expressed as a decimal), computed by dividing (i) the aggregate Net Revenues
generated by the Originators during the one month ending on such Cut-Off Date,
by (ii) the Net Pool Balance as of such Cut-Off Date.

          "Dilution Ratio" means, as of any Cut-Off Date, a ratio (expressed as
a percentage), computed by dividing (i) the total amount of decreases in
outstanding principal balances due to Dilution during the month ending on such
Cut-Off Date, by (ii) the aggregate Net Revenues generated by the Originators
ending on such Cut-Off Date one month prior.

          "Dilution Reserve" means, for any month, the product (expressed as a
percentage) of: (a) the sum of (i) 1.5 times the Adjusted Dilution Ratio as of
the immediately preceding Cut-Off Date, plus (ii) the Dilution Volatility
Component as of the immediately preceding Cut-Off Date, times (b) the Dilution
Horizon Ratio as of the immediately preceding Cut-Off Date.

          "Dilution Volatility Component" means the product (expressed as a
percentage) of (i) the difference between (a) the highest three (3)-month
rolling average Dilution Ratio over the past 12 months and (b) the Adjusted
Dilution Ratio, and (ii) a fraction, the numerator of which is equal to the
amount calculated in (i)(a) of this definition and the denominator of which is
equal to the amount calculated in (i)(b) of this definition.

          "Disallowed Receivable" means a Receivable for which payment is not
expected to be received by the applicable Originator.

          "Dollars" means dollars in lawful money of the United States of
America.

          "Downgraded Liquidity Bank" means a Blue Ridge Liquidity Bank which
becomes the subject of a Downgrading Event.

          "Downgrading Event" with respect to any Person means the lowering of
the rating with regard to the short-term securities of such Person to below (i)
A-1 by S&P, (ii) P-1 by Moody's, or (if applicable) (iii) F1 by Fitch.

          "Eligible Assignee" means (a) any "bankruptcy remote" special purpose
entity which is administered by Wachovia or CLNY (or any Affiliate of Wachovia
or CLNY) or any


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<PAGE>

Qualifying Liquidity Bank (or any Affiliate of a Qualifying Liquidity Bank) that
is in the business of acquiring or financing receivables, securities and/or
other financial assets and which issues commercial paper notes that are rated at
least A-1 by S&P, P-1 by Moody's and, if applicable, F1 by Fitch, (b) any
Qualifying Liquidity Bank, or (c) in the case of Blue Ridge, any Downgraded
Liquidity Bank whose liquidity commitment has been fully drawn by the Blue Ridge
Agent and funded into a collateral account.

          "Eligible Originator" means any of (a) Quest Diagnostics, (b) Quest
Diagnostics Incorporated a Michigan corporation, Quest Diagnostics Incorporated,
a Maryland corporation, Quest Diagnostics Incorporated, a California
corporation, Quest Diagnostics LLC, a Connecticut limited liability company,
Quest Diagnostics LLC, a Massachusetts limited liability company, Quest
Diagnostics of Pennsylvania Inc., a Delaware corporation, MetWest Inc., a
Delaware corporation, Quest Diagnostic Clinical Laboratories Inc., a Delaware
corporation, Quest Diagnostics LLC, an Illinois limited liability company,
Unilab Corporation, a Delaware corporation, Quest Diagnostics Nichols Institute,
Inc., a Virginia corporation formerly known as Medical Laboratories Corporation,
Inc., Quest Diagnostics Incorporated, a Nevada corporation formerly known as APL
Healthcare Group, Inc., and (c) each of the other direct or indirect,
wholly-owned Subsidiaries of Quest Diagnostics who (with the consent of the
Co-Agents if such Subsidiary constitutes a Material Proposed Addition) becomes a
"seller" party to the Sale Agreement by executing a Joinder Agreement and
complying with the conditions set forth in Article V of the Sale Agreement.

          "Eligible Receivable" means, at any time:

          (a) a Receivable which arises out of the provision or sale of Clinical
     Laboratory Services by an Eligible Originator in the ordinary course of its
     business that has been sold or contributed by such Originator to the
     Borrower pursuant to the Sale Agreement in a "true sale" or "true
     contribution" transaction;

          (b) a Receivable as to which the perfection of the Administrative
     Agent's security interest, on behalf of the Secured Parties, is governed by
     the laws of a jurisdiction where the Uniform Commercial Code-Secured
     Transactions is in force, and which constitutes an "account" or a "payment
     intangible" (each as defined in the Uniform Commercial Code as in effect in
     any relevant jurisdiction);

          (c) a Receivable the Obligor of which is resident of the United States
     or any of its possessions or territories, and is not an Affiliate of any
     Loan Party or Originator;

          (d) a Receivable which is not a Disallowed Receivable at such time;

          (e) the portion of a Receivable which is not an Ineligible Defaulted
     Receivable at such time;

          (f) a Receivable with regard to which the representations and
     warranties of the Borrower in Sections 6.1(j), (l) and (p) are true and
     correct;

          (g) a Receivable with regard to which the granting of a security
     interest therein does not contravene or conflict with any law;


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<PAGE>

          (h) a Receivable which is denominated and payable only in Dollars in
     the United States;

          (i) a Receivable which constitutes the legal, valid and binding
     obligation of the Obligor of such Receivable enforceable against such
     Obligor in accordance with its terms and is not subject to any actual or
     reasonably expected dispute, offset (except as provided below),
     counterclaim or defense whatsoever; provided, however, that if such
     dispute, offset, counterclaim or defense affects only a portion of the
     Unpaid Net Balance of such Receivable, then such Receivable may be deemed
     an Eligible Receivable to the extent of the portion of such Unpaid Net
     Balance which is not so affected;

          (j) a Receivable which, together with any Contract related thereto,
     does not contravene in any material respect any laws, rules or regulations
     applicable thereto (including, without limitation, laws, rules and
     regulations relating to usury, truth in lending, fair credit billing, fair
     credit reporting, equal credit opportunity, fair debt collection practices
     and privacy) and with respect to which no party to the Contract related
     thereto is in violation of any such law, rule or regulation in any material
     respect if such violation would impair the collectibility of such
     Receivable;

          (k) a Receivable which satisfies in all material respects all
     applicable requirements of the applicable Eligible Originator's Credit and
     Collection Policy;

          (l) a Receivable which is due and payable within 60 days from the
     invoice date of such Receivable;

          (m) [intentionally omitted];

          (n) a Receivable the original term of which has not been extended
     (except as permitted in Section 8.2(c));

          (o) a Receivable which has not been identified, either specifically or
     as a member of a class, in a notice by any of the Agents, in the exercise
     of its commercially reasonable credit judgment, as a Receivable that is not
     acceptable, including, without limitation, because such Receivables arises
     under an unreasonable Contract that is not acceptable to such Agent; and

          (p) if the applicable Eligible Originator acquired such Receivable
     through a Material Acquisition as to which the Administrative Agent is
     permitted to and has, in fact, conducted, a Review in accordance with
     Section 7.1(c), the Administrative Agent has notified the Borrower in
     writing that (i) such Receivable is (and other similarly-acquired
     Receivables are) acceptable to the Agents based on the satisfactory outcome
     of such Review, and (ii) each Conduit's Rating Agency Condition has been
     satisfied.

          "Employee Benefit Plan" means an employee benefit plan (as defined in
Section 3(3) of ERISA) that is maintained or contributed to by any ERISA Entity
or with respect to which Quest Diagnostics or a Subsidiary could incur
liability.


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<PAGE>

          "Equity Interests" means, with respect to any Person, any and all
shares, interests, participations or other equivalents, including membership
interests (however designated, whether voting or non-voting), of capital of such
Person, including, if such Person is a partnership, partnership interests
(whether general or limited) and any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, such partnership, whether outstanding on the date
hereof or issued after the date of this Agreement.

          "Equity Rights" means, with respect to any Person, any outstanding
subscriptions, options, warrants, commitments, preemptive rights or agreements
of any kind (including any stockholders' or voting trust agreements) for the
issuance, sale, registration or voting of, or outstanding securities convertible
into, any additional shares of Equity Interests of any class, or partnership or
other ownership interests of any type in, such Person.

          "ERISA" means the United States Employee Retirement Income Security
Act of 1974, as amended.

          "ERISA Entity" means any member of an ERISA Group.

          "ERISA Event" means (a) any Reportable Event with respect to a Pension
Plan; (b) the existence with respect to any Pension Plan of an "accumulated
funding deficiency" (as defined in Section 412 of the Code or Section 302 of
ERISA), whether or not waived, the failure to make by its due date a required
installment under Section 412(m) of the Code with respect to any Pension Plan or
the failure to make any required contribution to a Multiemployer Plan; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Pension Plan; (d) the incurrence by any ERISA Entity of any liability under
Title IV of ERISA with respect to the termination of any Pension Plan; (e) the
receipt by any ERISA Entity from the PBGC or a plan administrator of any notice
relating to an intention to terminate any Pension Plan or to appoint a trustee
to administer any Pension Plan, or the occurrence of any event or condition
which could constitute grounds under ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan; (f) the incurrence by
any ERISA Entity of any liability with respect to the withdrawal or partial
withdrawal from any Pension Plan or Multiemployer Plan; (g) the receipt by an
ERISA Entity of any notice, or the receipt by any Multiemployer Plan from any
ERISA Entity of any notice, concerning the imposition of Withdrawal Liability or
a determination that a Multiemployer Plan is, or is expected to be, insolvent or
in reorganization, within the meaning of Title IV of ERISA; (h) the making of
any amendment to any Pension Plan which could result in the imposition of a lien
or the posting of a bond or other security; or (i) the occurrence of a nonexempt
prohibited transaction (within the meaning of Section 4975 of the Code or
Section 406 of ERISA) which could result in liability to any Loan Party.

          "ERISA Group" means any Loan Party and all members of a controlled
group of corporations and all trades or businesses (whether or not incorporated)
under common control which, together with such Loan Party, are treated as a
single employer under Section 414 of the Code.


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<PAGE>

          "Eurodollar Loan" means a Loan which bears interest at the applicable
Eurodollar Rate.

          "Eurodollar Rate" means, for any Interest Period, the rate per annum
determined on the basis of the offered rate for deposits in Dollars of amounts
equal or comparable to the principal amount of the related Liquidity Funding
offered for a term comparable to such Interest Period, which rates appear on a
Bloomberg L.P. terminal, displayed under the address "US0001M < Index > Q
< Go >" effective as of 11:00 a.m., London time, two Business Days prior to
the first day of such Interest Period, provided that if no such offered rates
appear on such page, the Eurodollar Rate for such Interest Period will be the
arithmetic average (rounded upwards, if necessary, to the next higher 1/100th
of 1%) of rates quoted by not less than two major banks in New York City,
selected by the Co-Agents, at approximately 10:00 a.m., New York City time, two
Business Days prior to the first day of such Interest Period, for deposits in
Dollars offered by leading European banks for a period comparable to such
Interest Period in an amount comparable to the principal amount of such
Liquidity Funding.

          "Eurodollar Rate (Reserve Adjusted)" applicable to any Interest Period
means a rate per annum equal to the quotient obtained (rounded upwards, if
necessary, to the next higher 1/100th of 1%) by dividing (i) the applicable
Eurodollar Rate for such Interest Period by (ii) 1.00 minus the Eurodollar
Reserve Percentage.

          "Eurodollar Reserve Percentage" means, with respect to any Interest
Period, the maximum reserve percentage, if any, applicable to a Liquidity Bank
under Regulation D during such Interest Period (or if more than one percentage
shall be applicable, the daily average of such percentages for those days in
such Interest Period during which any such percentage shall be applicable) for
determining such Liquidity Bank's reserve requirement (including any marginal,
supplemental or emergency reserves) with respect to liabilities or assets having
a term comparable to such Interest Period consisting or included in the
computation of "Eurocurrency Liabilities" pursuant to Regulation D. Without
limiting the effect of the foregoing, the Eurodollar Reserve Percentage shall
reflect any other reserves required to be maintained by such Liquidity Bank by
reason of any Regulatory Change against (a) any category of liabilities which
includes deposits by reference to which the "London Interbank Offered Rate" or
"LIBOR" is to be determined or (b) any category of extensions of credit or other
assets which include LIBOR-based credits or assets.

          "Event of Default" means an event described in Section 10.1.

          "Event of Bankruptcy" shall be deemed to have occurred with respect to
a Person if either:

          (a) a case or other proceeding shall be commenced, without the
     application or consent of such Person, in any court, seeking the
     liquidation, reorganization, debt arrangement, dissolution, winding up, or
     composition or readjustment of debts of such Person, the appointment of a
     trustee, receiver, custodian, liquidator, assignee, sequestrator or the
     like for such Person or all or substantially all of its assets, or any
     similar action with respect to such Person under any law relating to
     bankruptcy, insolvency, reorganization, winding up or composition or
     adjustment of debts, and such


                                       76





<PAGE>

     case or proceeding shall continue undismissed, or unstayed and in effect,
     for a period of 60 consecutive days; or an order for relief in respect of
     such Person shall be entered in an involuntary case under the federal
     bankruptcy laws or other similar laws now or hereafter in effect; or

          (b) such Person shall commence a voluntary case or other proceeding
     under any applicable bankruptcy, insolvency, reorganization, debt
     arrangement, dissolution or other similar law now or hereafter in effect,
     or shall consent to the appointment of or taking possession by a receiver,
     liquidator, assignee, trustee, custodian, sequestrator (or other similar
     official) for, such Person or for all or substantially all of its property,
     or shall make any general assignment for the benefit of creditors, or shall
     be adjudicated insolvent, or admit in writing its inability to, pay its
     debts generally as they become due, or, if a corporation or similar entity,
     its board of directors shall vote to implement any of the foregoing.

          "Excess Concentration Amount" means, as of any date, the sum of the
amounts by which the aggregate Unpaid Net Balance of Receivables of each Obligor
exceeds the Obligor Concentration Limit for such Obligor.

          "Excess Rollforward Difference" means, at any time, an amount equal
the Rollforward Difference greater than 3% of the reported aggregate Unpaid Net
Balance of all Receivables.

          "Exchange Act" means the Securities Exchange Act of 1934, as amended.

          "Excluded JV Receivable" means any account receivable (and proceeds
thereof) that Quest Diagnostics of Pennsylvania Inc. ("Quest Pennsylvania")
bills in its own name and collects through its own accounts arising from
services for which revenues belong to Quest Diagnostics Venture LLC under that
certain Sharing and General Allocation Agreement dated as of November 1, 1998 by
and among Quest Diagnostics Venture LLC, a Pennsylvania limited liability
company, Quest Pennsylvania and UPMC Health System Diversified Services, Inc.,
as amended or modified from time to time.

          "Exhibit" refers to an exhibit to this Agreement, unless another
document is specifically referenced.

          "Existing Agreement" has the meaning set forth in the preamble to this
Agreement.

          "Extension Fee" means such amount as the Agents and the Borrower may
agree upon at the time of any Extension Request.

          "Extension Request" has the meaning set forth in Section 1.8.

          "Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the next higher 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on


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<PAGE>

the Business Day next succeeding such day, provided that (i) if the day for
which such rate is to be determined is not a Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (ii) if
such rate is not so published for any day, the Federal Funds Rate for such day
shall be the average rate charged to the applicable Co-Agent on such day on such
transactions, as reasonably determined by such Co-Agent.

          "Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto or to the functions thereof.

          "Fee Letters" means, collectively, the Atlantic Fee Letter and the
Blue Ridge Fee Letter.

          "Final Payout Date" means the date on or following the Termination
Date on which the Obligations have been paid in full.

          "Fitch" means Fitch, Inc.

          "Foreign Plan" means any employee benefit plan, program, policy,
arrangement or agreement maintained or contributed to by, or entered into with,
Quest Diagnostics or any of its Subsidiaries with respect to employees employed
outside the United States.

          "GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
accounting profession, which are applicable to the circumstances as of the date
of determination.

          "General Intangible" shall have the meaning specified in Article 9 of
the UCC.

          "Government Receivable" means:

          (i) any Receivable with respect to which the United States (or an
     agency or intermediary thereof) is obligated to pay, pursuant to federal
     Medicare statutes and regulations, for services rendered to eligible
     beneficiaries thereunder,

          (ii) any Receivable arising under any state's Medicaid statutes and
     regulations, for services rendered to eligible beneficiaries thereunder,

          (iii) (A) any Receivable with respect to which the United States (or
     an agency or fiscal intermediary thereof) is obligated to pay, pursuant to
     federal statutes and regulations applicable to The Civilian Health and
     Medical Program of the Uniform Services, for services rendered to eligible
     beneficiaries thereunder and not in contravention of any statute or
     regulation applicable thereto and (B) any Receivable with respect to which
     the Obligor is any Person (other than a Governmental Authority) who enters
     into a contract with the United States for the provision of health care
     services rendered to eligible beneficiaries under The Civilian Health and
     Medical Program of the Uniform Services,


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<PAGE>

          (iv) any Receivable with respect to which the United States (or an
     agency or fiscal intermediary thereof) is obligated to pay, pursuant to
     federal statutes and regulations applicable to The Civilian Health and
     Medical Program of Veterans Affairs, for services rendered to eligible
     beneficiaries thereunder and not in contravention of any statute or
     regulation applicable thereto,

          (v) any other Receivable as to which the Obligor is a Governmental
     Authority,

          (vi) any other Receivable as to which payment is required by law to be
     made directly to the provider of the services giving rise thereto or to an
     account under such provider's exclusive dominion and control, or

          (vii) any other Receivable requiring compliance with the Federal
     Assignment of Claims Act or any similar state legislation.

          "Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.

          "Group" means the Blue Ridge Group or the Atlantic Group, as the case
may be.

          "Guarantee" of or by any Person means any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, and including any obligation of such
Person, direct or indirect, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or to purchase (or to advance
or supply funds for the purchase of) any security for the payment of such
Indebtedness, (b) to purchase property, securities or services for the purpose
of assuring the owner of such Indebtedness of the payment of such Indebtedness
or (c) to maintain working capital, equity capital or other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness; provided however that the term Guarantee shall
not include endorsements for collection or deposit, in either case, in the
ordinary course of business.

          "HIPAA" has the meaning set forth in Section 14.14.

          "Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property or assets purchased by such Person, (e) all obligations of such Person
issued or assumed as the deferred purchase price of property or services (other
than trade payables incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the obligations
secured thereby have


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<PAGE>

been assumed, but limited, if such obligations are without recourse to such
Person, to the lesser of the principal amount of such Indebtedness or the fair
market value of such property, (g) all Guarantees by such Person of Indebtedness
of others, (h) all Capital Lease Obligations of such Person, (i) all obligations
of such Person in respect of interest rate protection agreements, foreign
currency exchange agreements or other interest or exchange rate hedging
arrangements (the amount of any such obligation to be the amount that would be
payable upon the acceleration, termination or liquidation thereof) and (j) all
obligations of such Person as an account party in respect of letters of credit
and bankers' acceptances. The Indebtedness of any Person shall include the
Indebtedness of any partnership in which such Person is a general partner.

          "Indemnified Amounts" has the meaning set forth in Section 13.1(a).

          "Indemnified Party" has the meaning set forth in Section 13.1(a).

          "Independent Director" has the meaning set forth in Section 7.4(b).

          "Ineligible Defaulted Receivable" means, on any date of determination,
the Outstanding Balance of a Defaulted Receivable multiplied by 1 minus the
Recovery Rate.

          "Interest Payment Date" means:

          (a) with respect to any CP Rate Loan of Blue Ridge, each Settlement
     Date, and with respect to any CP Rate Loan of Atlantic, the last day of its
     CP Tranche Period, the date on which any such CP Rate Loan is prepaid, in
     whole or in part, and the Termination Date;

          (b) with respect to any Eurodollar Loan, the last day of its Interest
     Period, the date on which any such Loan is prepaid, in whole or in part,
     and the Termination Date;

          (c) with respect to any Alternate Base Rate Loan, each Settlement Date
     while such Loan remains outstanding, the date on which any such Loan is
     prepaid, in whole or in part, the date on which the applicable Liquidity
     Bank's Scheduled Termination Date occurs, and the Termination Date; and

          (d) with respect to any Loan while the Default Rate is applicable
     thereto, upon demand or, in the absence of any such demand, each Settlement
     Date while such Loan remains outstanding, the date on which any such Loan
     is prepaid, in whole or in part, the Termination Date, and if the
     applicable Loan was funded by a Liquidity Bank, the date on which the
     applicable Liquidity Bank's Scheduled Termination Date occurs.

          "Interest Period" means, with respect to a Eurodollar Loan, a period
not to exceed three calendar months commencing on a Business Day selected by the
Borrower (or the Servicer on the Borrower's behalf) pursuant to this Agreement
and agreed to by the applicable Co-Agent. Such Interest Period shall end on the
day which corresponds numerically to such date one, two, or three calendar
months thereafter, provided, however, that (i) if there is no such numerically
corresponding day in such next, second or third succeeding calendar month, such
Interest Period shall end on the last Business Day of such next, second or third
succeeding calendar month, and (ii) if an Interest Period would otherwise end on
a day which is not a


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<PAGE>

Business Day, such Interest Period shall end on the next succeeding Business Day
unless said next succeeding Business Day falls in a new calendar month, then
such Interest Period shall end on the immediately preceding Business Day.

          "Interest Rate" means a Eurodollar Rate (Reserve Adjusted), a CP Rate,
an Alternate Base Rate or the Default Rate.

          "Invoice" means, with respect to any Receivable, any paper or
electronic bill, statement or invoice for services rendered by an Originator to
an Obligor.

          "Joinder Agreement" has the meaning set forth in the Sale Agreement.

          "Laws" means, collectively, all common law and all international,
foreign, federal, state and local statutes, treaties, rules, guidelines,
regulations, ordinances, codes and administrative or judicial precedents,
including without limitation the interpretation thereof by any Governmental
Authority charged with the enforcement thereof.

          "Lenders" means, collectively, Blue Ridge, the Blue Ridge Liquidity
Banks, Atlantic, the Atlantic Liquidity Banks, and their respective successors
and permitted assigns.

          "Lien" means any security interest, lien, encumbrance, pledge,
assignment, title retention, similar claim, right or interest.

          "Liquidity Agreements" means, collectively, the Atlantic Liquidity
Agreement and the Blue Ridge Liquidity Agreement.

          "Liquidity Bank" means (a) with respect to Blue Ridge, Wachovia or any
Eligible Assignee of Wachovia's Commitment and Liquidity Commitment, and (b)
with respect to Atlantic, CLNY or any Eligible Assignee of CLNY's Commitment and
Liquidity Commitment, in each of the foregoing cases, to which the Borrower has
consented if required under Section 12.1. A Liquidity Bank will become a
"Lender" hereunder at such time as it makes any Liquidity Funding.

          "Liquidity Commitment" means, with respect to each Liquidity Bank, its
commitment to make Liquidity Fundings pursuant to the Liquidity Agreement to
which it is a party.

          "Liquidity Funding" means (a) a purchase made by any Liquidity Bank
pursuant to its Liquidity Commitment of all or any portion of, or any undivided
interest in, a Loan of its applicable Conduit, or (b) any Loan made by the
applicable Liquidity Banks in lieu of a Conduit pursuant to Section 1.1.

          "Loan" means any loan made by a Lender to the Borrower pursuant to
this Agreement. Each Loan shall either be a CP Rate Loan, an Alternate Base Rate
Loan or a Eurodollar Rate Loan, selected in accordance with the terms of this
Agreement.

          "Loan Parties" means, collectively, (i) the Borrower, and (ii) Quest
Diagnostics so long as it is acting as the Servicer (or as a sub-servicer)
hereunder.


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<PAGE>

          "Lockbox" means any post office box maintained by an Originator on
behalf of the Borrower to which payments on certain Receivables are mailed.

          "Loss Reserve" means, for any month, the product (expressed as a
percentage) of (i) 2.0, times (ii) the highest three-month rolling average
Default Ratio during the 12 months ending on the immediately preceding Cut-Off
Date, times (iii) the Default Horizon Ratio as of the immediately preceding
Cut-Off Date, times (iv) one minus the Recovery Rate.

          "Material Acquisition" means that any existing Originator acquires the
Unpaid Net Balance of Receivables of one or more other Persons who are not
existing Eligible Originators, whether by purchase, merger, consolidation or
otherwise, if (i) the aggregate Unpaid Net Balance of receivables so acquired
from any one such Person exceeds 10% of the Allocation Limit in effect on the
date of acquisition, merger or consolidation, or (ii) the aggregate Unpaid Net
Balance of receivables so acquired from all Persons in any calendar year exceeds
(or from all such Persons in any calendar year) exceeds 10% of the weighted
average Allocation Limit in effect during such calendar year.

          "Material Adverse Effect" means an event, circumstance, occurrence, or
condition which has caused as of any date of determination any of (a) a material
adverse effect, or any condition or event that has resulted in a material
adverse effect, on the business, operations, financial condition or assets of
(i) the Originators taken as a whole (after taking into account indemnification
obligations by third parties that are Solvent to the extent that such third
party has not disputed (after notice of claim in accordance with the applicable
agreement therefor) liability to make such indemnification payment), (ii) the
Servicer, or (iii) the Borrower, (b) a material adverse effect on the ability of
the Originators, the Servicer or the Borrower to perform when and as due any of
their material obligations under any Transaction Document to which they are
parties, (c) a material adverse effect on the legality, binding effect or
enforceability of any Transaction Document or any of the material rights and
remedies of any of the Agents or Lenders thereunder or the legality, priority,
or enforceability of the Lien on a material portion of the Collateral, or (d) a
material adverse effect upon the validity, enforceability or collectibility of a
material portion of the Receivables.

          "Material Proposed Addition" means a Person whom any Loan Party
proposes to add as a "seller" under the Sale Agreement if either (i) the
aggregate Unpaid Net Balance of such Person's receivables (on the proposal date)
exceeds 10% of the weighted average Allocation Limit in effect on the proposal
date, or (ii) the Unpaid Net Balance of such Person's receivables (on such
proposal date), when aggregated with the receivables of all other Persons added
as "sellers" under the Sale Agreement in the same calendar year (measured on the
respective dates such other Persons became "sellers" under the Sale Agreement)
exceeds 10% of the weighted average Allocation Limit in effect during such
calendar year.

          "Missing Information Percentage" means the percentage equal to the
ratio of (a) the total number of incomplete requisitions received in any month
by the Originators, to (b) the total number of requisitions resulted in such
month by the Originators. For this purpose, a requisition (whether in paper or
electronic format) is incomplete if at the time that the test results of a
specimen are reported, the Originator has not been provided sufficient
information (whether from the requisition or otherwise) to bill the appropriate
Person for the test or other service being


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<PAGE>

performed. As used herein, a "resulted" requisition is one which is processed
and on which its results have been reported.

          "Missing Information Trigger Event" means that the most recent
three-calendar month rolling average Missing Information Percentage at any
Cut-Off Date exceeds 7.00% (it being understood that if a private carrier or
government action imposes any change expected to have an adverse impact on the
information gathering process of the Originators, this percentage will not be
utilized in the calculation of a Missing Information Trigger Event for the 3
Settlement Periods immediately following such change).

          "Monthly Report" means a report in the form of Exhibit 3.1(a).

          "Monthly Reporting Date" means the 20th day of each calendar month;
provided, however, that if any such day is not a Business Day, then the Monthly
Reporting Date shall occur on the next succeeding Business Day.

          "Moody's" means Moody's Investors Service, Inc.

          "Multiemployer Plan" means a multiemployer plan within the meaning of
Section 4001(a)(3) of ERISA (a) to which any ERISA Entity is then making or
accruing an obligation to make contributions, (b) to which any ERISA Entity has
within the preceding five plan years made contributions, including any Person
which ceased to be an ERISA Entity during such five year period, or (c) with
respect to which any Loan Party could incur liability.

          "Net Pool Balance" means, at any time, an amount equal to (i) Net
Receivables, minus (ii) Specified Government Ineligibles.

          "Net Receivables" means, at any time, an amount equal to the reported
aggregate Unpaid Net Balance of all Receivables at such time, minus (i) the
aggregate Unpaid Net Balance of all Receivables that are not Eligible
Receivables at such time, minus (ii) Receivables (other than those covered by
any other clause of this definition) that are not yet Defaulted Receivables
which are owing from any Top 10 Obligor as to which more than 50% of the
aggregate Unpaid Net Balance of all Receivables owing from such Top 10 Obligor
are Defaulted Receivables, minus (iii) the Excess Concentration Amount at such
time, minus (iv) 2% of the aggregate Unpaid Net Balance of all Receivables owing
from Obligors who are not Top 10 Obligors, minus (v) the Excess Rollforward
Difference.

          "Net Revenues" means, for any calendar month of determination, the
gross amount of Receivables generated by the Originators from Clinical
Laboratory Services during such calendar month less the associated Contractual
Disallowances but before accruals for and write-offs of bad debts.

          "Non-Approving Group" means any Group containing a Non-Approving
Lender.

          "Non-Approving Lender" means any Lender that does not approve (a) an
Extension Request, (b) a requested waiver to this Agreement or the Credit
Agreement, or (c) a requested amendment to this Agreement or the Credit
Agreement.


                                       83





<PAGE>

          "Obligations" means all unpaid principal of and accrued and unpaid
interest on the Loans, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Borrower to the Lenders
(or any Lender), any of the Agents or any Indemnified Party arising under the
Transaction Documents.

          "Obligor" means a Person obligated to make payments with respect to a
Receivable, including any guarantor thereof.

          "Obligor Concentration Limit" means, at any time, in relation to the
aggregate Unpaid Net Balance of Receivables owed by any single Obligor and its
Affiliated Obligors (if any), the applicable concentration limit shall (unless
each Co-Agent from time to time upon the Borrower's request agrees to a higher
percentage of Eligible Receivables for a particular Obligor and its Affiliates,
which agreement may be conditioned upon an increase in the percentage set forth
in clause (A)(i) of the definition of "Required Reserve" or upon satisfaction of
the Rating Agency Condition) be determined as follows for Obligors who have
short term unsecured debt ratings currently assigned to them by S&P and Moody's,
the applicable concentration limit shall be determined according to the
following table; provided, however, that if such Obligor has a split rating, the
applicable rating will be the lower of the two:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------
                                                  Allowable % of Eligible
     S&P Rating              Moody's Rating             Receivables
-------------------------------------------------------------------------
<S>                                <C>                      <C>
         A-1+                      P-1                      10%
-------------------------------------------------------------------------
          A-1                      P-1                       8%
-------------------------------------------------------------------------
          A-2                      P-2                       6%
-------------------------------------------------------------------------
          A-3                      P-3                       3%
-------------------------------------------------------------------------
Below A-3 or Not Rated   Below P-3 or Not Rated              2%
-------------------------------------------------------------------------
</TABLE>

and provided, further, that (a) unless and until any of the Agents gives the
Borrower 5 Business Days' notice to the contrary, the Obligor Concentration
Limit for United HealthGroup Incorporation and its Affiliated Obligors shall be
9% of Eligible Receivables and (b) if the change in a particular Obligor's
Obligor Concentration Limit is accomplished by an increase in clause (A)(i) of
the definition of Required Reserve, S&P, Moody's and, as long as it is rating
Atlantic's Commercial Paper Notes, Fitch, will receive notice of the increase
and the resulting increase in clause (A)(i) of the Required Reserve.

          "Organic Document" means, relative to any Person, its certificate of
incorporation, its by-laws, its partnership agreement, its memorandum and
articles of association, its limited liability company agreement and/or
operating agreement, share designations or similar organization documents and
all shareholder agreements, voting trusts and similar arrangements applicable to
any of its authorized Equity Interests.

          "Originator" means Quest Diagnostics or any its direct or indirect
wholly-owned Subsidiaries who is or becomes a "seller" under the Sale Agreement.

          "Payment Intangible" shall have the meaning specified in Article 9 of
the UCC.


                                       84





<PAGE>

          "PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.

          "Pension Plan" means an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code or Section 302 of ERISA
and is maintained or contributed to by any ERISA Entity or with respect to which
any Loan Party could incur liability.

          "Percentage" means, for each Group on any date of determination, the
ratio which the sum the outstanding principal balance of such Group's Loans
bears to the aggregate outstanding principal balance of all Advances.

          "Permitted Investments" means, on any date, any one or more of the
following types of investments provided that they mature on or prior to the next
Settlement Date:

          (a) marketable obligations of the United States of America, the full
     and timely payment of which are backed by the full faith and credit of the
     United States of America and which have a maturity of not more than 270
     days from the date of acquisition;

          (b) marketable obligations, the full and timely payment of which are
     directly and fully guaranteed by the full faith and credit of the United
     States of America and which have a maturity of not more than 270 days from
     the date of acquisition;

          (c) bankers' acceptances and certificates of deposit and other
     interest-bearing obligations (in each case having a maturity of not more
     than 270 days from the date of acquisition) denominated in dollars and
     issued by any bank with capital, surplus and undivided profits aggregating
     at least $50,000,000, the short-term obligations of which are rated at
     least A-1 by S&P and P-1 by Moody's;

          (d) repurchase obligations with a term of not more than ten days for
     underlying securities of the types described in clauses (a), (b) and (c)
     above entered into with any bank of the type described in clause (c) above;

          (e) commercial paper rated at least A-1 by S&P and P-1 by Moody's;
     and,

          (f) demand deposits, time deposits or certificates of deposit (having
     original maturities of no more than 365 days) of depository institutions or
     trust companies incorporated under the laws of the United States of America
     or any state thereof (or domestic branches of any foreign bank) and subject
     to supervision and examination by federal or state banking or depository
     institution authorities; provided, however, that at the time such
     investment, or the commitment to make such investment, is entered into, the
     short-term debt rating of such depository institution or trust company
     shall be at least A-1 by S&P and P-1 by Moody's.

          "Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.


                                       85





<PAGE>

          "PHI" has the meaning set forth in Section 14.14.

          "Pooled Commercial Paper" means Commercial Paper Notes of Blue Ridge
subject to any particular pooling arrangement by Blue Ridge but excluding
Commercial Paper Notes issued by Blue Ridge for a tenor and in an amount
specifically requested by any Person in connection with any agreement effected
by such Conduit.

          "Prepayment Notice" has the meaning set forth in Section 1.5(a).

          "Proceedings" means, collectively, lawsuits, arbitrations, mediations
and Congressional or regulatory hearings.

          "Prime Rate" means the rate of interest per annum publicly announced
from time to time by Wachovia as its "prime rate." (The "prime rate" is a rate
set by Wachovia based upon various factors including Wachovia's costs and
desired return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate.) Any change in the prime rate announced by Wachovia shall
take effect at the opening of business on the day specified in the public
announcement of such change.

          "Principal Amount" means the actual net cash proceeds received by a
Conduit upon issuance by it of a Commercial Paper Note.

          "Privacy Regulations" has the meaning set forth in Section 14.14.

          "Program Information" has the meaning set forth in Section 14.8.

          "Property" of a Person means any right, title or interest in or to
property or assets of any kind whatsoever, whether real, personal or mixed and
whether tangible or intangible and including Equity Interests or other ownership
interests of any Person.

          "QBS" means the Quest Billing System.

          "Qualifying Liquidity Bank" means a commercial bank having a combined
capital and surplus of at least $250,000,000 with a rating of its (or its parent
holding company's) short-term securities equal to or higher than (i) A-1 by S&P,
(ii) P-1 by Moody' and (if applicable) (iii) F1 by Fitch.

          "Quest Diagnostics" has the meaning set forth in the preamble of this
Agreement.

          "Ratable Share" means with respect to any Liquidity Bank, the ratio
which its Commitment bears to the Aggregate Commitment.

          "Rating Agency Condition" means that each of the Conduits has received
written notice from S&P, Moody's and, at any time while Fitch is rating such
Conduit's Commercial Paper Notes, Fitch, that an amendment, a change or a waiver
will not result in a withdrawal or downgrade of the then current ratings on such
Conduit's Commercial Paper Notes.


                                       86





<PAGE>

          "Receivable" means any Account or Payment Intangible arising from the
sale of Clinical Laboratory Services by an Originator, including, without
limitation, the right to payment of any interest or finance charges and other
amounts with respect thereto, which is sold or contributed to the Borrower under
the Sale Agreement; provided, however, that the term "Receivable" shall not
include (a) any Excluded JV Receivable, or (b) any Government Receivable except
a Specified Government Receivable. Rights to payment arising from any one
transaction, including, without limitation, rights to payment represented by an
individual invoice, shall constitute a Receivable separate from a Receivable
consisting of the rights to payment arising from any other transaction.

          "Records" means, collectively, all Invoices and all other documents,
books, records and other information (including, without limitation, computer
programs, tapes, disks, punch cards, data processing software and related
property and rights) evidencing, governing the payment terms or payment status
of, or identifying the Obligor on, any Receivable or Related Asset, other than
(i) any Contract related thereto, and (ii) any confidential patient information
including, without limitation, test results.

          "Recovery Rate" means at any time 50%.

          "Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to reserve requirements applicable to member banks of the Federal
Reserve System.

          "Regulation T, U or X" means Regulation T, U or X of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor or other regulation or official interpretation of said Board of
Governors relating to the extension of credit for the purpose of purchasing or
carrying margin stocks.

          "Regulatory Change" means any change after the date of this Agreement
in United States (federal, state or municipal) or foreign laws, regulations
(including Regulation D) or accounting principles or the adoption or making
after such date of any interpretations, directives or requests applying to a
class of banks (including the Liquidity Banks) of or under any United States
(federal, state or municipal) or foreign laws, regulations (whether or not
having the force of law) or accounting principles by any court, governmental or
monetary authority, or accounting board or authority (whether or not part of
government) charged with the establishment, interpretation or administration
thereof. For the avoidance of doubt, any interpretation of Accounting Research
Bulletin No. 51 by the Financial Accounting Standards Board shall constitute a
Regulatory Change.

          "Related Assets" means all of the Borrower's right, title and interest
in and to the following: (a) the Related Security, (b) the Sale Agreement, (c)
the Collateral Account (if any) and the balances and instruments from time to
time therein, (d) the Lockboxes and Collection Accounts and all balances and
instruments from time to time therein, (e) payments due in respect of the Demand
Advances, and (f) all proceeds and insurance proceeds of any of the foregoing.


                                       87





<PAGE>

          "Related Security" means, with respect to each Receivable, all right,
title and interest in and to the following:

          (a) (i) all Collections; (ii) all Records; (iii) all Collection
Accounts and all cash, balances and instruments therein from time to time
therein; (iv) the goods (including returned or repossessed goods), if any, the
sale of which by a Seller gave rise to such Receivable; (v) all supporting
obligations; and (vi) all liens and security interests, if any, securing payment
of such Receivable, whether pursuant to the Contract related to such Receivable
or otherwise; and

          (b) all proceeds and insurance proceeds of the foregoing.

          "Reportable Event" means any of the events set forth in Section
4043(c) of ERISA or the regulations thereunder, other than any such event for
which the 30-day notice requirement under ERISA has been waived in regulations
issued by the PBGC.

          "Reporting Date" means a Weekly Reporting Date or a Monthly Reporting
Date.

          "Required Amounts" has the meaning set forth in Section 3.2.

          "Required Day" means, with respect to any event, the Business Day
preceding such event by the Required Notice Period.

          "Required Notice Period" means the number of days required notice set
forth below applicable to the aggregate principal reduction indicated below:

<TABLE>
<CAPTION>
        AGGREGATE REDUCTION           REQUIRED NOTICE PERIOD
-----------------------------------   ----------------------
<S>                                      <C>
 < 25% of the Aggregate Commitment        2 Business Days

25%-50% of the Aggregate Commitment       5 Business Days

   > 50% of Aggregate Commitment         10 Business Days
</TABLE>

          "Requirement of Law" means as to any Person, the Organic Documents of
such Person, and any Law or determination of an arbitrator or any Governmental
Authority, in each case applicable to or binding upon such Person or any of its
Property or to which such Person or any of its Property is subject.

          "Required Reserve" means, on any day during a month, an amount equal
to the product of (i) the greater of (a) the Required Reserve Factor Floor and
(b) the sum of the Loss Reserve, the Yield Reserve, the Dilution Reserve, the Ad
Hoc Reserve and the Servicing Reserve, times (ii) the Net Pool Balance as of the
Cut-Off Date immediately preceding such month.


                                       88





<PAGE>

          "Required Reserve Factor Floor" means, for any month, the sum
(expressed as a percentage) of (i) 11% plus (ii) the product of the Adjusted
Dilution Ratio and the Dilution Horizon Ratio, in each case, as of the
immediately preceding Cut-Off Date.

          "Response Date" has the meaning set forth in Section 1.8.

          "Review" has the meaning set forth in Section 7.1(c).

          "Revolving Period" means, as to each Group, the period from and after
the date of this Agreement to but excluding the earlier to occur of (a) the
Termination Date, and (b) the last Scheduled Termination Date of any Liquidity
Bank in such Group.

          "Rollforward Difference" means, at any time, an amount equal to
absolute value of the reported aggregate Unpaid Net Balance of all Receivables
minus the calculated Unpaid Net Balance of all Receivables.

          "S&P" means Standard and Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc.

          "Sale Agreement" means the Second Amended and Restated Receivables
Sale Agreement dated as of April 20, 2004 between each of the Originators, as a
seller and/or contributor, and the Borrower, as purchaser and contributee, as it
may be amended, supplemented or otherwise modified in accordance with Section
7.3(f).

          "Schedule" refers to a specific schedule to this Agreement, unless
another document is specifically referenced.

          "Scheduled Termination Date" means, as to each Liquidity Bank, the
earlier to occur of April 20, 2007 and the date on which its Liquidity
Commitment(s) terminate(s) in accordance with the Liquidity Agreement to which
it is a party, in either of the foregoing cases, unless extended by agreement of
such Liquidity Bank in accordance with Section 1.8.

          "SEC" means the Securities and Exchange Commission.

          "Section" means a numbered section of this Agreement, unless another
document is specifically referenced.

          "Secured Parties" means the Indemnified Parties.

          "Security Regulations" has the meaning set forth in Section 14.14.

          "Servicer" has the meaning set forth in the preamble of this
Agreement.

          "Servicer Transfer Event" means the occurrence of any Event of
Default.

          "Servicer's Fee" accrued for any day in a Settlement Period means:

          (a) an amount equal to (x) 5.0% per annum (or, at any time while Quest
     Diagnostics is the Servicer, such lesser percentage as may be agreed
     between the


                                       89





<PAGE>

     Borrower and the Servicer on an arms' length basis based on then prevailing
     market terms for similar services), times (y) the reported aggregate Unpaid
     Net Balance of the Receivables at the close of business on the first day of
     such Settlement Period, times (z) 1/360; or

          (b) on and after the Servicer's reasonable request made at any time
     when Quest Diagnostics shall no longer be the Servicer, an alternative
     amount specified by the Servicer not exceeding (x) 110% of the Servicer's
     costs and expenses of performing its obligations under the Agreement during
     the Settlement Period when such day occurs, divided by (y) the number of
     days in such Settlement Period.

          "Servicing Reserve" means the product of 3.0% and a fraction, the
numerator of which is the highest Days Sales Outstanding calculated for each of
the most recent 12 calendar months and the denominator of which is 360.

          "Settlement Date" means (a) the second Business Day after each Monthly
Reporting Date, (b) such other Business Days as the Co-Agents may specify by
written notice to the Lenders, the Borrower and the Servicer, and (c) the
Termination Date.

          "Settlement Period" means each period from and including a Cut-Off
Date to the earlier to occur of the next Cut-Off Date or the Final Payout Date.

          "Solvent" and "Solvency" means, for any Person on a particular date,
that on such date (a) the fair value of the Property of such Person is greater
than the total amount of liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair salable value of the assets of
such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that it will,
incur debts and liabilities beyond such Person's ability to pay such debts and
liabilities as they mature and (d) such Person is not engaged in a business or a
transaction, and is not about to engage in a business or a transaction, for
which such Person's Property would constitute an unreasonably small capital.

          "Specified Government Ineligibles" means, on any date of
determination, 15% times Client-Billed Receivables for the Reserve Computation
as of the last day of the calendar month then most recently ended.

          "Specified Government Receivable" means a Government Receivable as to
which the Obligor is a state or local Governmental Authority (other than a
Receivable arising under any state's Medicaid statutes and regulations for
services rendered to eligible beneficiaries thereunder).

          "Subordinated Loan" has the meaning set forth in the Sale Agreement.

          "Subordinated Note" has the meaning set forth in the Sale Agreement.

          "Subsidiary" means, with respect to any Person, any corporation,
partnership or other entity of which at least a majority of the securities or
other ownership interests having by the terms thereof ordinary voting power to
elect a majority of the board of directors or other


                                       90





<PAGE>

persons performing similar functions of such corporation, partnership or other
entity (irrespective of whether or not at the time securities or other ownership
interests of any other class or classes of such corporation, partnership or
other entity shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned or controlled by
such Person and/or one or more Subsidiaries of such Person.

          "Successor Notice" has the meaning set forth in Section 8.1(b).

          "Taxes" means any and all taxes, imposts, duties, charges, fees,
levies or other similar charges or assessments, including income, gross
receipts, excise, real or personal property, sales, withholding, social
security, retirement, unemployment, occupation, use, service, license, net
worth, payroll, franchise, and transfer and recording, imposed by the Internal
Revenue Service or any taxing authority (whether domestic or foreign, including
any federal, state, U.S. possession, county, local or foreign government or any
subdivision or taxing agency thereof), whether computed on a separate,
consolidated, unitary, combined or any other basis, including interest, fines,
penalties or additions to tax attributable to or imposed on or with respect to
any such taxes, charges, fees, levies or other assessments.

          "Termination Date" means the earliest to occur of: (a) the last
Scheduled Termination Date of any Liquidity Bank; (b) the date designated by the
Borrower as the "Termination Date" on not less than fifteen (15) Business Days'
notice to the Co-Agents, provided that on such date the Obligations have been
paid in full; (c) the date specified in Section 10.2(a) or (b) (including,
without limitation, any such specified date following either Co-Agent's failure
to approve a requested waiver hereunder); (d) the 90th day after the Co-Agents
receive a copy of any proposed amendment (but not waiver) to the Credit
Agreement which does not become an Approved Amendment within 30 days after such
date of receipt; and (e) the 90th day after any requested amendment to this
Agreement (as opposed to a requested waiver hereunder) is not approved by each
Co-Agent within 30 days after receipt of such request (unless such proposed
amendment is approved by at least one Co-Agent and the Obligations owing the
dissenting Co-Agent(s)'s Group(s) are paid in full on or within 60 days after
such 30th day).

          "Top 10 Obligor" means any of the following and its Affiliates
considered as if it and its Affiliates were one and the same entity: (1) United
Healthcare, (2) Aetna / US Healthcare / Prudential, (3) Cigna, (4) Independence
Blue Cross / Amerihealth, (5) Private Health Care Systems (PHCS), (6) Beech
Street, (7) Texas BCBS, (8) Anthem Health, (9) Empire BCBS, and (10) BCBS Mass.

          "Transaction Documents" means this Agreement, the Collection Account
Agreements, the Sale Agreement, the Fee Letters, the Subordinated Notes and the
other documents to be executed and delivered in connection herewith or
therewith.

          "UCC" means the Uniform Commercial Code as from time to time in effect
in the applicable jurisdiction or jurisdictions.

          "Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute an Event of Default.


                                       91





<PAGE>

          "Unpaid Net Balance" of any Receivable means at any time (i) the
unpaid amount thereof, but excluding all late payment charges, delinquency
charges and extension or collection fees, minus (ii) Contractual Disallowances.

          "Unused Fee" has the meaning set forth in the Fee Letters.

          "Usage Fee" has the meaning set forth in each of the Fee Letters.

          "Wachovia" has the meaning set forth in the preamble of this
Agreement.

          "Wachovia Roles" has the meaning set forth in Section 11.10(a).

          "Weekly Report" means a report in the form of Exhibit 3.1(b).

          "Weekly Reporting Date" means Monday of any week in which Weekly
Reports are required to be delivered hereunder; provided, however, that if any
such Monday is not a Business Day, then the Weekly Reporting Date shall be the
next succeeding Business Day.

          "Yield Reserve" means, for any month, the product (expressed as a
percentage) of (i) 1.5 times (ii) the Alternate Base Rate as of the immediately
preceding Cut-Off Date times (iii) a fraction the numerator of which is the
highest Days Sales Outstanding for the most recent 12 months and the denominator
of which is 360.

          The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.

          B. Other Terms. All accounting terms not specifically defined herein
shall be construed in accordance with GAAP. All terms used in Article 9 of the
UCC in the State of New York, and not specifically defined herein, are used
herein as defined in such Article 9.

          C. Computation of Time Periods. Unless otherwise stated in this
Agreement, in the computation of a period of time from a specified date to a
later specified date, the word "from" means "from and including" and the words
"to" and "until" each mean "to but excluding".


                                       92

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>4
<FILENAME>ex10-3.txt
<DESCRIPTION>EXHIBIT 10.3
<TEXT>
<PAGE>

                                                                    Exhibit 10.3

================================================================================

             SECOND AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT

                           DATED AS OF APRIL 20, 2004

                                     BETWEEN

        QUEST DIAGNOSTICS INCORPORATED AND EACH OF ITS DIRECT OR INDIRECT
   WHOLLY-OWNED SUBSIDIARIES WHO IS OR HEREAFTER BECOMES A SELLER HEREUNDER,
                                 as the Sellers,

                                       AND

                       QUEST DIAGNOSTICS RECEIVABLES INC.,
                                  as the Buyer

================================================================================





<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                         PAGE
                                                                                         ----
<S>                                                                                        <C>
ARTICLE I - CAPITALIZATION OF THE BUYER AND AMOUNTS AND TERMS OF THE PURCHASES.............5

   SECTION 1.1.  [INTENTIONALLY OMITTED]...................................................5
   SECTION 1.2.  PURCHASES OF RECEIVABLES..................................................5
   SECTION 1.3.  PAYMENT FOR THE PURCHASES.................................................2
   SECTION 1.4.  PURCHASE PRICE CREDIT ADJUSTMENTS.........................................4
   SECTION 1.5.  PAYMENTS AND COMPUTATIONS, ETC............................................5
   SECTION 1.6.  TRANSFER OF RECORDS.......................................................5
   SECTION 1.7.  CHARACTERIZATION; GRANTING CLAUSES........................................5

ARTICLE II - REPRESENTATIONS AND WARRANTIES................................................6

   SECTION 2.1.  REPRESENTATIONS OF THE SELLERS............................................6
      (a) Ownership of such Seller.........................................................6
      (b) Existence; Due Qualification; Permits............................................6
      (c) Action...........................................................................6
      (d) Title to Receivables; Valid Security Interest....................................7
      (e) Absence of Change of Control.....................................................7
      (f) Noncontravention.................................................................7
      (g) No Proceedings...................................................................7
      (h) Taxes............................................................................8
      (i) Government Approvals.............................................................9
      (j) Financial Statements and Absence of Certain Material Adverse Changes.............9
      (k) Nature of Receivables...........................................................10
      (l) Margin Regulations..............................................................10
      (m) Quality of Title................................................................10
      (n) Accurate Reports................................................................10
      (o) Offices.........................................................................11
      (p) Collection Accounts.............................................................11
      (q) Eligible Receivables............................................................11
      (r) Names...........................................................................11
      (s) Credit and Collection Policy....................................................11
      (t) Payments to Sellers.............................................................12
      (u) Investment Company Act; Public Utility Holding Company Act; Other Restrictions..12
      (v) Solvency........................................................................12
      (w) ERISA...........................................................................12
      (x) Bulk Sales Act..................................................................12
      (y) Reliance on Separate Legal Identity.............................................12

ARTICLE III - CONDITIONS OF PURCHASES.....................................................12

   SECTION 3.1.  CONDITIONS PRECEDENT TO INITIAL PURCHASE.................................12
   SECTION 3.2.  CONDITIONS PRECEDENT TO ALL PURCHASES....................................13
   SECTION 3.3.  REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES..........................14

ARTICLE IV - COVENANTS....................................................................14

   SECTION 4.1.  AFFIRMATIVE COVENANTS....................................................14
      (a) Compliance With Laws, Etc.......................................................14
      (b) Preservation of Existence.......................................................14
      (c) Audits..........................................................................14
      (d) Keeping of Records and Books of Account.........................................15
      (e) Performance and Compliance with Receivables and Contracts.......................15
      (f) Location of Records.............................................................15
      (g) Credit and Collection Policies..................................................15
</TABLE>


                                       i





<PAGE>

<TABLE>
<S>                                                                                        <C>
      (h) Separate Corporate Existence of the Buyer.......................................15
      (i) Collections.....................................................................15
      (j) Further Assurances..............................................................16
   SECTION 4.2.  REPORTING REQUIREMENTS...................................................16
      (a) Sales, Liens, Etc...............................................................16
      (b) Extension or Amendment of Receivables...........................................16
      (c) Change in Business or Credit and Collection Policy..............................17
      (d) Change in Payment Instructions to Obligors......................................17
      (e) Deposits to Collection Accounts and Collection Account..........................17
      (f) Changes to Other Documents......................................................17
      (g) Change of Name, State of Organization, or Records Locations.....................17
      (h) Mergers, Consolidations and Acquisitions........................................17
      (i) Disposition of Receivables and Related Assets...................................18
      (j) Receivables Not to be Evidenced by Promissory Notes.............................18
      (k) Accounting for Purchases........................................................18

ARTICLE V - JOINDER OF ADDITIONAL SELLERS.................................................18

   SECTION 5.1.  ADDITION OF NEW SELLERS..................................................18
   SECTION 5.2.  DOCUMENTATION............................................................18

ARTICLE VI - ADDITIONAL RIGHTS AND OBLIGATIONS IN RESPECT OF THE RECEIVABLES..............19

   SECTION 6.1.  RIGHTS OF THE BUYER......................................................19
   SECTION 6.2.  RESPONSIBILITIES OF THE SELLERS..........................................19
      (a) Collection Procedures...........................................................19
      (b) Performance Under Contract......................................................19
      (c) Power of Attorney...............................................................19
   SECTION 6.3.  FURTHER ACTION EVIDENCING PURCHASES......................................19
   SECTION 6.4.  APPLICATION OF COLLECTIONS...............................................20

ARTICLE VII - INDEMNIFICATION.............................................................20

   SECTION 7.1.  INDEMNITIES BY THE SELLERS...............................................20
   SECTION 7.2.  CONTRIBUTION.............................................................22

ARTICLE VIII - MISCELLANEOUS..............................................................23

   SECTION 8.1.  WAIVERS AND AMENDMENTS...................................................23
   SECTION 8.2.  NOTICES, ETC.............................................................23
   SECTION 8.3.  CUMULATIVE REMEDIES......................................................23
   SECTION 8.4.  BINDING EFFECT; ASSIGNABILITY............................................23
   SECTION 8.5.  GOVERNING LAW............................................................24
   SECTION 8.6.  COSTS, EXPENSES AND TAXES................................................24
   SECTION 8.7.  SUBMISSION TO JURISDICTION...............................................24
   SECTION 8.8.  WAIVER OF JURY TRIAL.....................................................24
   SECTION 8.9.  CAPTIONS AND CROSS REFERENCES; INCORPORATION BY REFERENCE................25
   SECTION 8.10. EXECUTION IN COUNTERPARTS................................................25
   SECTION 8.11. ACKNOWLEDGMENT AND AGREEMENT.............................................25
   SECTION 8.12. NO PROCEEDINGS...........................................................25

ANNEX A - DEFINITIONS.....................................................................30

EXHIBIT A - FORM OF PURCHASE REPORT............................ERROR! BOOKMARK NOT DEFINED.

EXHIBIT B - FORM OF SUBORDINATED NOTE..........................ERROR! BOOKMARK NOT DEFINED.

EXHIBIT C - CREDIT AND COLLECTION POLICIES.....................ERROR! BOOKMARK NOT DEFINED.

EXHIBIT D - FORM OF JOINDER AGREEMENT..........................ERROR! BOOKMARK NOT DEFINED.
</TABLE>


                                       ii





<PAGE>

SCHEDULE 2.1(0) - SELLERS' FEDERAL TAXPAYER ID NUMBERS AND STATE ORGANIZATIONAL
ID NUMBERS; PRINCIPAL LABORATORIES AND BILLING CENTERS, AND LOCATION(S) WHERE
RECORDS ARE KEPT....................................ERROR! BOOKMARK NOT DEFINED.


                                      iii





<PAGE>

             SECOND AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT

          THIS SECOND AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT (as
amended, supplemented, restated or otherwise modified from time to time, this
"Agreement"), dated as of April 20, 2004 is entered into by and between:

          (1) Quest Diagnostics Incorporated, a Delaware corporation ("Quest
     Diagnostics"), Quest Diagnostics Incorporated, a Michigan corporation,
     Quest Diagnostics Incorporated, a Maryland corporation, Quest Diagnostics
     Incorporated, a California corporation, Quest Diagnostics LLC, a
     Connecticut limited liability company, Quest Diagnostics LLC, a
     Massachusetts limited liability company, Quest Diagnostics of Pennsylvania
     Inc., a Delaware corporation, MetWest Inc., a Delaware corporation, Quest
     Diagnostics LLC, an Illinois limited liability company, Quest Diagnostics
     Clinical Laboratories, Inc., a Delaware corporation, Unilab Corporation, a
     Delaware corporation ("Unilab"), Quest Diagnostics Nichols Institute, Inc.,
     a Virginia corporation formerly known as Medical Laboratories Corporation,
     Inc. ("Quest-Nichols"), Quest Diagnostics Incorporated, a Nevada
     corporation formerly known as APL Healthcare Group, Inc. ("Quest-Nevada"),
     and each of the other direct or indirect, wholly-owned subsidiaries of
     Quest Diagnostics who hereafter becomes a party hereto by executing a
     joinder agreement in the form of Exhibit D hereto (each, a "Joinder
     Agreement"), as sellers, and

          (2) Quest Diagnostics Receivables Inc., a Delaware corporation, as
     purchaser (the "Buyer"),

and amends and restates in its entirety that certain Amended and Restated
Receivables Sale Agreement dated as of September 30, 2003 by and among the
parties hereto other than Unilab, Quest-Nichols and Quest-Nevada (the "Existing
Agreement"). Unless otherwise indicated, capitalized terms used in this
Agreement are defined in ANNEX A hereto or, if not defined therein, in that
certain Third Amended and Restated Credit and Security Agreement dated as of
April 20, 2004, by and among the Buyer, as borrower, Quest Diagnostics, as
initial servicer, Blue Ridge Asset Funding Corporation, and Atlantic Asset
Securitization Corp., Credit Lyonnais New York Branch, individually and as
Atlantic Agent, and Wachovia Bank, National Association, individually, as Blue
Ridge Agent and as Administrative Agent, as amended, supplemented, restated,
joined or otherwise modified from time to time in accordance with the terms
thereof (the "Credit and Security Agreement").

                              W I T N E S S E T H :

          WHEREAS, Quest Diagnostics owns, directly or indirectly all of the
     issued and outstanding Equity Interests of each of the other Sellers;

          WHEREAS, the Buyer is a limited purpose corporation, all of the issued
     and outstanding Equity Interests of which are owned by Quest Diagnostics;


                                       4





<PAGE>

          WHEREAS, Quest Diagnostics contributed to the Buyer's capital all of
     its Receivables in existence as of the Initial Cut-Off Date, together with
     all Related Assets associated therewith;

          WHEREAS, the Sellers desire to sell Receivables and Related Assets
     owned from time to time by the Sellers to the Buyer, and the Buyer is
     willing, on the terms and subject to the conditions set forth herein, to
     purchase Receivables and Related Assets from the Sellers;

          WHEREAS, the Buyer has pledged the Receivables and Related Assets
     received from the Sellers hereunder to secure Obligations under the Credit
     and Security Agreement, including, without limitation, its obligations to
     repay Loans made thereunder; and

          WHEREAS, at the request of the Buyer and its assigns, Quest
     Diagnostics has agreed to continue to act as Servicer for the Receivables,
     although Quest Diagnostics has informed the Buyer and its assigns that it
     may, subject to their approval and to satisfaction of the Rating Agency
     Condition, if required, transfer that function to an Affiliate;

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

                                    ARTICLE I
       CAPITALIZATION OF THE BUYER AND AMOUNTS AND TERMS OF THE PURCHASES

          Section 1.1. [Intentionally Omitted].

          Section 1.2. Purchases of Receivables.

          (a) Effective on the Applicable Closing Date for each Seller that has
     not already sold or contributed Receivables and Related Assets under the
     Existing Agreement, in consideration for the Purchase Price and upon the
     terms and subject to the conditions set forth herein, each such Seller does
     hereby sell, assign, transfer, set-over and otherwise convey to the Buyer,
     without recourse (except to the extent expressly provided herein), and the
     Buyer does hereby purchase from such Seller, all of such Seller's right,
     title and interest in and to such Seller's Initial Receivables and all
     Related Assets with respect thereto.

          (b) Effective on each Business Day after each Seller's Applicable
     Closing Date and prior to the Sale Termination Date, in consideration for
     the Purchase Price and upon the terms and subject to the conditions set
     forth herein, such Seller does hereby sell, assign, transfer, set-over and
     otherwise convey to the Buyer, without recourse (except to the extent
     expressly provided herein), and the Buyer does hereby purchase from such
     Seller, all of such Seller's right, title and interest in and to such
     Seller's Additional Receivables and all Related Assets with respect
     thereto.


                                       5





<PAGE>

          (a) (c) It is the intention of the parties hereto that each conveyance
     of Receivables made under this Agreement shall constitute an outright "sale
     of accounts" (as such terms are used in Article 9 of the UCC) or other
     absolute transfer, which is absolute and irrevocable and shall provide the
     Buyer with the full benefits of ownership of the Receivables and the
     associated Related Assets. Except for the Purchase Price Credits owed
     pursuant to Section 1.4, each conveyance of Receivables hereunder is made
     without recourse to the applicable Seller; provided, however, that (i) each
     Seller shall be liable to the Buyer for all representations, warranties,
     covenants and indemnities made by such Seller pursuant to the terms of the
     Transaction Documents to which such Seller is a party, and (ii) such
     conveyance does not constitute and is not intended to result in an
     assumption by the Buyer or any assignee thereof of any obligation of such
     Seller or any other Person arising in connection with the Receivables, the
     related Contracts and/or other Related Assets or any other obligations of
     such Seller. In view of the intention of the parties hereto that the
     conveyances of Receivables made hereunder shall constitute outright sales
     of such Receivables rather than loans secured thereby, each Seller agrees
     that it will, on or prior to its Applicable Closing Date, mark its master
     data processing records relating to its Receivables with the following
     legend (or the substantive equivalent thereof):

          "THE RECEIVABLES DESCRIBED HEREIN, TOGETHER WITH CERTAIN RELATED
          ASSETS, ARE THE PROPERTY OF QUEST DIAGNOSTICS RECEIVABLES INC."

     Upon the request of the Buyer or the Administrative Agent, each Seller will
     file such financing or continuation statements, or amendments thereto or
     assignments thereof, and such other instruments or notices, as may be
     necessary or appropriate to perfect and maintain the perfection of the
     Buyer's ownership interest in the Receivables and the Related Assets or as
     the Buyer or the Administrative Agent may reasonably request.

          (d) Nothing herein shall be deemed to preclude Quest Diagnostics from
     contributing to the Buyer's capital, in lieu of selling, Receivables
     originated by Quest Diagnostics together with the Related Assets associated
     therewith, and any such contribution is made with the intention that each
     such contribution, if any, will be made with the same intentions as are set
     forth in Section 1.2(c) above. No Purchase Price shall be payable in
     respect of any contributed Receivable or its associated Related Assets.

          Section 1.3. Payment for the Purchases.

          (a) The Purchase Price for each purchase of Initial Receivables and
Related Assets from any Seller (other than Quest Diagnostics) either has been
paid pursuant to the Existing Agreement or shall be payable in full pursuant to
this Agreement by the Buyer to such Seller on such Seller's Applicable Closing
Date in one or both of the following manners:

          (i) by delivery of immediately available funds, to the extent of the
     Buyer's Available Funds; and


                                       2





<PAGE>

          (ii) solely to the extent such Available Funds are insufficient to pay
     the full amount of Purchase Price then due and owing, by delivery of a
     Subordinated Note made by the Buyer to the applicable Seller (and making a
     notation of a Subordinated Loan thereunder), so long as the aggregate
     principal amount of Subordinated Loans outstanding at any one time under
     such Subordinated Notes does not exceed the lesser of (A) the remaining
     unpaid portion of such Purchase Price, and (B) the maximum Subordinated
     Loan that could be borrowed without rendering the Buyer's net worth less
     than the amount required by Section 7.3(g) of the Credit and Security
     Agreement.

The Purchase Price for each purchase of Additional Receivables and Related
Assets shall be due and owing in full by the Buyer to the applicable Seller on
the date of such purchase (except that the Buyer may, with respect to any such
purchase, offset against such Purchase Price any amounts owed by such Seller to
the Buyer hereunder and which have become due but remain unpaid) and shall be
paid to such Seller in the manner provided in the following paragraphs (b), (c)
and (d).

          (b) With respect to any purchase of Additional Receivables and Related
Assets from any Seller, the Buyer shall pay the Purchase Price therefor on the
next subsequent Settlement Date in accordance with Section 1.3(d) and in one or
more of the following manners:

          (i) by delivery of immediately available funds, to the extent of the
     Buyer's Available Funds; and

          (ii) solely to the extent such Available Funds are insufficient to pay
     the full amount of Purchase Price then due and owing, by delivery of a
     Subordinated Note made by the Buyer to the applicable Seller (or by
     increasing the aggregate outstanding principal amount outstanding
     thereunder), so long as the aggregate principal amount of Subordinated
     Loans outstanding at any one time under such Subordinated Note does not
     exceed the lesser of (A) the remaining unpaid portion of such Purchase
     Price, and (B) the maximum Subordinated Loan that could be borrowed without
     rendering the Buyer's net worth less than the amount required by Section
     7.3(g) of the Credit and Security Agreement.

Subject to the limitations set forth in Section 1.3(a)(ii) and Section
1.3(b)(ii), each of the Sellers irrevocably agrees to advance each Subordinated
Loan requested by the Buyer on or prior to such Seller's Sale Termination Date.
The Subordinated Loans owing to each Seller shall be evidenced by, and shall be
payable in accordance with the terms and provisions, of its Subordinated Note
and shall be payable solely from Available Funds. Each Seller is hereby
authorized by the Buyer to endorse on the schedule attached to its Subordinated
Note an appropriate notation evidencing the date and amount of each Subordinated
Loan thereunder, as well as the date of each payment with respect thereto,
provided that the failure to make such notation shall not affect any obligation
of the Buyer thereunder.

          (c) On each Monthly Reporting Date after its Applicable Closing Date,
each Seller shall (or shall require the Servicer to) deliver to the Buyer and
the Administrative Agent a report in substantially the form of Exhibit A hereto
(each such report being herein called a


                                       3





<PAGE>

"Purchase Report") with respect to the Receivables sold by such Seller to the
Buyer during the Settlement Period then most recently ended. Each such Purchase
Report shall list the applicable Seller separately and shall specify, as
applicable: (i) the Initial Receivables and/or Additional Receivables sold by
such Seller during the Settlement Period then most recently ended, and (ii) the
amount of the Receivables described in the foregoing clause (i) that were
Eligible Receivables on the date they were acquired by the Buyer.

          (d) Although the Purchase Price for each purchase of Additional
Receivables and Related Assets shall be due and payable in full by the Buyer to
the applicable Seller on the date of such purchase, settlement of the Purchase
Price between the Buyer and such Seller shall be effected on Settlement Dates
with respect to all purchases within the same Settlement Period and based on the
information contained in the Purchase Report delivered for such Settlement
Period pursuant to Section 1.3(c). Although cash settlements shall be effected
on Settlement Dates, increases or decreases in the Subordinated Loans shall be
deemed to have occurred and shall be effective as of the last Business Day of
the Settlement Period to which such settlement relates.

          Section 1.4. Purchase Price Credit Adjustments. If as of the last day
of any Settlement Period:

          (a) the outstanding aggregate balance of the Net Receivables
originated by any Seller as reflected in the preceding Purchase Report (net of
any positive adjustments) has been reduced for any of the following reasons:

          (i) as a result of any rejected services, any cash discount or any
     other adjustment by the applicable Seller or any Affiliate thereof
     (regardless of whether the same is treated by such Seller or Affiliate as a
     write-off), or as a result of any surcharge or other governmental or
     regulatory action, or

          (ii) as a result of any setoff or breach of the underlying agreement
     in respect of any claim by the Obligor thereof (whether such claim arises
     out of the same or a related or an unrelated transaction), or

          (iii) on account of the obligation of the applicable Seller or any
     Affiliate thereof to pay to the related Obligor any rebate or refund, or

          (iv) as a result of any Unpaid Net Balance of any Receivable on the
     date of its sale or contribution proving to have been less on such date
     than the amount reflected on the applicable Purchase Report, or

          (b) any of the representations or warranties of the applicable Seller
set forth in Section 2.1(d), (k) or (m) was not true when made with respect to
any Receivable originated by it, or any of the representations or warranties of
the applicable Seller set forth in Section 2.1(m) is no longer true with respect
to any Receivable originated by it,

then, in such event, the Buyer shall be entitled to a credit (each, a "Purchase
Price Credit") against the Purchase Price otherwise payable hereunder equal to
(A) the amount of such reduction, cancellation or overstatement, in the case of
the preceding clauses (a)(i), (a)(ii), (a)(iii) and (a)(iv), and (B) in the full
amount of the Unpaid Net Balance of such Receivable in the case of the preceding
clause (b). If such Purchase Price Credit exceeds the original Unpaid Net


                                       4





<PAGE>

Balance of the Receivables to be sold by the applicable Seller on the date of a
purchase, then the applicable Seller shall pay the remaining amount of such
Purchase Price Credit in cash not later than the next Settlement Date; provided
that if such Seller's Sale Termination Date has not occurred, such Seller shall
be allowed to deduct the remaining amount of such Purchase Price Credit from any
Indebtedness owed to it under its Subordinated Note.

          Section 1.5. Payments and Computations, Etc. All amounts to be paid or
deposited by the Buyer hereunder shall be paid or deposited in accordance with
the terms hereof on the day when due in immediately available funds to the
account of the applicable Seller designated from time to time by such Seller or
as otherwise directed by such Seller. In the event that any payment owed by any
Person hereunder becomes due on a day that is not a Business Day, then such
payment shall be made on the next succeeding Business Day. If any Person fails
to pay any amount hereunder when due, such Person agrees to pay, on demand,
interest on the past due amount at the Default Rate until paid in full;
provided, however, that such interest shall not at any time exceed the maximum
rate permitted by applicable law. All computations of interest payable hereunder
shall be made on the basis of a year of 360 days for the actual number of days
(including the first but excluding the last day) elapsed.

          Section 1.6. Transfer of Records.

          (a) In connection with the purchases of Receivables hereunder, each
Seller hereby sells, transfers, assigns and otherwise conveys to the Buyer all
of such Seller's right and title to and interest in the Records relating to all
Receivables sold hereunder, without the need for any further documentation in
connection with any purchase. In connection with such transfer, each Seller
hereby grants to each of the Buyer, the Administrative Agent and the Servicer an
irrevocable, non-exclusive license to use, without royalty or payment of any
kind, all software used by such Seller to account for its Receivables, to the
extent necessary to administer such Receivables following replacement of Quest
Diagnostics (or any of its Affiliates) as the Servicer, whether such software is
owned by such Seller or is owned by others and used by such Seller under license
agreements with respect thereto, provided that should the consent of any
licensor of such Seller to such grant of the license described herein be
required, such Seller hereby agrees that upon the request of the Buyer, the
Servicer or the Administrative Agent, such Seller will use its reasonable
efforts to obtain the consent of such third-party licensor. The license granted
hereby shall be irrevocable, and shall terminate on the date this Agreement
terminates in accordance with its terms.

          (b) Each Seller (i) shall take such action requested by the Buyer
and/or the Administrative Agent, from time to time hereafter, that may be
necessary or reasonably appropriate to ensure that the Buyer has an enforceable
ownership interest in the Records relating to the Receivables purchased from
such Seller hereunder, and (ii) shall use its reasonable efforts to ensure that
the Buyer and the Servicer each has an enforceable right (whether by license or
sublicense or otherwise) to use all of the computer software used to account for
the Receivables and/or to recreate such Records.

          Section 1.7. Characterization; Granting Clause.

          (a) If, notwithstanding the intention of the parties expressed in
Section 1.2(c), any sale by any of the Sellers to the Buyer of Receivables
hereunder shall be characterized as a secured loan and not a sale, then this
Agreement shall be deemed to constitute a security


                                       5





<PAGE>

agreement under the UCC and other applicable law. For this purpose and without
being in derogation of the parties' intention that each sale of Receivables
hereunder shall constitute a true sale thereof, each of the Sellers hereby
grants to the Buyer a duly perfected security interest in all of such Seller's
right, title and interest in, to and under all of such Seller's Receivables now
existing and hereafter arising, and in all Related Assets with respect thereto,
which security interest shall be prior to all other Liens thereto. After the
occurrence of a Seller's Sale Termination Event, the Buyer and its assigns shall
have as against the applicable Seller, in addition to the rights and remedies
which they may have under this Agreement, all other rights and remedies provided
to a secured creditor after default under the UCC and other applicable law,
which rights and remedies shall be cumulative.

          (b) Each Seller hereby covenants and agrees to do all things necessary
under each of its Contracts to facilitate collection of the Receivables arising
thereunder by the Buyer and its assigns.

                                   ARTICLE II
                         REPRESENTATIONS AND WARRANTIES

          Section 2.1. Representations of the Sellers. In order to induce the
Buyer to enter into this Agreement and to make purchases and accept the
contributions hereunder, each Seller hereby makes the following representations
and warranties, as to itself, as of the date of each sale or contribution by it
hereunder:

          (a) Ownership of such Seller. Quest Diagnostics owns, directly or
indirectly, all the issued and outstanding Equity Interests of each of the other
Sellers, and all of such Equity Interests are fully paid and non-assessable.

          (b) Existence; Due Qualification; Permits. Such Seller: (i) is a
corporation or limited liability company duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization; (ii) has
all requisite corporate or other power and authority, and has all governmental
licenses, authorizations, consents and approvals necessary to own its Property
and carry on its business as now being conducted; (iii) is qualified to do
business and is in good standing in all jurisdictions in which the nature of the
business conducted by it makes such qualification necessary; and (iv) is in
compliance with all Requirements of Law, except, in the case of clauses (i),
(ii), (iii) and (iv) where the failure thereof individually or in the aggregate
could not reasonably be expected to have a Seller Material Adverse Effect. Such
Seller holds all governmental permits, licenses, authorizations, consents and
approvals necessary for such Seller to own, lease, and operate its Properties
and to operate its businesses as now being conducted (collectively, the
"Permits"), except for Permits the failure of which to obtain would not have a
Seller Material Adverse Effect. None of the Permits has been modified in any way
that is reasonably likely to have a Seller Material Adverse Effect. All Permits
are in full force and effect except where the failure to be in full force and
effect would not have a Seller Material Adverse Effect.

          (c) Action. Such Seller has all necessary corporate or other entity
power, authority and legal right to execute, deliver and perform its obligations
under each Transaction Document to which it is a party and to consummate the
transactions herein and therein contemplated; the execution, delivery and
performance by such Seller of each Transaction Document to which it is a party
and the consummation of the transactions herein and therein


                                        6





<PAGE>

contemplated have been duly authorized by all necessary corporate or other
entity action on its part; and this Agreement has been duly and validly executed
and delivered by such Seller and constitutes, and each of the other Transaction
Documents to which it is a party when executed and delivered by such Seller will
constitute, its legal, valid and binding obligation, enforceable against such
Seller in accordance with its terms, except as such enforceability may be
limited by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws of general applicability from time to time in effect
affecting the enforcement of creditors' rights and remedies and (ii) the
application of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

          (d) Title to Receivables; Valid Security Interest. Each such
Receivable originated by such Seller has been transferred to the Buyer free and
clear of any Lien except as created hereby or by the other Transaction
Documents. Without limiting the foregoing, such Seller has delivered to the
Administrative Agent (as the Buyer's assignee) in form suitable for filing all
financing statements or other similar instruments or documents necessary under
the UCC of all appropriate jurisdictions to perfect the Buyer's ownership
interest in such Receivable and the Administrative Agent's collateral assignment
thereof. This Agreement creates a valid security interest in each such
Receivable and its Related Assets in favor of the Buyer, and, upon filing of the
financing statements described in the preceding sentence, together with UCC
termination statements delivered hereunder, such security interest will be a
first priority perfected security interest.

          (e) Absence of Change of Control. No Change of Control has occurred.

          (f) Noncontravention.

          (i) None of the execution, delivery and performance by such Seller of
any Transaction Document to which it is a party nor the consummation of the
transactions herein and therein contemplated will (A) conflict with or result in
a breach of, or require any consent (which has not been obtained and is in full
force and effect) under, any Organic Document of such Seller or any applicable
Requirement of Law or any order, writ, injunction or decree of any Governmental
Authority binding on such Seller, or any term or provision of any Contractual
Obligation of such Seller or (B) constitute (with due notice or lapse of time or
both) a default under any such Contractual Obligation, or (C) result in the
creation or imposition of any Lien (except for the Liens created pursuant to the
Transaction Documents) upon any Property of such Seller pursuant to the terms of
any such Contractual Obligation, except with respect to each of the foregoing
which could not reasonably be expected to have a Seller Material Adverse Effect
and which would not subject the Buyer or its assigns to any material risk of
damages or liability to third parties.

          (ii) Such Seller is not in default under any material contract or
agreement to which it is a party or by which it is bound, nor, to such Seller's
knowledge, does any condition exist that, with notice or lapse of time or both,
would constitute such default, excluding in any case such defaults that are not
reasonably likely to have a Seller Material Adverse Effect.

          (g) No Proceedings. Except as described in Quest Diagnostics' Form
10-K for the fiscal year ended December 31, 2003 and all filings made with the
SEC under the Exchange Act by such Seller prior to the date of this Agreement,
copies of which have been provided to the Buyer and the Administrative Agent or
made available on EDGAR:


                                        7





<PAGE>

          (i) There is no Proceeding (other than any qui tam Proceeding, to
     which this Section is limited to the best of such Seller's knowledge)
     pending against, or, to the knowledge of such Seller, threatened in writing
     against or affecting, such Seller or any of its Properties before any
     Governmental Authority that, if determined or resolved adversely to such
     Seller, could reasonably be expected to have a Seller Material Adverse
     Effect.

          (ii) There is (A) no unfair labor practice complaint pending against
     any Seller or, to the best knowledge of such Seller, threatened against
     such Seller, before the National Labor Relations Board or any other
     Governmental Authority, and no grievance or arbitration proceeding arising
     out of or under any collective bargaining agreement is so pending against
     such Seller or, to the best knowledge of such Seller after due inquiry,
     threatened against such Seller, (B) no strike, labor dispute, slowdown or
     stoppage pending against such Seller or, to the best knowledge of such
     Seller, after due inquiry, threatened against such Seller and (C) to the
     best knowledge of such Seller after due inquiry, no union representation
     question existing with respect to the employees of such Seller and, to the
     best knowledge of such Seller, no union organizing activities are taking
     place, except such as would not, with respect to any matter specified in
     clause (A), (B) or (C) above, individually or in the aggregate, have a
     Seller Material Adverse Effect.

          (h) Taxes.

          (i) Except as would not have a Seller Material Adverse Effect: (A) all
     tax returns, statements, reports and forms (including estimated Tax or
     information returns) (collectively, the "Tax Returns") required to be filed
     with any taxing authority by, or with respect to, such Seller have been
     timely filed in accordance with all applicable laws; (B) such Seller has
     timely paid or made adequate provision for payment of all Taxes shown as
     due and payable on Tax Returns that have been so filed, and, as of the time
     of filing, each Tax Return was accurate and complete and correctly
     reflected the facts regarding income, business, assets, operations,
     activities and the status of such Seller (other than Taxes which are being
     contested in good faith and for which adequate reserves are reflected on
     the financial statements delivered hereunder); and (C) such Seller has made
     adequate provision for all Taxes payable by such Seller for which no Tax
     Return has yet been filed.

          (ii) Except as described in Quest Diagnostics' Form 10-K for the
     fiscal year ended December 31, 2003 and all filings made with the SEC under
     the Exchange Act by such Seller prior to the date of this Agreement, copies
     of which have been provided to the Buyer and the Administrative Agent: (A)
     as of the date hereof such Seller is not a member of an affiliated group of
     corporations within the meaning of Section 1504 of the Code other than an
     affiliated group of corporations of which Quest Diagnostics is the common
     parent; and (B) there are no material tax sharing or tax indemnification
     agreements under which such Seller is required to indemnify another party
     for a material amount of Taxes other than, in the case of Quest
     Diagnostics, the tax indemnity contained in the Merger


                                        8





<PAGE>

     Agreement dated as of August 16, 1999, between Glaxo Smith Kline (formerly
     known as Smith Kline Beecham) and Quest Diagnostics.

          (i) Government Approvals. No authorizations, approvals or consents of,
and no filings or registrations with, any Governmental Authority or any
securities exchange are necessary for the execution, delivery or performance by
such Seller of the Transaction Documents to which it is a party or for the
legality, validity or enforceability hereof or thereof or for the consummation
of the transactions herein and therein contemplated, except for filings and
recordings in respect of the Liens created pursuant to the Transaction Documents
(all of which have been duly made or delivered to the Administrative Agent for
filing or may be prepared for filing by the Buyer or the Administrative Agent in
accordance with the terms of the Transaction Documents) and except for consents,
authorizations and filings that have been obtained or made and are in full force
and effect or the failure of which to obtain would not have a Seller Material
Adverse Effect.

          (j) Financial Statements and Absence of Certain Material Adverse
Changes.

          (i) The information, reports, financial statements, exhibits and
     schedules furnished in writing by such Seller to the Administrative Agent
     or any of the Lenders in connection with the negotiation, preparation or
     delivery of the Transaction Documents, including Quest Diagnostics' Annual
     Report on Form 10-K for the year ended December 31, 2003 and all filings
     made with the SEC under the Exchange Act by such Seller prior to the date
     of this Agreement, copies of which have been provided to the Buyer and the
     Administrative Agent or made available on EDGAR, but in each case excluding
     all projections, whether prior to or after the date of this Agreement, when
     taken as a whole, do not, as of the date such information was furnished,
     contain any untrue statement of material fact or omit to state a material
     fact necessary in order to make the statements herein or therein, in light
     of the circumstances under which they were made, not materially misleading.
     The projections and pro forma financial information furnished at any time
     by such Seller to the Buyer, the Administrative Agent or any Lender
     pursuant to the Transaction Documents have been prepared in good faith
     based on assumptions believed by such Seller and/or Quest Diagnostics to be
     reasonable at the time made, it being recognized that such financial
     information as it relates to future events is not to be viewed as fact and
     that actual results during the period or periods covered by such financial
     information may differ from the projected results set forth therein by a
     material amount and no Seller, however, makes any representation as to the
     ability of any Seller to achieve the results set forth in any such
     projections. Each Seller understands that all such statements,
     representations and warranties shall be deemed to have been relied upon by
     the Buyer as a material inducement to entering into this Agreement and
     making any Purchase hereunder and by the Agents and the Lenders as a
     material inducement to make each extension of credit under the Credit and
     Security Agreement.

          (ii) From December 31, 2003 through and including the date of this
     Agreement, there has been no material adverse change in Quest Diagnostics'
     consolidated financial condition, business or operations. Since the date of
     this


                                        9





<PAGE>

     Agreement, there has been no material adverse change in Quest Diagnostics'
     consolidated financial condition, business or operations that has had, or
     would reasonably be expected to have, a material adverse effect upon its
     ability to perform its obligations, as a Seller or, if applicable, as
     Servicer, under the Transaction Documents when and as required, or a
     material adverse effect on the collectibility of any material portion of
     the Receivables.

          (iii) Since such Seller's Applicable Closing Date, no event has
     occurred which would have a Seller Material Adverse Effect.

          (k) Nature of Receivables. Each Receivable constitutes an "Account" or
a "Payment Intangible."

          (l) Margin Regulations. The use of all funds obtained by such Seller
under this Agreement or any other Transaction Document to which it is a party
will not conflict with or contravene any of Regulation T, U or X.

          (m) Title to Receivables and Quality of Title.

          (i) Upon issuance of its shares of capital stock to Quest Diagnostics
     (in the case of contributed Initial Receivables and any Receivables that
     Quest Diagnostics, in its sole discretion, may elect to contribute
     thereafter) and payment of the applicable Purchase Price for each purchased
     Receivable in one or both of the manners permitted by this Agreement, the
     Buyer will have irrevocably obtained all good title to such Receivable and
     its Related Assets (other than any Related Asset constituting a Contract
     that contains a prohibition on assignment, in which case the Buyer has
     obtained a valid and perfected first priority perfected security interest
     in the applicable Seller's right to receive payments thereunder to the
     extent contemplated by Section 9-406 of the UCC of the applicable
     jurisdiction), and the Buyer has the legal right to sell and encumber, each
     such Receivable and its Related Assets. Without limiting the foregoing,
     there have been duly filed all financing statements or other similar
     instruments or documents necessary under the UCC of all appropriate
     jurisdictions to perfect the Buyer's ownership interest in such Receivable.

          (ii) No financing statement or other instrument similar in effect
     covering any portion of the Collateral is on file in any recording office
     except such as may be filed (A) in favor of a Seller in accordance with the
     Contracts, (B) in favor of the Buyer and its assigns in connection with
     this Agreement, (C) in favor of the Administrative Agent in accordance with
     the Credit and Security Agreement, (D) in connection with any Lien arising
     solely as the result of any action taken by the Administrative Agent or one
     of the Secured Parties, or (E) which shall be terminated or amended
     pursuant to the UCC termination statements or amendments delivered
     hereunder.

          (n) Accurate Reports. No Purchase Report prepared by such Seller, or
to the extent information therein was supplied by such Seller, no other
information, exhibit, schedule or information concerning the Receivables
originated by such Seller furnished or to be furnished


                                       10





<PAGE>

verbally or in writing before or after the date of this Agreement, by or on
behalf of such Seller to the Buyer or any of its assigns pursuant to this
Agreement was or will be inaccurate in any material respect as of the date it
was or will be dated or (except as otherwise disclosed to the Buyer and the
Administrative Agent at such time) as of the date so furnished, or contained or
(in the case of information or other materials to be furnished in the future)
will contain any material misstatement of fact or omitted or (in the case of
information or other materials to be furnished in the future) will omit to state
a material fact or any fact necessary to make the statements contained therein
not materially misleading in light of the circumstances made or presented.

          (o) Offices. The principal laboratories and billing centers of such
Seller are located at the respective addresses set forth on Schedule 2.1(o)
hereto or its Joinder Agreement, as applicable, and the offices where such
Seller keep all books, records and documents evidencing the Receivables
originated by it (other than books, records and documents that are stored
off-site with respect to Receivables which are no longer outstanding or which
have been written-off), the related material Contracts and all purchase orders
and other agreements related to such Receivables are located at the addresses
specified in Schedule 2.1(o) hereto or its Joinder Agreement (or at such other
locations, notified to the Buyer in accordance with Section 4.3(g), in
jurisdictions where all action required by Section 4.3(g) has been taken and
completed).

          (p) Collection Accounts. Such Seller has instructed all Obligors
thereon to pay all Collections either directly by mail addressed to a Lockbox
listed on Schedule 6.1(o) to the Credit and Security Agreement which is subject
to a Collection Account Agreement, or by wire transfer or other electronic funds
transfer directly to a Collection Account listed on Schedule 6.1(o) to the
Credit and Security Agreement which is subject to a Collection Account
Agreement. Such Seller has instructed each bank maintaining a Lockbox or
Collection Account to sweep all collected funds received therein each Business
Day to a Collection Account in the name of the Buyer which is subject to a
Collection Account Agreement. The Buyer will cause each of the Collection
Accounts that is currently in the name of a Seller to be transferred to it and
into its own name within a reasonable period of time after the initial Advance
under the Credit and Security Agreement, and each Seller agrees to cooperate
fully with the Buyer in effecting such transfers.

          (q) Eligible Receivables. Each Receivable originated by such Seller
that is included as an Eligible Receivable on any Purchase Report was an
Eligible Receivable on the date on which it was sold or contributed to the Buyer
pursuant hereto.

          (r) Names. Except as set forth on Schedule 2.1(o), in the five years
preceding such Seller's Applicable Closing Date, such Seller has not used any
legal names, trade names or assumed names other than the name in which it has
executed this Agreement.

          (s) Credit and Collection Policy. With respect to the Receivables
originated by such Seller, such Seller has complied in all material respects
with its applicable Credit and Collection Policy, and no change has been made to
such Credit and Collection Policy since the date of this Agreement which would
be reasonably likely to materially and adversely affect the collectibility of
the Receivables originated by such Seller or decrease the credit quality of any
newly created Receivables originated by such Seller except for such changes as
to which the Administrative Agent has received the notice required under Section
7.2(h) of the Credit and Security Agreement and has given its prior written
consent thereto (which consent shall not be unreasonably withheld or delayed).


                                       11





<PAGE>

          (t) Payments to Sellers. With respect to each Receivable sold or
contributed to the Buyer by such Seller under this Agreement, the Buyer has
given reasonably equivalent value to such Seller in consideration for such
Receivable and the Related Assets with respect thereto and no such transfer is
or may be voidable under any section of the Bankruptcy Reform Act of 1978 (11
U.S.C. 'SS''SS' 101 et seq.), as amended.

          (u) Investment Company Act; Public Utility Holding Company Act; Other
Restrictions. Such Seller is not an "investment company", or a company
"controlled" by an "investment company", within the meaning of the United States
Investment Company Act of 1940, as amended. Seller is not a "holding company",
or an "affiliate" of a "holding company" or a "subsidiary company" of a "holding
company", within the meaning of the United States Public Utility Holding Company
Act of 1935, as amended. Such Seller is not subject to regulation under any law
or regulation which limits its ability to incur Indebtedness, other than
Regulation X of the Board of Governors of the Federal Reserve System.

          (v) Solvency. As of the date of each sale or contribution by such
Seller hereunder, after giving effect thereto, such Seller is and will be
Solvent.

          (w) ERISA. No ERISA Event has occurred or is reasonably expected to
occur which could have a Seller Material Adverse Effect. The present value of
all accumulated benefit obligations of all underfunded Pension Plans (based on
the assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed by more than $20.0 million the fair market value
of the assets of all such underfunded Pension Plans of the Sellers. Each ERISA
Entity is in compliance in all material respects with the presently applicable
provisions of ERISA and the Code with respect to each Employee Benefit Plan.
Using actuarial assumptions and computation methods consistent with subpart 1 of
subtitle E of Title IV of ERISA, the aggregate liabilities of any of each ERISA
Entity to all Multiemployer Plans in the event of a complete withdrawal
therefrom, as of the close of the most recent fiscal year of each such
Multiemployer Plan, would not result in a Seller Material Adverse Effect. All
Foreign Plans are in substantial compliance with all Requirements of Law (other
than to the extent such failure to comply would not reasonably be expected to
have a Seller Material Adverse Effect).

          (x) Bulk Sales Act. No transaction contemplated hereby requires
compliance with any bulk sales act or similar law.

          (y) Reliance on Separate Legal Identity. Such Seller is aware that the
Lenders, the Liquidity Banks and the Agents are entering into the Transaction
Documents in reliance upon the Buyer's identity as a legal entity separate from
such Seller and any of its other Affiliates.

                                   ARTICLE III
                             CONDITIONS OF PURCHASES

          Section 3.1. Conditions Precedent to the Initial Purchase under this
Agreement. The initial purchase from each Seller on or after April 20, 2004 is
subject to the conditions precedent that (1) the Buyer shall have executed and
delivered a Subordinated Note in favor of each such Seller, and (2) the Buyer
shall have received, on or before each Seller's Applicable Closing Date, the
following, each (unless otherwise indicated) dated such Seller's Applicable


                                       12





<PAGE>

Closing Date, and each in form, substance and date reasonably satisfactory to
the Buyer and the Administrative Agent:

          (a) A copy of the resolutions of such Seller's board of directors,
     board of managers, general partners or analogous Persons of such Seller
     approving the Transaction Documents to be delivered by it and the
     transactions contemplated hereby and thereby, certified by a Responsible
     Officer of such Seller;

          (b) A good standing certificate for such Seller issued as of a recent
     date by the Secretary of State of the state of its formation;

          (c) A certificate of a Responsible Officer of such Seller certifying
     the names and true signatures of the officers, partners, managers or
     members authorized on such Seller's behalf to sign the Transaction
     Documents to be delivered by it, on which certificate the Buyer and the
     Servicer (if the Servicer is not such Seller) may conclusively rely until
     such time as the Buyer and the Servicer shall receive from such Seller a
     revised certificate meeting the requirements of this subsection (c);

          (d) Recently certified copies of such Seller's Organic Document or a
     certificate of a Responsible Officer that there have been no changes
     therein since the date of the Existing Agreement;

          (e) Copies of the proper financing statements (Form UCC-1 or UCC-3)
     necessary to continue the perfection of the Liens under the Existing
     Agreement and give effect to the amendments embodied in this Agreement;

          (f) Evidence (i) of the execution and delivery by each of the parties
     thereto of each of the other Transaction Documents to be executed and
     delivered in connection herewith and (ii) that each of the conditions
     precedent to the execution, delivery and effectiveness of such other
     Transaction Documents has been satisfied to the Buyer's satisfaction; and

          (g) One or more opinions of such Seller's counsel in form and
     substance reasonably satisfactory to the Agents covering the matters
     referenced in Exhibit 5.1(h) to the Credit and Security Agreement, the
     treatment of the transactions evidenced hereby as true sales and certain
     related bankruptcy matters.

          Section 3.2. Conditions Precedent to All Purchases. Each purchase
shall be subject to the further conditions precedent that:

          (a) Such Seller's Sale Termination Date shall not have occurred;

          (b) The Buyer (or its assigns) shall have received such other
     approvals, opinions or documents as it may reasonably request; and

          (c) On the date of such purchase, each of the representations and
     warranties of such Seller set forth in Article II hereof are true and
     correct on and


                                       13





<PAGE>

     as of the date of such purchase (and after giving effect thereto) as though
     made on and as of such date except to the extent it relates to an earlier
     date.

          Section 3.3. Reaffirmation of Representations and Warranties. Each
Seller, by accepting the Purchase Price related to each purchase of such
Seller's Receivables and Related Assets, shall be deemed to have certified that
the representations and warranties of such Seller contained in Article II are
true and correct as to such Seller on and as of the day of such purchase, with
the same effect as though made on and as of such day except to the extent it
relates to an earlier date.

                                   ARTICLE IV
                                    COVENANTS

          Section 4.1. Affirmative Covenants. From each Seller's Applicable
Closing Date until the later of the Final Payout Date or the cessation of the
purchases of the Buyer hereunder, unless the Buyer and the Agents shall
otherwise consent in writing:

          (a) Compliance With Laws, Etc. Such Seller will comply with all
applicable laws, rules, regulations and orders, including those with respect to
the Receivables and related Contracts and Invoices, except, in each of the
foregoing cases, where the failure to so comply would not individually or in the
aggregate have a Seller Material Adverse Effect.

          (b) Preservation of Existence. Such Seller will preserve and maintain
its existence, rights, franchises and privileges in the jurisdiction of its
organization, and qualify and remain qualified in good standing as a foreign
corporation in each jurisdiction where the failure to preserve and maintain such
existence, rights, franchises, privileges and qualification would have a Seller
Material Adverse Effect.

          (c) Audits. Such Seller will, subject to compliance with applicable
law: (i) at any time and from time to time upon not less than ten (10) Business
Days' notice (unless an Unmatured Default or Event of Default has occurred and
is continuing, in which case, not more than one (1) Business Day's notice shall
be required) during regular business hours, permit the Buyer, the Agents or any
of their agents or representatives: (A) to examine and make copies of and
abstracts from all Records, Contracts and Invoices in the possession or under
the control of such Seller, and (B) to visit the offices and properties of such
Seller for the purpose of examining such Records, Contracts and Invoices and to
discuss matters relating to Receivables or such Seller's performance hereunder
with any of the officers or employees of such Seller having knowledge of such
matters; and (ii) without limiting the provisions of clause (i) above, from time
to time, at the expense of such Seller, permit certified public accountants or
auditors acceptable to the Agents to conduct a review of such Seller's
Contracts, Invoices and Records (each, a "Review"); provided, however, that, so
long as no Event of Default has occurred and is continuing, such Seller shall
only be responsible for the costs and expenses of one (1) such Review under this
Section in any one calendar year unless (1) the first such Review in such
calendar year resulted in negative findings (in which case such Seller shall be
responsible for the costs and expenses of two (2) such Reviews in such calendar
year), or (2) the Buyer delivers an Extension Request under the Credit and
Security Agreement and the applicable Response Date is more than 3 calendar
months after the first Review in such calendar year. Notwithstanding the
foregoing, if (1) such Seller requests the approval of a new Eligible Originator
who is a Material Proposed Addition or (2) any Material Acquisition is
consummated by such Seller, such Seller


                                       14





<PAGE>

shall be responsible for the costs and expenses of one additional Review per
proposed Material Proposed Addition or per Material Acquisition in the calendar
year in which such Material Proposed Addition is expected to occur or such
Material Acquisition is expected to be consummated if such additional Review is
requested by the Buyer or any of the Agents.

          (d) Keeping of Records and Books of Account. Such Seller will maintain
and implement administrative and operating procedures (including, without
limitation, an ability to recreate essential Records evidencing the Receivables
originated by such Seller in the event of the destruction of the originals
thereof), and keep and maintain, all Contracts, Records and other information
necessary or reasonably advisable for the collection of all such Receivables
(including, without limitation, Records adequate to permit the identification as
of any Business Day when required of outstanding Unpaid Net Balances by Obligor
and related debit and credit details of the Receivables).

          (e) Performance and Compliance with Receivables and Contracts. Such
Seller will, at its expense, timely and fully perform and comply with all
provisions, covenants and other promises, if any, required to be observed by it
under the Contracts and/or Invoices related to the Receivables originated by
such Seller and all agreements related to such Receivables except for such
failures to fully perform and comply as would not, individually or in the
aggregate, have a Seller Material Adverse Effect.

          (f) Location of Records. Such Seller will keep its chief place of
business and chief executive office, and the offices where it keeps its Records
and material Contracts (and, to the extent that any of the foregoing constitute
instruments, chattel paper or negotiable documents, all originals thereof), at
the addresses referred to in Schedule 6.1(n) to the Credit and Security
Agreement or to its Joinder Agreement, if applicable, or, upon 15 days' prior
written notice to the Administrative Agent, at such other locations in
jurisdictions where all action required by Section 8.5 of the Credit and
Security Agreement shall have been taken and completed.

          (g) Credit and Collection Policies. Such Seller will comply in all
material respects with its Credit and Collection Policy in regard to the
Receivables originated by it and the related Contracts and Invoices.

          (h) Separate Corporate Existence of the Buyer. Each Seller will take
such actions as shall be required in order to maintain the separate identity of
the Buyer separate and apart from such Seller and its other Affiliates,
including those actions set forth in Section 7.4 of the Credit and Security
Agreement.

          (i) Collections. Such Seller will instruct all Obligors thereon to pay
all Collections either directly by mail addressed to a Lockbox listed on
Schedule 6.1(o) to the Credit and Security Agreement which is subject to a
Collection Account Agreement, or by wire transfer or other electronic funds
transfer directly to a Collection Account listed on Schedule 6.1(o) to the
Credit and Security Agreement which is subject to a Collection Account
Agreement. Such Seller will instruct each bank maintaining a Lockbox or
Collection Account in the name of any Seller to sweep all collected funds
received therein each Business Day to a Collection Account in the name of the
Buyer (or the Administrative Agent or its designee) which is subject to a
Collection Account Agreement. Such Seller will cooperate fully with the Buyer in
transferring each of the Collection Accounts to the Buyer and, to the extent
that such Collection Account is not already


                                       15





<PAGE>

in the Buyer's name, into the Buyer's name within a reasonable period of time
after the initial Advance under the Credit and Security Agreement.

          (j) Further Assurances. Such Seller shall take all necessary action to
establish and maintain in favor of the Buyer, a valid and perfected ownership
interest in the Receivables and Related Assets.

          Section 4.2. Reporting Requirements. From such Seller's Applicable
Closing Date until the later of the Final Payout Date or the cessation of the
purchases of the Buyer hereunder, such Seller will furnish to the Buyer and the
Administrative Agent:

          (a) Proceedings. As soon as possible and in any event within ten
     Business Days after any Authorized Officer of such Seller obtains knowledge
     thereof, notice of (i) any litigation, investigation or proceeding which
     may exist at any time which would reasonably be expected to have a Seller
     Material Adverse Effect and (ii) any development in previously disclosed
     litigation which development would reasonably be expected to have a Seller
     Material Adverse Effect;

          (b) Change in Business or Credit and Collection Policy. Prompt written
     notice of any material change in the character of such Seller's business
     prior to the occurrence of such change, and not less than 15 Business Days'
     prior written notice of any material change in such Seller's Credit and
     Collection Policy (together with a copy of such proposed change); and

          (c) Other. Promptly, from time to time, such other information,
     documents, records or reports respecting the Receivables originated by such
     Seller, the condition, operations, financial or otherwise, of such Seller
     or such Seller's performance hereunder that the Buyer or any of the Agents
     may from time to time reasonably request in order to protect the interests
     of the Buyer and the Administrative Agent, on behalf of the Secured
     Parties, under or as contemplated by the Transaction Documents.

          Section 4.3. Negative Covenants. From such Seller's Applicable Closing
Date until the later of the Final Payout Date or the cessation of the purchases
of the Buyer hereunder, unless the Buyer and the Agents shall otherwise consent
in writing, such Seller shall not:

          (a) Sales, Liens, Etc. (i) Except as otherwise provided herein and in
the other Transaction Documents, sell, assign (by operation of law or otherwise)
or otherwise dispose of, or create or suffer to exist any Lien upon or with
respect to, any Receivables originated by it, or any account to which any
Collections are sent, or any right to receive income or proceeds from or in
respect of any of the foregoing (except, prior to the execution of Collection
Agreements, set-off rights of any bank at which any such account is maintained),
or (ii) assert any interest in the Receivables, except as Servicer (or a
designated sub-servicer for the Servicer).

          (b) Extension or Amendment of Receivables. Extend, amend or otherwise
modify the terms of any Receivable originated by it, or amend, modify or waive
any term or condition of any Contract or Invoice related thereto in any way that
adversely affects the collectibility of the


                                       16





<PAGE>

Receivables originated by such Originator, taken as a whole, or any material
part thereof, or the Buyer's rights therein.

          (c) Change in Business or Credit and Collection Policy. Make or permit
to be made any change in the character of its business or in the Credit and
Collection Policy, which change would, in either case, impair the collectibility
of any significant portion of the Receivables originated by it or otherwise
materially and adversely affect the interests or remedies of the Buyer and its
assigns under this Agreement or any other Transaction Document.

          (d) Change in Payment Instructions to Obligors. Add or terminate any
bank as a Collection Bank from those listed in Schedule 6.1(o) to the Credit and
Security Agreement or, after the Collection Account has been established
pursuant to Section 7.1(i) of the Credit and Security Agreement, make any change
in its instructions to Obligors regarding payments to be made to the Buyer or
the Servicer or payments to be made to any Collection Bank (except for a change
in instructions solely for the purpose of directing Obligors to make such
payments to another existing Collection Bank and where such change is immaterial
and does not adversely affect the interests of the Administrative Agent, on
behalf of the Lenders, in any respect), unless (i) the Administrative Agent
shall have received prior written notice of such addition, termination or change
and (ii) the Administrative Agent shall have received duly executed copies of
Collection Agreements in a form reasonably acceptable to the Administrative
Agent with each new Collection Bank.

          (e) Deposits to Collection Accounts. Deposit or authorize the deposit
to any Collection Account of any cash or cash proceeds other than Collections of
Receivables and of certain of the Excluded JV Receivables.

          (f) Changes to Other Documents. Enter into any amendment or
modification of, or supplement to (i) such Seller's Organic Documents which
could reasonably be expected to be materially adverse to the Buyer, (ii) this
Agreement, or (iii) the Subordinated Notes.

          (g) Change of Name, State of Organization, or Records Locations.
Change its name or state of organization or relocate any office where Records
are kept unless it shall have: (i) given the Administrative Agent at least 15
days' prior notice thereof and (ii) prior to effectiveness of such change,
delivered to the Administrative Agent all financing statements, instruments and
other documents requested by the Administrative Agent in connection with such
change or relocation.

          (h) Mergers, Consolidations and Acquisitions. Liquidate or dissolve,
consolidate with, or merge into or with, any other Person, except for: (i)
mergers and consolidations of a Seller with one or more other Sellers (so long
as in any such transaction involving Quest Diagnostics, Quest Diagnostics is the
survivor), and (ii) other mergers or consolidations that do not constitute
Material Acquisitions, provided that, in each of the foregoing cases:

               (A) the Administrative Agent and the Buyer receive prior written
          notice of such consolidation or merger, and the successor or surviving
          entity (if not a Seller) unconditionally assumes such Seller's (or
          Sellers') respective obligations under the Transaction Documents to
          which it is (or they are) a party immediately prior to giving effect
          to such consolidation or merger,


                                       17





<PAGE>

               (B) all UCC financing statements necessary to maintain the
          validity and perfection of the Buyer's ownership interest in the
          Receivables and Related Assets acquired or to be acquired from such
          Seller or Sellers under this Agreement, and the Administrative Agent's
          security interest therein on behalf of the Secured Parties, have been
          duly filed in all necessary jurisdictions, and

               (C) if the surviving entity in such transaction(s) is not an
          existing Seller under this Agreement, all other documents required to
          be delivered in connection with a Joinder Agreement hereunder have
          been duly executed and delivered substantially contemporaneously with
          such transaction(s).

          (i) Disposition of Receivables and Related Assets. Except pursuant to
this Agreement, sell, lease, transfer, assign or otherwise dispose of (in one
transaction or in a series of transactions) any Receivables and Related Assets.

          (j) Receivables Not to be Evidenced by Promissory Notes. Take any
action to cause or permit any Receivable generated by it to become evidenced by
any "instrument" (as defined in the applicable UCC), except in connection with
the collection of overdue Receivables, provided that the original of any such
instrument is delivered to the Buyer for immediate delivery to the
Administrative Agent, duly endorsed.

          (k) Accounting for Purchases. Account for the transactions
contemplated hereby in any manner other than as a sale or contribution of
Receivables and the Related Assets by such Seller to the Buyer.

                                    ARTICLE V
                          JOINDER OF ADDITIONAL SELLERS

          Section 5.1. Addition of New Sellers. From time to time upon not less
than 60 days' prior written notice to the Buyer and the Administrative Agent (or
such shorter period of time as the Agents may agree upon), Quest Diagnostics may
propose that one or more of its existing or hereafter acquired wholly-owned
Subsidiaries become a Seller hereunder. No such addition shall become effective
(a) if such addition constitutes a Material Proposed Addition, without the
written consent of the Agents and, if applicable, each of the rating agencies
who is then rating Commercial Paper Notes of any Conduit but may become
effective prior to such 60th day if such written consent is given more promptly
and (b) unless all conditions precedent to such addition required by Section 5.2
below are satisfied prior to such date).

          Section 5.2. Documentation. In the event that the Buyer and the Agents
consent to the addition of a New Seller, such New Seller shall execute a Joinder
Agreement and shall deliver each of the documents, certificates and opinions
required to be delivered under Section 3.1 prior to such New Seller's Closing
Date, together with such updated Schedules and Exhibits hereto as may be
necessary to ensure that after giving effect to the addition of such New Seller,
each of the representations and warranties of such New Seller under Article II
hereof will be true and correct, and the Buyer will deliver a Subordinated Note
to such New Seller.


                                       18





<PAGE>

                                   ARTICLE VI
                      ADDITIONAL RIGHTS AND OBLIGATIONS IN
                           RESPECT OF THE RECEIVABLES

          Section 6.1. Rights of the Buyer. Each Seller hereby authorizes the
Buyer and the Servicer (if other than such Seller) or their respective designees
to take any and all steps in such Seller's name necessary or desirable, in their
respective determination, to collect all amounts due under any and all
Receivables, including, without limitation, endorsing such Seller's name on
checks and other instruments representing Collections and enforcing such
Receivables, the Invoices and the provisions of the related Contracts that
concern payment and/or enforcement of rights to payment.

          Section 6.2. Responsibilities of the Sellers. Anything herein to the
contrary notwithstanding:

          (a) Collection Procedures. Each Seller agrees to direct all Obligors
     to make payments of such Seller's Receivables directly to a Collection
     Account that is the subject of a Lock Box Agreement at a Collection Bank.
     Each Seller further agrees to transfer any Collections (including any
     security deposits applied to the Unpaid Net Balance of any Receivable) that
     it receives on such Receivables directly to the Servicer (if other than
     such Seller) within one (1) Business Day after receipt thereof, and agrees
     that all such Collections shall be deemed to be received in trust for the
     Buyer; provided that, to the extent permitted pursuant to Section 1.3, each
     Seller may retain such Collections as a portion of the Purchase Price then
     payable to it or apply such Collections to the reduction of the outstanding
     balance of its Subordinated Note.

          (b) Performance Under Contract. Each Seller shall remain responsible
     for performing its obligations hereunder and under the Contracts applicable
     to such Seller, and the exercise by the Buyer or its designee of its rights
     hereunder shall not relieve any Seller from such obligations.

          (c) Power of Attorney. Each Seller hereby grants to the Servicer (if
     other than such Seller) an irrevocable power of attorney, with full power
     of substitution, coupled with an interest, to take in the name of such
     Seller all steps necessary or advisable to endorse, negotiate or otherwise
     realize on any writing or other right of any kind held or transmitted by
     such Seller or transmitted or received by the Buyer (whether or not from
     such Seller) in connection with any Receivables generated by such Seller.

          Section 6.3. Further Action Evidencing Purchases. Each Seller agrees
that from time to time, at its expense, it will promptly execute (if required)
and deliver all further instruments and documents, and take all further action
that the Buyer may reasonably request in order to perfect, protect or more fully
evidence the Buyer's ownership of the Receivables generated by such Seller (and
the Related Assets) purchased by the Buyer hereunder, or to enable the Buyer to
exercise or enforce any of its rights hereunder or under any other Transaction
Document. Without limiting the generality of the foregoing, upon the request of
the Buyer, each Seller will:


                                       19





<PAGE>

          (a) file such financing or continuation statements, or amendments
     thereto or assignments thereof, and such other instruments or notices, as
     may be necessary or appropriate; and

          (b) mark the summary master control data processing records with the
     legend set forth in Section 3.1(i).

Each Seller hereby authorizes the Buyer or its designee to file one or more
financing or continuation statements, and amendments thereto and assignment
thereof, relative to all or any of the Receivables (and the Related Assets) now
existing or hereafter sold by such Seller. If such Seller fails to perform any
of its agreements or obligations under this Agreement, the Buyer or its designee
may (but shall not be required to) itself perform, or cause performance of, such
agreement or obligation, and the expenses of the Buyer or its designee incurred
in connection therewith shall be payable by such Seller.

          Section 6.4. Application of Collections. Except as otherwise specified
by such Obligor or required by the underlying Contract or law: any payment by an
Obligor in respect of any indebtedness owed by it to such Seller or to the Buyer
shall be applied first, as a Collection of any Receivable or Receivables then
outstanding of such Obligor in the order of the age of such Receivables,
starting with the oldest of such Receivables (unless another reasonable basis
for allocation of such payments to the Receivables of such Obligor exists), and
second, to any other indebtedness of such Obligor.

                                   ARTICLE VII
                                 INDEMNIFICATION

          Section 7.1. Indemnities by the Sellers. Without limiting any other
rights which any such Person may have hereunder or under applicable law, each of
the Sellers hereby agrees to indemnify the Buyer, its assigns, and each of their
respective Affiliates, and all successors, transferees, participants and assigns
and all officers, directors, shareholders, controlling persons, employees and
agents (each, a "Seller Indemnified Party"), forthwith on demand, from and
against any and all damages, losses, claims, liabilities and related costs and
expenses, including attorneys' fees and disbursements (all of the foregoing
being collectively referred to as "Seller Indemnified Amounts") awarded against
or incurred by any of them arising out of or relating to this Agreement, any of
the other Transaction Documents to which such Seller is a party, and/or the
Receivables and Related Assets, excluding, however, (i) Seller Indemnified
Amounts to the extent determined by a court of competent jurisdiction to have
resulted from bad faith, gross negligence or willful misconduct on the part of
such Seller Indemnified Party, (ii) taxes imposed by the jurisdiction in which
such Seller Indemnified Party's principal executive office is located, on or
measured by the overall net income of such Seller Indemnified Party; and (iii)
recourse (except as otherwise specifically provided in this Agreement) for
Seller Indemnified Amounts to the extent the same includes losses in respect of
Receivables which are uncollectible on account of the insolvency, bankruptcy or
lack of creditworthiness of the related Obligor. Without limiting the foregoing,
each of the Sellers shall indemnify each Seller Indemnified Party for Seller
Indemnified Amounts arising out of or relating to:


                                       20





<PAGE>

          (A) the creation of any Lien on, or transfer by such Seller of any
     interest in, its Receivables and Related Assets other than (1) the sales
     and contributions of Receivables and Related Assets pursuant hereto, and
     (2) the Lien granted by the Buyer pursuant to the Credit and Security
     Agreement;

          (B) any representation or warranty made by such Seller (or any of its
     officers) under or in connection with any Transaction Document or any
     Purchase Report delivered by such Seller pursuant hereto, which shall have
     been false, incorrect or misleading in any respect when made or deemed made
     or delivered, as the case may be;

          (C) the failure by such Seller to comply with any applicable law, rule
     or regulation with respect to any of its Receivables or the related
     Contracts or Invoices, including, without limitation, any state or local
     assignment of claims act or similar legislation prohibiting or imposing
     notice and acknowledgement requirements or other limitations or conditions
     on the assignment of a Specified Government Receivable, or the
     nonconformity of any of such Seller's Receivables or the related Contracts
     or Invoices with any such applicable law, rule or regulation;

          (D) the failure to vest and maintain vested in the Buyer, a valid and
     perfected ownership interest in the Receivables and Related Assets sold or
     contributed by such Seller hereunder, free and clear of any other Lien,
     other than a Lien arising solely as a result of the Buyer, now or at any
     time thereafter;

          (E) the failure to file, or any delay in filing, financing statements
     or other similar instruments or documents under the UCC of any applicable
     jurisdiction or other applicable laws with respect to any Receivables or
     Related Assets originated by such Seller and sold or contributed by such
     Seller hereunder;

          (F) any dispute, claim, offset or defense (other than discharge in
     bankruptcy) of the Obligor to the payment of any Receivable originated by
     such Seller (including, without limitation, a defense based on such
     Receivable or the related Contract or Invoice not being a legal, valid and
     binding obligation of such Obligor enforceable against it in accordance
     with its terms), or any other claim resulting from the sale of the services
     related to such Receivable or the furnishing or failure to furnish such
     services;

          (G) any matter described in Section 1.4;

          (H) any failure of such Seller to perform its duties or obligations in
     accordance with the provisions of this Agreement or the other Transaction
     Documents to which it is a party;

          (I) any claim relating to a breach by such Seller of any related
     Contract or Invoice with respect to any Receivable;


                                       21





<PAGE>

          (J) any sales or use tax payable in connection with the transactions
     giving rise to any Receivable originated by such Seller, and any
     documentary stamp taxes or recording taxes associated with the perfection
     of the Buyer's ownership in the Receivables and Related Assets;

          (K) the commingling by such Seller of Collections of Receivables at
     any time with other funds;

          (L) any investigation, litigation or proceeding related to or arising
     from this Agreement or any other Transaction Document to which such Seller
     is a party, the transactions contemplated hereby or thereby, the use of the
     proceeds of any sale, the Buyer's ownership interest in the Receivables and
     Related Assets originated by such Seller or any other investigation,
     litigation or proceeding relating to such Seller or the Receivables and
     Related Assets originated by it in which any Seller Indemnified Party
     becomes involved as a result of any of the transactions contemplated hereby
     or thereby;

          (M) any products or professional liability, personal injury or damage
     suit, or other similar claim arising out of or in connection with
     merchandise, insurance or services that are the subject of any Contract or
     Invoice or any Receivable originated by such Seller;

          (N) any inability to litigate any claim against any Obligor in respect
     of any Receivable originated by such Seller as a result of such Obligor
     being immune from civil and commercial law and suit on the grounds of
     sovereignty or otherwise from any legal action, suit or proceeding; or

          (O) the occurrence of any Event of Bankruptcy with respect to such
     Seller; or

          (P) failure of any Specified Government Receivables to be recorded in
     the applicable Seller's billing and accounting systems solely as a
     Client-Billed Receivable.

In addition to Quest Diagnostics' obligations under the foregoing indemnity with
respect to itself as a Seller and the Receivables originated by it, Quest
Diagnostics hereby agrees to be jointly and severally liable with each other
Seller for such other Seller's indemnity obligations set forth above.

          Section 7.2. Contribution. If for any reason the indemnification
provided above in Section 7.1 (and subject to the exceptions set forth therein)
is unavailable to a Seller Indemnified Party or is insufficient to hold a Seller
Indemnified Party harmless, then the applicable Seller(s) shall contribute to
the amount paid or payable by such Seller Indemnified Party as a result of such
loss, claim, damage or liability in such proportion as is appropriate to reflect
not only the relative benefits received by such Seller Indemnified Party on the
one hand and the applicable Seller(s) on the other hand but also the relative
fault of such Seller Indemnified Party as well as any other relevant equitable
considerations.


                                       22





<PAGE>

                                  ARTICLE VIII
                                  MISCELLANEOUS

          Section 8.1. Waivers and Amendments. The provisions of this Agreement
may from time to time be amended, restated, otherwise modified or waived, if
such amendment, modification or waiver is in writing and consented to by each
Seller, the Buyer, the Agents and the Servicer (if the Servicer is not a
Seller); provided, however, that material amendments, modifications and waivers
may require the prior written consent of the rating agencies who are then rating
the Commercial Paper Notes of any Conduit. No failure or delay on the part of
the Buyer, the Servicer, any Seller or any third party beneficiary in exercising
any power or right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power or right preclude any other or
further exercise thereof or the exercise of any other power or right. No notice
to or demand on the Buyer, the Servicer or any Seller in any case shall entitle
it to any notice or demand in similar or other circumstances. No waiver or
approval by the Buyer or the Servicer under this Agreement shall, except as may
otherwise be stated in such waiver or approval, be applicable to subsequent
transactions. No waiver or approval under this Agreement shall require any
similar or dissimilar waiver or approval thereafter to be granted hereunder.

          Section 8.2. Notices, Etc. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including facsimile communication) and shall be personally delivered or sent by
express mail or courier or by certified mail, postage-prepaid, or by facsimile,
to the intended party in care of Quest Diagnostics at the address or facsimile
number of Quest Diagnostics set forth on Schedule 14.2 of the Credit and
Security Agreement or, in the case of a New Seller, below its signature on its
Joinder Agreement, or at such other address or facsimile number as shall be
designated by such party in a written notice to the other parties hereto. All
such notices and communications shall be effective, (i) if personally delivered
or sent by express mail or courier or if sent by certified mail, when received,
and (ii) if transmitted by facsimile, when sent, receipt confirmed by telephone
or electronic means.

          Section 8.3. Cumulative Remedies. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.

          Section 8.4. Binding Effect; Assignability. This Agreement shall be
binding upon and inure to the benefit of the Buyer, each Seller and its
respective successors and permitted assigns. Except as permitted in Section
4.3(h), no Seller may assign its rights hereunder or any interest herein without
the prior written consent of the Buyer and the Agents; subject to Section 8.11,
the Buyer may not assign its rights hereunder or any interest herein without the
prior written consent of each of the Sellers and the Agents. This Agreement
shall create and constitute the continuing obligations of the parties hereto in
accordance with its terms, and shall remain in full force and effect as to each
Seller until the date after such Seller's Sale Termination Date on which such
Seller has received payment in full for all Receivables and Related Assets
conveyed by it to the Buyer hereunder and shall have paid and performed all of
its obligations hereunder in full. The rights and remedies with respect to any
breach of any representation and warranty made by any Seller pursuant to Article
II and the indemnification and payment provisions of Article VII and Section 8.6
shall be continuing and shall survive any termination of this Agreement.


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<PAGE>

          Section 8.5. Governing Law. EACH TRANSACTION DOCUMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK,
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF OTHER THAN SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW (EXCEPT IN THE CASE OF THE OTHER
TRANSACTION DOCUMENTS, TO THE EXTENT OTHERWISE EXPRESSLY STATED THEREIN) AND
EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE OWNERSHIP INTERESTS OR SECURITY
INTERESTS OF THE BUYER OR THE ADMINISTRATIVE AGENT, ON BEHALF OF THE SECURED
PARTIES, IN ANY COLLATERAL IS GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN
THE STATE OF NEW YORK.

          Section 8.6. Costs, Expenses and Taxes. In addition to the obligations
of each Seller under Article VII, each of the Sellers agrees to pay on demand:

          (a) all reasonable costs and expenses, including attorneys' fees, in
     connection with the enforcement against such Seller of this Agreement and
     the other Transaction Documents executed by such Seller; and

          (b) all stamp duties and other similar filing or recording taxes and
     fees payable or determined to be payable in connection with the execution,
     delivery, filing and recording of this Agreement or the other Transaction
     Documents, and agrees to indemnify each Seller Indemnified Party against
     any liabilities with respect to or resulting from any delay in paying or
     omission to pay such taxes and fees.

          Section 8.7. Submission to Jurisdiction. EACH PARTY HERETO HEREBY
IRREVOCABLY (a) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE
OR UNITED STATES FEDERAL COURT SITTING IN THE STATE OF NEW YORK, OVER ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO ANY TRANSACTION DOCUMENT; (b) AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH STATE OR UNITED STATES FEDERAL COURT; (c) WAIVES, TO THE
FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING; (d) CONSENTS
TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES OF SUCH PROCESS TO SUCH PERSON AT ITS ADDRESS SPECIFIED IN
SECTION 8.2; AND (e) TO THE EXTENT ALLOWED BY LAW, AGREES THAT A FINAL JUDGMENT
IN ANY SUCH 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. NOTHING IN THIS SECTION 8.7 SHALL AFFECT BUYER'S RIGHT TO SERVE LEGAL
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING ANY ACTION OR
PROCEEDING AGAINST ANY SELLER OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION.

          Section 8.8. Waiver of Jury Trial. EACH PARTY HERETO EXPRESSLY WAIVES
ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND
ANY RIGHTS UNDER THIS AGREEMENT, ANY OTHER


                                       24





<PAGE>

TRANSACTION DOCUMENT, OR UNDER ANY AMENDMENT, INSTRUMENT, JOINDER AGREEMENT OR
DOCUMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED BY IT OR ON ITS
BEHALF IN CONNECTION HEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, AND AGREES
THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY.

          Section 8.9. Captions and Cross References; Incorporation by
Reference. The various captions (including, without limitation, the table of
contents) in this Agreement are included for convenience only and shall not
affect the meaning or interpretation of any provision of this Agreement.
References in this Agreement to any underscored Section or Exhibit are to such
Section or Exhibit of this Agreement, as the case may be. The Exhibits hereto
are hereby incorporated by reference into and made a part of this Agreement.

          Section 8.10. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.

          Section 8.11. Acknowledgment and Agreement. By execution below, each
Seller expressly acknowledges and agrees that all of the Buyer's rights, title,
and interests in, to, and under this Agreement shall be pledged and/or
collaterally assigned by the Buyer to the Administrative Agent for the benefit
of the Secured Parties pursuant to the Credit and Security Agreement (and the
Lenders may further assign such rights in accordance with the Credit and
Security Agreement), and each Seller consents to such assignment. Each of the
parties hereto acknowledges and agrees that the Agents and the Lenders are third
party beneficiaries of the rights of the Buyer arising hereunder and under the
other Transaction Documents to which any Seller is a party.

          Section 8.12. No Proceedings. Each Seller agrees that it shall not
institute against the Buyer or any Conduit, or join any other Person in
instituting against the Buyer or any Conduit, any insolvency proceeding (namely,
any proceeding of the type referred to in the definition of Event of Bankruptcy)
as long as there shall not have elapsed one year plus one day after the Final
Payout Date. The foregoing shall not limit any Seller's right to file any claim
in or otherwise take any action with respect to any insolvency proceeding that
was instituted by any Person other than a Seller.

                            signature pages follow


                                       25





<PAGE>

          IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the date first above written.

                                      QUEST DIAGNOSTICS INCORPORATED, A DELAWARE
                                      CORPORATION


                                      By: /s/ Joseph P. Manory
                                          --------------------------------------
                                          Name:  Joseph P. Manory
                                          Title: Vice President and Treasurer


                                      QUEST DIAGNOSTICS INCORPORATED, A MICHIGAN
                                      CORPORATION


                                      QUEST DIAGNOSTICS INCORPORATED, A MARYLAND
                                      CORPORATION


                                      QUEST DIAGNOSTICS INCORPORATED, A
                                      CALIFORNIA CORPORATION


                                       26





<PAGE>

                                      QUEST DIAGNOSTICS LLC, A CONNECTICUT
                                      LIMITED LIABILITY COMPANY


                                      QUEST DIAGNOSTICS LLC, A MASSACHUSETTS
                                      LIMITED LIABILITY COMPANY


                                      QUEST DIAGNOSTICS OF PENNSYLVANIA, INC.,
                                      A DELAWARE CORPORATION


                                      QUEST DIAGNOSTICS LLC, AN ILLINOIS LIMITED
                                      LIABILITY COMPANY




                                       27





<PAGE>

                                      METWEST INC., A DELAWARE CORPORATION


                                      QUEST DIAGNOSTICS CLINICAL LABORATORIES,
                                      INC., A DELAWARE CORPORATION


                                      UNILAB CORPORATION, A DELAWARE
                                      CORPORATION,


                                      QUEST DIAGNOSTICS NICHOLS INSTITUTE, INC.,
                                      A VIRGINIA CORPORATION


                                      QUEST DIAGNOSTICS INCORPORATED, A NEVADA
                                      CORPORATION




                                       28





<PAGE>

                                      QUEST DIAGNOSTICS RECEIVABLES INC.


                                      By:  /s/ Joseph P. Manory
                                          --------------------------------------
                                          Name:  Joseph P. Manory
                                          Title: Vice President and Treasurer




                                       29





<PAGE>

                                     ANNEX A
                                   DEFINITIONS

          A. Incorporation of Credit and Security Agreement Definitions. Unless
otherwise defined herein, terms that are capitalized and used throughout this
Agreement are used as defined in the Credit and Security Agreement (hereinafter
defined).

          B. Certain Defined Terms. The following terms have the respective
meanings indicated hereinbelow:

          "Additional Receivables" means, with respect to any Seller, all
Receivables of such Seller arising after the close of such Seller's business on
the Initial Cut-Off Date (in the case of each of the Original Sellers) or the
applicable New Seller Cut-Off Date (in the case of any New Seller) through and
including such Seller's Sale Termination Date.

          "Applicable Closing Date" means (i) with respect to each of the
Original Sellers, the Initial Closing Date or, as applicable, the date specified
in its applicable Joinder Agreement, and (ii) with respect to each New Seller,
its New Seller Closing Date. The Applicable Closing Date for each of Unilab,
Quest-Nichols and Quest-Nevada shall be April 20, 2004.

          "Applicable Cut-Off Date" means (i) with respect to each Original
Seller, the Initial Cut-Off Date, (ii) with respect to each New Seller, its New
Seller Cut-Off Date, and (iii) with respect to all Sellers, each Cut-Off Date
after the applicable date in the preceding clause (i) or clause (ii).

          "Available Funds" means, on any date of determination, monies then
held by or on behalf of the Buyer after deduction of (a) all Obligations, if
any, that are due and owing under the Credit and Security Agreement, (b) all
Servicer's Fees that are then due and owing, and (c) in the Buyer's discretion,
the accrued and unpaid portion of all current expenses of the Buyer (whether or
not then due and owing).

          "Buyer" has the meaning set forth in the preamble.

          "Collections" means, with respect to any Receivable, (i) all funds
which are received from or on behalf of any related Obligor in payment of any
amounts owed (including, without limitation, purchase prices, finance charges,
interest and all other charges) in respect of such Receivable, or applied to
such amounts owed by such Obligor (including, without limitation, payments that
the Buyer, the applicable Seller or the Servicer receives from third party
payors and applies in the ordinary course of its business to amounts owed in
respect of such Receivable and net proceeds of sale or other disposition of
repossessed goods or other collateral or property of the Obligor or any other
party directly or indirectly liable for payment of such Receivable and available
to be applied thereon), or (ii) all Purchase Price Credits.

          "Contract" means, with respect to any Receivable, any requisition,
purchase order, agreement, contract or other writing with respect to the
provision of services by a Seller to an Obligor other than (i) an Invoice and
(ii) any confidential patient information including, without limitation, test
results.

          "Credit and Security Agreement" has the meaning set forth in the
preamble.

          "Discount Factor" means a percentage calculated to provide the Buyer
with a reasonable return on its investment in the Receivables acquired from each
Seller after taking


                                       30





<PAGE>

account of (i) the time value of money based upon the anticipated dates of
collection of the Receivables and the cost to the Buyer of financing its
investment in such Receivables during such period and (ii) the risk of
nonpayment by the Obligors. Each Seller and the Buyer may agree from time to
time to change the Discount Factor applicable to purchases from such Seller
based on changes in one or more of the items affecting the calculation thereof,
provided that any change to the Discount Factor shall take effect as of the
commencement of a Calculation Period, shall apply only prospectively and shall
not affect the Purchase Price payment in respect of Purchases which occurred
during any Calculation Period ending prior to the Calculation Period during
which such Seller and the Buyer agree to make such change.

          "Excluded JV Receivable" means any account receivable (and proceeds
thereof) that Quest Diagnostics of Pennsylvania Inc. ("Quest Pennsylvania")
bills in its own name and collects through its own accounts arising from
services for which revenues belong to Quest Diagnostics Venture LLC under that
certain Sharing and General Allocation Agreement dated as of November 1, 1998 by
and among Quest Diagnostics Venture LLC, a Pennsylvania limited liability
company, Quest Pennsylvania and UPMC Health System Diversified Services, Inc.,
as amended or modified from time to time.

          "Existing Agreement" has the meaning set forth in the preamble.

          "Initial Closing Date" means July 21, 2000.

          "Initial Cut-Off Date" means the Cut-Off Date immediately preceding
the Initial Closing Date.

          "Initial Receivables" means, with respect to any Seller, all
Receivables of such Seller that existed and was owing to such Seller as of the
close of such Seller's business on the Initial Cut-Off Date (in the case of each
of the Original Sellers) or the applicable New Seller Cut-Off Date (in the case
of any New Seller).

          "Invoice" means, with respect to any Receivable, any paper or
electronic bill, statement or invoice for services rendered by a Seller to an
Obligor.

          "Joinder Agreement" has the meaning set forth in the preamble.

          "New Seller" means any direct or indirect wholly-owned Subsidiary of
Quest Diagnostics that hereafter becomes a Seller under this Agreement by
executing a Joinder Agreement and complying with the provisions of Article V
hereof.

          "New Seller Closing Date" means, as to any New Seller, the Business
Day on which each of the conditions set forth in Article V has been satisfied.

          "New Seller Cut-Off Date" means, with respect to each New Seller,
Cut-Off Date immediately preceding its New Seller Closing Date.

          "Original Sellers" means Quest Diagnostics Incorporated, a Delaware
corporation; Quest Diagnostics Incorporated, a Michigan corporation; Quest
Diagnostics Incorporated, a Maryland corporation; Quest Diagnostics
Incorporated, a California corporation; Quest Diagnostics LLC, a Connecticut
limited liability company; Quest Diagnostics LLC, a Massachusetts limited
liability company; Quest Diagnostics of Pennsylvania Inc., a Delaware
corporation; Quest Diagnostics LLC, an Illinois limited liability company;
MetWest Inc., a


                                       31





<PAGE>

Delaware corporation; and Quest Diagnostics Clinical Laboratories, Inc., a
Delaware corporation.

          "Purchase Price" means, with respect to any purchase of Receivables
and their Related Assets from a Seller on any date, the aggregate price to be
paid therefor by the Buyer to the applicable Seller in accordance with Section
1.3 of this Agreement on such date, which price shall equal (i) the product of
(x) the Unpaid Net Balance of such Receivables as of the Applicable Cut-Off
Date, multiplied by (y) one minus the Discount Factor then in effect, minus (ii)
any Purchase Price Credits to be credited against the Purchase Price otherwise
payable in accordance with Section 1.4 of the Agreement.

          "Purchase Price Credit" shall have the meaning provided in Section 1.4
hereof.

          "Purchase Report" shall have the meaning provided in Section 1.3(c)
hereof.

          "Receivable" means any Account or Payment Intangible arising from the
sale of Clinical Laboratory Services by a Seller, including, without limitation,
the right to payment of any interest or finance charges and other amounts with
respect thereto; provided, however, that the term "Receivable" shall not include
(a) any Excluded JV Receivable, or (b) any Government Receivable except a
Specified Government Receivable. Rights to payment arising from any one
transaction, including, without limitation, rights to payment represented by an
individual invoice, shall constitute a Receivable separate from a Receivable
consisting of the rights to payment arising from any other transaction.

          "Records" means, collectively, all Invoices and all other documents,
books, records and other information (including, without limitation, computer
programs, tapes, disks, punch cards, data processing software and related
property and rights) relating to any Receivable, Related Asset and/or Obligor
other than (i) any Contract related thereto, and (ii) any confidential patient
information including, without limitation, test results.

          "Related Assets" means, with respect to each Receivable, all right,
title and interest in and to the following:

          (a) (i) all Collections; (ii) all Records; (iii) all Collection
Accounts and all cash, balances and instruments therein from time to time
therein; (iv) the goods (including returned or repossessed goods), if any, the
sale of which by a Seller gave rise to such Receivable; (v) all supporting
obligations; and (vi) all liens and security interests, if any, securing payment
of such Receivable, whether pursuant to the Contract related to such Receivable
or otherwise; and

          (b) all proceeds and insurance proceeds of the foregoing.

          "Responsible Officer" means, with respect to each Seller, any of its
chief executive officer, president, vice president-finance, treasurer or
secretary, acting singly.

          "Sale Termination Date" means, as to any Seller, the earliest to occur
of the following:

          (i) the date designated by such Seller to the Buyer upon not less than
     15 Business Days' prior written notice,


                                       32





<PAGE>

          (ii) the date on which an Event of Bankruptcy occurs with respect to
     such Seller;

          (iii) the date on which such Seller is unable to satisfy the
     applicable conditions precedent to each purchase set forth in Article III
     hereof;

          (iv) the date on which a Change in Control occurs with respect to
     Quest Diagnostics, the Buyer or such Seller; and

          (v) the occurrence of the Termination Date under clause (a) or (b) of
     the definition of such term in the Credit and Security Agreement.

          "Seller" means an Original Seller or a New Seller.

          "Seller Indemnified Amounts" shall have the meaning provided in
Section 7.1(a) hereof.

          "Seller Indemnified Party" shall have the meaning provided in Section
7.1(a) hereof.

          "Seller Material Adverse Effect" means, with respect to any Seller,
the occurrence of any of the following events, circumstances, occurrences, or
conditions:

          (i) any event, circumstance, occurrence or condition which has caused
     as of any date of determination any of (a) a material adverse effect, or
     any condition or event that has resulted in a material adverse effect, on
     the business, operations, consolidated financial condition or assets of the
     Sellers, taken as a whole (after taking into account indemnification
     obligations by third parties that are Solvent to the extent that such third
     party has not disputed (after notice of claim in accordance with the
     applicable agreement therefor) liability to make such indemnification
     payment),

          (ii) any event, circumstance, occurrence or condition which has caused
     as of any date of determination a material adverse effect on the ability of
     such Seller to perform its obligations under this Agreement or any other
     Transaction Document to which such Seller is a party;

          (iii) any event, circumstance, occurrence or condition which has
     caused as of any date of determination a material adverse effect on the
     validity or enforceability of this Agreement or any other Transaction
     Document to which such Seller is a party, or the validity, enforceability
     or collectibility of a material portion of the Receivables sold by such
     Seller to the Buyer; or

          (iv) any event, circumstance, occurrence or condition which has caused
     as of any date of determination a material adverse effect on the validity,
     perfection, priority or enforceability of the Buyer's title to the
     Receivables and Related Assets acquired by the Buyer from such Seller.


                                       33





<PAGE>

          "Specified Government Receivable" means a Government Receivable as to
which the Obligor is a state or local Governmental Authority (other than a
Receivable arising under any state's Medicaid statutes and regulations, for
services rendered to eligible beneficiaries thereunder).

          "Subordinated Loan" means a subordinated revolving loan from a Seller
to the Buyer which is evidenced by a Subordinated Note.

          "Subordinated Note" means a subordinated promissory note substantially
in the form of Exhibit B hereto issued by the Buyer to a Seller, as it may be
amended, supplemented, endorsed or otherwise modified from time to time in
substitution therefor or renewal thereof in accordance with the Transaction
Documents.

The foregoing definitions shall be equally applicable to both the singular and
plural forms of the defined terms.

          C. Other Terms. All accounting terms not specifically defined herein
shall be construed in accordance with GAAP. All terms used in Article 9 of the
UCC in the State of New York, and not specifically defined herein, are used
herein as defined in such Article 9.

          D. Computation of Time Periods. Unless otherwise stated in this
Agreement, in the computation of a period of time from a specified date to a
later specified date, the word "from" means "from and including" and the words
"to" and "until" each mean "to but excluding".


                                       34


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>5
<FILENAME>ex10-4.txt
<DESCRIPTION>EXHIBIT 10.4
<TEXT>

<PAGE>


                                                                    Exhibit 10.4

                                            Published CUSIP Number:
                                                                    ------------

                      AMENDED AND RESTATED CREDIT AGREEMENT

                                      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

                       WACHOVIA BANK, NATIONAL ASSOCIATION
                              as Syndication Agent

                                       AND
                                  BANK ONE, NA,
                         PNC BANK, NATIONAL ASSOCIATION
                                       AND
                          KEYBANK NATIONAL ASSOCIATION
                           As Co-Documentation Agents

                           DATED AS OF APRIL 20, 2004

                         BANC OF AMERICA SECURITIES LLC
                                       and
                          WACHOVIA CAPITAL MARKETS, LLC
                    as Co-Book Managers and Co-Lead Arrangers





<PAGE>



                                TABLE OF CONTENTS

<TABLE>
<S>                                                                           <C>
SECTION 1   DEFINITIONS AND ACCOUNTING TERMS...................................1
   1.1      Definitions........................................................1
   1.2      Other Interpretive Provisions.....................................24
   1.3      Accounting Terms/Calculation of Financial Covenants...............25
   1.4      Time..............................................................25
   1.5      Rounding..........................................................25
   1.6      References to Agreements and Laws.................................26
   1.7      Letter of Credit Amounts..........................................26
SECTION 2   CREDIT FACILITIES.................................................26
   2.1      Revolving Loans...................................................26
   2.2      Letter of Credit Subfacility......................................28
   2.3      Swing Line Loans Subfacility......................................34
   2.4      Competitive Bid Loans Subfacility.................................35
   2.5      Continuations and Conversions.....................................38
   2.6      Minimum Amounts...................................................38
SECTION 3   GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT......39
   3.1      Interest..........................................................39
   3.2      Place and Manner of Payments......................................39
   3.3      Prepayments.......................................................40
   3.4      Fees..............................................................41
   3.5      Payment in full at Maturity.......................................42
   3.6      Computations of Interest and Fees.................................42
   3.7      Pro Rata Treatment................................................43
   3.8      Sharing of Payments...............................................44
   3.9      Capital Adequacy/Regulation D.....................................45
   3.10     Inability To Determine Interest Rate..............................45
   3.11     Illegality........................................................45
   3.12     Requirements of Law...............................................46
   3.13     Taxes.............................................................46
   3.14     Compensation......................................................50
   3.15     Determination and Survival of Provisions..........................50
   3.16     Notification by Lenders...........................................50
   3.17     Mitigation; Mandatory Assignment..................................51
SECTION 4   GUARANTY..........................................................51
   4.1      Guaranty of Payment...............................................51
   4.2      Obligations Unconditional.........................................52
   4.3      Modifications.....................................................52
   4.4      Waiver of Rights..................................................53
   4.5      Reinstatement.....................................................53
   4.6      Remedies..........................................................53
   4.7      Limitation of Guaranty............................................54
   4.8      Rights of Contribution............................................54
   4.9      Release of Guarantors.............................................54
</TABLE>


                                        i





<PAGE>



<TABLE>
<S>                                                                           <C>
SECTION 5   CONDITIONS PRECEDENT..............................................54
   5.1      Closing Conditions................................................54
   5.2      Conditions to All Extensions of Credit............................56
SECTION 6   REPRESENTATIONS AND WARRANTIES....................................57
   6.1      Organization and Good Standing....................................57
   6.2      Due Authorization.................................................57
   6.3      Enforceable Obligations...........................................57
   6.4      No Conflicts......................................................58
   6.5      Consents..........................................................58
   6.6      Financial Condition...............................................58
   6.7      No Material Change................................................59
   6.8      Disclosure........................................................59
   6.9      No Default........................................................59
   6.10     Litigation........................................................59
   6.11     Taxes.............................................................59
   6.12     Compliance with Law...............................................59
   6.13     Licensing and Accreditation.......................................60
   6.14     Title to Properties, Liens........................................60
   6.15     Insurance.........................................................61
   6.16     Use of Proceeds...................................................61
   6.17     Government Regulation.............................................61
   6.18     ERISA.............................................................61
   6.19     Environmental Matters.............................................62
   6.20     Intellectual Property.............................................64
   6.21     Subsidiaries......................................................64
   6.22     Solvency..........................................................64
SECTION 7   AFFIRMATIVE COVENANTS.............................................64
   7.1      Information Covenants.............................................64
   7.2      Financial Covenants...............................................68
   7.3      Preservation of Existence and Franchises..........................68
   7.4      Books and Records.................................................69
   7.5      Compliance with Law...............................................69
   7.6      Payment of Taxes and Other Indebtedness...........................69
   7.7      Insurance.........................................................70
   7.8      Maintenance of Property...........................................70
   7.9      Performance of Obligations........................................70
   7.10     Use of Proceeds...................................................70
   7.11     Audits/Inspections................................................70
   7.12     Additional Credit Parties.........................................71
   7.13     Compliance Program................................................71
   7.14     Existing Term Credit Agreement....................................72
SECTION 8   NEGATIVE COVENANTS................................................72
   8.1      Indebtedness......................................................72
   8.2      Liens.............................................................73
   8.3      Nature of Business................................................73
   8.4      Consolidation and Merger..........................................73
</TABLE>


                                       ii





<PAGE>



<TABLE>
<S>                                                                           <C>
   8.5      Sale or Lease of Assets...........................................74
   8.6      Investments.......................................................74
   8.7      Transactions with Affiliates......................................74
   8.8      Fiscal Year; Accounting; Organizational Documents.................75
   8.9      Stock Repurchases.................................................75
   8.10     Sale/Leasebacks...................................................75
SECTION 9   EVENTS OF DEFAULT.................................................76
   9.1      Events of Default.................................................76
   9.2      Acceleration; Remedies............................................78
   9.3      Allocation of Payments After Event of Default.....................79
SECTION 10  AGENCY PROVISIONS.................................................80
   10.1     Appointment.......................................................80
   10.2     Delegation of Duties..............................................81
   10.3     Exculpatory Provisions............................................81
   10.4     Reliance on Communications........................................82
   10.5     Notice of Default.................................................83
   10.6     Non-Reliance on Administrative Agent and Other Lenders............83
   10.7     Indemnification...................................................83
   10.8     Administrative Agent in Its Individual Capacity...................84
   10.9     Successor Agent...................................................84
   10.10.   Agent May File Proofs of Claim....................................85
SECTION 11  MISCELLANEOUS.....................................................86
   11.1     Notices, Etc......................................................86
   11.2     Right of Set-Off..................................................87
   11.3     Benefit of Agreement..............................................88
   11.4     No Waiver; Remedies Cumulative....................................91
   11.5     Payment of Expenses; Indemnification..............................91
   11.6     Amendments, Waivers and Consents..................................93
   11.7     Counterparts......................................................94
   11.8     Headings..........................................................94
   11.9     Defaulting Lender.................................................94
   11.10    Survival of Indemnification.......................................94
   11.11    Governing Law; Venue; Jurisdiction................................94
   11.12    Waiver of Jury Trial; Waiver of Consequential Damages.............95
   11.13    Severability......................................................95
   11.14    Further Assurances................................................95
   11.15    Confidentiality...................................................95
   11.16    Entirety..........................................................96
   11.17    Binding Effect; Continuing Agreement..............................96
   11.18.   USA Patriot Act Notice............................................97
</TABLE>


                                       iii





<PAGE>



SCHEDULES

Schedule 1.1(a)   Commitment Percentages/Lending Offices
Schedule 2.2(c)   Existing Letters of Credit
Schedule 6.7      Material Changes
Schedule 6.10     Litigation
Schedule 6.21     Subsidiaries
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(e)    Form of Revolving Note
Exhibit 2.3(b)    Form of Swing Line Loan Request
Exhibit 2.3(d)    Form of Swing Line Note
Exhibit 2.4(b)    Form of Competitive Bid Request
Exhibit 2.4(g)    Form of Competitive Bid Loan Note
Exhibit 2.5       Form of Notice of Continuation/Conversion
Exhibit 7.1(c)    Form of Officer's Certificate
Exhibit 7.12      Form of Joinder Agreement
Exhibit 11.3(b)   Form of Assignment and Assumption


                                       iv





<PAGE>



                      AMENDED AND RESTATED CREDIT AGREEMENT

     THIS AMENDED AND RESTATED CREDIT AGREEMENT (this "Credit Agreement"), is
entered into as of April 20, 2004 among QUEST DIAGNOSTICS INCORPORATED, a
Delaware corporation (the "Borrower"), certain of the Subsidiaries of the
Borrower (individually a "Guarantor" and collectively the "Guarantors"), the
Lenders (as defined herein), and BANK OF AMERICA, N.A., as Administrative Agent
for the Lenders and as Issuing Lender.

                                    RECITALS

     WHEREAS, the Borrower, the Guarantors, the lenders party thereto and Bank
of America, N.A., as administrative agent and issuing lender entered into that
certain Credit Agreement dated as of June 27, 2001 (as previously amended or
modified, the "Existing Revolving Credit Agreement";

     WHEREAS, the Borrower has requested that the parties thereto amend and
restate the terms of the Existing Revolving Credit Agreement;

     WHEREAS, certain existing lenders will no longer be a party to the amended
and restated credit facility and certain new lenders will become a party to the
amended and restated credit facility; and

     WHEREAS, the parties hereto have agreed to amend and restate the terms of
the Existing Revolving Credit Agreement as set forth herein.

     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:

                                    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.





<PAGE>



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

          "Adjusted Eurodollar Rate" means the Eurodollar Rate plus the
     Applicable Percentage.

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

          "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.

          "Agency Services Address" means Bank of America, N.A., NC1-001-15-04,
     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.

          "Agents" means Bank of America N.A., in its capacity as Administrative
     Agent, Wachovia Bank, National Association in its capacity as Syndication
     Agent, Bank One, NA in its capacity as Co-Documentation Agent, PNC Bank,
     National Association in its capacity as Co-Documentation Agent, and KeyBank
     National Association in its capacity as Co-Documentation Agent.


                                        2





<PAGE>



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

<TABLE>
<CAPTION>
==========================================================================================================================
                                                                                             Applicable
                                                     Applicable            Applicable      Percentage for
                                                   Percentage for        Percentage for      Commercial       Applicable
     Pricing                                    Revolving Loans that   Standby Letter of      Letter of     Percentage for
      Level             Debt Rating             are Eurodollar Loans      Credit Fees       Credit Fees      Facility Fee
---------------------------------------------------------------------------------------------------------------------------
<S>            <C>                                      <C>                  <C>                <C>              <C>
        I      >=A- from S&P/                          .275%                .275%              .1325%           .100%
               >=A3 from Moody's
--------------------------------------------------------------------------------------------------------------------------
        II     >=BBB+ but < A-from S&P/                .375%                .375%              .1875%           .125%
               >=Baa1 but < A3 from Moody's
--------------------------------------------------------------------------------------------------------------------------
       III     >=BBB but  < BBB+ from S&P/             .475%                .475%              .2375%           .150%
               >=Baa2 but < Baa1 from Moody's
--------------------------------------------------------------------------------------------------------------------------
        IV     >=BBB- but < BBB from S&P/              .575%                .575%              .2875%           .175%
               >=Baa3 but < Baa2 from Moody's
--------------------------------------------------------------------------------------------------------------------------
        V      >=BB+ but < BBB- from S&P/              1.00%                1.00%              .5000%           .250%
               >=Ba1 but < Baa3 from Moody's
--------------------------------------------------------------------------------------------------------------------------
        VI     < BB+ or unrated by S&P/                1.20%                1.20%              .6000%           .300%
               < Ba1 or unrated by Moody's
==========================================================================================================================
</TABLE>

     The Applicable Percentage for Eurodollar Loans, the Letter of Credit Fees
     and the Facility Fees shall, in each case, 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
     and Letters of Credit as well as any new Eurodollar Loans made or Letters
     of Credit issued.

          "Approved Fund" means any Fund that is administered or managed by (a)
     a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of
     an entity that administers or manages a Lender.

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

          "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


                                        3





<PAGE>



     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 1/2 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 Revolving Loan bearing interest at a rate
     determined by reference to the Base Rate.

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

          "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.

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

          "CAP" means the College of American Pathologists.

          "Capital Expenditures" means all expenditures of the Borrower and its
     Subsidiaries on a consolidated basis which, in accordance with GAAP, would
     be classified as capital expenditures, including, without limitation,
     Capital Leases which would be so classified in accordance with GAAP.


                                        4





<PAGE>



          "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 (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.


                                        5





<PAGE>



          "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 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 Act as set forth at
     42 U.S.C. 263a and the regulations promulgated thereunder, as amended.

          "Closing Date" means the date hereof.

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

          "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.

          "Commitments" means (a) the commitment of each Lender with respect to
     the Revolving Committed Amount, (b) the commitment of the Issuing Lender
     with respect to the LOC Commitment and (c) the commitment of the Swing Line
     Lender with respect to the Swing Line Committed Amount.

          "Competitive Bid" means an offer by a Lender to make a Competitive Bid
     Loan pursuant to the terms of Section 2.4.

          "Competitive Bid Loan" means a loan made by a Lender in its discretion
     pursuant to the provisions of Section 2.4.

          "Competitive Bid Loan Notes" means the promissory notes of the
     Borrower in favor of each Lender evidencing the Competitive Bid Loans
     provided pursuant to


                                        6





<PAGE>



     Section 2.4, individually or collectively, as appropriate, as such
     promissory notes may be amended, modified, supplemented or replaced from
     time to time and as evidenced in the form of Exhibit 2.4(g).

          "Competitive Bid Fee" means $1,000 for each Competitive Bid Request.

          "Competitive Bid Rate" means, as to any Competitive Bid made by a
     Lender in accordance with the provisions of Section 2.4, the rate of
     interest offered by the Lender making the Competitive Bid.

          "Competitive Bid Request" means a request by the Borrower for
     Competitive Bids in the form of Exhibit 2.4(b).

          "Credit Documents" means this Credit Agreement, the Notes, any Joinder
     Agreement, the LOC Documents, any Notice of Borrowing, any Competitive Bid
     Request and any Swing Line Loan Request.

          "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 (including the Issuing
     Lender and the Swing Line Lender) and the Administrative Agent, whenever
     arising, under this Credit Agreement, the Notes, or any of the other Credit
     Documents.

          "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.

          "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.


                                        7





<PAGE>



          "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 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 and (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") 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.

          "Effective 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 and/or the
     initial Letters of Credit shall have been issued.

          "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 Closing Date 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, the Issuing Lender 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.

          "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,


                                        8





<PAGE>



     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, 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.

          "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.


                                        9





<PAGE>



          "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.

          "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.

          "Existing Letters of Credit" means the letters of credit described on
     Schedule 2.2(c).

          "Existing Revolving Credit Agreement" has the meaning set forth in the
     Recitals.

          "Existing Term Credit Agreement" means that certain Term Loan Credit
     Agreement, dated as of June 21, 2002, among the Borrower, the Guarantors,
     the lenders party thereto and Bank of America, N.A., as administrative
     agent and issuing lender.

          "Extension of Credit" means, as to any Lender, the making of a Loan by
     such Lender (or a participation therein by a Lender) or the issuance of, or
     participation in, a Letter of Credit by such Lender.

          "Facility Fees" means the fees payable to the Lenders pursuant to
     Section 3.4(a).

          "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


                                       10





<PAGE>



     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 Letters" means (a) that certain letter agreement dated as of
     April 2, 2004 among the Borrower, BAS, and Bank of America and (b) that
     certain letter agreement, dated as of April 2, 2004, among the Borrower,
     Wachovia Capital Markets, LLC and Wachovia Bank, National Association.

          "Foreign Subsidiary" means any 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 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.

          "Governmental Authority" means any Federal, state, local, provincial
     or foreign court or governmental agency, authority, instrumentality or
     regulatory body.

          "Guarantor" means each of the Material Domestic Subsidiaries of the
     Borrower, any other Subsidiary of the Borrower that guaranties any Pari
     Passu Debt 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,


                                       11





<PAGE>



     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
     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.

          "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,


                                       12





<PAGE>



     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 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.

          "Intellectual Property" has the meaning set forth in Section 6.20.

          "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, for any period, with respect to the Borrower
     and its Subsidiaries on a consolidated basis, 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 and Swing Line
     Loans, the last day of each calendar quarter and the Maturity Date, (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 and (c) as to Competitive Bid Loans, on the last day of the
     Interest Period for each Competitive Bid Loan and on the Maturity Date. 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 (a) 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) and (b) as to Competitive Bid Loans, a period
     beginning on the date the Competitive Bid Loan is made and ending on the
     date specified in the respective Competitive Bid whereby the offer to make
     the Competitive Loan was extended, which shall not be less than 14 days nor
     more than 180 days duration; provided, however, (i) if any Interest Period
     would end on a day which is not a Business


                                       13





<PAGE>



     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 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.

          "Issuing Lender" means Bank of America.

          "Issuing Lender Fees" has the meaning set forth in Section 3.4(b)(ii).

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

          "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.

          "Letter of Credit" means any letter of credit issued for the account
     of the Borrower by the Issuing Lender pursuant to Section 2.2, as such
     letter of credit may be amended, modified, extended, renewed or replaced.

          "Letter of Credit Fees" has the meaning set forth in Section
     3.4(b)(i).

          "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


                                       14





<PAGE>



     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 Revolving Loans, the Competitive Bid Loans
     and the Swing Line Loans (or any portion thereof), individually or
     collectively, as appropriate.

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

          "LOC Commitment" means the commitment of the Issuing Lender to issue
     Letters of Credit for the account of the Borrower in an aggregate face
     amount outstanding (together with the amounts of any unreimbursed drawings
     thereon) at any time of up to the LOC Committed Amount.

          "LOC Committed Amount" means ONE HUNDRED TWENTY-FIVE MILLION DOLLARS
     ($125,000,000).

          "LOC Documents" means, with respect to any Letter of Credit, such
     Letter of Credit, any amendments thereto, any documents delivered in
     connection therewith, any application therefor, and any agreements,
     instruments, guarantees or other documents (whether general in application
     or applicable only to such Letter of Credit) governing or providing for (a)
     the rights and obligations of the parties concerned or at risk or (b) any
     collateral security for such obligations.

          "LOC Obligations" means, at any time, the sum of (a) the maximum
     amount which is, or at any time thereafter may become, available to be
     drawn under Letters of Credit then outstanding, assuming compliance with
     all requirements for drawings referred to in such Letters of Credit plus
     (b) the aggregate amount of all drawings under Letters of Credit honored by
     the Issuing Lender but not theretofore reimbursed.

          "London Interbank Offered Rate" means for any Interest Period with
     respect to any Eurodollar Loan: (a) the rate per annum equal to the rate
     determined by the Administrative Agent to be the offered rate that appears
     on the page of the Telerate screen (or any successor thereto) that displays
     an average British Bankers Association Interest Settlement Rate for
     deposits in Dollars (for delivery on the first day of such Interest Period)
     with a term equivalent to such Interest Period, determined as of
     approximately 11:00 A.M. (London time) two Business Days prior to the first
     day of such Interest Period, or (b) if the rate referenced in the preceding
     clause (a) does not appear on such page or service or such page or service
     shall cease to be available, the rate per annum equal to the rate
     determined by the Administrative Agent to be the offered rate on such other
     page or other service that displays an average British Bankers Association
     Interest Settlement Rate for deposits in Dollars (for delivery on the first
     day of such Interest Period) with a term equivalent to such Interest
     Period, determined as of approximately 11:00 A.M. (London time) two
     Business Days prior to the first day of such Interest Period, or (c) if the
     rates referenced in the preceding clauses (a) and (b) are not available,
     the rate per annum determined by the Administrative Agent as the rate of
     interest at which deposits in Dollars for delivery on the first day of such
     Interest Period in


                                       15





<PAGE>



     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 4:00 p.m. (London time) two Business Days prior to the first
     day of such Interest Period.

          "Mandatory Borrowing" has the meaning set forth in Section 2.2(e).

          "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 Quest Receivables shall not be deemed to be a Material
     Domestic Subsidiary.

          "Maturity Date" means April 20, 2009.

          "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.

          "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


                                       16





<PAGE>



     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 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" 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 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.

          "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.

          "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,
     as determined in accordance with GAAP.

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


                                       17





<PAGE>



          "Non-Material Domestic Subsidiary" means any wholly-owned Domestic
     Subsidiary that is not a Guarantor other than Quest Receivables.

          "Note" or "Notes" means the Revolving Notes, the Competitive Bid Loan
     Notes and the Swing Line Loan Note, 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 2.5.

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

          "Pari Passu Debt" means all unsecured indebtedness of the Borrower.

          "Participants" means Lenders with a Revolving Loan Commitment
     Percentage greater than zero.

          "Participation Interest" means the Extension of Credit by a Lender by
     way of a purchase of a participation in (a) Letters of Credit or LOC
     Obligations as provided in Section 2.2, (b) Swing Line Loans as provided in
     Section 2.3 or (c) any Loans as provided in Section 3.8.

          "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 and (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.

          "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


                                       18





<PAGE>



     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 Closing Date; 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.

          "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 permitted by Sections
     8.1(d), (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 Effective 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


                                       19





<PAGE>



     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(d), (p) Liens on Property of non-wholly owned Subsidiaries of the
     Borrowers incurred to finance working capital and (q) 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.

          "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


                                       20





<PAGE>



     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.

          "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.

          "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.

          "Regulation A, D, T, U or X" means Regulation A, D, 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.

          "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 (a) at any time prior to the
     termination of the Commitments, the sum of the Revolving Loan Commitment
     Percentage of such Lender multiplied by the Revolving Committed Amount and
     (b) at any time after the termination of the Commitments, the sum of (i)
     the principal balance of the outstanding Loans of such Lender plus (ii)
     such Lender's Participation Interests in the face amount of the outstanding
     Letters of Credit and outstanding Swing Line Loans.

          "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 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.


                                       21





<PAGE>



          "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.

          "Revolving Committed Amount" means FIVE HUNDRED MILLION DOLLARS
     ($500,000,000) or such lesser amount to which the Revolving Committed
     Amount may be reduced pursuant to Section 2.1(d).

          "Revolving Loan Commitment Percentage" means, for each Lender, the
     percentage identified as its Revolving 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.

          "Revolving Loans" means the Revolving Loans made to the Borrower
     pursuant to Section 2.1.

          "Revolving Notes" means the promissory notes of the Borrower in favor
     of each of the Lenders evidencing the Revolving 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(e).

          "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.

          "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.

          "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


                                       22





<PAGE>



     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.

          "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.

          "Swing Line Committed Amount" means FIFTY MILLION DOLLARS
     ($50,000,000).

          "Swing Line Lender" means Bank of America.

          "Swing Line Loans" means the loans made by the Swing Line Lender
     pursuant to Section 2.3.

          "Swing Line Loan Note" means the promissory note of the Borrower in
     favor of the Swing Line Lender evidencing the Swing Line Loans provided
     pursuant to Section 2.3, as such promissory note may be amended, modified,
     supplemented, extended, renewed or replaced from time to time in and as
     evidenced by the form of Exhibit 2.3(d).

          "Swing Line Loan Request" means a request by the Borrower for a Swing
     Line Loan in substantially the form of Exhibit 2.3(b).


                                       23





<PAGE>



          "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.

          "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 $35,000,000 during the term of this Credit
     Agreement.

          "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.

          "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).

     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".


                                       24





<PAGE>



          (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.

          (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,


                                       25





<PAGE>



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.

     1.7 Letter of Credit Amounts.

     Unless otherwise specified, all references herein to the amount of a Letter
of Credit at any time shall be deemed to mean the maximum face amount of such
Letter of Credit after giving effect to all increases thereof contemplated by
such Letter of Credit or the LOC Documents related thereto, whether or not such
maximum face amount is in effect at such time.

                                    SECTION 2

                                CREDIT FACILITIES

     2.1 Revolving Loans.

          (a) Loan Commitment. Subject to the terms and conditions set forth
     herein, including but not limited to Section 5.2, each Lender severally
     agrees to make revolving loans (each a "Revolving Loan" and collectively
     the "Revolving Loans") to the Borrower, in Dollars, in an amount equal to
     its Revolving Loan Commitment Percentage, if any, of such Revolving Loan,
     at any time and from time to time, during the period from and including the
     Effective Date to but not including the Maturity Date (or such earlier date
     if the Commitments have been terminated as provided herein); provided,
     however, that the sum of the aggregate amount of Revolving Loans
     outstanding plus the aggregate amount of LOC Obligations outstanding plus
     the aggregate amount of Competitive Bid Loans outstanding plus the
     aggregate amount of Swing Line Loans outstanding shall not exceed the
     Revolving Committed Amount. Subject to the terms of this Credit Agreement,
     the Borrower may borrow, repay and reborrow Revolving Loans.

          (b) Method of Borrowing for Revolving Loans. By no later than 11:00
     a.m. (i) on the date of the requested borrowing of Revolving Loans that
     will be Base Rate Loans or (ii) three Business Days prior to the date of
     the requested borrowing of Revolving Loans that will be Eurodollar Loans,
     the Borrower shall provide telephonic notice to the Administrative Agent,
     followed promptly by a written Notice of Borrowing in the form of


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     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 Revolving Loans shall accrue
     interest at the Base Rate or the Adjusted Eurodollar Rate, (C) with respect
     to Revolving Loans that will be Eurodollar Loans, the Interest Period
     applicable thereto and (D) certification that the Borrower has complied in
     all respects with Section 5.2.

          (c) Funding of Loans. Upon receipt of a Notice of Borrowing, the
     Administrative Agent shall promptly inform the Lenders as to the terms
     thereof. Each Lender shall make its Revolving Loan Commitment Percentage of
     the requested Revolving Loans available to the Administrative Agent by 1:00
     p.m. on the date specified in the Notice of Borrowing by deposit, in
     Dollars, of immediately available funds at the Agency Services Address. The
     amount of the requested Revolving 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 Revolving Loans are made available to the
     Administrative Agent.

          No Lender shall be responsible for the failure or delay by any other
     Lender in its obligation to make Revolving 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 Revolving Loan that such Lender does not
     intend to make available to the Administrative Agent its portion of the
     Revolving Loans to be made on such date, the Administrative Agent may
     assume that such Lender has made such amount available to the
     Administrative Agent on the date of such Revolving 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 applicable rate for such Revolving Loan pursuant to the Notice of
     Borrowing 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) Reductions of Revolving Committed Amount. Upon at least three
     Business Days' prior written notice, the Borrower shall have the right to
     permanently reduce, without premium or penalty, all or part of the
     aggregate unused amount of the Revolving Committed Amount at any time or
     from time to time; provided that (i) each partial reduction shall be in an
     aggregate amount at least equal to $10,000,000 and in integral multiples of
     $1,000,000


                                       27





<PAGE>



     above such amount and (ii) no reduction shall be made which would reduce
     the Revolving Committed Amount to an amount less than the aggregate amount
     of outstanding Revolving Loans plus the aggregate amount of outstanding LOC
     Obligations plus the aggregate amount of outstanding Competitive Bid Loans
     plus the aggregate amount of outstanding Swing Line Loans. Any reduction in
     (or termination of) the Revolving Committed Amount pursuant to this Section
     2.1(d) shall be permanent and may not be reinstated. The Administrative
     Agent shall immediately notify the Lenders of any reduction in the
     Revolving Committed Amount pursuant to this Section 2.1(d).

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

     2.2 Letter of Credit Subfacility.

          (a) Issuance. Subject to the terms and conditions hereof and of the
     LOC Documents, if any, and any other terms and conditions which the Issuing
     Lender may reasonably require (so long as such terms and conditions do not
     impose any financial obligation on or require any Lien (not otherwise
     contemplated by this Credit Agreement) to be given by any Credit Party or
     conflict with any obligation of, or detract from any action which may be
     taken by, the Borrower or its Subsidiaries under this Credit Agreement),
     the Issuing Lender agrees, in reliance upon the agreements of the other
     Lenders set forth in this Section 2.2, from time to time upon request, in
     its reasonable discretion, to issue (from the Effective Date to thirty days
     prior to the Maturity Date and in a form reasonably acceptable to the
     Issuing Lender), in Dollars, and the Participants shall participate in,
     Letters of Credit for the account of the Borrower; provided, however, that
     (i) the aggregate amount of LOC Obligations shall not at any time exceed
     the LOC Committed Amount, (ii) the aggregate amount of commercial Letters
     of Credit shall not at any time exceed $40,000,000, (iii) the sum of the
     aggregate amount of outstanding LOC Obligations plus the aggregate amount
     of outstanding Revolving Loans plus the aggregate amount of outstanding
     Competitive Bid Loans plus the aggregate amount of outstanding Swing Line
     Loans shall not exceed the Revolving Committed Amount and (iv) if any
     Participant shall be a Defaulting Lender at the time of issuance of any
     Letter of Credit, the amount of such Letter of Credit shall be reduced by
     the amount of such Participant's Participation Interest in such Letter of
     Credit, unless otherwise agreed by the Issuing Lender in its sole
     discretion. The Issuing Lender may require the issuance and expiry date of
     each Letter of Credit to be a Business Day. Each Letter of Credit shall be
     either (A) a standby letter of credit issued to support the obligations
     (including pension or insurance obligations), contingent or otherwise, of
     the Borrower or any of its Subsidiaries, or (B) a commercial letter of
     credit in respect of the purchase of goods or services by the Borrower or
     any of its Subsidiaries in the ordinary course of business; provided that
     any "time" commercial Letter of Credit shall not have a tenor exceeding 180
     days. Except as otherwise expressly agreed upon by all the Participants, no
     Letter of Credit shall have an original expiry date more than one year from
     the date of issuance nor, as extended or otherwise, shall have an expiry
     date beyond the Maturity Date. Each Letter of Credit shall comply with the
     related LOC Documents. The Borrower shall promptly examine a copy of each
     Letter of Credit and each amendment thereto that is


                                       28





<PAGE>



     delivered to it and, in the event of any claim of noncompliance with the
     Borrower's instructions or other irregularity, the Borrower will
     immediately notify the Issuing Lender.

          (b) Notice and Reports. The request for the issuance of a Letter of
     Credit shall be submitted to the Issuing Lender at least three Business
     Days prior to the requested date of issuance. The Issuing Lender will, at
     least quarterly and more frequently upon request, provide to the
     Administrative Agent for dissemination to the Lenders a report specifying
     the Letters of Credit which are then issued and outstanding. The Issuing
     Lender will further provide to the Administrative Agent, promptly upon
     request, copies of the Letters of Credit and the other LOC Documents.

          (c) Participations.

               (i) On the Effective Date, each Participant shall automatically
          acquire a participation in the liability of the Issuing Lender under
          each Existing Letter of Credit in an amount equal to its Revolving
          Loan Commitment Percentage of such Existing Letters of Credit.

               (ii) Each Participant, upon issuance of a Letter of Credit, shall
          be deemed to have purchased without recourse a risk participation from
          the Issuing Lender in such Letter of Credit and each LOC Document
          related thereto and the rights and obligations arising thereunder and
          any collateral relating thereto, in each case in an amount equal to
          its Revolving Loan Commitment Percentage of the obligations under such
          Letter of Credit, and shall absolutely, unconditionally and
          irrevocably assume, as primary obligor and not as surety, and be
          obligated to pay to the Issuing Lender therefor and discharge when
          due, its Revolving Loan Commitment Percentage of the obligations
          arising under such Letter of Credit. Without limiting the scope and
          nature of each Participant's participation in any Letter of Credit, to
          the extent that the Issuing Lender has not been reimbursed as required
          hereunder or under any such Letter of Credit or pursuant to a
          Mandatory Borrowing under Section 2.2(e)(i), each such Participant
          shall fund its Participation Interest in such unreimbursed drawing in
          accordance with the terms of Section 2.2(e)(ii). Any such
          reimbursement shall not relieve or otherwise impair the obligation of
          the Borrower or any other Credit Party to reimburse the Issuing Lender
          under any Letter of Credit, together with interest as hereinafter
          provided.

          (d) Reimbursement by Borrower. In the event of any drawing under any
     Letter of Credit, the Issuing Lender will promptly notify the Borrower.
     Unless the Borrower shall notify the Issuing Lender of its intent to
     otherwise reimburse the Issuing Lender and shall reimburse the Issuing
     Lender in same day funds within one hour of receipt of notice of such
     drawing from the Issuing Lender, the Borrower shall be deemed to have
     requested a Revolving Loan at the Base Rate in the amount of the drawing,
     the proceeds of which will be used to satisfy the reimbursement
     obligations. The Borrower's reimbursement obligations hereunder shall be
     absolute and unconditional under all circumstances irrespective of (but
     without waiver of) (i) any rights of set-off, counterclaim or defense to
     payment the applicable account party or the Borrower may claim or have
     against the Issuing


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<PAGE>



     Lender, the Administrative Agent, the Lenders, the beneficiary of the
     Letter of Credit drawn upon or any other Person, including without
     limitation, any defense based on any failure of the applicable account
     party, the Borrower or any other Credit Party to receive consideration or
     (ii) the legality, validity, regularity or unenforceability of the Letter
     of Credit, this Credit Agreement or any other Credit Document.

          (e) Reimbursement by Lenders.

               (i) Reimbursement with Revolving Loans. On any day on which the
          Borrower shall have requested, or been deemed to have requested, a
          Revolving Loan borrowing to reimburse a drawing under a Letter of
          Credit (as set forth in clause (d) above), the Administrative Agent
          shall give notice to the Lenders that a Revolving Loan has been
          requested or deemed requested in connection with a drawing under a
          Letter of Credit, in which case a Revolving Loan borrowing comprised
          solely of Base Rate Loans (each such borrowing, a "Mandatory
          Borrowing") shall be made from all Lenders (without giving effect to
          any termination of the Commitments pursuant to Section 9.2) pro rata
          based on each Lender's respective Revolving Loan Commitment Percentage
          and the proceeds thereof shall be paid directly to the Issuing Lender
          for application to the respective LOC Obligations. Each applicable
          Lender hereby irrevocably agrees to make such Revolving Loans upon any
          such request or deemed request on account of each such Mandatory
          Borrowing in the amount and in the manner specified in the preceding
          sentence and in accordance with the terms of Section 2.2(e)(iii)
          notwithstanding (A) the amount of Mandatory Borrowing may not comply
          with the minimum amount for borrowings of Revolving Loans otherwise
          required hereunder, (B) whether any conditions specified in Section
          5.2 are then satisfied, (C) whether a Default or Event of Default then
          exists, (D) failure of any such request or deemed request for
          Revolving Loans to be made by the time otherwise required hereunder,
          (E) the date of such Mandatory Borrowing, (F) any reduction in the
          Revolving Committed Amount or any termination of the Commitments, or
          (G) any set-off, counterclaim, recoupment, defense or other right
          which such Lender may have against the Issuing Lender, the Borrower or
          any other Person for any reason whatsoever.

               (ii) Reimbursement Through Funding of Participation Interests. In
          the event that any Mandatory Borrowing cannot for any reason be made
          on the date otherwise required above (including, without limitation,
          as a result of the commencement of a proceeding under the Bankruptcy
          Code with respect to the Borrower or any other Credit Party), the
          Issuing Lender will promptly notify the Participants of the amount of
          any unreimbursed drawing (as of the date the Mandatory Borrowing would
          otherwise have occurred, but adjusted for any payments received from
          the Borrower on or after such date and prior to the funding of the
          Participation Interests therein) and each Participant shall fund its
          Participation Interest in such unreimbursed drawing by paying to the
          Issuing Lender, in Dollars and in immediately available funds, the
          amount of such Participant's Revolving Loan Commitment Percentage of
          such unreimbursed drawing. Each Participant's obligation to make such
          payment to the Issuing Lender, and the right of the Issuing


                                       30





<PAGE>



          Lender to receive the same, shall be absolute and unconditional, shall
          not be affected by any circumstance whatsoever and without regard to
          (A) the termination of this Credit Agreement or the Commitments
          hereunder, (B) the existence of a Default or Event of Default, (C) the
          acceleration of the obligations hereunder and (D) any set-off,
          counterclaim, recoupment, defense or other right which such
          Participant may have against the Issuing Lender, the Borrower or any
          other Person for any reason whatsoever. Simultaneously with the making
          of each such payment by a Participant to the Issuing Lender, such
          Participant shall, automatically and without any further action on the
          part of the Issuing Lender or such Participant, acquire a
          participation in an amount equal to such payment (excluding the
          portion of such payment constituting interest owing to the Issuing
          Lender) in the related unreimbursed drawing portion of the LOC
          Obligation and in the interest thereon and in the related LOC
          Documents, and shall have a claim against the Borrower and the other
          Credit Parties with respect thereto.

               (iii) Funding of Mandatory Borrowing or Participation Interest.
          Each applicable Lender (including the Lender acting as Issuing Lender)
          and each Participant shall upon any notice pursuant to Section
          2.2(e)(i) or Section 2.2(e)(ii), respectively, make its Revolving Loan
          Commitment Percentage of the unreimbursed drawing available to the
          Administrative Agent, for the benefit of the Issuing Lender, by 1:00
          p.m. on the day of the notice if notice is given on or before 11:00
          a.m. or by 1:00 p.m. the next Business Day if notice is given after
          11:00 a.m., in Dollars, of immediately available funds at the Agency
          Services Address. The Administrative Agent shall remit the funds so
          received to the Issuing Lender.

               (iv) Failure to Fund. In the event any Lender or any Participant
          shall fail to fund its portion of a Mandatory Borrowing or its
          Participation Interest, respectively, on the date required pursuant to
          Section 2.2(e)(iii), the amount of such Lender's unfunded portion of
          the Mandatory Borrowing or such Participant's unfunded Participation
          Interest shall bear interest payable to the Issuing Lender upon
          demand, 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.

          (f) Modification and Extension. The issuance of any supplement,
     modification, amendment, renewal, or extensions to any Letter of Credit
     shall, for purposes hereof, be treated in all respects the same as the
     issuance of a new Letter of Credit hereunder.

          (g) Applicability of ISP98 and UCP. Unless otherwise expressly agreed
     by the Issuing Lender and the Borrower when a Letter of Credit is issued
     (including any such agreement applicable to an Existing Letter of Credit),
     (i) the rules of the "International Standby Practices 1998" published by
     the Institute of International Banking Law & Practice (or such later
     version thereof as may be in effect at the time of issuance) shall apply to
     each standby Letter of Credit, and (ii) the rules of the Uniform Customs
     and Practice for Documentary Credits, as most recently published by the


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<PAGE>



     International Chamber of Commerce at the time of issuance shall apply to
     each commercial Letter of Credit.

          (h) Responsibility of Issuing Lender.

               (i) It is expressly understood and agreed as between the Lenders
          that the obligations of the Issuing Lender hereunder to the
          Participants are only those expressly set forth in this Credit
          Agreement and that the Issuing Lender shall be entitled to assume that
          the conditions precedent set forth in Section 5.2 have been satisfied
          unless it shall have acquired actual knowledge that any such condition
          precedent has not been satisfied; provided, however, that nothing set
          forth in this Section 2.2 shall be deemed to prejudice the right of
          any Participant to recover from the Issuing Lender any amounts made
          available by such Participant to the Issuing Lender pursuant to this
          Section 2.2 in the event that it is determined by a court of competent
          jurisdiction that the payment with respect to a Letter of Credit
          constituted gross negligence or willful misconduct on the part of the
          Issuing Lender.

               (ii) The Issuing Lender shall be under no obligation to issue any
          Letter of Credit if (a) any order, judgment or decree of any
          Governmental Authority or arbitrator shall by its terms purport to
          enjoin or restrain the Issuing Lender from issuing such Letter of
          Credit, (b) any Requirement of Law applicable to the Issuing Lender or
          any request or directive (whether or not having the force of law) from
          any Governmental Authority with jurisdiction over the Issuing Lender
          shall prohibit, or request that the Issuing Lender refrain from, the
          issuance of letters of credit generally or such Letter of Credit in
          particular or shall impose upon the Issuing Lender with respect to
          such Letter of Credit any restriction, reserve or capital requirement
          (for which the Issuing Lender is not otherwise compensated hereunder)
          not in effect on the Closing Date, or shall impose upon the Issuing
          Lender any unreimbursed loss, cost or expense which was not applicable
          on the Closing Date and which the Issuing Lender in good faith deems
          material to it, or (c) the issuance of such Letter of Credit would
          violate one or more policies of the Issuing Lender.

          (i) Conflict with LOC Documents. In the event of any conflict between
     this Credit Agreement and any LOC Document, this Credit Agreement shall
     govern.

          (j) Indemnification of Issuing Lender.

               (i) In addition to its other obligations under this Credit
          Agreement, the Borrower hereby agrees to protect, indemnify, pay and
          save the Issuing Lender harmless from and against any and all claims,
          demands, liabilities, damages, losses, costs, charges and expenses
          (including Attorney Costs) that the Issuing Lender may incur or be
          subject to as a consequence, direct or indirect, of (A) the issuance
          of any Letter of Credit or (B) the failure of the Issuing Lender to
          honor a drawing under a Letter of Credit as a result of any act or
          omission, whether rightful or wrongful, of any present or future de
          jure or de facto Governmental Authority (all such acts or omissions,
          herein called "Government Acts").


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<PAGE>



               (ii) As between the Borrower and the Issuing Lender, the Borrower
          shall assume all risks of the acts, omissions or misuse of any Letter
          of Credit by the beneficiary thereof. The Issuing Lender shall not be
          responsible for (except in the case of (A), (B) and (C) below if the
          Issuing Lender has actual knowledge to the contrary): (A) the form,
          validity, sufficiency, accuracy, genuineness or legal effect of any
          document submitted by any party in connection with the application for
          and issuance of any Letter of Credit, even if it should in fact prove
          to be in any or all respects invalid, insufficient, inaccurate,
          fraudulent or forged; (B) the validity or sufficiency of any
          instrument transferring or assigning or purporting to transfer or
          assign any Letter of Credit or the rights or benefits thereunder or
          proceeds thereof, in whole or in part, that may prove to be invalid or
          ineffective for any reason; (C) failure of the beneficiary of a Letter
          of Credit to comply fully with conditions required in order to draw
          upon a Letter of Credit; (D) errors, omissions, interruptions or
          delays in transmission or delivery of any messages, by mail, cable,
          telegraph, telex or otherwise, whether or not they be in cipher; (E)
          any loss or delay in the transmission or otherwise of any document
          required in order to make a drawing under a Letter of Credit or of the
          proceeds thereof; and (F) any consequences arising from causes beyond
          the control of the Issuing Lender, including, without limitation, any
          Government Acts. None of the above shall affect, impair, or prevent
          the vesting of the Issuing Lender's rights or powers hereunder.

               (iii) In furtherance and extension and not in limitation of the
          specific provisions hereinabove set forth, any action taken or omitted
          by the Issuing Lender, under or in connection with any Letter of
          Credit or the related certificates, if taken or omitted in good faith,
          shall not put the Issuing Lender under any resulting liability to the
          Borrower or any other Credit Party. It is the intention of the parties
          that this Credit Agreement shall be construed and applied to protect
          and indemnify the Issuing Lender against any and all risks involved in
          the issuance of the Letters of Credit, all of which risks are hereby
          assumed by the Borrower, including, without limitation, any and all
          risks of the acts or omissions, whether rightful or wrongful, of any
          present or future Government Acts. The Issuing Lender shall not, in
          any way, be liable for any failure by the Issuing Lender or anyone
          else to pay any drawing under any Letter of Credit as a result of any
          Government Acts or any other cause beyond the control of the Issuing
          Lender.

               (iv) Nothing in this subsection (j) is intended to limit the
          reimbursement obligation of the Borrower contained in this Section
          2.2. The obligations of the Borrower under this subsection (j) shall
          survive the termination of this Credit Agreement. No act or omission
          of any current or prior beneficiary of a Letter of Credit shall in any
          way affect or impair the rights of the Issuing Lender to enforce any
          right, power or benefit under this Credit Agreement.

               (v) Notwithstanding anything to the contrary contained in this
          subsection (j), the Borrower shall have no obligation to indemnify the
          Issuing Lender in respect of any liability incurred by the Issuing
          Lender arising out of the


                                       33





<PAGE>



          gross negligence or willful misconduct of the Issuing Lender, as
          determined by a court of competent jurisdiction.

          (k) Designation of other Persons as Account Parties. Notwithstanding
     anything to the contrary set forth in this Credit Agreement, including
     without limitation Section 2.2(a) hereof, a Letter of Credit issued
     hereunder may contain a statement to the effect that such Letter of Credit
     is issued for the account of a Subsidiary of the Borrower; provided that
     notwithstanding such statement, the Borrower shall be the actual account
     party for all purposes of this Credit Agreement for such Letter of Credit
     and such statement shall not affect the Borrower's reimbursement
     obligations hereunder with respect to such Letter of Credit.

          (l) Payments Set Aside. If any payment received by the Issuing Lender
     (or by the Administrative Agent for the account of the Issuing Lender)
     pursuant to Section 2.2(d) or (e) is subsequently invalidated, declared to
     be fraudulent or preferential, set aside or required (including pursuant to
     any settlement entered into by the Issuing Lender in its discretion) to be
     repaid to a trustee, receiver or any other party, in connection with any
     proceeding under the Bankruptcy Code or any other Requirement of Law or
     otherwise, each Participant shall fund its Participation Interest in such
     payment by paying to the Issuing Lender its Revolving Loan Commitment
     Percentage of such payment on demand of the Administrative Agent, plus
     interest thereon from the date of such demand to the date such
     Participation Interest is funded by such Lender, at a rate per annum equal
     to the Federal Funds Rate from time to time in effect.

     2.3 Swing Line Loans Subfacility.

          (a) Swing Line Loans. The Swing Line Lender hereby agrees, on the
     terms and subject to the conditions set forth herein and in the other
     Credit Documents, to make loans (each a "Swing Line Loan" and collectively,
     the "Swing Line Loans") to the Borrower, in Dollars, at any time and from
     time to time, during the period from and including the Effective Date to
     but not including the Maturity Date (or such earlier date if the
     Commitments have been terminated as provided herein); provided that (i) the
     aggregate principal amount of the Swing Line Loans outstanding at any one
     time shall not exceed the Swing Line Committed Amount and (ii) the
     aggregate amount of outstanding Swing Line Loans plus the aggregate amount
     of outstanding Revolving Loans plus the aggregate amount of outstanding LOC
     Obligations plus the aggregate amount of outstanding Competitive Bid Loans
     shall not exceed the Revolving Committed Amount. Subject to the terms of
     this Credit Agreement, the Borrower may borrow, repay and reborrow Swing
     Line Loans.

          (b) Method of Borrowing and Funding Swing Line Loans. By no later than
     1:00 p.m. on the date of the requested borrowing of Swing Line Loans, the
     Borrower shall provide telephone notice to the Swing Line Lender, followed
     promptly by a written Swing Line Loan Request in the form of Exhibit 2.3(b)
     (which may be submitted by telecopy) setting forth (i) the amount of the
     requested Swing Line Loan and (ii) the date of the requested Swing Line
     Loan and complying in all respects with Section 5.2. The Swing Line


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<PAGE>



     Lender shall initiate the transfer of funds representing the Swing Line
     Loan advance to the Borrower by 3:00 p.m. on the Business Day of the
     requested borrowing.

          (c) Repayment and Participations of Swing Line Loans. The Borrower
     agrees to repay all Swing Line Loans immediately upon the existence of a
     Default or Event of Default or otherwise within three Business Days of
     demand therefor by the Swing Line Lender. Each repayment of a Swing Line
     Loan may be accomplished by requesting Revolving Loans which request is not
     subject to the conditions set forth in Section 5.2. In the event that the
     Borrower shall fail to timely repay any Swing Line Loan, and in any event
     upon (i) a request by the Swing Line Lender, (ii) the occurrence of an
     Event of Default described in Section 9.1(f) or (iii) the acceleration of
     any Loan or termination of any Commitment pursuant to Section 9.2, each
     other Participant shall irrevocably and unconditionally purchase from the
     Swing Line Lender, without recourse or warranty, an undivided interest and
     participation in such Swing Line Loan in an amount equal to such other
     Lender's Revolving Loan Commitment Percentage thereof, by directly
     purchasing a participation in such Swing Line Loan in such amount
     (regardless of whether the conditions precedent thereto set forth in
     Section 5.2 are then satisfied, whether or not the Borrower has submitted a
     Notice of Borrowing and whether or not the Commitments are then in effect,
     any Event of Default exists or all the Loans have been accelerated) and
     paying the proceeds thereof to the Swing Line Lender at the Agency Services
     Address, or at such other address as the Swing Line Lender may designate,
     in Dollars and in immediately available funds. If such amount is not in
     fact made available to the Swing Line Lender by any Participant, the Swing
     Line Lender shall be entitled to recover such amount on demand from such
     Participant, together with accrued interest thereon for each day from the
     date of demand thereof, at a rate equal to, if paid within two Business
     Days of such date, the Federal Funds Rate, and thereafter at a rate equal
     to the Base Rate plus two percent (2%) per annum. If such Participant does
     not pay such amount forthwith upon the Swing Line Lender's demand therefor,
     and until such time as such Participant makes the required payment, the
     Swing Line Lender shall be deemed to continue to have outstanding Swing
     Line Loans in the amount of such unpaid participation obligation for all
     purposes of the Credit Documents other than those provisions requiring the
     other Participants to purchase a participation therein. Further, such
     Participant shall be deemed to have assigned any and all payments made of
     principal and interest on its Loans, and any other amounts due to it
     hereunder to the Swing Line Lender to fund Swing Line Loans in the amount
     of the participation in Swing Line Loans that such Participant failed to
     purchase pursuant to this Section 2.3(c) until such amount has been
     purchased (as a result of such assignment or otherwise).

          (d) Swing Line Loan Note. The Swing Line Loans made by the Swing Line
     Lender shall, if requested by the Swing Line Lender, be evidenced by a duly
     executed promissory note of the Borrower to the Swing Line Lender in
     substantially the form of Exhibit 2.3(d).

     2.4 Competitive Bid Loans Subfacility.

          (a) Competitive Bid Loans. Subject to the terms and conditions set
     forth herein, the Borrower may, from time to time, during the period from
     the Closing Date to


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<PAGE>



     the Maturity Date, request, in Dollars, and each Lender may, in its sole
     discretion, agree to make loans to the Borrower in accordance with the
     terms of this Section 2.4 (each a "Competitive Bid Loan" and collectively
     the "Competitive Bid Loans"); provided, however, that (i) the sum of the
     aggregate amount of outstanding Revolving Loans plus the aggregate amount
     of outstanding Competitive Bid Loans plus the aggregate amount of
     outstanding Swing Line Loans plus the aggregate amount of outstanding LOC
     Obligations shall not exceed the Revolving Loan Commitment, (ii) the
     aggregate amount of Competitive Bid Loans outstanding at any one time
     cannot exceed $300,000,000 and (iii) if a Lender does make a Competitive
     Bid Loan it shall not reduce such Lender's obligation to make its pro rata
     share of any Revolving Loan.

          (b) Competitive Bid Requests. The Borrower may solicit Competitive
     Bids by delivery of a Competitive Bid Request to the Administrative Agent
     by 11:00 a.m. on a Business Day not less than one nor more than five
     Business Days prior to the date of the requested Competitive Bid Loan. A
     Competitive Bid Request must be substantially in the form of Exhibit 2.4(b)
     and shall specify (i) the date of the requested Competitive Bid Loan (which
     shall be a Business Day), (ii) the amount of the requested Competitive Bid
     Loan and (iii) the applicable Interest Period or Interest Periods requested
     and be accompanied by the Competitive Bid Fee. The Administrative Agent
     shall notify the Lenders of its receipt of a Competitive Bid Request and
     the contents thereof and invite the Lenders to submit Competitive Bids in
     response thereto. The Borrower may not request a Competitive Bid for more
     than four different Interest Periods per Competitive Bid Request and
     Competitive Bid Requests may be made no more frequently than six times
     every calendar month.

          (c) Competitive Bid Procedure. Each Lender may, in its sole
     discretion, make one or more Competitive Bids to the Borrower in response
     to a Competitive Bid Request. Each Competitive Bid must be received by the
     Administrative Agent not later than 11:00 a.m. on the proposed date of the
     requested Competitive Bid Loan; provided, however, that should the
     Administrative Agent, in its capacity as a Lender, desire to submit a
     Competitive Bid it shall notify the Borrower of its Competitive Bid and the
     terms thereof not later than 15 minutes prior to the time the other Lenders
     are required to submit their Competitive Bid. A Lender may offer to make
     all or part of the requested Competitive Bid Loan and may submit multiple
     Competitive Bids in response to a Competitive Bid Request. Any Competitive
     Bid must specify (i) the particular Competitive Bid Request as to which the
     Competitive Bid is submitted, (ii) the minimum (which shall be not less
     than $10,000,000 and integral multiples of $1,000,000 in excess thereof)
     and maximum principal amounts of the requested Competitive Bid Loan or
     Loans as to which the Lender is willing to make and (iii) the applicable
     interest rate or rates and Interest Period or Interest Periods therefor. A
     Competitive Bid submitted by a Lender in accordance with the provisions
     hereof shall be irrevocable. The Administrative Agent shall promptly notify
     the Borrower of all Competitive Bids made and the terms thereof. The
     Administrative Agent shall send a copy of each of the Competitive Bids to
     the Borrower and each of the Lenders for its records as soon as
     practicable.


                                       36





<PAGE>



          (d) Acceptance of Competitive Bids. The Borrower may, in its sole
     discretion, subject only to the provisions of this subsection (d), accept
     or refuse any Competitive Bid offered to it. To accept a Competitive Bid,
     the Borrower shall give oral notification of its acceptance of any or all
     such Competitive Bids (which shall be promptly confirmed in writing) to the
     Administrative Agent by 12:00 noon on the proposed date of the Competitive
     Bid Loan; provided, however, (i) the failure by the Borrower to give timely
     notice of its acceptance of a Competitive Bid shall be deemed to be a
     refusal thereof, (ii) to the extent Competitive Bids are for comparable
     Interest Periods, the Borrower may accept Competitive Bids only in
     ascending order of rates, (iii) the aggregate amount of Competitive Bids
     accepted by the Borrower shall not exceed the principal amount specified in
     the Competitive Bid Request, (iv) if the Borrower shall accept a bid or
     bids made at a particular Competitive Bid Rate, but the amount of such bid
     or bids shall cause the total amount of bids to be accepted by the Borrower
     to be in excess of the amount specified in the Competitive Bid Request,
     then the Borrower shall accept a portion of such bid or bids in an amount
     equal to the amount specified in the Competitive Bid Request less the
     amount of all other Competitive Bids accepted with respect to such
     Competitive Bid Request, which acceptance in the case of multiple bids at
     such Competitive Bid Rate, shall be made pro rata in accordance with the
     amount of each such bid at such Competitive Bid Rate and (v) no bid shall
     be accepted for a Competitive Bid Loan unless such Competitive Bid Loan is
     in a minimum principal amount of $10,000,000 and integral multiples of
     $1,000,000 in excess thereof, except that where a portion of a Competitive
     Bid is accepted in accordance with the provisions of clause (iv) of
     subsection (d) hereof, then in a minimum principal amount of $500,000 and
     integral multiples of $100,000 (but not in any event less than the minimum
     amount specified in the Competitive Bid), and in calculating the pro rata
     allocation of acceptances of portions of multiple bids at a particular
     Competitive Bid Rate pursuant to clause (iv) of subsection (d) hereof, the
     amounts shall be rounded to integral multiples of $100,000 in a manner
     which shall be in the discretion of the Borrower. A notice of acceptance of
     a Competitive Bid given by the Borrower in accordance with the provisions
     hereof shall be irrevocable. The Administrative Agent shall, not later than
     1:00 p.m. on the proposed date of such Competitive Bid Loan, notify each
     bidding Lender whether or not its Competitive Bid has been accepted (and if
     so, in what amount and at what Competitive Bid Rate), and each successful
     bidder will thereupon become bound, subject to the other applicable
     conditions hereof, to make the Competitive Bid Loan in respect of which its
     bid has been accepted.

          (e) Funding of Competitive Bid Loans. Each Lender which is to make a
     Competitive Bid Loan shall make its Competitive Bid Loan available to the
     Administrative Agent by 2:00 p.m. on the date specified in the Competitive
     Bid Request by deposit of immediately available funds at the Agency
     Services Address or at such other address as the Administrative Agent may
     designate in writing. The Administrative Agent will, upon receipt, make the
     proceeds of such Competitive Bid Loans available to the Borrower.

          (f) Maturity of Competitive Bid Loans. Each Competitive Bid Loan shall
     mature and be due and payable in full on the last day of the Interest
     Period applicable


                                       37





<PAGE>



     thereto. Unless the Borrower shall give notice to the Administrative Agent
     otherwise (or repays such Competitive Bid Loan), or a Default or Event of
     Default exists and is continuing, the Borrower shall be deemed to have
     requested Revolving Loans from all of the Lenders (in the amount of the
     maturing Competitive Bid Loan and accruing interest at the Base Rate), the
     proceeds of which will be used to repay such Competitive Bid Loan.

          (g) Competitive Bid Loan Notes. The Competitive Bid Loans made by each
     Lender shall be evidenced by a duly executed promissory note of the
     Borrower to each Lender that requests a Competitive Bid Loan Note in
     substantially the form of Exhibit 2.4(g).

     2.5 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 to a Base Rate Loan or (b)
three Business Days prior to the date of the requested continuation of a
Eurodollar Loan 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
2.5 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. It is understood and agreed that Competitive
Bid Loans and Swing Line Loans may not be continued or converted.

     2.6 Minimum Amounts.

     Each request for a borrowing, conversion or continuation shall be subject
to the requirements that (a) each Eurodollar Loan and each Competitive Bid Loan
shall be in a minimum amount of $10,000,000 and in integral multiples of
$1,000,000 in excess thereof, (b) each Base Rate Loan shall be in a minimum
amount of the lesser of $5,000,000 (and in integral multiples of $1,000,000 in
excess thereof) or the remaining amount available under the Revolving Committed
Amount, (c) each Swing Line Loan shall be in a minimum amount of the lesser of
$1,000,000 (and in integral multiples of $100,000 in excess thereof) or the
remaining amount available under the Swing Line Committed Amount and (d) no more
than ten Eurodollar Loans shall be outstanding hereunder at any one time. For
the purposes of this Section 2.6, all Eurodollar Loans with the same


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<PAGE>



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 AND LETTERS OF CREDIT

     3.1 Interest.

          (a) Interest Rate. Subject to Section 3.1(b), (i) all Base Rate Loans
     shall accrue interest at the Base Rate, (ii) all Eurodollar Loans shall
     accrue interest at the Adjusted Eurodollar Rate, (iii) all Swing Line Loans
     shall accrue interest at the Base Rate and (iv) all Competitive Bid Loans
     shall accrue interest at the applicable Competitive Bid Rate with respect
     to each Competitive Bid Loan.

          (b) Default Rate of Interest. Upon the occurrence, and during the
     continuation, of an Event of Default pursuant to Section 9.1(a), 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. Interest on Loans shall be due and payable in
     arrears on each Interest Payment Date.

     3.2 Place and Manner of Payments.

     All payments of principal, interest, fees, expenses and other amounts to be
made by a Credit Party under this Credit Agreement shall be made unconditionally
and without any setoff, deduction, counterclaim, defense, recoupment or
withholding of any kind and received not later than 2:00 p.m. on the date when
due, in Dollars and in immediately available funds, by the Administrative Agent
at the Agency Services Address. Payments received after such time shall be
deemed to have been received on the next Business Day. The Borrower shall, at
the time it makes any payment under this Credit Agreement, specify to the
Administrative Agent the Loans, Letters of Credit, fees or other amounts payable
by the Borrower hereunder to which such payment is to be applied (and in the
event that it fails to specify, or if such application would be inconsistent
with the terms hereof, the Administrative Agent shall, subject to Section 3.7,
distribute such payment to the Lenders in such manner as the Administrative
Agent may reasonably deem appropriate). The Administrative Agent will distribute
such payments to the Lenders on the same Business Day if any such payment is
received at or before 2:00 p.m.; otherwise the Administrative Agent will
distribute such payment to the Lenders on the next succeeding Business Day.
Whenever any payment hereunder shall be stated to be due on a day which is not a
Business Day, the due date thereof shall be extended to the next succeeding
Business Day (subject to accrual of interest and fees for the period of such


                                       39





<PAGE>



extension), except that, in the case of Eurodollar Loans (or interest payable
with respect thereto), if the extension would cause the payment to be made in
the next following calendar month, then such payment shall instead be made on
the next preceding Business Day.

     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) Eurodollar Loans may only be prepaid on three
     Business Days' prior written notice to the Administrative Agent, (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, (iii) each such partial prepayment of Swing Line Loans shall be
     in the minimum principal amount of $1,000,000 and integral multiples of
     $100,000 and (iv) Competitive Bid Loans may not be prepaid unless a
     breakage fee equal to the amount of damages suffered by the Lender (other
     than loss of anticipated profits) whose Competitive Bid Loan is prepaid is
     paid to such Lender (as determined by such Lender in its reasonable
     discretion). Amounts prepaid pursuant to this Section 3.3(a) shall be
     applied as the Borrower may elect; however, if the Borrower fails to
     specify, such prepayment will be applied in the manner set forth in Section
     3.3(c) below.

          (b) Mandatory Prepayments. If at any time (i) the sum of the aggregate
     amount of outstanding Revolving Loans plus the aggregate amount of
     outstanding LOC Obligations plus the aggregate amount of outstanding
     Competitive Bid Loans plus the aggregate amount of outstanding Swing Line
     Loans exceeds the Revolving Committed Amount, (ii) the aggregate amount of
     outstanding Swing Line Loans exceeds the Swing Line Committed Amount, (iii)
     the aggregate amount of outstanding LOC Obligations exceeds the LOC
     Committed Amount, (iv) the aggregate amount of outstanding commercial
     Letters of Credit exceeds $40,000,000 or (v) the amount of outstanding
     Competitive Bid Loans exceeds $300,000,000, the Borrower shall immediately
     make a principal payment to the Administrative Agent (or with respect to
     LOC Obligations an amount to be held as cash collateral) in a manner and in
     an amount necessary to be in compliance with Sections 2.1, 2.2, 2.3 and
     2.4, as applicable and as directed by the Administrative Agent (any such
     prepayment with respect to clause (i) above to 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), if the Borrower has not otherwise elected an
     application of such amounts, shall be applied first to Swing Line Loans,
     second to Revolving Loans (first to Base Rate Loans and then to Eurodollar
     Loans in direct order of Interest Period Maturities), third, pro rata, to
     Competitive Bid Loans and fourth to a cash collateral account in respect of
     LOC Obligations. All prepayments under this Section 3.3 shall be subject to
     Section 3.14.


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<PAGE>



     3.4 Fees.

          (a) Facility Fees. In consideration of the Revolving Committed Amount
     being made available by the Lenders hereunder, the Borrower agrees to pay
     to the Administrative Agent, for the pro rata benefit of each Lender (based
     on such Lender's Revolving Loan Commitment Percentage of the Revolving
     Committed Amount), a per annum fee equal to the Applicable Percentage for
     Facility Fees (the "Facility Fees"). The Facility Fees shall commence to
     accrue on the Effective Date and shall be due and payable in arrears on the
     last day of each fiscal quarter (beginning with the fiscal quarter ending
     June 30, 2004) of the Borrower (as well as on the Maturity Date and on any
     date that the Revolving Committed Amount is reduced) for the immediately
     preceding fiscal quarter, or portion thereof, (or with respect to the
     fiscal quarter ending June 30, 2004, for the period from the Closing Date
     to June 30, 2004).

          (b) Letter of Credit Fees.

               (i) Letter of Credit Fees. In consideration of the issuance of
          Letters of Credit hereunder, the Borrower agrees to pay to the Issuing
          Lender, for the pro rata benefit of each Lender (based on each
          Lender's Commitment Percentage), a per annum fee (the "Letter of
          Credit Fees") (i) for each commercial Letter of Credit equal to the
          Applicable Percentage for Commercial Letter of Credit Fees on the
          average daily maximum amount available to be drawn under each such
          Letter of Credit (whether or not such maximum amount is then in effect
          under such Letter of Credit) from the date of issuance to the date of
          expiration and (ii) for each standby Letter of Credit equal to the
          Applicable Percentage for Standby Letter of Credit Fees on the average
          daily maximum amount available to be drawn under each such Letter of
          Credit (whether or not such maximum amount is then in effect under
          such Letter of Credit) from the date of issuance to the date of
          expiration. The Letter of Credit Fees will be payable in arrears on
          the last day of each fiscal quarter (beginning with the fiscal quarter
          ending June 30, 2004) of the Borrower (as well as on the Maturity
          Date) for the immediately preceding fiscal quarter, or portion
          thereof, (or with respect to the fiscal quarter ending June 30, 2004,
          for the period from the Closing Date to June 30, 2004).

               (ii) Issuing Lender Fees. In addition to the Letter of Credit
          Fees payable pursuant to subsection (i) above, the Borrower shall pay
          to the Issuing Lender for its own account, without sharing by the
          other Lenders, (A) the customary, incidental and/or out of pocket
          charges from time to time to the Issuing Lender for its services in
          connection with the issuance, amendment, payment, transfer,
          administration, cancellation and conversion of, and drawings under,
          Letters of Credit and (B) (1) with respect to each commercial Letter
          of Credit, a one time commercial letter of credit fronting fee based
          on the Issuing Lender's commercial letter of credit fee schedule then
          in effect, payable on demand by the Issuing Lender upon the issuance
          of any commercial Letter of Credit and (2) with respect to each
          standby Letter of Credit, a standby letter of credit fronting fee of
          .125% per annum of the face amount of each Letter of Credit payable
          quarterly on the last day of each fiscal quarter of the


                                       41





<PAGE>



          Borrower (beginning with the fiscal quarter ending June 30, 2004) and
          on the Maturity Date (collectively, the "Issuing Lender Fees").

          (c) Administrative Fees. The Borrower agrees to pay to the
     Administrative Agent, for its own account, an annual fee as agreed to
     between the Borrower and the Administrative Agent.

     3.5 Payment in full at Maturity.

     On the Maturity Date, the entire outstanding principal balance of all Loans
and all LOC Obligations, 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 and Swing Line 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


                                       42





<PAGE>



     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.

     3.7 Pro Rata Treatment.

     Except to the extent otherwise provided herein:

          (a) Revolving Loans. Each Revolving Loan borrowing (including, without
     limitation, each Mandatory Borrowing), each payment or prepayment of
     principal of any Revolving Loan, each payment of fees (other than the
     Issuing Lender Fees retained by the Issuing Lender for its own account and
     the Administrative Fees retained by the Administrative Agent for its own
     account), each reduction of the Revolving Committed Amount, and each
     conversion or continuation of any Revolving Loan, shall (except as
     otherwise provided in Section 3.11) be allocated pro rata among the
     relevant Lenders in accordance with the respective Revolving 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 Revolving Loans
     and Participation Interests of such Lenders); provided that, if any Lender
     shall have failed to pay its applicable pro rata share of any Revolving
     Loan, then any amount to which such Lender would otherwise be entitled
     pursuant to this subsection (a) 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 subsection (a) 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; and

          (b) Letters of Credit. Each payment of unreimbursed drawings in
     respect of LOC Obligations shall be allocated to each Participant pro rata
     in accordance with its Revolving Loan Commitment Percentage; provided that,
     if any Participant shall have failed to pay its applicable pro rata share
     of any drawing under any Letter of Credit, then any amount to which such
     Participant would otherwise be entitled pursuant to this subsection (b)
     shall instead be payable to the Issuing Lender until the share of such
     unreimbursed drawing not funded by such Lender has been repaid; provided
     further, that in the event any amount paid to any Participant pursuant to
     this subsection (b) is rescinded or must otherwise be returned by the
     Issuing Lender, each Participant shall, upon the request of the Issuing
     Lender, repay to the Administrative Agent for the account of the Issuing
     Lender the amount so paid to such Participant, with interest for the period
     commencing on the date such payment is returned by the Issuing Lender until
     the date the Issuing Lender receives such repayment at a rate per annum
     equal to, during the period to but excluding the date two


                                       43





<PAGE>



     Business Days after such request, the Federal Funds Rate, and thereafter,
     the Base Rate plus two percent (2%) per annum.

          (c) Swing Line Loans. The Swing Line Lender shall receive, for its own
     account, all payments or prepayments of principal and interest with respect
     to the Swing Line Loans; provided, however, upon the funding of the
     Participants' participation interests with respect to a Swing Line Loan
     pursuant to Section 2.3(c), such Participants shall be entitled to receive
     their pro rata share of any payment or prepayment of principal and interest
     with respect to such Swing Line Loan.

     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, unreimbursed drawing with respect to any LOC Obligations 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, LOC Obligations, 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, LOC Obligation 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 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.


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<PAGE>



     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
     Eurocurrency funds or deposits (currently known as "Eurocurrency
     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 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


                                       45





<PAGE>



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 (as the
case may be) issuing or participating in Letters of Credit, 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 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 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


                                       46





<PAGE>



     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.

          (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


                                       47





<PAGE>



     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 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


                                       48





<PAGE>



     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. (v) The obligation of the Lenders under this Section 3.13(f) shall
     survive the payment of all 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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<PAGE>



     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 repayment of a Competitive Bid Loan on a date which is not the
     last day of the Interest Period applicable thereto or any failure by the
     Borrower to borrow a Competitive Bid Loan on the date in the amount
     previously agreed to by the Borrower.

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 Dollar interbank market 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


                                       50





<PAGE>



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
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.


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<PAGE>



     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 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, 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


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<PAGE>



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.

     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


                                       53





<PAGE>



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).

     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.

     The obligation of the Lenders to enter into this Credit Agreement and make
the initial Extension of Credit is subject to satisfaction (or waiver) of the
following conditions:


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<PAGE>



          (a) Executed Credit Documents. Receipt by the Administrative Agent of
     duly executed copies of: (i) this Credit Agreement; (ii) the Notes
     requested by Lenders (or the Swing Line Lender) 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.

               (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 Certificates. The Administrative Agent shall have
     received a certificate or certificates executed by an Authorized Officer of
     the Borrower as of the Closing Date stating that (i) the financial
     statements and information delivered to the


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<PAGE>



     Administrative Agent on or before the Closing Date were prepared in good
     faith and that such financial statements were prepared in accordance with
     GAAP and (ii) immediately after giving effect to this Credit Agreement, the
     other Credit Documents and all the transactions contemplated herein or
     therein to occur on such date, (A) each Credit Party is Solvent and the
     Borrower and its Subsidiaries taken as a whole are Solvent, (B) no Default
     or Event of Default exists, (C) all representations and warranties
     contained herein and in the other Credit Documents are true and correct in
     all material respects, and (D) the Credit Parties are in compliance with
     each of the financial covenants set forth in Section 7.2.

          (f) Existing Revolving Credit Agreement. Receipt by the Administrative
     Agent of evidence satisfactory to it that all of the Indebtedness of the
     Credit Parties under the Existing Revolving Credit Agreement has been paid
     in full (or will be paid in full with the proceeds of the initial Loans
     made herein) and all documents executed or delivered in connection
     therewith have been terminated.

          (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 Letters.

          (h) Other. Receipt by the Lenders of such other documents,
     instruments, agreements or information as reasonably and timely requested
     by any Lender.

     5.2 Conditions to All 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 unless:

          (a) Notice. The Borrower shall have delivered (i) in the case of any
     new Revolving Loan, to the Administrative Agent, an appropriate Notice of
     Borrowing, duly executed and completed, by the time specified in Section
     2.1, (ii) in the case of any Letter of Credit, to the Issuing Lender, an
     appropriate request for issuance of a Letter of Credit in accordance with
     the provisions of Section 2.2, (iii) in the case of any Swing Line Loan, to
     the Swing Line Lender, a Swing Line Loan Request, duly executed and
     completed, by the time specified in Section 2.3, and (iv) in the case of
     any Competitive Bid Loan, to the Administrative Agent, an appropriate
     Competitive Bid Request, duly executed and completed, by the time specified
     in Section 2.4.

          (b) Representations and Warranties. The representations and warranties
     made by the Credit Parties in 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.

          (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.


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<PAGE>



          (d) Availability. Immediately after giving effect to the making of a
     Loan (and the application of the proceeds thereof) or to the issuance of a
     Letter of Credit, as the case may be, (i) the sum of the outstanding
     Revolving Loans plus outstanding LOC Obligations plus outstanding Swing
     Line Loans plus outstanding Competitive Bid Loans shall not exceed the
     Revolving Committed Amount, (ii) the sum of outstanding LOC Obligations
     shall not exceed the LOC Committed Amount, (iii) the sum of outstanding
     commercial Letters of Credit shall not exceed $40,000,000, (iv) the sum of
     outstanding Swing Line Loans shall not exceed the Swing Line Committed
     Amount and (v) the sum of outstanding Competitive Bid Loans shall not
     exceed $300,000,000.

The delivery of each Notice of Borrowing, each request for a Letter of Credit,
each Swing Line Loan Request and each Competitive Bid Loan Request 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.

     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


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<PAGE>



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, 2003,
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 Closing Date or pursuant to Section 7.1 or
in the notes thereto or (ii) otherwise permitted by the terms of this Credit
Agreement and communicated to the Administrative Agent and the Lenders.


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<PAGE>



     6.7 No Material Change.

     Except as disclosed on Schedule 6.7, since December 31, 2003, there has
been no development or event relating to or affecting the Borrower or any of its
Subsidiaries which has had or would reasonably be expected to have a Material
Adverse Effect.

     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:


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<PAGE>



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


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<PAGE>



     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 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. No proceeds of the Loans will be used for the Acquisition of
another Person unless such Acquisition is a Permitted Acquisition.

     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 Public Utility Holding Company Act of 1935, 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)


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<PAGE>



     no Lien in favor or 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
     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.


                                       62





<PAGE>



               (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 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.


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<PAGE>



     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 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 Closing Date, 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.

                                    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 and LOC Obligations, together with
interest and fees and other obligations then due and payable hereunder, have
been paid in full and the Commitments and Letters of Credit hereunder shall have
terminated:

     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


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<PAGE>



     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 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


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     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 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; and (v) any breach
     by the Borrower or any of its Subsidiaries or any predecessor of the
     Borrower or any of its Subsidiaries of the Corporate Integrity Agreement
     entered into with the OIG if such breach causes the OIG to take any adverse
     action as a result of such breach.

          (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).


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          (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 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


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     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".

          (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 (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 3.25 to 1.0.

          (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


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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 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


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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 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 (a) to repay
Indebtedness outstanding under the Existing Revolving Credit Agreement and any
other Indebtedness of the Borrower and its Subsidiaries, (b) to provide working
capital for the Borrower and its Subsidiaries and (c) for general corporate
purposes of the Borrower and its Subsidiaries. The Borrower will use the Letters
of Credit solely for the purposes set forth in Section 2.2(a).

     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


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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.

     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 any 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, 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.


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     7.14 Existing Term Credit Agreement.

     The Borrower will repay in full all outstanding obligations under the
Existing Term Credit Agreement on the earlier of (a) the last day of the
applicable Eurodollar interest periods in effect as of the Closing Date and (b)
May 15, 2004.

                                    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 and LOC Obligations, together with
interest, fees and other obligations then due and payable hereunder, have been
paid in full and the Commitments and Letters of Credit hereunder shall have
terminated:

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

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

          (d) 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;

          (e) 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;

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

          (g) Any guaranty of Indebtedness of the Borrower;


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          (h) Indebtedness incurred after the Effective 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;

          (i) Indebtedness existing on the Closing Date as set forth on Schedule
     8.1; and

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

     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 Effective Date or engage
in any substantial manner in any business other than (a) the business conducted
by the Borrower and its Subsidiaries as of the Effective Date 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
     prior 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


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          (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 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


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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 Closing Date 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 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) the
          prepayment of the Revolving Loans (with a corresponding permanent
          reduction in the Revolving Committed Amount) or the prepayment of debt
          ranking equally with the Loans; 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.


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          (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.

                                    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 or any reimbursement obligation
     arising from drawings under Letters of Credit 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 of the other Credit Documents or in connection
     herewith.

          (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, 7.12, or
          7.14 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.


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          (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.

          (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 $100,000,000 (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 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


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     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 $100,000,000 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 (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 $100,000,000.

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

     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


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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.

          (b) Acceleration of Loans. Declare the unpaid principal of and any
     accrued interest in respect of all Loans, any reimbursement obligations
     arising from drawings under Letters of Credit 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) Cash Collateral. Direct the Borrower to pay (and the Borrower
     agrees that upon receipt of such notice, or upon the occurrence of an Event
     of Default under Section 9.1(f), it will immediately pay) to the
     Administrative Agent additional cash, to be held by the Administrative
     Agent, for the benefit of the Lenders, in a cash collateral account as
     additional security for the LOC Obligations in respect of subsequent
     drawings under all then outstanding Letters of Credit in an amount equal to
     the maximum aggregate amount which may be drawn under all Letters of
     Credits then outstanding.

          (d) 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 the Commitments shall automatically terminate and all
Loans, all reimbursement obligations under Letters of Credit, 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 causes the Commitments to
terminate and/or 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:


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          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, the
     Issuing Lender, the Swing Line Lender 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 and unreimbursed drawings under Letters of Credit, and to the payment
     or cash collateralization of the outstanding LOC Obligations, 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

          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; (b) each of the Lenders shall receive an amount equal to
its pro rata share (based on the proportion that the then outstanding Loans, and
LOC Obligations held by such Lender bears to the aggregate then outstanding
Loans and LOC Obligations of amounts available to be applied; and (c) to the
extent that any amounts available for distribution pursuant to clause "FOURTH"
above are attributable to the issued but undrawn amount of outstanding Letters
of Credit, such amounts shall be held by the Administrative Agent in a cash
collateral account and applied (i) first, to reimburse the Issuing Lender from
time to time for any drawings under such Letters of Credit and (ii) then,
following the expiration of all Letters of Credit, to all other obligations of
the types described in clauses "FOURTH" and "FIFTH" above in the manner provided
in this Section 9.3.

                                   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


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     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) The Issuing Lender shall act on behalf of the Lenders with respect
     to any Letters of Credit issued by it and the documents associated
     therewith until such time (and except for so long) as the Administrative
     Agent may agree at the request of the Required Lenders to act for the
     Issuing Lender with respect thereto; provided, however, that the Issuing
     Lender shall have all of the benefits and immunities (i) provided to the
     Administrative Agent in this Section 10 with respect to any acts taken by
     or omissions of the Issuing Lender in connection with Letters of Credit
     issued by it or proposed to be issued by it and the application and
     agreements for letters of credit pertaining to the Letters of Credit as
     fully as if the term "Administrative Agent" as used in this Section 10
     included the Issuing Lender with respect to such acts or omissions, and
     (ii) as additionally provided herein with respect to the Issuing Lender.

          (c) Each of (i) Wachovia Bank, National Association in its capacity as
     Syndication Agent and (ii) Bank One, NA, PNC Bank, National Association and
     KeyBank 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.

     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


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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 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.


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     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.

     10.7 Indemnification.

     Whether or not the transactions contemplated hereby are consummated, the
Lenders shall indemnify upon demand each Agent-Related Person (to the extent not
reimbursed by or on


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behalf of any Credit Party and without limiting the obligation of any Credit
Party to do so), pro rata, and hold harmless each Agent-Related Person from and
against any and all Indemnified Liabilities incurred by it; provided, however,
that no Lender shall be liable for the payment to any Agent-Related Person of
any portion of such Indemnified Liabilities resulting from such Agent-Related
Person's gross negligence or willful misconduct; it being understood that no
action taken in accordance with the directions of the Required Lenders shall be
deemed to constitute gross negligence or willful misconduct for purposes of this
Section 10.7. Without limitation of the foregoing, each Lender shall reimburse
the Administrative Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the Administrative
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Credit Agreement, any other Credit Document, or any
document contemplated by or referred to herein, to the extent that the
Administrative Agent is not reimbursed for such expenses by or on behalf of the
Credit Parties. The undertaking in this Section 10.7 shall survive termination
of the Commitments, the payment of all Obligations hereunder and the resignation
or replacement of the Administrative Agent.

     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 or the
Issuing Lender 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 or the Issuing Lender, 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


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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 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 Administrative 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.


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          (c) 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.

          (d) 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 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.

     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, or
     (iii) by way of pledge or assignment of a security interest subject to the
     restrictions of subsection (f) 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, 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. Any Lender may at any time assign to one or more
     Eligible 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 (i) except 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 or an Affiliate of a Lender or an Approved Fund with
     respect to a Lender, the aggregate amount of the Revolving Committed Amount
     (which for this purpose includes Loans outstanding thereunder) 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); (ii) each partial
     assignment shall be made as an assignment of a proportionate part of all
     the assigning Lender's rights and obligations under this Credit Agreement
     with respect to the Loans or the Commitment assigned; (iii) any assignment
     of a Commitment must be approved by the Administrative Agent unless the
     Person that is the proposed assignee is itself a Lender or an Affiliate of
     a Lender (whether or not the proposed assignee would otherwise qualify as
     an Eligible Assignee); and (iv) the parties to each assignment shall
     execute and deliver to the Administrative Agent an Assignment and
     Assumption, together with a processing and recordation fee of $3,500.
     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 Eligible Assignee
     thereunder shall be a party to this Credit Agreement and, to the extent of
     the interest assigned by such Assignment and Assumption, have the rights
     and obligations of a Lender under this Credit Agreement, and the assigning
     Lender thereunder shall, to the extent of the interest assigned by such
     Assignment and Assumption, be released from its


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     obligations under this Credit Agreement (and, in the case of an Assignment
     and Assumption covering all of the assigning Lender's rights and
     obligations under this Credit Agreement, such Lender shall cease to be a
     party hereto but shall continue to be entitled to the benefits of Sections
     3.9, 3.13, 3.14 and 11.5 with respect to facts and circumstances occurring
     prior to the effective date of such assignment). Upon request, the Borrower
     (at its expense) shall execute and deliver applicable Note(s) to the
     assignee Lender. Any assignment or transfer by a Lender of rights or
     obligations under this Credit Agreement that does not comply with this
     subsection shall be treated for purposes of this Credit 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 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,
     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
     Commitment 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


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     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 Participant also shall be entitled to the benefits of Section 11.2 as
     though it were a Lender, provided such Participant agrees to be subject to
     Section 3.8 as though it were a Lender.

          (e) 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 Participant, unless the sale of the
     participation to such 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.


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     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.

               (i) Whether or not the transactions contemplated hereby are
          consummated, the Borrower shall indemnify and hold harmless each


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          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 judgment of a court of
          competent jurisdiction to have resulted from the gross negligence or
          willful misconduct 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;

          (b) reduce the rate 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 all or
     substantially all of the Guarantors from their respective obligations under
     the Credit Documents;

          (f) amend, modify or waive any provision of this Section 11.6 or
     Section 3.4(a), 3.4(b)(i), 3.7, 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, (i) no provisions of Section 10 may be amended or
modified without the consent of the Administrative Agent, (ii) no provisions of
Section 2.2 may be amended or modified without the consent of the Issuing Lender
and (iii) no provisions of Section 2.3 may be amended or modified without the
consent of the Swing Line Lender.

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 or the
Letters of Credit, 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.


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     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, the issuance of the Letters
of Credit and the repayment of the Loans, LOC Obligations and other obligations
and the termination of the Commitments hereunder.

     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.


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          (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 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 Affiliates' respective
partners, directors, officers, employees, agents, advisors and representatives
(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; (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process; (d)
to any other party to this Credit Agreement; (e) in connection with the exercise
of any remedies hereunder or any suit, action or proceeding relating to this
Credit Agreement or the enforcement of rights hereunder; (f) subject to an
agreement containing provisions substantially the same as those of this Section,
to (i) any Eligible Assignee of or Loan Participant in, or any prospective
Eligible Assignee of or Loan Participant in, any of


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its rights or obligations under this Credit Agreement or (ii) any direct or
indirect contractual counterparty or prospective counterparty (or such
contractual counterparty's or prospective counterparty's professional advisor)
to any credit derivative transaction relating to obligations of the Credit
Parties; (g) with the consent of the Borrower; (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section or (ii) becomes available to the Administrative Agent or any Lender
on a nonconfidential basis from a source other than the Borrower; or (i) to the
National Association of Insurance Commissioners or any other similar
organization. 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 Commitments. For the 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.

     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


                                       96





<PAGE>



     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, LOC Obligations, interest,
     fees and other Credit Party Obligations have been paid in full and all
     Commitments and Letters of Credit 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
     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 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.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


                                       97





<PAGE>



     Each of the parties hereto has caused a counterpart of this Amended and
Restated 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
                                         ---------------------------------------





<PAGE>



            Signature Page to Amended and Restated Credit Agreement
                         Quest Diagnostics Incorporated

GUARANTORS:

                                  QUEST DIAGNOSTICS HOLDINGS
                                  INCORPORATED
                                  a Delaware corporation

                                  QUEST DIAGNOSTICS CLINICAL
                                  LABORATORIES, INC.,
                                  a Delaware corporation

                                  APL PROPERTIES LIMITED LIABILITY
                                  COMPANY,
                                  a Nevada limited liability company

                                  QUEST DIAGNOSTICS INCORPORATED,
                                  a California corporation

                                  QUEST DIAGNOSTICS INCORPORATED,
                                  a Maryland corporation

                                  QUEST DIAGNOSTICS INCORPORATED,
                                  a Nevada corporation

                                  QUEST DIAGNOSTICS LLC,
                                  an Illinois limited liability company

                                  QUEST DIAGNOSTICS INCORPORATED,
                                  a Michigan corporation

                                  QUEST DIAGNOSTICS NICHOLS INSTITUTE, INC.
                                  a Virginia corporation

                                  QUEST DIAGNOSTICS OF PENNSYLVANIA, INC.,
                                  a Delaware corporation

                                  METWEST INC.,
                                  a Delaware corporation

                                  NICHOLS INSTITUTE DIAGNOSTICS,
                                  a California corporation

                                  DPD HOLDINGS, INC.,
                                  a Delaware corporation

                                  DIAGNOSTICS REFERENCE SERVICES INC.,
                                  a Maryland corporation

                                  QUEST DIAGNOSTICS LLC,
                                  a Connecticut limited liability company

                                  QUEST DIAGNOSTICS LLC,
                                  a Massachusetts limited liability company

                                  UNILAB CORPORATION,
                                  a Delaware corporation

                                  UNILAB ACQUISITION CORPORATION,
                                  a Delaware corporation

                                  AMERICAN MEDICAL LABORATORIES, INCORPORATED,
                                  a Delaware corporation

                                  AML INC,
                                  a Delaware corporation


                                  By: /s/ Joseph P. Manory
                                      ------------------------------------------
                                  Name: Joseph P. Manory
                                        Vice President and Treasurer
                                        of each of the above Guarantors





<PAGE>



             Signature Page to Amended and Restated Credit Agreement
                         Quest Diagnostics Incorporated

                                  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/ Robert S. Galen
                                     -------------------------------------------
                                  Name: Robert S. Galen
                                       -----------------------------------------
                                  Title: Vice President
                                        ----------------------------------------


                                  QUEST DIAGNOSTICS FINANCE INCORPORATED,
                                  a Delaware corporation


                                  By: /s/ Robert S. Galen
                                     -------------------------------------------
                                  Name: Robert S. Galen
                                       -----------------------------------------
                                  Title: Vice President
                                        ----------------------------------------





<PAGE>



             Signature Page to Amended and Restated Credit Agreement
                         Quest Diagnostics Incorporated

LENDERS:

                                  BANK OF AMERICA, N.A.,
                                  individually in its capacity as a Lender and
                                  in its capacity as Administrative Agent and
                                  Issuing Lender


                                  By: /s/ Philip S. Durand
                                     -------------------------------------------
                                  Name: Philip S. Durand
                                       -----------------------------------------
                                  Title: Managing Director
                                        ----------------------------------------





<PAGE>



             Signature Page to Amended and Restated Credit Agreement
                         Quest Diagnostics Incorporated

                                  BANK ONE, NA,
                                  as a Lender


                                  By: /s/ Michael R. Zaksheske
                                     -------------------------------------------
                                  Name: Michael R. Zaksheske
                                       -----------------------------------------
                                  Title: Director
                                        ----------------------------------------





<PAGE>



             Signature Page to Amended and Restated Credit Agreement
                         Quest Diagnostics Incorporated

                                  NATIONAL CITY BANK,
                                  as a Lender


                                  By: /s/ Heather M. McIntyre
                                     -------------------------------------------
                                  Name: Heather M. McIntyre
                                       -----------------------------------------
                                  Title: Assistant Vice President
                                        ----------------------------------------





<PAGE>



             Signature Page to Amended and Restated Credit Agreement
                         Quest Diagnostics Incorporated

                                  KEYBANK NATIONAL ASSOCIATION,
                                  as a Lender


                                  By: /s/ J.T. Taylor
                                     -------------------------------------------
                                  Name: J.T. Taylor
                                       -----------------------------------------
                                  Title: Vice President and Senior Portfolio
                                         Manager
                                        ----------------------------------------





<PAGE>



             Signature Page to Amended and Restated Credit Agreement
                         Quest Diagnostics Incorporated

                                  SUNTRUST BANK,
                                  as a Lender


                                  By: /s/ Mark D. Mattson
                                     -------------------------------------------
                                  Name: Mark D. Mattson
                                       -----------------------------------------
                                  Title: Managing Director
                                        ----------------------------------------





<PAGE>



             Signature Page to Amended and Restated Credit Agreement
                         Quest Diagnostics Incorporated

                                  MERRILL LYNCH BANK USA,
                                  as a Lender


                                  By: /s/ Louis Alder
                                     -------------------------------------------
                                  Name: Louis Alder
                                       -----------------------------------------
                                  Title: Director
                                        ----------------------------------------





<PAGE>



             Signature Page to Amended and Restated Credit Agreement
                         Quest Diagnostics Incorporated

                                  SUMITOMO MITSUI BANKING CORP., NEW YORK
                                  as a Lender


                                  By: /s/ Robert H. Riley III
                                     -------------------------------------------
                                  Name: Robert H. Riley III
                                       -----------------------------------------
                                  Title: Senior Vice President
                                        ----------------------------------------





<PAGE>



             Signature Page to Amended and Restated Credit Agreement
                         Quest Diagnostics Incorporated

                                  THE BANK OF NEW YORK,
                                  as a Lender


                                  By: /s/ Thomas J. McCormack
                                     -------------------------------------------
                                  Name: Thomas J. McCormack
                                       -----------------------------------------
                                  Title: Vice President
                                        ----------------------------------------





<PAGE>



             Signature Page to Amended and Restated Credit Agreement
                         Quest Diagnostics Incorporated

                                  FIFTH THIRD BANK,
                                  as a Lender


                                  By: /s/ Christine L. Wagner
                                     -------------------------------------------
                                  Name: Christine L. Wagner
                                       -----------------------------------------
                                  Title: Vice President
                                        ----------------------------------------





<PAGE>



             Signature Page to Amended and Restated Credit Agreement
                         Quest Diagnostics Incorporated

                                  CREDIT LYONNAIS NEW YORK BRANCH,
                                  as a Lender


                                  By: /s/ Charles Heidsieck
                                     -------------------------------------------
                                  Name: Charles Heidsieck
                                       -----------------------------------------
                                  Title: Senior Vice President
                                        ----------------------------------------





<PAGE>



             Signature Page to Amended and Restated Credit Agreement
                         Quest Diagnostics Incorporated

                                  WACHOVIA BANK, NATIONAL ASSOCIATION,
                                  as a Lender


                                  By: /s/ Jeanette A. Griffin
                                     -------------------------------------------
                                  Name: Jeanette A. Griffin
                                       -----------------------------------------
                                  Title: Director
                                        ----------------------------------------





<PAGE>



             Signature Page to Amended and Restated Credit Agreement
                         Quest Diagnostics Incorporated

                                  MANUFACTURERS AND TRADERS TRUST COMPANY,
                                  as a Lender


                                  By: /s/ W. Blake Hampson
                                     -------------------------------------------
                                  Name: W. Blake Hampson
                                       -----------------------------------------
                                  Title: Vice President
                                        ----------------------------------------





<PAGE>



             Signature Page to Amended and Restated Credit Agreement
                         Quest Diagnostics Incorporated

                                  WELLS FARGO BANK, NATIONAL ASSOCIATION,
                                  as a Lender


                                  By: /s/ Roy H. Roberts
                                     -------------------------------------------
                                  Name: Roy H. Roberts
                                       -----------------------------------------
                                  Title: Vice President
                                        ----------------------------------------





<PAGE>



             Signature Page to Amended and Restated Credit Agreement
                         Quest Diagnostics Incorporated

                                  MORGAN STANLEY BANK,
                                  as a Lender


                                  By: /s/ Daniel Twenge
                                     -------------------------------------------
                                  Name: Daniel Twenge
                                       -----------------------------------------
                                  Title: Vice President
                                        ----------------------------------------





<PAGE>



             Signature Page to Amended and Restated Credit Agreement
                         Quest Diagnostics Incorporated

                                  PNC BANK, NATIONAL ASSOCIATION,
                                  as a Lender


                                  By: /s/ Michael Richards
                                     -------------------------------------------
                                  Name: Michael Richards
                                       -----------------------------------------
                                  Title: Vice President
                                        ----------------------------------------



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>6
<FILENAME>ex10-5.txt
<DESCRIPTION>EXHIBIT 10.5
<TEXT>

<PAGE>


                                                                    Exhibit 10.5

                                QUEST DIAGNOSTICS

                     SUPPLEMENTAL DEFERRED COMPENSATION PLAN

   (Effective January 1, 1999, Amended and Restated Effective January 1, 2004)





<PAGE>



PREAMBLE

Effective as of January 1, 1999, Quest Diagnostics adopted this Quest
Diagnostics Supplemental Deferred Compensation Plan for the benefit of certain
of its Employees. Quest Diagnostics hereby amends and restates this Plan in its
entirety, effective as of the Restatement Effective Date, to reflect amendments
adopted and to implement certain other changes. The provisions of this restated
Plan shall govern the rights of Employees who have Accounts under the Plan that
have not been paid in full prior to the Restatement Effective Date. The purpose
of the Plan is to provide supplemental retirement income and to permit eligible
Employees the option to defer receipt of Compensation, pursuant to the terms of
the Plan. The Plan is intended to be an unfunded deferred compensation plan
maintained for the benefit of a select group of management or highly compensated
employees under sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.





<PAGE>



                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                               <C>
ARTICLE 1.   DEFINITIONS...........................................................................1

1.1    Definitions.................................................................................1

ARTICLE 2.   PARTICIPATION.........................................................................4

2.1    Commencement of Participation...............................................................4
2.2    Resumption of Participation Following Reemployment..........................................4
2.3    Change in Employment Status.................................................................4

ARTICLE 3.   CONTRIBUTIONS.........................................................................5

3.1    Deferral Contributions......................................................................5
3.2    Participating Employer Contributions........................................................6
3.3    Transfer of Funds...........................................................................6

ARTICLE 4.   PARTICIPANTS' ACCOUNTS................................................................7

4.1    Individual Accounts.........................................................................7
4.2    Accounting for Payments.....................................................................7

ARTICLE 5.   INVESTMENT OF CONTRIBUTIONS...........................................................8

5.1    Manner of Investment........................................................................8
5.2    Investment Decisions........................................................................8

ARTICLE 6.   RIGHT TO BENEFITS.....................................................................9

6.1    Termination of Employment...................................................................9
6.2    Death.......................................................................................9
6.3    Payment on a Designated Future Date.........................................................9
6.4    Payment Due to an Unforeseen Emergency......................................................9
6.5    Adjustment for Investment Experience........................................................9
6.6    Forfeiture of Unvested Amounts.............................................................10

ARTICLE 7.   PAYMENT OF BENEFITS..................................................................11

7.1    Payment of Benefits to Participants and Beneficiaries......................................11
7.2    Determination of Method of Payment.........................................................11
7.3    Right of Offset............................................................................11
7.4    Payment in the Event of Taxation...........................................................11

ARTICLE 8.   AMENDMENT AND TERMINATION............................................................12

8.1    Amendment by Quest Diagnostics.............................................................12
8.2    Retroactive Amendments.....................................................................12
8.3    Plan Termination...........................................................................12
</TABLE>


                                      -i-





<PAGE>



<TABLE>
<S>                                                                                               <C>
8.4    Payment upon Termination of the Plan.......................................................12

ARTICLE 9.   THE TRUST............................................................................13

9.1    Establishment of Trust.....................................................................13

ARTICLE 10.  MISCELLANEOUS........................................................................14

10.1   Limitation of Rights.......................................................................14
10.2   Spendthrift Provision......................................................................14
10.3   Facility of Payment........................................................................14
10.4.  Discharge of Obligations...................................................................14
10.5   Furnishing Information.....................................................................15
10.6   Information between the Administrator and Trustee..........................................15
10.7   Notices....................................................................................15
10.8   Writings and Electronic Communications. All elections, notices and other communication
          with respect to the Plan, including signatures relating to such documentation, may be
          executed and stored on paper, electronically or in another medium.......................15
10.9   Governing Law..............................................................................15
10.10  Construction...............................................................................15

ARTICLE 11.  PLAN ADMINISTRATION..................................................................16

11.1   Powers and Responsibilities of the Administrator...........................................16
11.2   Claims and Review Procedures...............................................................16
11.3   Plan's Administrative Costs................................................................17
</TABLE>


                                      -ii-





<PAGE>



Article 1. Definitions.

1.1 Definitions. Pronouns used in the Plan are in the masculine gender but
include the feminine gender unless the context clearly indicates otherwise.
Wherever used herein, the following terms have the meanings set forth below,
unless a different meaning is clearly required by the context:

(a) "Account" means an account established on the books of a Participant's
Employer for the purpose of recording Deferral Contributions and Employer
Contributions credited on behalf of a Participant in respect of compensation for
services to such Employer and any notional income, expenses, gains or losses
related thereto. For each Participant who was a participant in the MetPath Inc.
Deferred Compensation Plan, a MetPath Plan Subaccount was established as part of
the Participant's Account.

(b) "Administrator" means the Quest Diagnostics Benefits Administration
Committee or its delegee, which has been designated by Quest Diagnostics to be
responsible for the administration of the Plan.

(c) "Beneficiary" means the person or persons entitled under Section 6.2 to
receive benefits under the Plan upon the death of a Participant.

(d) "Bonus" means the cash bonus that is payable each March (if not deferred
pursuant to Section 3.1) under the Senior Management Incentive Plan or the Quest
Diagnostics Incorporated Management Incentive Plan.

(e) "Code" means the Internal Revenue Code of 1986, as amended from time to
time.

(f) "Compensation" shall have the meaning ascribed to the term "Deferral
Compensation" by the Profit Sharing Plan; provided that any exclusion
attributable to (i) deferred compensation deferred pursuant to this Plan or (ii)
limits imposed by Code Section 401(a)(17) shall not apply.

(g) "Deferral Contributions" means those amounts credited to a Participant's
Account pursuant to Section 3.1.

(h) "Effective Date" means January 1, 1999.

(i) "Eligible Employee" means an Employee of an Employer who is determined by
the Administrator to be among a select group of management or highly compensated
Employees and who is designated by the Administrator as an Eligible Employee for
purposes of the Plan.

(j) "Employee" means any employee of an Employer.

(k) "Employer" means Quest Diagnostics and any successors and assigns unless
otherwise provided herein, and shall include any Related Employer or other
affiliated employer adopting this Plan.

(l) "Employer Contributions" means amounts credited to a Participant's Account
pursuant to Section 3.2.





<PAGE>



(m) "Employer Stock" means any class of common stock of Quest Diagnostics or the
preferred stock of Quest Diagnostics that is convertible into common stock.

(n) "ERISA" means the Employee Retirement Income Security Act of 1974, as from
time to time amended.

(o) "MetPath Plan Subaccount" means the subaccount established and maintained by
the Administrator pursuant to Section 4.1 on behalf of each Participant who was
a participant in the MetPath Inc. Deferred Compensation Plan.

(p) "Participant" means any Eligible Employee who has filed in accordance with
Article 2 an election to defer Compensation pursuant to Section 3.1.

(q) "Plan" means this Quest Diagnostics Supplemental Deferred Compensation Plan
as in effect from time to time.

(r) "Plan Year" means the calendar year.

(s) "Profit Sharing Plan" means the Profit Sharing Plan of Quest Diagnostics
Incorporated, as amended from time to time.

(t) "Quest Diagnostics" means Quest Diagnostics Incorporated.

(u) "Related Employer" means any employer other than Quest Diagnostics, if Quest
Diagnostics and such other employer are members of a controlled group of
corporations (as defined in Section 414(b) of the Code) or an affiliated service
group (as defined in Code Section 414(m)), or are trades or businesses (whether
or not incorporated) which are under common control (as defined in Section
414(c)), or such other employer is required to be aggregated with Quest
Diagnostics pursuant to regulations issued under Code Section 414(o).

(v) "Restatement Effective Date" means January 1, 2004.

(w) "Section 16 Executive" means an Eligible Employee who is designated as such
by the Administrator.

(x) "Section 401(a)(17) Limit" means the maximum amount of annual compensation
that can be taken into account by the Profit Sharing Plan pursuant to Code
Section 401(a)(17).

(y) "Senior Executive" means an Eligible Employee who is designated as such by
the Administrator.

(z) "Senior Management Incentive Plan" means the Quest Diagnostics Incorporated
Senior Management Incentive Plan, as in effect from time to time.

(aa) "SMIP Bonus Subaccount" means the portion of a Participant's Account
established and maintained by the Administrator on behalf of each Participant
who elects to defer a portion of his Bonus payable under the Senior Management
Incentive Plan and any other plan intended to pay performance-based compensation
within the meaning of Code Section 162(m)(4)(c).


                                      -2-





<PAGE>



(bb) "Supplemental Contribution" means an additional discretionary Employer
Contribution credited to a Participant's Account pursuant to Section 3.2.

(cc) "Trust" means the trust fund established pursuant to the terms of the Plan.

(dd) "Trust Agreement" means the agreement by and among the Trustee and each
Employer establishing the Trust.

(ee) "Trustee" means the corporation or individuals named in the agreement
establishing the Trust and such successor and/or additional trustees as may be
named in accordance with the Trust Agreement.

(ff) "Valuation Date" means the last day of the Plan Year and such other date(s)
as designated by the Administrator.


                                      -3-





<PAGE>



Article 2. Participation.

2.1 Commencement of Participation. Each Eligible Employee who, as of the
Restatement Effective Date, has filed an election to defer Compensation in
accordance with Section 3.1 or has an Account is a Participant in this Plan.
Each other Eligible Employee shall become a Participant in this Plan after he
has timely filed an election to defer Compensation pursuant to Section 3.1 or
has a Supplemental Contribution credited to his Account. An election to defer
Compensation will be timely if it is filed in accordance with procedures
established by the Administrator which shall require elections to be filed no
later than January 1 of the Plan Year to which the deferral election applies or,
if an individual is designated by the Administrator as an Eligible Employee
during the Plan Year, within 30 days following the date of such designation.

2.2 Resumption of Participation Following Reemployment. If a Participant ceases
to be an Employee and thereafter returns to the employ of an Employer, he may
again become a Participant following his reemployment, provided he is an
Eligible Employee and has timely filed an election to defer Compensation
pursuant to Section 3.1.

2.3 Change in Employment Status. If any Participant continues in the employ of
an Employer but ceases to be an Eligible Employee, he shall continue to be a
Participant until the entire amount of the value of his Account is paid;
provided, however, he shall not be entitled to make Deferral Contributions or
receive an allocation of Employer Contributions or Supplemental Contributions
during the period that he is not an Eligible Employee.


                                      -4-





<PAGE>



Article 3. Contributions.

3.1  Deferral Contributions.

(a) Participant deferral elections. Each Participant who is not a Senior
Executive may elect to defer up to fifty (50) percent (in whole percentages) of
his future Compensation in excess of the Section 401(a)(17) Limit.

(b) Senior Executive deferral elections. Each Participant who is a Senior
Executive may elect to defer (1) up to fifty (50) percent (in whole percentages)
of his future Compensation (excluding any Bonus deferred pursuant to Section
3.1(b)(2)) in excess of the Section 401(a)(17) Limit; and (2) up to ninety-five
(95) percent (in whole percentages) of his future Compensation which constitutes
Bonus.

(c) Effectiveness of deferral election. A deferral election shall become
effective on the first day of the Plan Year (or for an individual who is
designated as an Eligible Employee during the Plan Year and timely files a
deferral election, the first day of the first payroll period that follows
receipt by the Administrator of such election). The election will be effective
to defer Compensation relating to all services performed in the Plan Year
subsequent to the time such election becomes effective. Any subsequent election
will be effective as of the first day of the following Plan Year and will apply
only to Compensation payable with respect to services rendered after such date.
Amounts credited to a Participant's Account prior to the effective date of any
subsequent election will not be affected by such subsequent election.

(d) Commencement of deferrals. (i) Deferrals made pursuant to Section 3.1(a) and
3.1(b)(1). If a Participant's Compensation for a Plan Year exceeds the Section
401(a)(17) Limit on account of payment of Compensation (excluding any Bonus),
then deferrals pursuant to his election under Section 3.1(a) or 3.1(b)(1) shall
commence as of the payroll period coincident with or next following the payroll
period in which the Participant's Compensation exceeds the Section 401(a)(17)
Limit (but deferrals shall be made only on Compensation in excess of the Section
401(a)(17) Limit). If a Participant's Compensation for a Plan Year exceeds the
Section 401(a)(17) Limit on account of payment of Bonus, then deferrals pursuant
to his election shall commence as of the payroll period in which the
Participant's Compensation exceeds the Section 401(a)(17) Limit (but deferrals
shall be made only on Compensation in excess of the Section 401(a)(17) Limit).
(ii) Deferrals made pursuant to Section 3.1(b)(2). Deferrals of Bonus pursuant
to Section 3.1(b)(2) shall be made in the payroll period in which the Bonus
would otherwise be paid.

(e) Election irrevocable except as required pursuant to Profit Sharing Plan. An
Employer shall credit to the Account maintained on behalf of a Participant the
amount of Compensation deferred pursuant to such Participant's election. Under
no circumstances may an election to defer Compensation be adopted or effective
retroactively. A Participant may not revoke or change an election to defer
Compensation for a Plan Year during that year; provided, however, that a
Participant who has made a hardship withdrawal under the Profit Sharing Plan may
not defer Compensation under this Plan for a period of six months from the date
of the withdrawal, unless otherwise determined by the Administrator.


                                      -5-





<PAGE>



(f) SMIP Bonus Subaccount. A Participant's Employer shall credit to the
Participant's SMIP Bonus Subaccount an amount corresponding to the amount of
Bonus payable under the Senior Management Incentive Plan deferred pursuant to
Section 3.1(b)(2).

(g) Vested Right. Subject to the claims of the Employer's creditors in the event
of the Employer's insolvency, a Participant shall have a nonforfeitable right to
the value of Deferral Contributions credited to his Account.

3.2  Participating Employer Contributions.

(a) Employer Contributions. (i) Matching Contribution. An Employer shall credit
an Employer Contribution to the Account maintained on behalf of each Participant
who had Deferral Contributions credited to his Account for a payroll period.
Notwithstanding the preceding sentence, no Employer Contribution shall be
credited to the Account of a Participant who is also a participant in the Quest
Diagnostics Transferee Pension Plan for former Corning Incorporated employees.
The amount of the Employer Contribution to be credited on behalf of a
Participant shall be equal to the applicable percentage specified from time to
time in Section 3.2 of the Profit Sharing Plan of the Deferral Contributions
made on behalf of the Participant with respect to such payroll period. (ii)
Vested Right. Subject to the claims of the Employer's creditors in the event of
the Employer's insolvency, a Participant shall have a nonforfeitable right to
the value of Employer Contributions credited to his Account.

(b) Supplemental Contributions. In addition, a Participant's Employer may, from
time to time in its sole discretion, credit a Supplemental Contribution to a
Participant's Account in an amount determined by such Employer in its sole
discretion and without regard to any Deferral Contribution elected by such
Participant. Unless otherwise specified by the Employer at the time the
Supplemental Contribution is made, a Participant shall have a nonforfeitable
right to the value of such Supplemental Contribution credited to his Account,
subject to the claims of such Employer's creditors in the event of such
Employer's insolvency.

3.3 Transfer of Funds. Each Employer will, as soon as administratively
practicable after each payroll period, make a transfer of assets to the Trustee.
The Employers shall provide the Trustee with information on the amount credited
to each Participant's Account.


                                      -6-





<PAGE>



Article 4. Participants' Accounts.

4.1 Individual Accounts. The Administrator will establish and maintain an
Account for each Participant which will reflect Deferral Contributions, Employer
Contributions and Supplemental Contributions credited to the Account and any
notional earnings, expenses, gains and losses credited thereto, attributable to
the investments in which the Participant's Account is treated as invested. For
each Participant who was a participant in the MetPath Inc. Deferred Compensation
Plan, the Administrator will establish and maintain, as part of such
Participant's Account, a subaccount (the "MetPath Plan Subaccount") to reflect
his participation in the MetPath Inc. Deferred Compensation Plan. The MetPath
Plan Subaccount had an opening balance equal to the balance of the Participant's
account under the MetPath Inc. Deferred Compensation Plan on the date the
Participant's balance under the MetPath Inc. Deferred Compensation Plan was
transferred to this Plan (with interest credited, pursuant to the terms of the
MetPath Inc. Deferred Compensation Plan, from December 31, 1998 to the transfer
date). The Administrator will establish and maintain such other accounts and
records as it decides in its discretion to be reasonably required or appropriate
in order to discharge its duties under the Plan. Participants will be furnished
statements of their Account value at least once each Plan Year.

4.2 Accounting for Payments. A payment to the Participant or to the
Participant's Beneficiary(ies) shall be charged to the Participant's Account as
of the date of such payment.


                                      -7-





<PAGE>



Article 5. Investment of Contributions.

5.1 Manner of Investment. All amounts credited to the Accounts of Participants
shall be treated as though invested and reinvested only in eligible investments
selected by the Administrator.

5.2 Investment Decisions. Investments in which the Accounts of Participants
shall be treated as invested and reinvested shall be directed by the Employer,
each Participant, or both, as specified pursuant to procedures established by
the Administrator from time to time. No portion of the Employer Contributions
credited to a Participant's Account on or after January 1, 2003 or Deferral
Contributions credited to a Participant's Account on or after April 1, 2004 may
be treated as though invested in Employer Stock, but the portion of the Employer
Contributions credited to a Participant's Account before January 1, 2003 that
was treated as though invested in Employer Stock shall continue, on and after
January 1, 2003, to be treated as though invested in Employer Stock.

Notwithstanding the preceding provisions of this Section 5.2, in no event may a
Section 16 Executive direct that Deferral Contributions made by him on or after
January 1, 2000 be treated as though invested in Employer Stock.


                                      -8-





<PAGE>



Article 6. Right to Benefits.

6.1 Termination of Employment. If a Participant terminates his employment for
any reason, the value of the Participant's Account will be paid in accordance
with Article 7.

6.2 Death. If a Participant dies before payment of the value of his Account has
commenced, or before such payment has been completed, his designated Beneficiary
or Beneficiaries will be entitled to receive the remaining balance of his
Account. Payment to the Beneficiary or Beneficiaries will be made in accordance
with Article 7.

A Participant may designate a Beneficiary or Beneficiaries, or change any prior
designation of Beneficiary or Beneficiaries by giving notice to the
Administrator on a form designated by the Administrator. With respect to any
Beneficiary designations filed with the Administrator, after December 31, 2003,
a Participant's spouse must consent to his designation of a Beneficiary other
than his spouse. If more than one person is designated as the Beneficiary, their
respective interests shall be indicated on the designation form. A copy of the
death notice or other sufficient documentation must be filed with and approved
by the Administrator. If upon the death of the Participant there is, in the
opinion of the Administrator, no designated Beneficiary for part or all of the
value of the Participant's Account, such amount will be paid to his surviving
spouse or, if none, to his estate (such spouse or estate shall be deemed to be
the Beneficiary for purposes of the Plan). If a Beneficiary dies after payment
to such Beneficiary has commenced, but before the full value of the
Participant's Account has been paid, and, in the opinion of the Administrator,
no person has been designated to receive such remaining balance, then such
balance shall be paid to the deceased Beneficiary's estate.

6.3 Payment on a Designated Future Date. Concurrently with a Participant's
election to defer Compensation pursuant to Section 3.1 for any Plan Year (or the
making of a Supplemental Contribution by an Employer), the Administrator may
permit a Participant to designate a specific date on which a specified amount of
the value of his Account attributable to such election (or a Supplemental
Contribution that is nonforfeitable) shall be paid in accordance with Article 7;
provided that in the event of such Participant's earlier termination of
employment or death, his Account shall be paid in accordance with Section 6.1 or
6.2, as the case may be. Unless otherwise permitted under procedures specified
by the Administrator, such election shall be irrevocable.

6.4 Payment Due to an Unforeseen Emergency. A Participant shall not be permitted
to withdraw any portion of the value of his Account prior to termination of
employment or any date specified pursuant to Section 6.3 (whichever occurs
first), except a Participant may apply to the Administrator, in accordance with
procedures specified by the Administrator, to withdraw some or all of the value
of his Account if such withdrawal is required on account of a financial hardship
resulting from an unforeseen emergency. The Administrator shall establish
criteria to determine what constitutes financial hardship. Withdrawals made on
account of financial hardship shall be made in a lump sum payment in accordance
with Article 7.

6.5 Adjustment for Investment Experience. If the total value of a Participant's
Account is not paid in a single sum after the Participant terminates employment,
the amount remaining in the Account after the first payment will continue to be
treated as invested in an interest-bearing


                                      -9-





<PAGE>



money market account and will be subject to adjustment until paid to reflect the
income, gains and losses on such deemed investment.

6.6 Forfeiture of Unvested Amounts. Any portion of the value of a Participant's
Account attributable to a Supplemental Contribution that is not fully vested at
the time he terminates employment shall be forfeited.


                                      -10-





<PAGE>



Article 7. Payment of Benefits.

7.1 Payment of Benefits to Participants and Beneficiaries. (a) Payments under
the Plan to a Participant or to the Beneficiary of the Participant shall be made
in a lump sum in cash or, if permitted by the Administrator and specified in the
Participant's election to defer Compensation, under a systematic withdrawal plan
(installment(s)) not exceeding 5 years, upon termination of employment or death.
Notwithstanding the preceding sentence, amounts attributable to that portion of
the Employer Contribution credited to a Participant's Account treated as though
invested in Employer Stock pursuant to Section 5.2 shall be paid in Employer
Stock following termination of employment, and any amounts attributable to
Deferral Contributions credited to a Participant's Account treated as though
invested in Employer Stock shall be paid in cash or Employer Stock, as elected
by the Participant. Payments under the Plan shall be made first from the value
of the Participant's SMIP Bonus Subaccount and then from the remaining value of
the Participant's Account.

(b) Payments under a systematic withdrawal plan must be made in substantially
equal annual installments, in cash, over a period certain which does not exceed
5 years.

7.2 Determination of Method of Payment. The Participant will determine the
method of payment of benefits to himself and the method of payment to his
Beneficiary. Unless such determination was made at least one (1) year prior to
the date on which a payment is to be made pursuant to Section 6.1, 6.2 or 6.3,
the Participant's prior determination shall govern such payment. If the
Participant does not determine the method of payment to him or his Beneficiary
within the time frame set forth in the preceding sentence, the method shall be a
lump sum.

7.3 Right of Offset. The value of a Participant's Account to be paid under the
Plan may be reduced in accordance with procedures established by the
Administrator by any amount the Participant owes his Employer at the time
payment is made.

7.4 Payment in the Event of Taxation. If, for any reason, all or any portion of
the value of a Participant's Account under this Plan becomes taxable to the
Participant prior to receipt, a Participant may petition the Administrator for a
payment of that portion of the value of his Account that has become taxable.
Upon the grant of such a petition, a payment shall immediately be made to a
Participant in an amount equal to the taxable portion of the value of his
Account (which amount shall not exceed the remaining balance of a Participant's
Account). If the petition is granted, the tax liability payment shall be made as
soon as practicable after the Participant's petition is granted.


                                      -11-





<PAGE>



Article 8. Amendment and Termination.

8.1 Amendment by Quest Diagnostics. Quest Diagnostics reserves the authority to
amend the Plan at any time, provided, however, that no amendment may reduce the
value of any Participant's Account determined as though the Participant
terminated his employment as of the date of such amendment. The Compensation
Committee of the Quest Diagnostics Board of Directors of or other individual
specified in the resolution of such Committee shall act on behalf of Quest
Diagnostics for purposes of this Section.

8.2 Retroactive Amendments. An amendment made by Quest Diagnostics in accordance
with Section 8.1 may be made effective on a date prior to the first day of the
Plan Year in which it is adopted. Any retroactive amendment by the Employer
shall be subject to the provisions of Section 8.1.

8.3 Plan Termination. Neither Quest Diagnostics nor any other Employer has any
obligation or liability whatsoever to maintain the Plan for any length of time
and may discontinue deferrals under the Plan or terminate the Plan at any time
without any liability hereunder for any such discontinuance or termination.

8.4 Payment upon Termination of the Plan. Upon termination of the Plan, no
further Deferral Contributions or Employer Contributions shall be made under the
Plan, but Accounts of Participants maintained under the Plan at the time of
termination shall continue to be governed by the terms of the Plan until paid
out in accordance with the terms of the Plan. In its discretion, and
notwithstanding any prior election made by the Participant, Quest Diagnostics
may, upon Plan termination or at any time thereafter, cause each Participant to
be paid in a single lump sum the value of the Participant's Account in full
satisfaction of all obligations to the Participant under the Plan.


                                      -12-





<PAGE>



Article 9. The Trust

9.1 Establishment of Trust. Quest Diagnostics has established the Trust between
each Employer and the Trustee, in accordance with the terms and conditions as
set forth in a separate agreement, under which assets are held, administered and
managed, subject to the claims of an Employer's creditors in the event of such
Employer's insolvency, until paid to Participants and their Beneficiaries as
specified in the Plan. The Trust is intended to be treated as a grantor trust
under the Code, and the establishment of the Trust is not intended to cause
Participants to realize current income on amounts contributed thereto or
earnings on the Trust's assets.


                                      -13-





<PAGE>



Article 10. Miscellaneous.

10.1 Limitation of Rights. None of the establishment of the Plan or the Trust,
or any amendment thereof, or the creation of any fund or Account, or the payment
of any benefits, will be construed as giving to any Participant or other person
any legal or equitable right against an Employer, the Administrator or the
Trustee, except as provided herein, and in no event will the terms of employment
or service of any Participant be modified or in any way affected hereby.

10.2 Spendthrift Provision. A Participant's or Beneficiary's right to payment
under the Plan is not subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, attachment, judgment, seizure,
alimony or separate maintenance owed by Participant or his Beneficiary or
garnishment by creditors of the Participant or his Beneficiary, either
voluntarily, involuntarily by operation of law or as a result of property
settlement, and any attempt to cause such right to payment to be so subjected
will not be recognized, except to such extent as shall be required by law.

10.3 Facility of Payment. In the event the Administrator determines, on the
basis of medical reports or other evidence satisfactory to the Administrator,
that the recipient of any benefit payments under the Plan is incapable of
handling his affairs by reason of minority, illness, infirmity or other
incapacity, the Administrator may make such payments to a person or institution
designated by a court which has jurisdiction over such recipient or a person or
institution otherwise having the legal authority under State law for the care
and control of such recipient. The receipt by such person or institution of any
such payments therefore, and any such payment to the extent thereof, shall
discharge the liability of the Employers and the Trust for the payment of
benefits hereunder to such recipient.

10.4. Discharge of Obligations. Payment of the value of an Account under the
Plan to a person believed in good faith by the Administrator to be a valid
Beneficiary shall fully and completely discharge the Employers from all further
obligations under this Plan with respect to the Participant. Neither the
Administrator nor Quest Diagnostics shall be obliged to search for any
Participant or Beneficiary beyond the sending of a registered letter to the
Participant's or Beneficiary's last known address. If the Administrator notifies
any Participant or Beneficiary that he is entitled to an amount under the Plan
and the Participant or Beneficiary fails to claim such amount or make his
location known to the Administrator within one year thereafter, then, except as
otherwise required by law, if the location of one or more of the next of kin of
the Participant is known to the Administrator, the Administrator may direct
payment of such amount to any one or more or all of such next of kin, and in
such proportions as the Administrator determines. If the location of none of the
foregoing persons can be determined, the Administrator shall have the right to
direct that the amount payable shall be deemed to be forfeited and retained by
the Employers, except that the dollar amount of the forfeiture, unadjusted for
deemed earnings, gains or losses in the interim, may be paid in full
satisfaction of the Employers' obligations under this Plan in the sole
discretion of the Administrator if a claim for payment subsequently is made by
the Participant or the Beneficiary to whom it was payable. If any benefit
payable to a Participant or Beneficiary who has not been located is subject to
escheat pursuant to applicable state law, neither the Administrator nor Quest
Diagnostics shall be liable to any person for any payment made in accordance
with such law.


                                      -14-





<PAGE>



10.5 Furnishing Information. A Participant or his Beneficiary will cooperate
with the Administrator by furnishing any and all information requested by the
Administrator and take such other actions as may be requested in order to
facilitate the administration of the Plan and the payments of amounts hereunder.

10.6 Information between the Administrator and Trustee. The Administrator agrees
to furnish the Trustee, and the Trustee agrees to furnish the Administrator,
with such information relating to the Plan and Trust as may be required by the
other in order to carry out their respective duties hereunder, including without
limitation information required under the Code or ERISA and any regulations
issued or forms adopted thereunder.

10.7 Notices. Any notice or other communication in connection with this Plan
shall be deemed delivered in writing if addressed as provided below and if
either actually delivered at said address or, in the case of a letter, three
business days shall have elapsed after the same shall have been deposited in the
United States mails, first-class postage prepaid and registered or certified:

(a) If it is sent to Quest Diagnostics, an Employer or the Administrator, it
will be at the address specified by Quest Diagnostics, such Employer or the
Administrator, as the case may be.

(b) If it is sent to the Trustee, it will be sent to the address set forth in
the Trust Agreement; or, in each case at such other address as the addressee
shall have specified by written notice delivered in accordance with the
foregoing to the addressee's then effective notice address.

10.8 Writings and Electronic Communications. All elections, notices and other
communication with respect to the Plan, including signatures relating to such
documentation, may be executed and stored on paper, electronically or in another
medium. Any documentation executed or stored electronically shall comply with
the Electronic Signatures Act.

10.9 Governing Law. The Plan will be construed, administered and enforced
according to ERISA, and to the extent not preempted thereby, the laws of the
State of New Jersey.

10.10 Construction. In the event that it is determined that a Participant or
group of Participants does not qualify as a select group of management or highly
compensated employees as determined in accordance with Sections 201(2),
301(a)(3) and 401(a)(1) of ERISA, the Administrator shall have the right, in its
sole discretion, to (i) terminate any election to defer Compensation made by
each such Participant pursuant to Section 3.1 for the remainder of the Plan Year
in which the Participant's status changes, (ii) prevent the Participant from
making future elections to defer Compensation and/or (iii) immediately pay the
value of the Participant's Account and terminate the Participant's participation
in the Plan. In any event, following such determination the Plan shall
constitute two plans, one covering such non-qualifying Participants and one
covering the remaining Participants up to the maximum number of participants
permissible for an unfunded deferred compensation plan maintained for the
benefit of a select group of management or highly compensated employees under
such sections of ERISA.


                                      -15-





<PAGE>



Article 11. Plan Administration.

11.1 Powers and Responsibilities of the Administrator. The Administrator has the
full power and the full responsibility to administer the Plan in all of its
details, subject, however, to the applicable requirements of ERISA. The
Administrator's powers and responsibilities include, but are not limited to, the
following:

(a) To make and enforce such rules and regulations as it deems necessary or
proper for the efficient administration of the Plan;

(b) To interpret the Plan, its interpretation thereof in good faith to be final,
conclusive and binding on all persons claiming payment under the Plan;

(c) To decide all questions concerning the Plan and the eligibility of any
person to participate in the Plan;

(d) To administer the claims and review procedures specified in Section 11.3;

(e) To compute the amount of benefits which will be payable to any Participant,
former Participant or Beneficiary in accordance with the provisions of the Plan;

(f) To determine the person or persons to whom such benefits will be paid;

(g) To authorize the payment of benefits;

(h) To comply with applicable requirements of Part 1 of Subtitle B of Title I of
ERISA; and

(i) To appoint such agents, counsel, accountants, and consultants as may be
required to assist in administering the Plan.

11.2 Claims and Review Procedures.

(a) Claims Procedure. If any person believes he is being denied any rights or
benefits under the Plan, such person may file a claim in writing with the
Administrator. If any such claim is wholly or partially denied, the
Administrator will notify such person of its decision in writing. Such
notification will contain (i) specific reasons for the denial, (ii) specific
reference to pertinent Plan provisions, (iii) a description of any additional
material or information necessary for such person to perfect such claim and an
explanation of why such material or information is necessary, and (iv)
information as to the steps to be taken if the person wishes to submit a request
for review. Such notification will be given within 90 days after the claim is
received by the Administrator (or within 180 days, if special circumstances
require an extension of time for processing the claim, and if written notice of
such extension and circumstances is given to such person within the initial
90-day period). If such notification is not given within such period, the claim
will be considered denied as of the last day of such period and such person may
request a review of his claim.

(b) Review Procedure. Within 60 days after the date on which a person receives
written notice of a denied claim (or, if applicable, within 60 days after the
date on which such denial is


                                      -16-





<PAGE>



considered to have occurred), such person (or his duly authorized
representative) may (i) file a written request with the Administrator for a
review of his denied claim and of pertinent documents and (ii) submit issues and
comments to the Administrator. The Administrator will notify such person of its
decision in writing. Such notification will be written in a manner calculated to
be understood by such person and will contain specific reasons for the decision
as well as specific references to pertinent Plan provisions. The decision on
review will be made within 60 days after the request for review is received by
the Administrator (or within 120 days, if special circumstances require an
extension of time for processing the request, such as an election by the
Administrator to hold a hearing, and if written notice of such extension and
circumstances is given to such person within the initial 60-day period). If the
decision on review is not made within such period, the claim will be considered
denied.

(c) LIMITATIONS ON ACTIONS. NO ACTION (WHETHER AT LAW, IN EQUITY OR OTHERWISE)
SHALL BE BROUGHT BY OR ON BEHALF OF ANY PARTICIPANT OR BENEFICIARY FOR OR WITH
RESPECT TO PAYMENT DUE UNDER THIS PLAN UNLESS THE PERSON BRINGING SUCH ACTION
HAS TIMELY EXHAUSTED THE PLAN'S CLAIM REVIEW PROCEDURE. ANY ACTION (WHETHER AT
LAW, IN EQUITY OR OTHERWISE) MUST BE COMMENCED WITHIN ONE YEAR. THIS ONE-YEAR
PERIOD SHALL BE COMPUTED FROM THE EARLIER OF (I) THE DATE A FINAL DETERMINATION
DENYING SUCH BENEFIT, IN WHOLE OR IN PART, IS ISSUED UNDER THE PLAN'S CLAIM
REVIEW PROCEDURE AND (II) THE DATE SUCH INDIVIDUAL'S CAUSE OF ACTION FIRST
ACCRUED (AS DETERMINED UNDER THE LAWS OF THE STATE OF NEW JERSEY WITHOUT REGARD
TO PRINCIPLES OF CHOICE OF LAWS).

11.3 Plan's Administrative Costs.

The Employers shall pay all reasonable costs and expenses (including legal,
accounting, and employee communication fees) incurred by the Administrator and
the Trustee in administering the Plan and Trust.


                                      -17-





<PAGE>



IN WITNESS WHEREOF, Quest Diagnostics by its duly authorized officer(s), has
caused this Plan to be amended and restated as of January 1, 2004.

QUEST DIAGNOSTICS INCORPORATED


By:
   -------------------------------
   David W. Norgard


   -------------------------------
   Vice President, Human Resources


                                      -18-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>7
<FILENAME>ex31-1.txt
<DESCRIPTION>EXHIBIT 31.1
<TEXT>


<PAGE>

                                                                    Exhibit 31.1

              CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Kenneth W. Freeman, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Quest Diagnostics
     Incorporated;

2.   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report;

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

     a)   designed such disclosure controls and procedures, or caused such
          disclosure controls and procedures to be designed under our
          supervision, to ensure that material information relating to the
          registrant, including its consolidated subsidiaries, is made known to
          us by others within those entities, particularly during the period in
          which this quarterly report is being prepared;

     b)   evaluated the effectiveness of the registrant's disclosure controls
          and procedures and presented in this quarterly report our conclusions
          about the effectiveness of the disclosure controls and procedures, as
          of the end of the period covered by this report based on such
          evaluation; and

     c)   disclosed in this quarterly report any change in the registrant's
          internal control over financial reporting that occurred during the
          registrant's most recent fiscal quarter (the registrant's fourth
          fiscal quarter in the case of an annual report) that has materially
          affected, or is reasonably likely to materially affect, the
          registrant's internal control over financial reporting; and

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of registrant's board of
     directors (or persons performing the equivalent functions):

     a)   all significant deficiencies and material weaknesses in the design or
          operation of internal control over financial reporting which are
          reasonably likely to adversely affect the registrant's ability to
          record, process, summarize and report financial information; and

     b)   any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          control over financial reporting.

April 30, 2004


By /s/ Kenneth W. Freeman
   ----------------------------------
      Kenneth W. Freeman
      Chairman of the Board and
      Chief Executive Officer



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>8
<FILENAME>ex31-2.txt
<DESCRIPTION>EXHIBIT 31.2
<TEXT>


<PAGE>

                                                                    Exhibit 31.2

              CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert A. Hagemann, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Quest Diagnostics
     Incorporated;

2.   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report;

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

     a)   designed such disclosure controls and procedures, or caused such
          disclosure controls and procedures to be designed under our
          supervision, to ensure that material information relating to the
          registrant, including its consolidated subsidiaries, is made known to
          us by others within those entities, particularly during the period in
          which this quarterly report is being prepared;

     b)   evaluated the effectiveness of the registrant's disclosure controls
          and procedures and presented in this quarterly report our conclusions
          about the effectiveness of the disclosure controls and procedures, as
          of the end of the period covered by this report based on such
          evaluation; and

     c)   disclosed in this quarterly report any change in the registrant's
          internal control over financial reporting that occurred during the
          registrant's most recent fiscal quarter (the registrant's fourth
          fiscal quarter in the case of an annual report) that has materially
          affected, or is reasonably likely to materially affect, the
          registrant's internal control over financial reporting; and

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of registrant's board of
     directors (or persons performing the equivalent functions):

     a)   all significant deficiencies and material weaknesses in the design or
          operation of internal control over financial reporting which are
          reasonably likely to adversely affect the registrant's ability to
          record, process, summarize and report financial information; and

     b)   any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          control over financial reporting.

April 30, 2004


By /s/ Robert A. Hagemann
   ----------------------------------
       Robert A. Hagemann
       Senior Vice President and
       Chief Financial Officer



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>9
<FILENAME>ex32-1.txt
<DESCRIPTION>EXHIBIT 32.1
<TEXT>


<PAGE>

                                                                    Exhibit 32.1

   CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. 'SS' 1350,
     AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     Pursuant to 18 U.S.C. 'SS' 1350, the undersigned certifies that, to the
best of my knowledge, the Quarterly Report on Form 10-Q for the period ended
March 31, 2004 of Quest Diagnostics Incorporated, as being filed with the
Securities and Exchange Commission concurrently herewith, fully complies with
the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of
1934 (15 U.S.C. 'SS' 78m or 78o(d)) and that the information contained in
the Quarterly Report fairly presents, in all material respects, the financial
condition and results of operations of Quest Diagnostics Incorporated.


Dated: April 30, 2004                   /s/ Kenneth W. Freeman
                                        ----------------------------------------
                                            Kenneth W. Freeman
                                            Chairman of the Board and
                                            Chief Executive Officer



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>10
<FILENAME>ex32-2.txt
<DESCRIPTION>EXHIBIT 32.2
<TEXT>


<PAGE>

                                                                    Exhibit 32.2

   CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. 'SS' 1350,
     AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     Pursuant to 18 U.S.C. 'SS' 1350, the undersigned certifies that, to the
best of my knowledge, the Quarterly Report on Form 10-Q for the period ended
March 31, 2004 of Quest Diagnostics Incorporated, as being filed with the
Securities and Exchange Commission concurrently herewith, fully complies with
the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of
1934 (15 U.S.C. 'SS' 78m or 78o(d)) and that the information contained in the
Quarterly Report fairly presents, in all material respects, the financial
condition and results of operations of Quest Diagnostics Incorporated.


Dated: April 30, 2004                   /s/ Robert A. Hagemann
                                        ----------------------------------------
                                            Robert A. Hagemann
                                            Senior Vice President and
                                            Chief Financial Officer


</TEXT>
</DOCUMENT>
</SUBMISSION>
