10-Q

UNITED STATES
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 quarterly period ended June 30, 2008
Commission file number 001-12215

Quest Diagnostics Incorporated

Three Giralda Farms
Madison, NJ 07940
(973) 520-2700
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 a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	X		Accelerated filer ______
Non-accelerated filer	______	(Do not check if a smaller reporting company)	Smaller reporting company ______

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ______   No     X    

As of July 18, 2008, there were 195,131,806 outstanding shares of the registrant’s common stock, $.01 par value.

PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements
		Page
	Index to consolidated financial statements filed as part of this report:
	Consolidated Statements of Operations for the Three and
	Six Months Ended June 30, 2008 and 2007	2
	Consolidated Balance Sheets as of
	June 30, 2008 and December 31, 2007	3
	Consolidated Statements of Cash Flows for the
	Six Months Ended June 30, 2008 and 2007	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	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk
	See Item 2. “Management’s Discussion and Analysis of Financial Condition
	and Results of Operations”	33
Item 4.	Controls and Procedures
	Controls and Procedures	33

1

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2008 AND 2007
(unaudited)
(in thousands, except per share data)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
		2008			2007			2008			2007
Net revenues	$	1,837,901		$	1,641,156		$	3,622,538		$	3,167,364
Operating costs and expenses:
Cost of services		1,083,481			968,742			2,142,108			1,900,527
Selling, general and administrative		438,037			395,105			873,115			779,898
Amortization of intangible assets		9,916			5,350			19,180			9,810
Other operating (income) expense, net		(1,656	)		(450	)		(249	)		3,850
Total operating costs and expenses		1,529,778			1,368,747			3,034,154			2,694,085
Operating income		308,123			272,409			588,384			473,279
Other income (expense):
Interest expense, net		(45,432	)		(39,158	)		(93,049	)		(65,685	)
Minority share of income		(7,826	)		(6,353	)		(14,880	)		(12,483	)
Equity earnings in unconsolidated joint ventures		7,592			6,597			15,591			13,501
Other income (expense), net		548			337			(489	)		2,345
Total non-operating expenses, net		(45,118	)		(38,577	)		(92,827	)		(62,322	)
Income from continuing operations before taxes		263,005			233,832			495,557			410,957
Income tax expense		100,787			91,853			192,645			161,463
Income from continuing operations		162,218			141,979			302,912			249,494
Loss from discontinued operations, net of taxes		(890	)		(647	)		(1,977	)		(2,269	)
Net income	$	161,328		$	141,332		$	300,935		$	247,225
Earnings per common share - basic:
Income from continuing operations	$	0.83		$	0.74		$	1.56		$	1.29
Loss from discontinued operations		-			-			(0.01	)		(0.01	)
Net income	$	0.83		$	0.74		$	1.55		$	1.28
Earnings per common share - diluted:
Income from continuing operations	$	0.83		$	0.73		$	1.55		$	1.28
Loss from discontinued operations		(0.01	)		-			(0.01	)		(0.01	)
Net income	$	0.82		$	0.73		$	1.54		$	1.27
Weighted average common shares outstanding:
Basic		194,527			192,651			194,335			193,015
Diluted		196,119			194,476			195,951			194,870
Dividends per common share	$	0.10		$	0.10		$	0.20		$	0.20

The accompanying notes are an integral part of these statements.

2

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2008 AND DECEMBER 31, 2007
(in thousands, except per share data)

		June 30,			December 31,
		2008			2007
		(unaudited)			(audited)
Assets
Current assets:
Cash and cash equivalents	$	143,398		$	167,594
Accounts receivable, net of allowance for doubtful accounts of $286,752
and $250,067 at June 30, 2008 and December 31, 2007, respectively		922,513			881,967
Inventories		98,331			95,234
Deferred income taxes		161,182			149,841
Prepaid expenses and other current assets		91,664			79,721
Total current assets		1,417,088			1,374,357
Property, plant and equipment, net		893,073			911,998
Goodwill, net		5,219,770			5,220,104
Intangible assets, net		873,633			886,733
Other assets		163,469			172,501
Total assets	$	8,567,033		$	8,565,693
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	1,080,236		$	1,124,716
Short-term borrowings and current portion of long-term debt		50,364			163,581
Total current liabilities		1,130,600			1,288,297
Long-term debt		3,209,298			3,377,212
Other liabilities		559,481			575,942
Stockholders’ equity:
Common stock, par value $0.01 per share; 600,000 shares authorized at
both June 30, 2008 and December 31, 2007; 214,112 and 213,745
issued at June 30, 2008 and December 31, 2007, respectively		2,141			2,137
Additional paid-in capital		2,237,346			2,210,825
Retained earnings		2,319,730			2,057,744
Accumulated other comprehensive income		46,951			25,279
Treasury stock, at cost; 19,032 and 19,705 shares at June 30, 2008 and
December 31, 2007, respectively		(938,514	)		(971,743	)
Total stockholders’ equity		3,667,654			3,324,242
Total liabilities and stockholders’ equity	$	8,567,033		$	8,565,693

The accompanying notes are an integral part of these statements.

3

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2008 AND 2007
(unaudited)
(in thousands)

	Six Months Ended
	June 30,
		2008			2007
Cash flows from operating activities:
Net income	$	300,935		$	247,225
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization		132,684			105,233
Provision for doubtful accounts		167,568			138,725
Stock-based compensation expense		36,841			31,608
Deferred income tax (benefit) provision		(6,061	)		7,680
Minority share of income		14,880			12,483
Excess tax benefits from stock-based compensation arrangements		(1,223	)		(5,576	)
Other, net		(4,811	)		539
Changes in operating assets and liabilities:
Accounts receivable		(213,615	)		(185,462	)
Accounts payable and accrued expenses		(40,065	)		(68,214	)
Integration, settlement and other special charges		(4,196	)		(5,163	)
Income taxes payable		2,187			5,697
Other assets and liabilities, net		(13,914	)		(4,429	)
Net cash provided by operating activities		371,210			280,346
Cash flows from investing activities:
Business acquisitions, net of cash acquired		19,887			(1,479,439	)
Capital expenditures		(94,821	)		(89,332	)
Decrease (increase) in investments and other assets		5,965			(6,488	)
Net cash used in investing activities		(68,969	)		(1,575,259	)
Cash flows from financing activities:
Repayments of debt		(304,082	)		(2,247,838	)
Proceeds from borrowings		20,039			3,670,995
Purchases of treasury stock		-			(105,000	)
Dividends paid		(38,889	)		(38,662	)
Exercise of stock options		11,562			27,260
Excess tax benefits from stock-based compensation arrangements		1,223			5,576
Decrease in book overdrafts		(4,167	)		(18,427	)
Financing costs paid		(289	)		(16,997	)
Distributions to minority partners		(11,834	)		(9,336	)
Net cash (used in) provided by financing activities		(326,437	)		1,267,571
Net change in cash and cash equivalents		(24,196	)		(27,342	)
Cash and cash equivalents, beginning of period		167,594			149,640
Cash and cash equivalents, end of period	$	143,398		$	122,298

The accompanying notes are an integral part of these statements.

4

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 world’s largest provider of diagnostic testing, information and services, providing insights that enable physicians and other healthcare professionals to make decisions to improve health. Quest Diagnostics offers patients and physicians the broadest access to diagnostic laboratory services through the Company’s network of laboratories and owned patient service centers. The Company provides interpretive consultation through the largest medical and scientific staff in the industry, with approximately 900 M.D.s and Ph.D.s around the country. Quest Diagnostics is the leading provider of gene-based and other esoteric testing, the leading provider of anatomic pathology services and the leading provider of testing for drugs-of-abuse. The Company is also a leading provider of testing for clinical trials, and risk assessment services for the life insurance industry. The Company’s diagnostics products business manufactures and markets diagnostic test kits and specialized point-of-care testing. Quest Diagnostics empowers healthcare organizations and clinicians with state-of-the-art information technology solutions that can improve patient care and medical practice.

          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 2007 Annual Report on Form 10-K.

          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. Potentially dilutive common shares include the dilutive effect of outstanding stock options, performance share units, restricted common shares and restricted stock units granted under the Company’s Amended and Restated Employee Long-Term Incentive Plan and its Amended and Restated Director Long-Term Incentive Plan.

5

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

          The computation of basic and diluted earnings per common share was as follows (in thousands, except per share data):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
		2008			2007			2008			2007
Income from continuing operations	$	162,218		$	141,979		$	302,912		$	249,494
Loss from discontinued operations		(890	)		(647	)		(1,977	)		(2,269	)
Net income available to common
stockholders – basic and diluted	$	161,328		$	141,332		$	300,935		$	247,225
Weighted average common shares
outstanding – basic		194,527			192,651			194,335			193,015
Effect of dilutive securities:
Stock options, restricted common shares
and performance share units		1,592			1,825			1,616			1,855
Weighted average common shares
outstanding – diluted		196,119			194,476			195,951			194,870
Earnings per common share – basic:
Income from continuing operations	$	0.83		$	0.74		$	1.56		$	1.29
Loss from discontinued operations		-			-			(0.01	)		(0.01	)
Net income	$	0.83		$	0.74		$	1.55		$	1.28
Earnings per common share – diluted:
Income from continuing operations	$	0.83		$	0.73		$	1.55		$	1.28
Loss from discontinued operations		(0.01	)		-			(0.01	)		(0.01	)
Net income	$	0.82		$	0.73		$	1.54		$	1.27

          Stock options, restricted common shares, restricted stock units and performance share units of 5.2 million shares and 4.7 million shares for the three and six months ended June 30, 2008, respectively, were not included due to their antidilutive effect.

          Stock options, restricted common shares and performance share units of 4.2 million shares and 4.4 million shares for the three and six months ended June 30, 2007, respectively, were not included due to their antidilutive effect.

          Fair Value Measurements

          On January 1, 2008, the Company adopted Statement of Financial Accounting Standards (“SFAS”) No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 provides a single definition of fair value and a common framework for measuring fair value as well as new disclosure requirements for fair value measurements used in financial statements. Under SFAS 157, fair value is determined based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants exclusive of any transaction costs. Fair value measurements are determined by either the principal market or the most advantageous market. The principal market is the market with the greatest level of activity and volume for the asset or liability. Absent a principal market to measure fair value, the Company has used the most advantageous market which is the market that the Company would receive the highest selling price for the asset or pay the lowest price to settle the liability, after considering transaction costs. However, when using the most advantageous market, transactions costs are only considered to determine which market is the most advantageous and these costs are then excluded when applying a fair value measurement. Adoption of SFAS 157 did not have a material effect on the Company’s financial position, results of operations or cash flows.

6

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

          In February 2008, the Financial Accounting Standards Board (“FASB”) issued FSP FAS 157-1, “Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13” (“FSP FAS 157-1”). FSP FAS 157-1 amended SFAS 157 to exclude from its scope SFAS No. 13, “Accounting for Leases”, and its related interpretive accounting pronouncements that address leasing transactions. However, this exclusion does not apply to the Company’s impairment of long-lived assets under a capital lease pursuant to SFAS No. 144, “Accounting for Impairment or Disposal of Long-Lived Assets,” the Company’s cost to terminate an operating lease under SFAS No. 146, “Accounting for Costs Associated with Exit and Disposal Activities,” and the measurement of acquired leases in a business combination pursuant to SFAS No. 141 or 141(R), “Business Combinations.” Also in February 2008, the FASB issued FSP FAS 157-2, “Effective Date of FASB Statement No. 157” (“FSP FAS 157-2”). FSP FAS 157-2amended SFAS 157 to defer the effective date of SFAS 157 for one year (January 1, 2009 for Quest Diagnostics) for non-financial assets and non-financial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis, at least annually. The Company is currently assessing the impact of SFAS 157 on its non-financial assets and non-financial liabilities measured at fair value on a nonrecurring basis.

          SFAS 157 creates a three-level hierarchy to prioritize the inputs used in the valuation techniques to derive fair values. The basis for fair value measurements for each level within the hierarchy is described below with Level 1 having the highest priority and Level 3 having the lowest.

          Level 1: Quoted prices in active markets for identical assets or liabilities.

          Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets.

          Level 3: Valuations derived from valuation techniques in which one or more significant inputs are unobservable.

          The following table provides a summary of the recognized assets and liabilities that are measured at fair value on a recurring basis.

			Basis of Fair Value Measurements
				Quoted Prices
				in Active
				Markets for		Significant
				Identical		Other		Significant
				Assets /		Observable		Unobservable
				Liabilities		Inputs		Inputs
		June 30,
		2008		Level 1		Level 2		Level 3
Assets:
Trading securities	$	31,529	$	31,529	$	-	$	-
Cash surrender value of life insurance
policies		16,510		-		16,510		-
Available-for-sale securities		2,045		2,045		-		-
Total	$	50,084	$	33,574	$	16,510	$	-
Liabilities:
Interest rate swaps	$	7,301	$	-	$	7,301	$	-
Deferred compensation liabilities		50,571		-		50,571		-
Total	$	57,872	$	-	$	57,872	$	-

          The Company offers certain employees the opportunity to participate in a supplemental deferred compensation plan. A participant’s deferrals, together with Company matching credits, are invested in a variety of

7

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

participant directed stock and bond mutual funds as well as Company stock and are classified as trading securities. Changes in the fair value of these securities are measured using quoted prices in active markets based on the market price per unit multiplied by the number of units held exclusive of any transaction costs. A corresponding adjustment for changes in fair value of the trading securities is also reflected in the changes in fair value of the deferred compensation obligation. The deferred compensation liabilities are classified within Level 2 because their inputs are derived principally from observable market data by correlation to the trading securities.

          In connection with the acquisition of AmeriPath Group Holdings, Inc. (“AmeriPath”) in May 2007, the Company assumed a non-qualified deferred compensation program AmeriPath offers to certain employees. A participant’s deferrals, together with Company matching credits, are “invested” at the direction of the employee in a hypothetical portfolio of investments which are tracked by an administrator. The Company purchases life insurance policies, with the Company named as beneficiary of the policies, for the purpose of funding the program’s liability. Changes in the cash surrender value of the life insurance policies are based upon earnings and changes in the value of the underlying investments. Changes in the fair value of the deferred compensation obligation are derived using quoted prices in active markets based on the market price per unit multiplied by the number of units. The cash surrender value and the deferred compensation obligations are classified within Level 2 because their inputs are derived principally from observable market data by correlation to the hypothetical investments.

          The Company’s investments in available-for-sale securities are exposed to equity price fluctuations. The fair value measurements for available-for-sale securities are based upon the quoted price in active markets multiplied by the number of shares owned exclusive of any transaction costs and without any adjustments to reflect discounts that may be applied to selling a large block of the securities at one time. The Company does not believe that the changes in fair value of these assets will materially differ from the amounts that could be realized upon settlement or that the changes in fair value will have a material effect on the Company’s results of operations, liquidity and capital resources. However, the ultimate amount that could be realized upon sale or settlement of certain equity investments is dependent on several factors including external market conditions, the terms and conditions of a sale agreement, the counterparty to a sale agreement, the investment’s liquidity in capital markets and the length of time to liquidate an equity investment.

          The fair value measurements of the Company’s interest rate swaps are model-derived valuations as of a given date in which all significant inputs are observable in active markets including certain financial information and certain assumptions regarding past, present and future market conditions. The Company does not believe that the changes in the fair values of its interest rate swaps will materially differ from the amounts that could be realized upon settlement or maturity or that the changes in fair value will have a material effect on its results of operations, liquidity and capital resources.

          SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”) became effective for the Company on January 1, 2008. SFAS 159 provides companies with an option to irrevocably elect to measure certain financial assets and financial liabilities at fair value on an instrument-by-instrument basis with the resulting changes in fair value recorded in earnings. The objective of SFAS 159 is to reduce both the complexity in accounting for financial instruments and the volatility in earnings caused by using different measurement attributes for financial assets and financial liabilities. As of January 1, 2008 and for the period ended June 30, 2008, the Company has elected not to apply the fair value option to any of its financial assets or financial liabilities on-hand because the Company does not believe that application of SFAS 159’s fair value option is appropriate, given the nature of its business operations.

          The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable and accrued expenses approximate fair value based on the short maturity of these instruments. In accordance with the provisions of SFAS No. 107, “Disclosures About Fair Value of Financial Instruments” at June 30, 2008 and December 31, 2007, the fair value of the Company’s debt was estimated at $3.2 billion and $3.6 billion, respectively, 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 June 30, 2008, the carrying value exceeded the estimated fair value of the debt by approximately $13.6 million and at December 31, 2007, the estimated fair value exceeded the carrying value of the debt by $59.1 million.

8

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

          New Accounting Standards

          In March 2008, the FASB issued SFAS No. 161 “Disclosures About Derivative Instruments and Hedging Activities – an amendment of FASB Statement No. 133” (“SFAS 161”). SFAS 161 amends SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” by requiring expanded disclosures about an entity’s derivative instruments and hedging activities. SFAS 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments. SFAS 161 is effective for the Company as of January 1, 2009. The adoption of SFAS 161 is not expected to have a material impact on the Company’s consolidated financial statements.

          In May 2008, the FASB issued SFAS No. 162 “The Hierarchy of Generally Accepted Accounting Principles” (“SFAS 162”). SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (the GAAP hierarchy). SFAS 162 will become effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AICPA Professional Standards AU Section 411, “The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles.” The adoption of SFAS 162 is not expected to have a material impact on the Company’s consolidated financial statements.

          In June 2008, the FASB issued FSP EITF 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities” (“FSP EITF 03-6-1”). FSP EITF 03-6-1 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to be included in computing earnings per share under the two-class method described in SFAS No. 128, “Earnings Per Share.” FSP EITF 03-6-1 is effective for the Company as of January 1, 2009 and in accordance with its requirements it will be applied retrospectively. The Company does not expect the adoption of FSP EITF 03-6-1 to have a material impact on its consolidated financial statements.

2.          BUSINESS ACQUISITIONS

          2007 Acquisitions

          Acquisition of HemoCue

          On January 31, 2007, the Company completed its acquisition of POCT Holding AB (“HemoCue”), a Sweden-based company specializing in point-of-care testing, in an all-cash transaction valued at approximately $450 million, including $113 million of assumed debt. HemoCue is the leading international provider in point-of-care for hemoglobin, with a growing share in professional glucose and microalbumin testing.

          HemoCue received Food and Drug Administration (“FDA”) 510(k) clearance in October 2007 for its White Blood Cell Analyzer, a whole-blood test performed on finger-stick samples that assist physicians diagnosing infection, inflammation, bone marrow failure, autoimmune diseases and many other medical conditions now routinely tested by reference laboratories. Additionally, in June 2008, HemoCue was granted a Clinical Laboratories Improvement Amendments of 1988 (“CLIA”) waiver for its Albumin 201 System, which will screen patients for microalbuminuria and allow physicians to begin treatment based on the test’s results during a single office visit.

          In conjunction with the acquisition of HemoCue, the Company repaid approximately $113 million of debt, representing substantially all of HemoCue’s existing outstanding debt as of January 31, 2007.

          The Company financed the aggregate purchase price of $344 million, which includes transaction costs of approximately $7 million, of which $2 million was paid in 2006, and the repayment of substantially all of HemoCue’s outstanding debt with the proceeds from a new $450 million term loan and cash on-hand. On May 31, 2007, the Company refinanced this term loan. In January 2008, the Company received a payment of approximately $23 million from an escrow fund established at the time of the acquisition which reduced the aggregate purchase price to $321 million.

9

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

           The acquisition of HemoCue was accounted for under the purchase method of accounting. As such, the cost to acquire HemoCue was allocated to the respective assets and liabilities acquired based on their estimated fair values as of the closing date. During 2007, the Company finalized its fair value estimates of the assets and liabilities acquired. The consolidated financial statements include the results of operations of HemoCue subsequent to the closing of the acquisition.

          Of the aggregate purchase price of $321 million, $298 million was allocated to goodwill, $38 million was allocated to customer relationships that are being amortized over 20 years and $39 million was allocated to technology that is being amortized over 14 years.

          In addition to the amortizable intangibles noted above, $53.8 million was allocated to tradenames, which is not subject to amortization, and $4.0 million was allocated to in-process research and development (“IPR&D”). The IPR&D was expensed in the Company’s results of operations during the first quarter of 2007, in accordance with FASB Interpretation No. 4, “Applicability of FASB Statement No. 2 to Business Combinations Accounted for by the Purchase Method,” and is included in “other operating (income) expense, net” within the consolidated statements of operations.

          Supplemental pro forma combined financial information has not been presented as the acquisition is not material to the Company’s consolidated results of operations.

          Acquisition of AmeriPath

          On May 31, 2007, the Company completed its acquisition of AmeriPath, in an all-cash transaction valued at approximately $2.0 billion, including approximately $780 million of assumed debt and related accrued interest. AmeriPath is a leading provider of anatomic pathology, including dermatopathology, and esoteric testing which generates annual revenues of approximately $800 million.

          Through the acquisition, the Company acquired all of AmeriPath’s operations. AmeriPath, with its team of approximately 400 board certified pathologists, operates 40 outpatient anatomic pathology laboratories and provides inpatient anatomic pathology and medical director services for approximately 200 hospitals throughout the United States. The Company financed the all-cash purchase price and related transaction costs, together with the repayment of approximately $780 million of principal and related accrued interest representing substantially all of AmeriPath’s debt as well as the refinancing of the term loan used to finance the acquisition of HemoCue with: $1.6 billion of borrowings under a new five-year term loan facility, $780 million of borrowings under a new one-year bridge loan, and cash on-hand. In June 2007, the Company completed an $800 million senior notes offering. The net proceeds of the senior notes offering were used to repay the $780 million borrowed under the bridge loan.

           The acquisition of AmeriPath was accounted for under the purchase method of accounting. As such, the cost to acquire AmeriPath was allocated to the respective assets and liabilities acquired based on their estimated fair values as of the closing date. During the second quarter of 2008, the Company finalized its fair value estimates of the assets and liabilities acquired.

10

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

          The following table summarizes the Company’s purchase price allocation of the cost to acquire AmeriPath:

		Fair Values
		as of
		May 31,
		2007
Current assets	$	196,165
Property and equipment		125,817
Intangible assets		561,300
Goodwill		1,467,367
Other assets		67,685
Total assets acquired		2,418,334
Current liabilities		141,435
Long-term liabilities		260,453
Long-term debt		801,424
Total liabilities assumed		1,203,312
Net assets acquired	$	1,215,022

          The acquired amortizable intangibles are being amortized over their estimated useful lives as follows:

			Weighted average
	Fair Value		useful life
Customer relationships	$	327,500	20 years
Non-compete agreement		5,800	5 years
Tradename		2,500	2 years

          In addition to the amortizable intangibles noted above, $226 million was allocated to tradenames, which is not subject to amortization.

          Of the amount allocated to goodwill and intangible assets, approximately $100 million is expected to be deductible for tax purposes.

11

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

          Pro Forma Combined Financial Information

          The following unaudited pro forma combined financial information for the three and six months ended June 30, 2007 assumes that the AmeriPath acquisition and related financing, including the Company’s June 2007 senior notes offering, were completed on January 1, 2007 (in thousands, except per share data):

	Three Months		Six Months
	Ended		Ended
	June 30, 2007
Net revenues	$	1,774,336	$	3,501,238
Net income		117,458		212,695
Basic earnings per common share:
Net income	$	0.61	$	1.10
Weighted average common shares
outstanding - basic		192,651		193,015
Diluted earnings per share:
Net income	$	0.60	$	1.09
Weighted average common shares
outstanding – diluted		194,476		194,870

          The unaudited pro forma combined financial information presented above reflects certain reclassifications to the historical financial statements of AmeriPath 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 and six months ended June 30, 2007 exclude transaction related costs of $44 million, which were incurred and expensed by AmeriPath in conjunction with its acquisition by Quest Diagnostics.

3.          GOODWILL AND INTANGIBLE ASSETS

          Goodwill at June 30, 2008 and December 31, 2007 consisted of the following:

		June 30,			December 31,
		2008			2007
Goodwill	$	5,400,808		$	5,401,216
Less: accumulated amortization		(181,038	)		(181,112	)
Goodwill, net	$	5,219,770		$	5,220,104

          The changes in the gross carrying amount of goodwill for the six month period ended June 30, 2008 and for the year ended December 31, 2007 are as follows:

		June 30,			December 31,
		2008			2007
Balance at beginning of period	$	5,401,216		$	3,572,238
Goodwill acquired during the period		(23,982	)		1,789,732
Other		23,574			39,246
Balance at end of period	$	5,400,808		$	5,401,216

12

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

          For the six months ended June 30, 2008, the decrease in goodwill acquired was primarily due to a payment received from an escrow fund established at the time of the HemoCue acquisition, (see Note 2 for further discussion), and the realization of certain pre-acquisition net operating loss carry forwards. The increase in other was primarily related to foreign currency translation. Approximately 90% of the Company’s goodwill as of June 30, 2008 and December 31, 2007 was associated with its clinical testing business.

          For the year ended December 31, 2007, the increase in goodwill was primarily related to the acquisitions of AmeriPath and HemoCue, and the impact on goodwill as a result of the adoption of FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes”. (See Notes 3 and 5 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007 for further discussions.)

          Intangible assets at June 30, 2008 and December 31, 2007 consisted of the following:

	Weighted
	Average	June 30, 2008							December 31, 2007
	Amortization				Accumulated							Accumulated
	Period		Cost		Amortization			Net		Cost		Amortization			Net
Amortizing intangible assets:
Customer-related
intangibles	19 years	$	591,181	$	(85,388	)	$	505,793	$	589,418	$	(70,036	)	$	519,382
Non-compete
agreements	5 years		54,016		(47,412	)		6,604		53,832		(46,476	)		7,356
Other	13 years		64,373		(11,700	)		52,673		64,214		(8,394	)		55,820
Total	19 years		709,570		(144,500	)		565,070		707,464		(124,906	)		582,558
Intangible assets not subject
to amortization:
Tradenames			308,563		-			308,563		304,175		-			304,175
Total intangible assets		$	1,018,133	$	(144,500	)	$	873,633	$	1,011,639	$	(124,906	)	$	886,733

          Amortization expense related to intangible assets was $9.9 million and $5.4 million for the three months ended June 30, 2008 and 2007, respectively. For the six months ended June 30, 2008 and 2007, amortization expense related to intangible assets was $19.2 million and $9.8 million, respectively.

          The estimated amortization expense related to intangible assets for each of the five succeeding fiscal years and thereafter as of June 30, 2008 is as follows:

Fiscal Year Ending
December 31,
Remainder of 2008	$	17,278
2009		36,967
2010		36,188
2011		35,909
2012		34,664
2013		33,680
Thereafter		370,384
Total	$	565,070

13

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

4.          STOCKHOLDERS’ EQUITY

          Changes in stockholders’ equity for the six months ended June 30, 2008 were as follows:

												Accumulated
	Shares of											Other
	Common					Additional						Compre-			Treasury			Compre-
	Stock			Common		Paid-In			Retained			hensive			Stock,			hensive
	Outstanding			Stock		Capital			Earnings			Income (Loss)			at Cost			Income
Balance,
December 31, 2007	194,040		$	2,137	$	2,210,825		$	2,057,744		$	25,279		$	(971,743	)
Net income									300,935								$	300,935
Currency translation												26,818						26,818
Market valuation, net of tax
benefit of $2,269												(3,461	)					(3,461	)
Deferred loss, less
reclassifications												(1,685	)					(1,685	)
Comprehensive income																	$	322,607
Dividends declared									(38,949	)
Issuance of common stock under
benefit plans	693			4		(21	)								9,326
Stock-based compensation
expense						30,909									5,932
Exercise of stock options	397					(8,023	)								19,585
Shares to cover employee payroll
tax withholdings on stock
issued under benefit plans	(50	)				(687	)								(1,614	)
Tax benefits associated with
stock-based compensation plans						4,009
Other						334
Balance,
June 30, 2008	195,080		$	2,141	$	2,237,346		$	2,319,730		$	46,951		$	(938,514	)

          For the three months ended June 30, 2008, total comprehensive income was $157 million.

          The market valuation adjustment represents unrealized holding losses on investments, net of taxes. The deferred loss primarily represents deferred losses on the Company’s interest rate swap agreements, net of amounts reclassified to interest expense. Foreign currency translation adjustments are not adjusted for income taxes since they relate to indefinite investments in non-U.S. subsidiaries.

          For the three and six months ended June 30, 2008, the Company reissued 0.3 million shares and 0.7 million shares, respectively, for employee benefit plans. The Company did not purchase any shares of its common stock during the three or six months ended June 30, 2008. Since the inception of the share repurchase program in May 2003 through June 30, 2008, the Company has repurchased 44.1 million shares of its common stock at an average price of $45.35 for approximately $2 billion. At June 30, 2008, $104 million of the share repurchase authorizations remained available.

          During each of the quarters of 2008 and 2007, the Company’s Board of Directors has declared a quarterly cash dividend of $0.10 per common share.

14

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

          Changes in stockholders’ equity for the six months ended June 30, 2007 were as follows:

													Accumulated
	Shares of												Other
	Common						Additional						Compre-			Treasury			Compre-
	Stock			Common			Paid-In			Retained			hensive			Stock,			hensive
	Outstanding			Stock			Capital			Earnings			Income (Loss)			at Cost			Income
Balance,
December 31, 2006	193,949		$	2,138		$	2,185,073		$	1,800,255		$	(65	)	$	(968,230	)
Net income										247,225								$	247,225
Currency translation													8,897						8,897
Market valuation, net of tax
benefit of $69													(105	)					(105	)
Deferred loss, less
reclassifications													(3,613	)					(3,613	)
Comprehensive income																		$	252,404
Dividends declared										(38,539	)
Issuance of common stock under
benefit plans	230						(1,313	)								11,084
Stock-based compensation
expense							31,608
Exercise of stock options	886						(16,154	)								43,414
Shares to cover employee payroll
tax withholdings on stock
issued under benefit plans	(18	)		(1	)		(918	)
Tax benefits associated with
stock-based compensation
plans							6,813
Purchases of treasury stock	(2,060	)														(105,000	)
Adjustments upon adoption of
FASB Interpretation No. 48							(10,441	)		(5,146	)
Other							2,345
Balance,
June 30, 2007	192,987		$	2,137		$	2,197,013		$	2,003,795		$	5,114		$	(1,018,732	)

          For the three months ended June 30, 2007, total comprehensive income was $146 million.

          During the second quarter of 2007, the Company received reimbursement of $2.3 million from Corning Incorporated related to tax benefits on indemnified billing-related claims, as reflected in “Other” in the table above.

          During the first quarter of 2007, the Company repurchased 2.1 million shares of its common stock at an average price of $50.98 per share for $105 million. For the three and six months ended June 30, 2007, the Company reissued 0.4 million shares and 1.1 million shares, respectively, for employee benefit plans.

15

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

5.          SUPPLEMENTAL CASH FLOW & OTHER DATA

	Three Months Ended						Six Months Ended
	June 30,						June 30,
		2008			2007			2008			2007
Depreciation expense	$	57,509		$	49,548		$	113,504		$	95,423
Interest expense		(46,876	)		(40,683	)		(96,521	)		(68,773	)
Interest income		1,444			1,525			3,472			3,088
Interest expense, net		(45,432	)		(39,158	)		(93,049	)		(65,685	)
Interest paid		40,702			58,810			99,631			79,084
Income taxes paid		168,371			130,989			193,213			140,240
Businesses acquired:
Fair value of assets acquired	$	-		$	2,356,750		$	-		$	2,886,712
Fair value of liabilities assumed		-			1,145,590			-			1,333,888

6.          DISCONTINUED OPERATIONS

          During the fourth quarter of 2005, NID instituted its second voluntary product hold within a six-month period due to quality issues, which adversely impacted the operating performance of NID. As a result, the Company evaluated a number of strategic options for NID. On April 19, 2006, the Company decided to discontinue NID’s operations. During the third quarter of 2006, the Company completed its wind down of NID and classified the operations of NID as discontinued operations. Results of operations for NID have been reported as discontinued operations in the accompanying consolidated statements of operations and related disclosures for all periods presented.

          The government investigation of NID continues (see Note 8). During the third quarter of 2007, the government and the Company began settlement discussions. In the course of those discussions, the government disclosed to the Company certain of the government’s legal theories regarding the amount of damages allegedly incurred by the government. The Company analyzed the government’s position and presented its own analysis which argued against many of the government’s claims. In light of that analysis and based on the status of settlement discussions, the Company established a reserve, in accordance with generally accepted accounting principles, reflected in discontinued operations, of $241 million during the second half of 2007 in connection with these claims. The Company estimates that the amount reserved represents the minimum expected probable loss with respect to this matter. See Note 8 for further details.

          Summarized financial information for the discontinued operations of NID is set forth below:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
		2008			2007			2008			2007
Net revenues	$	-		$	-		$	-		$	-
Loss from discontinued operations before income
taxes		(1,500	)		(1,111	)		(3,093	)		(3,766	)
Income tax benefit		(610	)		(464	)		(1,116	)		(1,497	)
Loss from discontinued operations, net of taxes	$	(890	)	$	(647	)	$	(1,977	)	$	(2,269	)

          Results for the three and six months ended June 30, 2008 and 2007 reflect expenses associated with the ongoing government investigation of NID. The $241 million reserve established in 2007 in connection with various

16

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

government claims is included in “accounts payable and accrued expenses” in the consolidated balance sheets at June 30, 2008 and December 31, 2007. The deferred tax asset recorded in connection with establishing the reserve is included in “deferred income taxes” in the consolidated balance sheets at June 30, 2008 and December 31, 2007. The remaining balance sheet information related to NID was not material at June 30, 2008 and December 31, 2007.

7.          DEBT

          In June 2008, the Company amended its existing receivables securitization facility (the “Secured Receivables Credit Facility”) and increased it from $375 million to $400 million. The Secured Receivables Credit Facility is supported by back-up facilities provided on a committed basis by two banks: (a) $125 million, which matures on December 13, 2008 and (b) $275 million, which matures on June 10, 2009. Interest on the Secured Receivables Credit Facility is based on rates that are intended to approximate commercial paper rates for highly rated issuers. Borrowings outstanding under the Secured Receivables Credit Facility, if any, are classified as a current liability on the Company's consolidated balance sheet. At June 30, 2008, there were no borrowings outstanding under the Secured Receivables Credit Facility.

          In June 2008, the Company repaid $168 million of borrowings under the Term Loan due 2012. As of June 30, 2008, total borrowings outstanding under the Term Loan due 2012 were $1.2 billion.

8.          COMMITMENTS AND CONTINGENCIES

          The Company has lines of credit with two financial institutions totaling $95 million for the issuance of letters of credit (the “letter of credit lines”). The letter of credit lines, which are renewed annually, mature on November 30, 2008 and December 31, 2008 and are guaranteed by the Subsidiary Guarantors.

          In support of its risk management program, to ensure the Company’s performance or payment to third parties, $83 million were outstanding on the letter of credit lines at June 30, 2008. The letters of credit primarily represent collateral for current and future automobile liability and workers’ compensation loss payments.

          Contingent Lease Obligations

          The Company is subject to contingent obligations under certain leases and other instruments incurred in connection with real estate activities and other operations associated with LabOne, Inc., which the Company acquired in 2005, and certain of its predecessor companies. No liability has been recorded for any of these potential contingent obligations. See Note 15 to the Consolidated Financial Statements contained in the Company’s 2007 Annual Report on Form 10-K for further details.

          The Company is involved in various legal proceedings. Some of the proceedings against the Company involve claims that are substantial in amount.

          NID Investigation

          NID and the Company each received a subpoena from the United States Attorney’s Office for the Eastern District of New York during the fourth quarter of 2004. The subpoenas requested a wide range of business records, including documents regarding parathyroid hormone (“PTH”) test kits manufactured by NID and PTH testing performed by the Company. The Company has voluntarily and actively cooperated with the investigation, providing information, witnesses and business records of NID and the Company, including documents related to PTH tests and test kits, as well as other tests and test kits. In the second and third quarters of 2005, the FDA conducted an inspection of NID and issued a Form 483 listing the observations made by the FDA during the course of the inspection. NID responded to the Form 483.

          During the fourth quarter of 2005, NID instituted its second voluntary product hold within a six-month period due to quality issues, which adversely impacted the operating performance of NID. As a result, the Company evaluated a number of strategic options for NID, and on April 19, 2006, decided to cease operations at NID. Upon completion of the wind down of operations in the third quarter of 2006, the operations of NID were classified as discontinued operations.

17

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

During the third quarter of 2006, the government issued two additional subpoenas, one to NID and one to the Company. The subpoenas covered various records, including records related to tests and test kits in addition to PTH.

          During the third quarter of 2007, the government and the Company began settlement discussions. In the course of those discussions, the government disclosed to the Company certain of the government’s legal theories regarding the amount of damages allegedly incurred by the government, which include alleged violations of civil and criminal statutes including the False Claims Act and the Food, Drug and Cosmetics Act. Violations of these statutes and related regulations could lead to a warning letter, injunction, fines or penalties, exclusion from federal healthcare programs and/or criminal prosecution, as well as claims by third parties. The Company analyzed the government’s position and presented its own analysis which argued against many of the government’s claims. In light of that analysis and based on the status of settlement discussions, the Company has established a reserve, in accordance with generally accepted accounting principles, reflected in discontinued operations, of $241 million in connection with these claims. Of the total reserve, $51 million and $190 million were recorded in the third and fourth quarters, respectively, of 2007. The Company estimates that the amount reserved represents the minimum expected probable loss with respect to this matter. The Company does not believe that a reasonable estimate for these losses in excess of the established reserve can be made at this time. The Company has recorded a deferred tax benefit associated with that portion of the reserve that it expects will be tax deductible. Eventual losses related to these matters may substantially exceed the reserve, and the impact could be material to the Company’s results of operations, cash flows and financial condition in the period that such matters are determined or paid.

          The Company continues to engage in discussions with the United States Attorney’s Office and those discussions potentially could lead to an agreement in principle to resolve some or all of the matters in the near future. There can be no assurance, however, when or whether a settlement may be reached, or as to its terms. If the Company cannot reach an acceptable settlement agreement with the United States Attorney’s Office, the Company would defend itself and NID and could incur significant costs in doing so.

          Other Matters

          The Company has in the past entered into several settlement agreements with various government and private payers relating to industry-wide billing and marketing practices that had been substantially discontinued. The federal or state governments may bring additional claims based on new theories as to the Company’s practices which management believes to be in compliance with law. In addition, certain federal and state statutes, including the qui tam provisions of the federal False Claims Act, allow private individuals to bring lawsuits against healthcare companies on behalf of government or private payers alleging inappropriate billing practices. The Company is aware of certain pending lawsuits, including a class action lawsuit, and has received several subpoenas related to billing practices.

          During the second quarter of 2005, the Company received a subpoena from the United States Attorney’s Office for the District of New Jersey. The subpoena seeks the production of business and financial records regarding capitation and risk sharing arrangements with government and private payers for the years 1993 through 1999. Also, during the third quarter of 2005, the Company received a subpoena from the U.S. Department of Health and Human Services, Office of the Inspector General. The subpoena seeks the production of various business records including records regarding the Company’s relationship with health maintenance organizations, independent physician associations, group purchasing organizations, and preferred provider organizations relating back to as early as 1995. The Company is cooperating with the United States Attorney’s Office and the Office of the Inspector General.

          During the second quarter of 2006, each of the Company and its subsidiary, Specialty Laboratories, Inc. (“Specialty”), received a subpoena from the California Attorney General’s Office. The subpoenas seek various documents including documents relating to billings to MediCal, the California Medicaid program. The subpoenas seek documents from various time frames ranging from three to ten years. The Company and Specialty are cooperating with the California Attorney General’s Office.

          In the first quarter of 2008, the U.S. Department of Justice informally requested records from the Company regarding AmeriPath’s billing practices for flow cytometry testing panels performed on blood, bone marrow and lymph node specimens. The inquiry seeks to determine whether AmeriPath may have billed for laboratory tests that were not medically necessary. The Company is cooperating fully with the inquiry.

18

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

          The Company understands that there may be pending qui tam claims brought by former employees or other “whistle blowers” as to which the Company cannot determine the extent of any potential liability. The Company also is aware of certain pending individual or class action lawsuits related to billing practices filed under the qui tam provisions of the civil False Claims Act and/or other federal and state statutes, regulations or other laws.

          Several of these other matters are in their early stages of development and involve responding to and cooperating with various government investigations and related subpoenas. While the Company believes that at least a reasonable possibility exists that losses may have been incurred, based on the nature and status of the investigations, the losses are either currently not probable or cannot be reasonably estimated.

          Management has established reserves in accordance with generally accepted accounting principles for the other matters discussed above. Such reserves totaled less than $5 million as of June 30, 2008. Although management cannot predict the outcome of such matters, management does not anticipate that the ultimate outcome of such matters will have a material adverse effect on the Company’s financial condition but may be material to the Company’s results of operations or cash flows in the period in which the impact of such matters is determined or paid. However, there may be pending qui tam claims brought by former employees or other “whistle blowers”, or other pending claims as to which the Company has not been provided with a copy of the complaint and accordingly cannot determine the extent of any potential liability.

          As a general matter, providers of clinical 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 coverage for claims that could result from providing or failing to provide clinical 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. Reserves for such matters are established by considering 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 condition but may be material to the Company’s results of operations or cash flows in the period in which the impact of such claims is determined or paid.

9.          BUSINESS SEGMENT INFORMATION

          Clinical testing is an essential element in the delivery of healthcare services. Physicians use tests to assist in the detection, diagnosis, evaluation, monitoring and treatment of diseases and other medical conditions. Clinical laboratory testing is generally categorized as clinical testing and anatomic pathology testing. Clinical testing is performed on body fluids, such as blood and urine. Anatomic pathology testing is performed on tissues, including biopsies, and other samples, such as human cells. Customers of the clinical testing business include patients, physicians, hospitals, employers, governmental institutions and other commercial clinical laboratories. The clinical testing business accounted for greater than 90% of net revenues from continuing operations in 2008 and 2007.

          All other operating segments include the Company’s non-clinical testing businesses and consist of its risk assessment services business, its clinical trials testing business, its healthcare information technology business, MedPlus, and its diagnostics products businesses. The Company’s risk assessment business provides underwriting support services to the life insurance industry including teleunderwriting, paramedical examinations, laboratory testing and medical record retrieval. The Company’s clinical trials testing business provides clinical testing performed in connection with clinical research trials on new drugs and vaccines. MedPlus is a developer and integrator of clinical connectivity and data management solutions for healthcare organizations, physicians and clinicians. The Company’s diagnostics products business manufactures and markets diagnostic test kits, hand-held instruments and testing systems.

          On April 19, 2006, the Company decided to discontinue NID’s operations and results of operations for NID have been classified as discontinued operations for all periods presented (see Note 6).

19

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

          During the the first quarter of 2007, the Company acquired HemoCue, and in the second quarter of 2007, it acquired AmeriPath (see Note 2). HemoCue is included in the Company’s other operating segments. AmeriPath’s operations are included in the Company’s clinical testing business.

          At June 30, 2008, substantially all of the Company’s services are provided within the United States, and substantially all of the Company’s assets are located within the United States.

          The following table is a summary of segment information for the three and six months ended June 30, 2008 and 2007. Segment asset information is not presented since it is not reported to or used by the chief operating decision maker at the operating segment level. Operating earnings (loss) of each segment represents net revenues less directly identifiable expenses. General management and administrative corporate expenses, including amortization of intangible assets, are included in general corporate expenses below. The accounting policies of the segments are the same as those of the Company as set forth in Note 2 to the Consolidated Financial Statements contained in the Company’s 2007 Annual Report on Form 10-K and Note 1 to the interim consolidated financial statements.

	Three Months Ended						Six Months Ended
	June 30,						June 30,
		2008			2007			2008			2007
Net revenues:
Clinical testing business	$	1,676,491		$	1,492,177		$	3,305,310		$	2,883,451
All other operating segments		161,410			148,979			317,228			283,913
Total net revenues	$	1,837,901		$	1,641,156		$	3,622,538		$	3,167,364
Operating earnings (loss):
Clinical testing business	$	337,938		$	297,810		$	643,902		$	533,909		(a)
All other operating segments		14,050			13,059			22,692			10,579		(b) (c)
General corporate expenses		(43,865	)		(38,460	)		(78,210	)		(71,209	)
Total operating income		308,123			272,409			588,384			473,279
Non-operating expenses, net		(45,118	)		(38,577	)		(92,827	)		(62,322	)
Income from continuing operations
before income taxes		263,005			233,832			495,557			410,957
Income tax expense		100,787			91,853			192,645			161,463
Income from continuing operations		162,218			141,979			302,912			249,494
Loss from discontinued operations, net
of taxes		(890	)		(647	)		(1,977	)		(2,269	)
Net income	$	161,328		$	141,332		$	300,935		$	247,225

(a)	During the six months ended June 30, 2007, operating income included $9.9 million of first quarter charges, associated with workforce reductions in response to reduced volume levels.
(b)	During the six months ended June 30, 2007, operating income included a $4 million first quarter charge related to the expensing of in-process research and development associated with the acquisition of HemoCue (see Note 2).
(c)	During the six months ended June 30, 2007, operating income included $0.8 million of first quarter charges, associated with workforce reductions in response to reduced volume levels.

20

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

10.        SUMMARIZED FINANCIAL INFORMATION

          The Company’s 5.125% senior notes due 2010, 7.5% senior notes due 2011, 5.45% senior notes due 2015, 6.40% senior notes due 2017 and 6.95% senior notes due 2037 are fully and unconditionally guaranteed by certain of the Company’s wholly owned subsidiaries that have operations in the United States (the “Subsidiary Guarantors”). With the exception of Quest Diagnostics Receivables Incorporated (see paragraph below), the non-guarantor subsidiaries are primarily foreign subsidiaries and less than wholly owned subsidiaries.

          In conjunction with the Company’s Secured Receivables Credit Facility, the Company maintains a wholly owned non-guarantor subsidiary, Quest Diagnostics Receivables Incorporated (“QDRI”). The Company and certain of its Subsidiary Guarantors transfer all private domestic receivables to QDRI. QDRI utilizes the transferred receivables to collateralize borrowings under 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. HemoCue and AmeriPath have been included in the accompanying condensed consolidating financial data, subsequent to the closing of the acquisitions, as Subsidiary Guarantors.

21

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 June 30, 2008
					Subsidiary			Non-Guarantor
		Parent			Guarantors			Subsidiaries			Eliminations			Consolidated
Net revenues	$	210,309		$	1,518,732		$	160,313		$	(51,453	)	$	1,837,901
Operating costs and expenses:
Cost of services		129,935			892,634			60,912			-			1,083,481
Selling, general and administrative		55,002			305,632			83,430			(6,027	)		438,037
Amortization of intangible assets		58			7,807			2,051			-			9,916
Royalty (income) expense		(107,694	)		107,694			-			-			-
Other operating expense (income), net		4			(49	)		(1,611	)		-			(1,656	)
Total operating costs and expenses		77,305			1,313,718			144,782			(6,027	)		1,529,778
Operating income		133,004			205,014			15,531			(45,426	)		308,123
Non-operating expenses, net		(39,262	)		(44,510	)		(6,772	)		45,426			(45,118	)
Income from continuing operations before taxes .		93,742			160,504			8,759			-			263,005
Income tax expense		32,462			64,408			3,917			-			100,787
Income from continuing operations		61,280			96,096			4,842			-			162,218
Loss from discontinued operations, net of taxes		-			(889	)		(1	)		-			(890	)
Equity earnings from subsidiaries		100,048			-			-			(100,048	)		-
Net income	$	161,328		$	95,207		$	4,841		$	(100,048	)	$	161,328
Condensed Consolidating Statement of Operations
Three Months Ended June 30, 2007
					Subsidiary			Non-Guarantor
		Parent			Guarantors			Subsidiaries			Eliminations			Consolidated
Net revenues	$	203,886		$	1,332,434		$	185,680		$	(80,844	)	$	1,641,156
Operating costs and expenses:
Cost of services		121,406			782,923			64,413			-			968,742
Selling, general and administrative		47,482			269,454			84,078			(5,909	)		395,105
Amortization of intangible assets		50			4,009			1,291			-			5,350
Royalty (income) expense		(99,091	)		99,091			-			-			-
Other operating expense (income), net		51			(288	)		(213	)		-			(450	)
Total operating costs and expenses		69,898			1,155,189			149,569			(5,909	)		1,368,747
Operating income		133,988			177,245			36,111			(74,935	)		272,409
Non-operating expenses, net		(35,361	)		(73,435	)		(4,716	)		74,935			(38,577	)
Income from continuing operations before taxes .		98,627			103,810			31,395			-			233,832
Income tax expense		37,246			41,534			13,073			-			91,853
Income from continuing operations		61,381			62,276			18,322			-			141,979
Loss from discontinued operations, net of taxes		-			(656	)		9			-			(647	)
Equity earnings from subsidiaries		79,951			-			-			(79,951	)		-
Net income	$	141,332		$	61,620		$	18,331		$	(79,951	)	$	141,332

22

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

Condensed Consolidating Statement of Operations
Six Months Ended June 30, 2008
					Subsidiary			Non-Guarantor
		Parent			Guarantors			Subsidiaries			Eliminations			Consolidated
Net revenues	$	407,728		$	2,999,331		$	330,469		$	(114,990	)	$	3,622,538
Operating costs and expenses:
Cost of services		249,737			1,768,897			123,474			-			2,142,108
Selling, general and administrative		97,244			618,406			169,381			(11,916	)		873,115
Amortization of intangible assets		113			15,725			3,342			-			19,180
Royalty (income) expense		(212,334	)		212,334			-			-			-
Other operating expense (income), net		4			(150	)		(103	)		-			(249	)
Total operating costs and expenses		134,764			2,615,212			296,094			(11,916	)		3,034,154
Operating income		272,964			384,119			34,375			(103,074	)		588,384
Non-operating expenses, net		(87,096	)		(98,102	)		(10,703	)		103,074			(92,827	)
Income from continuing operations before taxes .		185,868			286,017			23,672			-			495,557
Income tax expense		67,598			114,798			10,249			-			192,645
Income from continuing operations		118,270			171,219			13,423			-			302,912
Loss from discontinued operations, net of taxes		-			(1,624	)		(353	)		-			(1,977	)
Equity earnings from subsidiaries		182,665			-			-			(182,665	)		-
Net income	$	300,935		$	169,595		$	13,070		$	(182,665	)	$	300,935
Condensed Consolidating Statement of Operations
Six Months Ended June 30, 2007
					Subsidiary			Non-Guarantor
		Parent			Guarantors			Subsidiaries			Eliminations			Consolidated
Net revenues	$	415,769		$	2,554,757		$	356,565		$	(159,727	)	$	3,167,364
Operating costs and expenses:
Cost of services		244,840			1,530,962			124,725			-			1,900,527
Selling, general and administrative		100,062			523,782			167,732			(11,678	)		779,898
Amortization of intangible assets		135			6,562			3,113			-			9,810
Royalty (income) expense		(194,228	)		194,228			-			-			-
Other operating expense (income), net		44			(282	)		4,088			-			3,850
Total operating costs and expenses		150,853			2,255,252			299,658			(11,678	)		2,694,085
Operating income		264,916			299,505			56,907			(148,049	)		473,279
Non-operating expenses, net		(63,698	)		(139,570	)		(7,103	)		148,049			(62,322	)
Income from continuing operations before taxes .		201,218			159,935			49,804			-			410,957
Income tax expense		76,204			64,147			21,112			-			161,463
Income from continuing operations		125,014			95,788			28,692			-			249,494
Loss from discontinued operations, net of taxes		-			(2,176	)		(93	)		-			(2,269	)
Equity earnings from subsidiaries		122,211			-			-			(122,211	)		-
Net income	$	247,225		$	93,612		$	28,599		$	(122,211	)	$	247,225

23

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

Condensed Consolidating Balance Sheet
June 30, 2008
							Non-
				Subsidiary			Guarantor
		Parent		Guarantors			Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	97,829	$	11,180		$	34,389		$	-		$	143,398
Accounts receivable, net		16,986		262,224			643,303			-			922,513
Other current assets		53,370		199,510			105,518			(7,221	)		351,177
Total current assets		168,185		472,914			783,210			(7,221	)		1,417,088
Property, plant and equipment, net		214,246		632,874			45,953			-			893,073
Goodwill and intangible assets, net		153,374		5,397,992			542,037			-			6,093,403
Intercompany receivable (payable)		850,804		(494,125	)		(356,679	)		-			-
Investment in subsidiaries		5,315,631		-			-			(5,315,631	)		-
Other assets		173,343		43,958			43,899			(97,731	)		163,469
Total assets	$	6,875,583	$	6,053,613		$	1,058,420		$	(5,420,583	)	$	8,567,033
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	473,646	$	567,228		$	46,583		$	(7,221	)	$	1,080,236
Short-term borrowings and current portion
of long-term debt		-		47,637			2,727			-			50,364
Total current liabilities		473,646		614,865			49,310			(7,221	)		1,130,600
Long-term debt		2,635,856		248,142			325,300			-			3,209,298
Other liabilities		98,427		475,329			83,456			(97,731	)		559,481
Stockholders’ equity		3,667,654		4,715,277			600,354			(5,315,631	)		3,667,654
Total liabilities and stockholders’ equity	$	6,875,583	$	6,053,613		$	1,058,420		$	(5,420,583	)	$	8,567,033
Condensed Consolidating Balance Sheet
December 31, 2007
							Non-
				Subsidiary			Guarantor
		Parent		Guarantors			Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	111,610	$	14,847		$	41,137		$	-		$	167,594
Accounts receivable, net		27,309		234,532			620,126			-			881,967
Other current assets		46,986		183,505			101,055			(6,750	)		324,796
Total current assets		185,905		432,884			762,318			(6,750	)		1,374,357
Property, plant and equipment, net		215,062		654,341			42,595			-			911,998
Goodwill and intangible assets, net		153,848		5,422,270			530,719			-			6,106,837
Intercompany receivable (payable)		859,841		(610,371	)		(249,470	)		-			-
Investment in subsidiaries		5,149,196		-			-			(5,149,196	)		-
Other assets		167,105		48,433			38,054			(81,091	)		172,501
Total assets	$	6,730,957	$	5,947,557		$	1,124,216		$	(5,237,037	)	$	8,565,693
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	451,944	$	634,079		$	45,443		$	(6,750	)	$	1,124,716
Short-term borrowings and current portion
of long-term debt		-		62,386			101,195			-			163,581
Total current liabilities		451,944		696,465			146,638			(6,750	)		1,288,297
Long-term debt		2,829,927		247,573			299,712			-			3,377,212
Other liabilities		124,844		457,837			74,352			(81,091	)		575,942
Stockholders’ equity		3,324,242		4,545,682			603,514			(5,149,196	)		3,324,242
Total liabilities and stockholders’ equity	$	6,730,957	$	5,947,557		$	1,124,216		$	(5,237,037	)	$	8,565,693

24

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

Condensed Consolidating Statement of Cash Flows
Six Months Ended June 30, 2008
					Subsidiary			Non-Guarantor
		Parent			Guarantors			Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net income	$	300,935		$	169,595		$	13,070		$	(182,665	)	$	300,935
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization		25,736			97,370			9,578			-			132,684
Provision for doubtful accounts		5,788			57,873			103,907			-			167,568
Other, net		(161,572	)		16,914			1,619			182,665			39,626
Changes in operating assets and liabilities		137,626			(270,297	)		(136,932	)		-			(269,603	)
Net cash provided by (used in) operating
activities		308,513			71,455			(8,758	)		-			371,210
Net cash (used in) provided by investing activities		(124,134	)		(57,283	)		18,857			93,591			(68,969	)
Net cash used in financing activities		(198,160	)		(17,839	)		(16,847	)		(93,591	)		(326,437	)
Net change in cash and cash equivalents		(13,781	)		(3,667	)		(6,748	)		-			(24,196	)
Cash and cash equivalents, beginning of period		111,610			14,847			41,137			-			167,594
Cash and cash equivalents, end of period	$	97,829		$	11,180		$	34,389		$	-		$	143,398
Condensed Consolidating Statement of Cash Flows
Six Months Ended June 30, 2007
					Subsidiary			Non-Guarantor
		Parent			Guarantors			Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net income	$	247,225		$	93,612		$	28,599		$	(122,211	)	$	247,225
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization		24,767			72,667			7,799			-			105,233
Provision for doubtful accounts		6,544			24,126			108,055			-			138,725
Other, net		(111,979	)		34,439			2,063			122,211			46,734
Changes in operating assets and liabilities		35,899			(171,163	)		(122,307	)		-			(257,571	)
Net cash provided by operating activities		202,456			53,681			24,209			-			280,346
Net cash used in investing activities		(1,616,132	)		(1,227,499	)		(313,110	)		1,581,482			(1,575,259	)
Net cash provided by financing activities		1,353,431			1,195,565			300,057			(1,581,482	)		1,267,571
Net change in cash and cash equivalents		(60,245	)		21,747			11,156			-			(27,342	)
Cash and cash equivalents, beginning of period		134,598			7,661			7,381			-			149,640
Cash and cash equivalents, end of period	$	74,353		$	29,408		$	18,537		$	-		$	122,298

25

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 our business 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 Annual Report on Form 10-K for the year ended December 31, 2007.

          Recent Acquisitions

          Acquisition of AmeriPath

          On May 31, 2007, we completed the acquisition of AmeriPath Group Holdings, Inc. (“AmeriPath”), in an all-cash transaction valued at approximately $2 billion, including approximately $780 million of assumed debt and related accrued interest. AmeriPath is a leading provider of anatomic pathology, including dermatopathology, and esoteric testing which generates annual revenues of approximately $800 million.

          Through the acquisition, we acquired all of AmeriPath’s operations. AmeriPath, with its team of approximately 400 board certified pathologists, operates 40 outpatient anatomic pathology laboratories and provides inpatient anatomic pathology and medical director services for approximately 200 hospitals throughout the country. We financed the all-cash purchase price and related transaction costs, together with the repayment of approximately $780 million of principal and related accrued interest representing substantially all of AmeriPath’s debt, as well as the refinancing of the $450 million term loan used to finance the acquisition of HemoCue with $1.6 billion of borrowings under a new five-year term loan facility, $780 million of borrowings under a new one-year bridge loan, and cash on-hand. In June 2007, we completed an $800 million senior notes offering. The net proceeds of the senior notes offering were used to repay the $780 million borrowed under the bridge loan. The acquisition was accounted for under the purchase method of accounting.

          Acquisition of HemoCue

          On January 31, 2007, we acquired POCT Holding AB (“HemoCue”), a Sweden-based company specializing in point-of-care testing, in an all-cash transaction valued at approximately $450 million, including $113 million of assumed debt of HemoCue. The transaction was financed through an interim credit facility, which was refinanced during the second quarter of 2007 in connection with the financing of the AmeriPath acquisition. In January 2008, we received a payment of approximately $23 million from an escrow fund established at the time of the acquisition.

          HemoCue is the leading international provider in point-of-care testing for hemoglobin, with a growing share in professional glucose and microalbumin testing. HemoCue received Food and Drug Administration (“FDA”) clearance in October 2007 for a test to determine white blood cell counts and has applied to receive Clinical Laboratories Improvement Amendments of 1988 (“CLIA”)-waived status. Additionally, in June 2008, HemoCue was granted a CLIA waiver for its Albumin 201 System, which will screen patients for microalbuminuria and allow physicians to begin treatment based on the test’s results during a single office visit.

          This acquisition complements our point-of-care testing for infectious disease and cancer, including new tests for colorectal cancer screening and Herpes Simplex Type 2. The acquisition increases our presence in the growing point-of-care testing market and we plan to leverage HemoCue’s international presence to reach new markets around the world. HemoCue generated annual revenues of approximately $80 million at the time of acquisition.

26

          Results of Operations

          Our clinical testing business currently represents our one reportable business segment. The clinical testing business accounted for more than 90% of net revenues from continuing operations in both 2008 and 2007. Our other operating segments consist of our risk assessment services business, our clinical trials testing business, our healthcare information technology business, MedPlus, and our diagnostic products business. Our business segment information is disclosed in Note 9 to the interim consolidated financial statements.

          Three and Six Months Ended June 30, 2008 Compared with Three and Six Months Ended June 30, 2007

          Continuing Operations

          Income from continuing operations for the three months ended June 30, 2008 was $162 million, or $0.83 per diluted share, compared to $142 million, or $0.73 per diluted share, in 2007. Income from continuing operations for the six months ended June 30, 2008 was $303 million, or $1.55 per diluted share, compared to $249 million, or $1.28 per diluted share, in 2007. These increases in income from continuing operations were principally driven by revenue growth and actions we have taken to reduce our cost structure. In addition, the favorable resolution of certain tax contingencies increased diluted earnings per share by $0.01 in the quarter and six months ended June 30, 2008.

          During the first quarter of 2007, the Company became a non-contracted provider to United Healthcare Group Inc., (“UNH”). As a result of the change in status, the Company’s revenues and earnings were significantly impacted for the first quarter and full year 2007. However, the ongoing profit impact was successfully mitigated by the end of 2007 as a result of actions taken to reduce costs and higher reimbursement for the testing we continued to perform for UNH members as a non-contracted provider.

          Results for the six months ended June 30, 2007 include first quarter pre-tax charges of $10.7 million, or $0.03 per share, associated with workforce reductions in response to reduced volume levels, and a first quarter pre-tax charge of $4.0 million, or $0.01 per share, related to in-process research and development expense associated with the HemoCue acquisition.

          Net Revenues

          Net revenues for the three months ended June 30, 2008 grew by 12% over the prior year level to $1.8 billion. Net revenues for the six months ended June 30, 2008 were $3.6 billion, 14% above the prior year level. The acquisition of AmeriPath contributed approximately 8.1% and 10.5% to revenue growth for the three and six months ended June 30, 2008, respectively. While the UNH contract change took effect as of January 1, 2007, much of the loss of volume and change in revenues took place over the course of the first quarter last year. Therefore, there continues to be a carry-over impact in comparing the three and six months ended June 30, 2008 volume and revenues to that of the prior year. We estimate that the carry-over impact of our change in status with UNH reduced 2008 revenue growth for the three and six months ended June 30, 2008 by just over 1%.

          Our clinical testing business, which accounts for over 90% of our net revenues, grew 12.4% above the prior year level for the three months ended June 30, 2008, with AmeriPath contributing 8.9% growth. Volume, measured by the number of requisitions, increased 4.9% for the three months ended June 30, 2008, with 3.9% due to the impact of the AmeriPath acquisition. We estimate that the impact of our change in status with UNH reduced volume growth for the three months ended June 30, 2008 by approximately 0.8% . After adjusting for the impact of the UNH contract change, we estimate the underlying volume growth to be between one and two percent. This is despite an almost 10% decline in pre-employment drug testing volume which accounted for approximately 7% of our total volume. We believe the volume decrease in pre-employment drug testing is principally due to slower hiring by the employers served by this business. Revenue per requisition increased 7.1% for the three months ended June 30, 2008 and was impacted by the results of AmeriPath, which contributed 4.5% to the improvement. The balance of the increase was primarily driven by a positive test mix, partially offset by price reductions on various health plan contracts.

          For the six months ended June 30, 2008, clinical testing revenues grew 14.6% above the prior year level with AmeriPath contributing 11.5% growth. Volume, measured by the number of requisitions, increased 5.3%

27

primarily due to the impact of the AmeriPath acquisition, which contributed about 5% volume growth. We estimate that the impact of our change in status with UNH reduced volume growth by approximately 1.2% . After adjusting for the impact of the UNH contract change, results for the six months ended June 30, 2008 reflect underlying volume growth of between one and two percent. Revenue per requisition increased 8.9% for the six months ended June 30, 2008 and was impacted by the results of AmeriPath, which contributed 6.1% to the improvement. The balance of the increase was primarily driven by a positive test mix, partially offset by price reductions on various health plan contracts.

          Our businesses other than clinical testing accounted for approximately 9% of our net revenues for the three and six months ended June 30, 2008. These businesses include our risk assessment services business, our clinical trials testing business, our healthcare information technology business, MedPlus, and our diagnostic products business. The revenues for these businesses as a group grew 8% and 12% for the three and six months ended June 30, 2008, respectively, with the increase primarily driven by a strong performance of our healthcare information technology, point-of-care and clinical trials testing businesses.

          Operating Costs and Expenses

          Total operating costs and expenses for the three and six months ended June 30, 2008 increased $161 million and $340 million, respectively, from the prior year periods. For the three and six months ended June 30, 2008, these increases are primarily due to costs associated with the acquired operations of AmeriPath, and increased costs associated with annual compensation adjustments. These increases were partially offset by actions taken to improve our operating efficiency and reduce the size of our workforce.

          Results for the six months ended June 30, 2007 reflect first quarter costs of $10.7 million associated with workforce reductions ($3.9 million included in cost of services and $6.8 million included in selling, general and administrative) and $4 million of in-process research and development costs associated with the acquisition of HemoCue, which was recorded in “other operating (income) expense, net”.

          Cost of services, which includes the costs of obtaining, transporting and testing specimens, was 59.0% of net revenues for the three months ended June 30, 2008, similar to the prior year period. For the six months ended June 30, 2008, cost of services, as a percentage of net revenues, was 59.1% of net revenues, decreasing from 60.0% of net revenues in the prior year period. The improvement over the prior year reflects actions taken to reduce our cost structure and higher revenue per requisition.

          Selling, general and administrative expenses, which include the costs of the sales force, billing operations, bad debt expense, and general management and administrative support, were 23.8% of net revenues for the three months ended June 30, 2008, compared to 24.1% in the prior year period. For the six months ended June 30, 2008, selling, general and administrative expenses, as a percentage of net revenues, decreased to 24.1% from 24.6% in the prior year period. These improvements were primarily due to actions taken to reduce our cost structure and higher revenue per requisition, partially offset by the impact of the acquired operations of AmeriPath. In addition, selling, general and administrative expenses for the six months ended June 30, 2007 contained first quarter costs associated with efforts to retain business and clarify for patients, physicians and employers misinformation regarding the UNH contract change.

          For the three months ended June 30, 2008 and 2007, bad debt expense was 4.4% and 4.3% of net revenues, respectively. For the six months ended June 30, 2008, bad debt expense was 4.6% compared to 4.4% of net revenues in 2007. The increase for the three and six months ended June 30, 2008 was driven by the inclusion of AmeriPath, which carries a higher bad debt rate than the rest of our business, primarily due to its revenue and customer mix, and increased the consolidated bad debt rate by approximately half a percent for both periods.

          Amortization of intangible assets for the three and six months ended June 30, 2008 increased $4.6 million and $9.4 million, respectively, over the prior year periods. These increases were primarily due to the amortization of intangible assets acquired in conjunction with the acquisition of AmeriPath.

          Other operating (income) expense, net represents miscellaneous income and expense items related to operating activities, including gains and losses associated with the disposal of operating assets and provisions for restructurings and other special charges. For the six months ended June 30, 2007, other operating (income) expense, net includes a $4.0 million first quarter charge related to in-process research and development expense recorded in connection with the acquisition of HemoCue.

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          Operating Income

          Operating income for the three months ended June 30, 2008 was $308 million, or 16.8% of net revenues, compared to $272 million, or 16.6% of net revenues, in the prior year period. For the six months ended June 30, 2008, operating income was $588 million, or 16.2% of net revenues, compared to $473 million, or 14.9% of net revenues in the prior year period. The increases in operating income were primarily due to actions we have taken to reduce our cost structure, partially offset by the impact of the acquired operations of AmeriPath. In addition, the operating income percentage for the three and six months ended June 30, 2008, reflects the impact of the various items which served to reduce cost of services and selling, general and administrative expenses as a percentage of net revenues.

          Other Income (Expense)

          Interest expense, net for the three and six months ended June 30, 2008 increased $6.3 million and $27.4 million, respectively, over the prior year periods. These increases were primarily due to additional interest expense associated with borrowings used to fund the acquisition of AmeriPath.

          Income Tax Expense

          The effective income tax rate for the three and six months ended June 30, 2008 decreased 1.0% and 0.4%, respectively, compared to the prior year periods. These decreases were primarily due to the favorable resolution of certain tax contingencies in the second quarter of 2008.

          Discontinued Operations

          Loss from discontinued operations, net of taxes, for the three months ended June 30, 2008 was $0.9 million, or $0.01 per diluted share, compared to $0.6 million, with no impact to diluted earnings per share in the prior year. Loss from discontinued operations, net of taxes, for the six months ended June 30, 2008 was $2.0 million, or $0.01 per diluted share, compared to $2.2 million, or $0.01 per diluted share in the prior year. Results for the three and six months ended June 30, 2008 and 2007 reflect expenses associated with the on-going government investigation of NID, which is more fully described in Notes 6 and 8 to the interim consolidated financial statements.

          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 condition or results of operations. See Note 11 to the Consolidated Financial Statements in our 2007 Annual Report on Form 10-K for additional discussion of our financial instruments and hedging activities.

          At June 30, 2008 and December 31, 2007, the fair value of our debt was estimated at approximately $3.2 billion and $3.6 billion, respectively, 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 June 30, 2008, the carrying value exceeded the estimated fair value of the debt by approximately $13.6 million and at December 31, 2007, the estimated fair value exceeded the carrying value of the debt by $59.1 million. A hypothetical 10% increase in interest rates on our total debt portfolio (representing approximately 55 and 61 basis points at June 30, 2008 and December 31, 2007, respectively) would potentially reduce the estimated fair value of our debt by approximately $75 million and $78 million at June 30, 2008 and December 31, 2007, respectively.

          Borrowings under our senior unsecured revolving credit facility, our secured receivables credit facility, our term loan due December 2008, and our term loan due May 2012, are subject to variable interest rates. Interest on our secured receivables credit facility is based on rates that are intended to approximate commercial paper rates for highly-rated issuers. Interest rates on our senior unsecured revolving credit facility, term loan due December 2008 and term loan due May 2012 are subject to a pricing schedule that can fluctuate based on changes in our credit ratings. As such, our borrowing cost under these credit arrangements will be subject to both fluctuations in interest rates and changes in our credit ratings. As of June 30, 2008, the borrowing rates under these credit facilities were: for our senior unsecured credit facility, LIBOR plus 0.40%; for our term loan due December 2008,

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LIBOR plus 0.55%; and for our term loan due May 2012, LIBOR plus 0.50% . At June 30, 2008, the LIBOR rate was 2.46% . At June 30, 2008, there was $1.2 billion outstanding under our term loan due May 2012, $45 million outstanding under our term loan due December 2008; and no borrowings outstanding under our secured receivables credit facility and our $750 million senior unsecured revolving credit facility.

          During the third quarter ended September 30, 2007, we entered into various variable-to-fixed interest rate swap agreements, whereby we fixed the interest rates on $500 million of our term loan due May 2012 for periods ranging from October 2007 through October 2009. The fixed interest rates range from 5.095% to 5.267% . Based on our net exposure to interest rate changes, a hypothetical 10% change in interest rates on our variable rate indebtedness (representing approximately 29 basis points) would impact annual net interest expense by approximately $2.3 million, assuming no changes to the debt outstanding at June 30, 2008.

          The fair value of the interest rate swap agreements at June 30, 2008 was a liability of $7.3 million. A hypothetical 10% decrease in interest rates on our term loan (representing approximately 34 basis points) would potentially increase the fair value of the liability of these instruments by approximately $1.4 million. A hypothetical 10% increase in interest rates would potentially decrease the fair value of the liability of these instruments by approximately $1.4 million. For details regarding our outstanding debt and our financial instruments, see Notes 10 and 11 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2007 and Note 7 to the interim consolidated financial statements.

          Risk Associated with Investment Portfolio

          Our investment portfolio includes equity investments in publicly held companies that are classified as available-for-sale securities and other strategic equity holdings in privately held companies. These securities are exposed to price fluctuations and are generally concentrated in the life sciences industry. The carrying values of our available-for-sale equity securities and privately held securities were $16 million at June 30, 2008.

          We do not hedge our equity price risk. The impact of an adverse movement in equity prices on our holdings in privately held companies cannot be easily quantified, as our ability to realize returns on investments depends on, among other things, the enterprises’ ability to raise additional capital or derive cash inflows from continuing operations or through liquidity events such as initial public offerings, mergers or private sales.

          Fair Value Measurements

          On January 1, 2008, we adopted Statement of Financial Accounting Standards (“SFAS”) No. 157, “Fair Value Measurements” (“SFAS 157”). Adoption of this accounting standard did not have a material effect on our financial position, results of operations or cash flows. See Note 1 to the interim consolidated financial statements for further details.

          SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”) became effective for the Company on January 1, 2008. As of January 1, 2008 and for the period ended June 30, 2008, the Company has elected not to apply the fair value option to any of its financial assets or financial liabilities on-hand because the Company does not believe that application of SFAS 159’s fair value option is appropriate given the nature of its business operations. See Note 1 to the interim consolidated financial statements for further details.

          Liquidity and Capital Resources

          Cash and Cash Equivalents

          Cash and cash equivalents at June 30, 2008 totaled $143 million compared to $168 million at December 31, 2007. Cash flows from operating activities in 2008 were $371 million, which were used to fund investing and financing activities of $69 million and $326 million, respectively. Cash and cash equivalents at June 30, 2007 totaled $122 million, compared to $150 million at December 31, 2006. Cash flows from operating activities in 2007 were $280 million, which together with cash flows from financing activities of $1.3 billion and cash on-hand, were used to fund investing activities of $1.6 billion.

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          Cash Flows from Operating Activities

          Net cash provided by operating activities for the six months ended June 30, 2008 was $371 million compared to $280 million in the prior year period. This increase was principally due to higher earnings in the current year. Net cash provided by operating activities for the six months ended June 30, 2007 was reduced by $57 million of fees and other expenses paid in connection with the acquisition of AmeriPath. Days sales outstanding, a measure of billing and collection efficiency, were 46 days at June 30, 2008 compared to 48 days at December 31, 2007.

          Cash Flows from Investing Activities

          Net cash used in investing activities for the six months ended June 30, 2008 was $69 million, consisting principally of capital expenditures of $95 million, partially offset by $23 million related to the receipt of a payment from an escrow fund established at the time of the acquisition of HemoCue, and a decrease in investments of $6 million.

          Net cash used in investing activities for the six months ended June 30, 2007 was $1.6 billion, consisting principally of $1.2 billion related to the acquisition of AmeriPath, $307 million related to the acquisition of HemoCue and capital expenditures of $89 million.

          Cash Flows from Financing Activities

          Net cash used in financing activities for the six months ended June 30, 2008 was $326 million, consisting primarily of net reductions of debt of $284 million, which included the repayment of $120 million on our Secured Receivables Credit Facility, $15 million on our Term Loan due December 31, 2008 and $168 million on our term loan due May 31, 2012, offset partially by borrowings of $20 million on our Secured Receivables Credit Facility. In addition, cash flows from financing activities include dividend payments of $39 million.

          Since the completion of the AmeriPath acquisition in May 2007, we have reduced our total debt by $700 million.

          Net cash provided by financing activities for the six months ended June 30, 2007 was $1.3 billion, primarily associated with new borrowings and repayments related to the acquisitions of AmeriPath and HemoCue.

          Dividend Program

          During each of the quarters of 2008 and 2007, our Board of Directors declared a quarterly cash dividend of $0.10 per common share. On May 21, 2008, our Board of Directors declared a quarterly cash dividend per common share of $0.10, paid on July 18, 2008. 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

          We did not purchase any shares of our common stock during the six months ended June 30, 2008. Through June 30, 2008, we have repurchased approximately 44.1 million shares of our common stock at an average price of $45.35 for $2 billion under our share repurchase program. At June 30, 2008, the total available for repurchases under the remaining authorizations was $104 million.

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          Contractual Obligations and Commitments

          The following table summarizes certain of our contractual obligations as of June 30, 2008:

	Payments due by period
	(in thousands)
			Remainder
Contractual Obligations	Total		of 2008		1-3 years		3 –5 years		After 5 years
Long-term debt	$	3,238,458	$	48,755	$	418,439	$	1,474,669	$	1,296,595
Capital lease obligations		21,204		543		2,362		2,592		15,707
Interest payments on outstanding debt		1,586,030		91,737		346,988		227,546		919,759
Operating leases		694,529		95,479		291,127		160,671		147,252
Purchase obligations		91,337		37,498		41,646		11,646		547
Total contractual obligations	$	5,631,558	$	274,012	$	1,100,562	$	1,877,124	$	2,379,860

          Interest payments on our long-term debt have been calculated after giving effect to our interest rate swap agreements, using the interest rates as of June 30, 2008 applied to the June 30, 2008 balances, which are assumed to remain outstanding through their maturity dates.

          A full description of the terms of our indebtedness and related debt service requirements and our future payments under certain of our contractual obligations is contained in Note 10 to the Consolidated Financial Statements in our 2007 Annual Report on Form 10-K. A full discussion and analysis regarding our minimum rental commitments under noncancelable operating leases and noncancelable commitments to purchase products or services at December 31, 2007 is contained in Note 15 to the Consolidated Financial Statements in our 2007 Annual Report on Form 10-K. Also refer to Note 7 to the interim consolidated financial statements for an update of our indebtedness.

          As of June 30, 2008, our total liabilities for unrecognized tax benefits were approximately $96 million, which were excluded from the table above. Based upon the expiration of statutes of limitations, settlements and/or the conclusion of tax examinations, we believe it is reasonably possible that this amount may decrease by up to $42 million within the next twelve months. For the remainder, we cannot make reasonably reliable estimates of the timing of the future payments of these liabilities. See Note 5 to the Consolidated Financial Statements in our 2007 Annual Report on Form 10-K for information regarding our contingent tax liability reserves.

          Our credit agreements relating to our senior unsecured revolving credit facility, our term loan due December 2008 and our term loan due May 2012 contain various covenants and conditions, including the maintenance of certain financial ratios, that could impact our ability to, among other things, incur additional indebtedness. 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 equal less than 6% of our consolidated net revenues. Total assets associated with our unconsolidated joint ventures are less than 2% 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 between $240 million and $260 million during 2008 for capital expenditures to support and expand our existing operations, principally related to investments in information technology, equipment, and facility upgrades. During the first six months of 2008, we continued to make investments in support of our plans to develop and deploy standard systems across both the AmeriPath practices

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and our clinical laboratories. We have completed the enhancements to the AmeriPath laboratory and billing systems and have begun deployment of the enhanced systems during the second quarter of 2008. These investments will enable significant productivity gains and improved customer service.

          In June 2008, we amended our existing receivables securitization facility (the “Secured Receivables Credit Facility”) and increased it from $375 million to $400 million. The Secured Receivables Credit Facility is supported by back-up facilities provided on a committed basis by two banks: (a) $125 million, which matures on December 13, 2008 and (b) $275 million, which matures on June 10, 2009. Interest on the Secured Receivables Credit Facility is based on rates that are intended to approximate commercial paper rates for highly rated issuers. As of June 30, 2008, we had no borrowings outstanding under this facility.

          As of June 30, 2008, $1.2 billion of borrowing capacity was available under our existing credit facilities, including $400 million available under our Secured Receivables Credit Facility.

          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. We believe that our credit profile 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 Standards

          In June 2008, the Financial Accounting Standards Board (“FASB”) issued FSP EITF 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities”. In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles” and in March 2008, the FASB issued SFAS No. 161, “Disclosures About Derivative Instruments and Hedging Activities – an amendment of FASB Statement No. 133”. The impact of these accounting standards is discussed in Note 1 to the interim consolidated financial statements.

          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. Risks and uncertainties that may affect our future results include, but are not limited to, adverse results from pending or future government investigations, lawsuits or private actions, the competitive environment, changes in government regulations, changing relationships with customers, payers, suppliers and strategic partners and other factors discussed in “Business” in Part I, Item 1, “Risk Factors” and “Cautionary Factors That May Affect Future Results” in Item I, Part 1A, “Legal Proceedings” in Part I, Item 3, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 and “Quantitative and Qualitative Disclosures About Market Risk” in Part II, Item 7A in our 2007 Annual Report on Form 10-K and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Quantitative and Qualitative Disclosures About Market Risk” in our 2008 Quarterly Reports on Form 10-Q and other items throughout the 2007 Form 10-K and our 2008 Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

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)          Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures (as defined under Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934,

33

	as amended). Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.
(b)	During the second quarter of 2008, there were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended) that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

See Note 8 to the interim consolidated financial statements for information regarding the status of legal proceedings involving the Company.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

We did not purchase any shares of our common stock during the quarter and six months ended June 30, 2008.

Item 4.  Submission of Matters to a Vote of Security Holders

(a)	The Annual Meeting of Shareholders of the Company was held on May 16, 2008. At the meeting, the matters described below were approved by the shareholders.
(b)	The following nominees for the office of director were elected for terms expiring at the 2011 Annual Meeting of Shareholders, by the following votes:

	For	Withheld
William F. Buehler	169,241,790	3,266,520
Rosanne Haggerty	169,308,393	3,199,917
Daniel C. Stanzione, Ph.D.	167,872,738	4,635,572

The following persons continue as directors:

John C. Baldwin, Ph.D.
Jenne K. Britell, Ph. D.
Surya N. Mohapatra, Ph.D.
Gary M. Pfeiffer
Gail R. Wilensky, Ph.D.
John B. Ziegler

(c)    The ratification of the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm to audit the financial statements of the Company and its subsidiaries for the fiscal year ending December 31, 2008, was approved by the following number of shareholder votes for, against, and abstained:

               For: 169,235,593                Against: 1,943,037Abstained: 1,329,533

Item 6. Exhibits

Exhibits:
10.1	Amendment No. 6 dated as of May 23, 2008 to Third Amended and Restated Credit and Security Agreement dated as of April 20, 2004, among Quest Diagnostics Receivables Inc., as Borrower, the Company, as Servicer, each of the lenders party thereto and Wachovia Bank, National Association, as Administrative Agent.
10.2	Amendment No. 7 dated as of June 11, 2008 to Third Amended and Restated Credit and Security Agreement dated as of April 20, 2004, among Quest Diagnostics Receivables Inc., as Borrower, the Company, as Servicer, each of the lenders party thereto and Wachovia Bank, National Association, as Administrative Agent.
10.3	Fourth Amended and Restated Credit and Security Agreement dated as of June 11, 2008, among Quest Diagnostics Receivables Inc., as Borrower, the Company, as Servicer, each of the lenders party thereto and The Bank of Tokyo-Mitsubishi, UFJ, Ltd., New York Branch, individually, as

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	Gotham Agent and as Administrative Agent.
10.4	Form of Equity Award Agreement, dated as of March 4, 2008.
10.5	Form of Equity Award Agreement, dated as of March 4, 2008, between the Company and Surya N. Mohapatra.
10.6	Amendment No. 2 to Letter Agreement between SmithKline Beecham Corporation and the Company.
10.7	Amendment No. 3 to Letter Agreement between SmithKline Beecham Corporation and the Company.
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. §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. §1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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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.

July 24, 2008
Quest Diagnostics Incorporated

By	/s/	Surya N. Mohapatra
		Surya N. Mohapatra, Ph.D.
		Chairman, President and
		Chief Executive Officer
By	/s/	Robert A. Hagemann
		Robert A. Hagemann
		Senior Vice President and
		Chief Financial Officer

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EX-10.1

EXHIBIT 10.1

AMENDMENT NO. 6 TO THIRD AMENDED AND RESTATED CREDIT AND
SECURITY AGREEMENT

                       THIS AMENDMENT NO. 6 TO THIRD AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT (this “Amendment”) is entered into as of May 23, 2008, by and among:

               (1)      QUEST DIAGNOSTICS RECEIVABLES INC., a Delaware corporation (the “Borrower”),

               (2)      QUEST DIAGNOSTICS INCORPORATED, a Delaware corporation as initial servicer (together with the Borrower, the “Loan Parties”),

               (3)      VARIABLE FUNDING CAPITAL COMPANY LLC, a Delaware limited liability company (“VFCC”), and WACHOVIA BANK, NATIONAL ASSOCIATION, in its capacity as a Liquidity Bank to VFCC (together with VFCC, the “VFCC Group”),

               (4)       ATLANTIC ASSET SECURITIZATION LLC, a Delaware limited liability company (together with its successors, “Atlantic” and together with VFCC, the “Conduits”), and CALYON 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 VFCC Group (together with its successors in such capacity, the “VFCC Agent” or a “Co-Agent”), and CALYON 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 VFCC 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 Third Amended and Restated Credit and Security Agreement dated as of April 20, 2004, by and among the parties hereto (as heretofore amended, the “Existing Agreement” which, as amended hereby, is hereinafter referred to as the “Agreement”).

                       Unless otherwise indicated, capitalized terms used in this Amendment are used with the meanings attributed thereto in the Existing Agreement.

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WITNESSETH:

               WHEREAS, the parties hereto desire to amend the Existing Agreement 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 hereby agree as follows:

                       1.     Amendment to Existing Agreement. The definition of “Scheduled Termination Date” in Annex A to the Existing Agreement is hereby amended to delete “May 23, 2008” where it appears and to substitute in lieu thereof “June 13, 2008”.

                       2.     Representations.

                       2.1.      Each of the Loan Parties represents and warrants to the Lenders and the Agents that it has duly authorized, executed and delivered this Amendment and that the Agreement constitutes, a legal, valid and binding obligation of such Loan Party, enforceable in accordance with its terms (except as enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability).

                       2.2.      Each of the Loan Parties further represents and warrants to the Lenders and the Agents that each of its representations and warranties set forth in Section 6.1 of the Agreement is true and correct as of the date hereof and that no Event of Default or Unmatured Default exists as of the date hereof and is continuing.

                       3.     Conditions Precedent. This Amendment shall become effective as of the date first above written upon (a) receipt by the Administrative Agent of a counterpart hereof duly executed by each of the parties hereto, (b) receipt by each of the Atlantic Agent and the VFCC Agent of an amendment and restatement of the Fee Letter for its Group, duly executed by the parties thereto, and (c) receipt of each of the Atlantic Agent and the VFCC Agent of an amendment to the Liquidity Agreement for its Conduit, duly executed by the parties thereto, extending the commitment(s) thereunder to June 13, 2008.

                       4.     Miscellaneous.

                       4.1.      Except as expressly amended hereby, the Existing Agreement shall remain unaltered and in full force and effect, and each of the parties hereby ratifies and confirms the Agreement and each of the other Transaction Documents to which it is a party.

                       4.2.      THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW.

                       4.3.      EACH LOAN PARTY HEREBY ACKNOWLEDGES AND AGREES THAT:

                       4.3.1.    IT IRREVOCABLY (i) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION, FIRST, OF ANY UNITED STATES FEDERAL COURT, AND

2

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 THE 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.

                       4.3.2.    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 THE AGREEMENT.

                       4.4.      This Amendment may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same Amendment.

<Signature pages follow>

3

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

QUEST DIAGNOSTICS RECEIVABLES INC.
By:	/s/ Robert F. O’Keef
	Name: Robert F. O’Keef
	Title:    Vice President & Treasurer
QUEST DIAGNOSTICS INCORPORATED
By:	/s/ Robert F. O’Keef
	Name: Robert F. O’Keef
	Title:    Vice President & Treasurer

4

WACHOVIA BANK, NATIONAL ASSOCIATION, INDIVIDUALLY, AS
ADMINISTRATIVE AGENT AND AS VFCC AGENT
By:	/s/ Elizabeth R. Wagner
	Name: Elizabeth R. Wagner
	Title:    Managing Director

5

VARIABLE FUNDING CAPITAL COMPANY LLC
BY: WACHOVIA CAPITAL MARKETS, LLC, ITS ATTORNEY-IN-FACT
By:	/s/ Douglas R. Wilson, Sr.
	Name: Douglas R. Wilson, Sr.
	Title:    Director

6

ATLANTIC ASSET SECURITIZATION LLC
By:	CALYON NEW YORK BRANCH
	AS ATTORNEY-IN-FACT
By:	/s/ Kostantina Kourmpetis
	Name: Kostantina Kourmpetis
	Title:    Managing Director
By:	/s/ Sam Pilcer
	Name: Sam Pilcer
	Title:    Managing Director
	CALYON NEW YORK BRANCH
By:	/s/ Kostantina Kourmpetis
	Name: Kostantina Kourmpetis
	Title:    Managing Director
By:	/s/ Sam Pilcer
	Name: Sam Pilcer
	Title:    Managing Director

7

EX-10.2

EXHIBIT 10.2

AMENDMENT NO. 7 TO THIRD AMENDED AND RESTATED CREDIT AND
SECURITY AGREEMENT

                       THIS AMENDMENT NO. 7 TO THIRD AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT (this “Amendment”) is entered into as of June 11, 2008, by and among:

               (1)      QUEST DIAGNOSTICS RECEIVABLES INC., a Delaware corporation (the “Borrower”),

               (2)      QUEST DIAGNOSTICS INCORPORATED, a Delaware corporation as initial servicer (together with the Borrower, the “Loan Parties”),

               (3)      VARIABLE FUNDING CAPITAL COMPANY LLC, a Delaware limited liability company (“VFCC”), and WACHOVIA BANK, NATIONAL ASSOCIATION, in its capacity as a Liquidity Bank to VFCC (together with VFCC, the “VFCC Group”),

               (4)      GOTHAM FUNDING CORPORATION, a Delaware corporation, as assignee of Atlantic Asset Securitization LLC (together with its successors, “Gotham” and together with VFCC, the “Conduits”), and THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH (“BTMU”), in its capacity as a Liquidity Bank to Gotham (together with Gotham, the “Gotham Group”),

               (5)      WACHOVIA BANK, NATIONAL ASSOCIATION, in its capacity as agent for the VFCC Group (the “VFCC Agent” or a “Co-Agent”), and THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH, in its capacity as agent for the Gotham Group (the “Gotham Agent” or a “Co-Agent”),

               (6)      WACHOVIA BANK, NATIONAL ASSOCIATION, as existing administrative agent for the VFCC Group, the Gotham Group and the Co-Agents (in such capacity, together with any successors thereto in such capacity, the “Withdrawing Administrative Agent”), and

               (7)      THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH, as successor administrative agent for the VFCC Group, the Gotham 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 Third Amended and Restated Credit and Security Agreement dated as of April 20, 2004, by and among the parties hereto (as heretofore amended, the “Existing Agreement” which, as amended hereby, is hereinafter referred to as the “Agreement”).

1

                       Unless otherwise indicated, capitalized terms used in this Amendment are used with the meanings attributed thereto in the Existing Agreement.

WITNESSETH:

                       WHEREAS, Atlantic Asset Securitization LLC assigned all of its right, title, interest and obligations (if any) in, to and under the Existing Agreement to Gotham;

                       WHEREAS, Calyon New York Branch assigned all of its right, title, interest and obligations, as a Liquidity Bank and as a Co-Agent, in, to and under the Existing Agreement to BTMU; and

                       WHEREAS, the parties hereto desire to replace Wachovia Bank, National Association, as Withdrawing Administrative Agent, with The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as Administrative Agent, under the Existing Agreement.

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

                       1.     Amendment to Existing Agreement. Subject to the terms and conditions hereinafter set forth, the penultimate sentence of Section 11.1(a) of the Existing Agreement is hereby amended and restated in its entirety to read as follows:

               “Each of the Lenders and the Co-Agents hereby irrevocably designates and appoints The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch as Administrative Agent hereunder and under the Transaction Documents to which the Administrative Agent is a party, and authorizes the Administrative Agent to take such action on its behalf under the provisions of the Transaction Documents and to exercise such powers and perform such duties as are expressly delegated to the Administrative Agent by the terms of the Transaction Documents, together with such other powers as are reasonably incidental thereto.”

On the terms and subject to the conditions set forth in the Transaction Documents, The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch hereby accepts the appointment as, and agrees to perform the duties of, the Administrative Agent. The Withdrawing Administrative Agent hereby agrees to execute such assignments, amendments and other documents as may be reasonably required to give effect to the foregoing amendment.

                       2.     Representations.

                       2.1.   Each of the Loan Parties represents and warrants to the Lenders and the Agents that it has duly authorized, executed and delivered this Amendment and that the Agreement constitutes, a legal, valid and binding obligation of such Loan Party, enforceable in accordance with its terms (except as enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability).

2

                       2.2.      Each of the Loan Parties further represents and warrants to the Lenders and the Agents that each of its representations and warranties set forth in Section 6.1 of the Agreement is true and correct as of the date hereof and that no Event of Default or Unmatured Default exists as of the date hereof and is continuing.

                       3.        Condition Precedent. This Amendment shall become effective as of the date first above written upon receipt by the Administrative Agent and the Withdrawing Administrative Agent of a counterpart hereof duly executed by each of the parties hereto.

                       4.        Miscellaneous.

                       4.1.      Except as expressly amended hereby, the Existing Agreement shall remain unaltered and in full force and effect, and each of the parties hereby ratifies and confirms the Agreement and each of the other Transaction Documents to which it is a party.

                       4.2.      THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW.

                       4.3.      EACH LOAN PARTY HEREBY ACKNOWLEDGES AND AGREES THAT:

                       4.3.1.   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 THE 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.

                       4.3.2.   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 THE AGREEMENT.

                       4.4.      This Amendment may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same Amendment.

<Signature pages follow>

3

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

QUEST DIAGNOSTICS RECEIVABLES INC.
By:	/s/ Robert F. O’Keef
	Name: Robert F. O’Keef
	Title: Vice President & Treasurer
QUEST DIAGNOSTICS INCORPORATED
By:	/s/ Robert F. O’Keef
	Name: Robert F. O’Keef
	Title: Vice President & Treasurer

[Signature Page to Amendment No. 7 to Third Amended and Restated Credit and Security Agreement]

	WACHOVIA BANK, NATIONAL ASSOCIATION, INDIVIDUALLY, AS
	WITHDRAWING ADMINISTRATIVE AGENT AND AS VFCC AGENT
By:	/s/ Elizabeth R. Wagner
	Name: Elizabeth R. Wagner
	Title:    Managing Director

[Signature Page to Amendment No. 7 to Third Amended and Restated Credit and Security Agreement]

VARIABLE FUNDING CAPITAL COMPANY LLC
BY: WACHOVIA CAPITAL MARKETS, LLC, ITS ATTORNEY-IN-FACT
By:	/s/ Douglas R. Wilson, Sr.
	Name: Douglas R. Wilson, Sr.
	Title:    Director

[Signature Page to Amendment No. 7 to Third Amended and Restated Credit and Security Agreement]

GOTHAM FUNDING CORPORATION
By:	/s/ R. Douglas Donaldson
	Name: R. Douglas Donaldson
	Title: Treasurer

[Signature Page to Amendment No. 7 to Third Amended and Restated Credit and Security Agreement]

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK
BRANCH, individually as a Liquidity Bank
By:	/s/ J. Carlos
	Name: J. Carlos
	Title: Authorized Signatory
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK
BRANCH, as Gotham Agent
By:	/s/ Aditya Reddy
	Name: Aditya Reddy
	Title: VP & Manager
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK
BRANCH, as Administrative Agent
By:	/s/ Aditya Reddy
	Name: Aditya Reddy
	Title: VP & Manager

[Signature Page to Amendment No. 7 to Third Amended and Restated Credit and Security Agreement]

EX-10.3

Exhibit 10.3

FOURTH AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT

DATED AS OF JUNE 11,2008

AMONG

QUEST DIAGNOSTICS RECEIVABLES INC., AS BORROWER,

QUEST DIAGNOSTICS INCORPORATED, AS INITIAL SERVICER,

VARIABLE FUNDING CAPITAL COMPANY LLC,

GOTHAM FUNDING CORPORATION,

WACHOVIA BANK, NATIONAL ASSOCIATION,
INDIVIDUALLY AND AS VFCC AGENT,

AND

THE BANK OF TOKYO-MITSUBISHI, UFJ, LTD., NEW YORK BRANCH,
INDIVIDUALLY, AS GOTHAM AGENT AND AS ADMINISTRATIVE AGENT

TABLE OF CONTENTS
		PAGE
ARTICLE I. THE CREDIT		7
Section 1.1	The Facility	7
Section 1.2	Funding Mechanics; Liquidity Fundings	8
Section 1.3	Interest Rates	9
Section 1.4	Payment Dates; Absence of Notes to Evidence Loans	10
Section 1.5	Prepayments	10
Section 1.6	Reductions in Aggregate Commitment	11
Section 1.7	Distribution of Certain Notices; Notification of Interest Rates	12
ARTICLE II. BORROWING AND PAYMENT MECHANICS; CERTAIN
COMPUTATIONS		12
Section 2.1	Method of Borrowing	12
Section 2.2	Selection of CP Tranche Periods and Interest Periods	12
Section 2.3	Computation of Concentration Limits and Unpaid Net Balance	13
Section 2.4	Maximum Interest Rate	13
Section 2.5	Payments and Computations, Etc	13
(a) Payments		13
(b) Late Payments		14
(c) Method of Computation		14
(d) Avoidance or Rescission of Payments		14
Section 2.6	Non-Receipt of Funds by the Co Agents	14
ARTICLE III. SETTLEMENTS		14
Section 3.1	Reporting	14
(a) Monthly Reports		14
(b) Weekly Reports; Right to Request Cash Collateral Payment		15
(c) Interest; Other Amounts Due		15
Section 3.2	Turnover of Collections	15
Section 3.3	Non-Distribution of Servicer’s Fee	17
Section 3.4	Deemed Collections	17
ARTICLE IV. FEES AND YIELD PROTECTION		18
Section 4.1	Fees	18
Section 4.2	Yield Protection	18
Section 4.3	Funding Losses	21
ARTICLE V. CONDITIONS OF ADVANCES		21
Section 5.1	Conditions Precedent to Restatement Effectiveness	21

Section 5.2	Conditions Precedent to All Advances	22
ARTICLE VI. REPRESENTATIONS AND WARRANTIES		23
Section 6.1	Representations and Warranties of Loan Parties	23
(a) Ownership of the Borrower		23
(b) Existence; Due Qualification; Permits		23
(c) Action		24
(d) Absence of Default		24
(e) Noncontravention		24
(f) No Proceedings		25
(g) Taxes		25
(h) Government Approvals		26
(i) Financial Statements and Absence of Certain Material Adverse
Changes		26
(j) Nature of Receivables		26
(k) Margin Regulations		26
(l) Title to Receivables and Quality of Title		27
(m) Accurate Reports		27
(n) Jurisdiction of Organization; Offices		27
(o) Lockboxes and Collection Accounts		28
(p) Eligible Receivables		28
(q) ERISA		28
(r) Names		29
(s) Credit and Collection Policy		29
(t) Payments to Applicable Originator		29
(u) Investment Company Act; Public Utility Holding Company Act; Other
Restrictions		29
(v) Borrowing Base; Solvency		29
ARTICLE VII. GENERAL COVENANTS OF LOAN PARTIES		29
Section 7.1	Affirmative Covenants of Loan Parties	29
(a) Compliance With Laws, Etc		29
(b) Preservation of Existence		29
(c) Audits		30
(d) Keeping of Records and Books of Account		30
(e) Performance and Compliance with Receivables, Invoices and
Contracts		30
(f) Jurisdiction of Organization; Location of Records		30
(g) Credit and Collection Policies		31
(h) Sale Agreement		31
(i) Collections		31
(j) Further Assurances		31
Section 7.2	Reporting Requirements of Loan Parties	32
(a) Quarterly Financial Statements		32
(b) Annual Financial Statements		32

2

(c) Reports to SEC and Exchanges		32
(d) ERISA		32
(e) Events of Default, etc		32
(f) Litigation		32
(g) Reviews of Receivables		33
(h) Change in Business or Credit and Collection Policy		33
(i) Downgrade		33
(j) Other		33
Section 7.3	Negative Covenants of Loan Parties	33
(a) Sales, Liens, Etc		33
(b) Extension or Amendment of Receivables		33
(c) Change in Business or Credit and Collection Policy		33
(d) Change in Payment Instructions to Obligors		34
(e) Deposits to Accounts		34
(f) Changes to Other Documents		34
(g) Restricted Payments by the Borrower		34
(h) Borrower Indebtedness		34
(i) Prohibition on Additional Negative Pledges		35
(j) Name Change, Offices, Records and Books of Accounts		35
(k) Mergers, Consolidations and Acquisitions		35
(l) Disposition of Receivables and Related Assets		35
(m) Borrowing Base		35
Section 7.4	Separate Existence of the Borrower	35
ARTICLE VIII. ADMINISTRATION AND COLLECTION		38
Section 8.1	Designation of Servicer	38
(a) Quest Diagnostics as Initial Servicer		38
(b) Successor Notice; Servicer Transfer Events		38
(c) Subcontracts		38
(d) Expense Indemnity after a Servicer Transfer Event		39
Section 8.2	Duties of Servicer	39
(a) Appointment; Duties in General		39
(b) Segregation of Collections		39
(c) Modification of Receivables		39
(d) Contracts and Records		39
(e) Certain Duties to the Borrower		39
(f) Termination		40
(g) Power of Attorney		40
Section 8.3	Rights of the Agents	40
(a) Notice to Obligors		40
(b) Notice to Collection Banks		40
(c) Rights on Servicer Transfer Event		40
Section 8.4	Responsibilities of Loan Parties	41
(a) Contracts		41
(b) Limitation of Liability		41
Section 8.5	Further Action Evidencing the Security Interest	42

3

Section 8.6	Application of Collections	42
ARTICLE IX. SECURITY INTEREST		42
Section 9.1	Grant of Security Interest	42
Section 9.2	Termination after Final Payout Date	42
Section 9.3	Limitation on Rights to Collateral Proceeds	43
ARTICLE X. EVENTS OF DEFAULT		43
Section 10.1	Events of Default	43
Section 10.2	Remedies	45
(a) Optional Acceleration		45
(b) Automatic Acceleration		46
(c) Additional Remedies		46
ARTICLE XI. THE AGENTS		46
Section 11.1	Appointment	46
Section 11.2	Delegation of Duties	47
Section 11.3	Exculpatory Provisions	47
Section 11.4	Reliance by Agents	47
Section 11.5	Notice of Events of Default	48
Section 11.6	Non-Reliance on Other Agents and Lenders	48
Section 11.7	Indemnification of Agents	49
Section 11.8	Agents in their Individual Capacities	49
Section 11.9	[Reserved]	49
Section 11.10	Conflict Waivers	49
Section 11.11	UCC Filings	50
ARTICLE XII. ASSIGNMENTS AND PARTICIPATIONS		50
Section 12.1	Restrictions on Assignments, etc	50
Section 12.2	Rights of Assignees and Participants	51
Section 12.3	Terms and Evidence of Assignment	51
ARTICLE XIII. INDEMNIFICATION		52
Section 13.1	Indemnities by the Borrower	52
(a) General Indemnity		52
(b) Contest of Tax Claim; After-Tax Basis		54
(c) Contribution		54
Section 13.2	Indemnities by Servicer	55
ARTICLE XIV. MISCELLANEOUS		55
Section 14.1	Amendments, Etc	55
Section 14.2	Notices, Etc	56

4

Section 14.3	No Waiver; Remedies	56
Section 14.4	Binding Effect; Survival	57
Section 14.5	Costs, Expenses and Stamp Taxes	57
Section 14.6	No Proceedings	58
Section 14.7	Confidentiality of Borrower Information	58
Section 14.8	Confidentiality of Program Information	59
(a) Confidential Information		59
(b) Availability of Confidential Information		60
(c) Legal Compulsion to Disclose		60
(d) Survival		60
Section 14.9	Captions and Cross References	60
Section 14.10	Integration	60
Section 14.11	Governing Law	60
Section 14.12	Waiver Of Jury Trial	61
Section 14.13	Consent To Jurisdiction; Waiver Of Immunities	61
Section 14.14	Business Associate Agreement; Health Care Data Privacy and
	Security Requirements	61
(a) Definitions		61
(b) Privacy		61
(c) Security		62
(d) EDI		63
(e) Benefit		63
(f) Mitigation		63
(g) Amendment		63
(h) Survival		63
(i) Interpretation		63
(j) Several Liability of Business Associates		63
Section 14.15	Execution in Counterparts	63
Section 14.16	No Recourse Against Other Parties	63

5

FOURTH AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT

               THIS FOURTH AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT is entered into as of June 11, 2008, 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)       VARIABLE FUNDING CAPITAL COMPANY LLC, a Delaware corporation (together with its successors, “VFCC”), and WACHOVIA BANK, NATIONAL ASSOCIATION, in its capacity as a Liquidity Bank to VFCC (together with its successors, “Wachovia” and together with VFCC, the “VFCC Group”),

               (4)       GOTHAM FUNDING CORPORATION, a Delaware corporation (together with its successors, “Gotham”), and THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH, in its capacity as a Liquidity Bank to Gotham (together with its successors, “BTMU” and, together with Gotham, the “Gotham Group”),

               (5)       WACHOVIA BANK, NATIONAL ASSOCIATION, in its capacity as agent for the VFCC Group (together with its successors in such capacity, the “VFCC Agent” or a “Co-Agent”), and THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH, in its capacity as agent for the Gotham Group (together with its successors in such capacity, the “Gotham Agent” or a “Co-Agent”), and

               (6)       THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH, as administrative agent for the VFCC Group, the Gotham 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 Third Amended and Restated Credit and Security Agreement dated as of April 20, 2004 originally by and among the Borrower, the Servicer, VFCC, Atlantic Asset Securitization LLC (“Atlantic”), Calyon New York Branch, individually and as a co-agent, and Wachovia Bank, National Association as 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.

6

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) Calyon and Atlantic assigned all of their respective rights and obligations under the Transaction Documents to BTMU and Gotham, respectively, and (ii) Wachovia Bank, National Association was replaced by The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as Administrative Agent;

               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 VFCC Group, the Gotham 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 for each Group request Advances by delivering a Borrowing Request to the applicable Co-Agent(s) in accordance with Section 2.1. Upon receipt of a copy of each Borrowing Request from the Borrower or Servicer during a Group’s Revolving Period, each applicable Co-Agent 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 VFCC elects not to make any such Loan to the Borrower, the VFCC Agent shall promptly notify the Borrower and, unless the Borrower cancels its Borrowing Request, each of the Liquidity Banks of VFCC 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 VFCC’s and its Liquidity Banks’ Loans at any one time outstanding exceed the lesser of (i) the aggregate amount of the VFCC Liquidity Banks’ Commitments, and (ii) the VFCC Group’s Percentage of the Borrowing Base (such lesser amount, the “VFCC Allocation Limit”);

7

               (b)in the event that Gotham elects not to make any such Loan to the Borrower, the Gotham Agent shall promptly notify the Borrower and, unless the Borrower cancels its Borrowing Request, each of the Liquidity Banks of Gotham 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 Gotham’s and its Liquidity Banks’ Loans at any one time outstanding exceed the lesser of (i) the aggregate amount of the Gotham Liquidity Banks’ Commitments, and (ii) the Gotham Group’s Percentage of the Borrowing Base (such lesser amount, the “Gotham 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)Prior to the VFCC Group’s Termination Date, each Advance hereunder shall consist of Loans made by (i) Gotham and/or its Liquidity Banks, and/or (ii) VFCC 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. From and after the VFCC Group’s Termination Date, each Advance hereunder shall consist of Loans made solely by Gotham and/or its Liquidity Banks.

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

               (c)While it is the intent of each of the Conduits to fund its respective Loans through the issuance of Commercial Paper Notes, the parties acknowledge that if either of the Conduits is unable, or determines that it is undesirable, to issue Commercial Paper Notes to fund all or any portion of its Loans at a CP Rate, or is unable to repay such Commercial Paper Notes upon the maturity thereof, such Conduit may sell all or any portion of its Loans (or interests therein) to its Liquidity Banks at any time pursuant to its Liquidity Agreement to finance or refinance the necessary portion of its Loans through a Liquidity Funding to the extent available. The Liquidity Fundings may be Alternate Base Rate Loans or Eurodollar Loans, or a combination thereof, selected by the Borrower in accordance with Article II. In addition, the parties acknowledge that Commercial Paper Notes are issued at a discount and at varying discount rates; accordingly, it may not be

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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 1.3Interest 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, each Pool Funded Conduit 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. At any time while Gotham is not acting as Pool Funded Conduit, on the 5th Business Day immediately preceding each Settlement Date, the Gotham Agent shall calculate Gotham’s CP Rate and each shall notify Borrower of the aggregate amount of 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.

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

               (a)The Borrower promises to pay the principal of each CP Rate Loan outstanding from each of the Conduits on the applicable Termination Date.

               (b)The Borrower promises to pay the principal of each Eurodollar Loan (if any) outstanding from each of the Liquidity Banks on or before the earliest to occur of (i) the applicable Termination Date, (ii) such Liquidity Bank’s Scheduled Termination Date, and (iii) the refinancing of such Loan with a CP Rate Loan or an Alternative Base Rate Loan.

               (c) In addition to the foregoing, on each Business Day occurring on or after the last day of a Group’s Revolving Period, the Borrower promises to pay a portion of the principal of the Loans outstanding from such Group equal to such Group’s Percentage of the Collections.

               (d)The Borrower promises to pay the principal of each Alternate Base Rate Loan (if any) outstanding from each of the Liquidity Banks on or before the earliest to occur of (i) the Termination Date, (ii) such Liquidity Bank’s Scheduled Termination Date, and (iii) the refinancing of such Loan with a CP Rate Loan or a Eurodollar Rate Loan.

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

               (f)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 giving prior written notice to the Co-Agents: (i) given within the Required Notice Period with respect to each Pool Funded Conduit’s Loans so prepaid and (ii) at any time while Gotham is not a Pool Funded Conduit, providing for such prepayment to occur on the last day of the CP Tranche Period with respect to Gotham’s CP Rate Loans so prepaid (each, a “Prepayment Notice”); 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

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

               (c)If, on any Business Day, the aggregate outstanding principal amount of the Loans from the Gotham Group exceeds the Gotham Allocation Limit, or the aggregate principal amount of the Loans outstanding from Gotham exceeds the Gotham Liquidity Banks’ aggregate Liquidity Commitments divided by 102%, the Borrower shall prepay such Loans by wire transfer to the Gotham 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 Section 1.5(a) may occur, in the aggregate, in any calendar week.

               Section 1.6Reductions 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 VFCC Liquidity Banks’ and the Gotham 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.

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               Section 1.7      Distribution of Certain Notices; Notification of Interest Rates. Promptly after receipt thereof, the VFCC Agent will notify the VFCC Group and the Gotham Agent will notify the Gotham Group, of the contents of each Monthly Report, Weekly Report, Borrowing Request, Commitment Reduction Notice, Prepayment Notice 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 2.2Selection of CP Tranche Periods and Interest Periods.

               (a)Except upon the occurrence and during the continuance of an Event of Default or when Gotham is a Pool Funded Conduit, 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 Gotham’s CP Rate Loans; provided, however, that (i) at any time while Gotham has CP Rate Loans outstanding, at least one CP Tranche Period of Gotham shall mature on each Settlement Date and (ii) no CP Tranche Period of Gotham may extend beyond the latest Scheduled Termination Date of any Gotham 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 Gotham 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 or when Gotham is acting as Pool Funded Conduit, the Gotham 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

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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 (3^rd) Business Day prior to the last day of an Interest Period that the Borrower intends to reduce the aggregate principal amount of the Eurodollar Loans outstanding from the Liquidity Banks, each of the Liquidity Banks shall be entitled to assume that the Borrower desires to refinance its maturing Eurodollar Loans on the last day of such Interest Period with Alternate Base Rate Loans.

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

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

               Section 2.5      Payments and Computations, Etc.

                      (a)Payments. All amounts to be paid or deposited by the Borrower or the Servicer (on the Borrower’s behalf) to any of the Agents or Lenders (other than amounts payable under Section 4.2) shall be paid by wire or electronic transfer of immediately available funds

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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 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 oran 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

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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 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 (if permitted), 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

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“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.

               (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) .

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               (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

                              (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).

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ARTICLE IV.
FEES AND YIELD PROTECTION

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

               Section 4.2      Yield Protection.

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

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

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

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

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

                              (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

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                              (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.

               (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

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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 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

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               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 payment required by Section 1.4 or 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 any Pool Funded Conduit, 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)An assignment and assumption agreement by and between Atlantic and Gotham with respect to Atlantic’s right, title and interest in, to and under the Existing Agreement and the related Transaction Documents, duly executed by Atlantic and Gotham and acknowledged by Calyon New York Branch, BTMU and the Borrower;

                              (ii)An assignment and assumption agreement by and between Calyon New York Branch and BTMU with respect to Calyon New York Branch’s right, title and interest in, to and under the Existing Agreement and the related Transaction Documents, duly executed by Calyon New York Branch, BTMU and the Borrower;

                              (iii)An amendment to the Existing Agreement replacing Wachovia Bank, National Association with BTMU as Administrative Agent, duly executed by the parties to the Existing Agreement remaining after giving effect to the assignment and assumption agreements described in clauses (i) and (ii) above;

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

                              (v)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

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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;

                              (vi)Opinions dated the date hereof addressed to the Agents and the Lenders as to (1) the existence of a “true sale” or “true contribution” of the Receivables from each of the Originators to the Borrower under the Sale Agreement, and (2) the inapplicability of the doctrine of substantive consolidation to the Borrower with respect to each of the Originators in connection with any bankruptcy proceeding involving any of the Originators or the Borrower;

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

                              (viii)Copies in form suitable for filing of any and all financing statements and amendments thereto 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;

                              (ix)A Monthly Report, prepared as of the Cut-Off Date of April 30, 2008;

                              (x)An amendment to the VFCC Liquidity Agreement, in form and substance satisfactory to the VFCC Agent, duly executed by the parties thereto, reducing the Liquidity Commitments thereunder to $127,500,000 and extending such Liquidity Commitments through the VFCC Group Termination Date;

                              (xi)The Gotham Fee Letter, duly executed by the parties thereto, together with payment of any and all fees due on or prior to the date hereof;

                              (xii) The VFCC Fee Letter, duly executed by the parties thereto, together with payment of any and all fees due on or prior to the date hereof;

                              (xiii)Collection Account Agreements (or amendments to or assignments of the Collection Account Agreements executed in connection with the Existing Agreement) with respect to each of the Collection Accounts, duly executed by the Borrower, the applicable Originator or the Servicer (as applicable), the applicable Collection Bank, and the Administrative Agent; and

                              (xiv)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

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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 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

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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 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.

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                              (f)No Proceedings. Except as described in Quest Diagnostics’ Form 10-K for the fiscal year ended December 31, 2007 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 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, 2007: (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.

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                              (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, 2007, 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; 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, 2007 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, 2007, 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.

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                              (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.

                              (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

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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 Collection Accounts is in full force and effect, and each of the Lockboxes and Collection Accounts is subject to a Collection Account Agreement that is in full force and effect.

                              (ii)The Borrower has not granted any Person other than the Administrative Agent, control of any Collection Account or any Lockbox, or the right to take 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).

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                              (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 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. §§101 et seq.), as amended.

                              (u)Investment Company Act; Public Utility Holding Company Act; OtherRestrictions. 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

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to preserve and maintain such existence, rights, franchises, privileges and qualification would have a Material Adverse Effect.

                              (c)Audits. Each Loan Party will, subject to compliance with applicable law: (i) at any time and from time to time upon not less than ten (10) Business Days’ notice (unless an Unmatured Default or Event of Default has occurred and is continuing, in which case, not more than one (1) Business Day’s notice shall be required) during regular business hours, permit each of the Agents or any of its agents or representatives: (A) to examine and make copies of and abstracts from all Records, Contracts and Invoices in the possession or under the control of such Loan Party, and (B) to visit the offices and properties of such Loan Party for the purpose of examining such Records, Contracts and Invoices and to discuss matters relating to Receivables or such Loan Party’s performance hereunder with any of the officers or employees of such Loan Party having knowledge of such matters; and (ii) without limiting the provisions of clause (i) above, from time to time, at the expense of such Loan Party, permit certified public accountants or auditors acceptable to each of the Co-Agents to conduct a review of such Loan Party’s Contracts, Invoices and Records (each, a “Review”); provided, however, that (x) so long as no Event of Default has occurred and is continuing, the Loan Parties shall only be responsible for the costs and expenses of one (1) such Review in any calendar year hereafter unless the first such Review in a calendar year resulted in negative findings (in which case the Loan Parties shall be responsible for the costs and expenses of two (2) such Reviews in such calendar year). 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

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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.

                              (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.

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               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);

                              (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;

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                              (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

                              (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

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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.

                              (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.

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                              (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, 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;

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               (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 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;

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               (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;

               (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.

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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 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

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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.

               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

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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 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

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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 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.

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

ARTICLE IX.
SECURITY INTEREST

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

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interest of the Administrative Agent and the other Secured Parties in and to the Collateral shall terminate.

               Section 9.3Limitation 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.

               (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

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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 CutOff Date exceeds 15.40%.

               (h)The three-calendar month rolling average Delinquency Ratio at any Cut-Off Date exceeds 9.00%.

               (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%.

               (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

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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.

               (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.

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                              (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 11.1Appointment.

               (a)Each member of the VFCC Group hereby irrevocably designates and appoints Wachovia Bank, National Association as VFCC Agent hereunder and under the other Transaction Documents to which the VFCC Agent is a party, and authorizes the VFCC 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 VFCC Agent by the terms of the Transaction Documents, together with such other powers as are reasonably incidental thereto. Each member of the Gotham Group hereby irrevocably designates and appoints BTMU as Gotham Agent hereunder and under the other Transaction Documents to which the Gotham Agent is a party , and authorizes the Gotham 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 Gotham 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 The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch as Administrative Agent hereunder and under the Transaction Documents to which the Administrative Agent is a party, and authorizes the Administrative Agent to take such action on its behalf under the provisions of the Transaction Documents and to exercise such powers and perform such duties as are expressly delegated to the Administrative Agent by the terms of the Transaction Documents, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement, none of the Agents shall have any duties or responsibilities, except those expressly set forth in the Transaction Documents to which it is a party, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities on the part of such Agent shall be read into any Transaction Document or otherwise exist against such Agent.

               (b)The provisions of this Article XI are solely for the benefit of the Agents and the Lenders, and neither of the Loan Parties shall have any rights as a third-party beneficiary or otherwise under any of the provisions of this Article XI, except that this

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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 VFCC Agent shall act solely as the agent of the members of the VFCC 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 Gotham Agent shall act solely as the agent of the members of the Gotham 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 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,

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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 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

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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].

               Section 11.10    Conflict Waivers.

               (a)Wachovia acts, or may in the future act: (i) as administrative agent for VFCC, (ii) as issuing and paying agent for VFCC’s Commercial Paper Notes, (iii) to provide credit or liquidity enhancement for the timely payment for VFCC’s Commercial Paper Notes and (iv) to provide other services from time to time for VFCC (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 VFCC, the giving of notice to the Liquidity Banks of a mandatory purchase pursuant to the VFCC Liquidity

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Agreement, and hereby acknowledges that neither Wachovia nor any of its Affiliates has any fiduciary duties hereunder to any Lender (other than VFCC) arising out of any of the Wachovia Roles.

               (b)BTMU acts, or may in the future act: (i) as administrator of Gotham, (ii) to provide credit or liquidity enhancement for the timely payment for Gotham’s Commercial Paper and (iii) to provide other services from time to time for Gotham (collectively, the “BTMU 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 BTMU Roles and agrees that in connection with any BTMU Role, BTMU may take, or refrain from taking, any action which it, in its discretion, deems appropriate, , including, without limitation, in its role as administrator of Gotham, the giving of notice to the Gotham LiquidityBanks of a mandatory purchase pursuant to the Gotham Liquidity Agreement, and hereby acknowledges that neither BTMU nor any of its Affiliates has any fiduciary duties hereunder to any Lender (other than Gotham) arising out of any of the BTMU 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 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):

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                              (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; and

                              (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 12.2Rights 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 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

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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 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;

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               (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;

               (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));

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               (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 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.

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               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:

               (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 (if applicable to such Co-Agent’s Conduit) must be satisfied with respect to each of such 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

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indemnity provision which expressly inures to the benefit of assignees or participants of such Co-Agent’s Conduit,

               (c)without the prior written consent of each Agent affected thereby, no such amendment, waiver or consent shall amend, modify, terminate or waive any provision of Article XI as the same applies to any Agent, or any other provision hereof as the same applies to the rights or obligations of any Agent, in each case without the consent of such Agent,

               (d)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

               (e)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 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.

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               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 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

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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, Gotham or VFCC, or join any Person in instituting against the Borrower, Gotham or VFCC, 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 Gotham or VFCC, 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 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

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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;

                              (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

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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 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.

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               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 SecurityRequirements.

                              (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 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,

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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 subcontractors 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, 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

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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 subcontractors 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 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

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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>

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

BORROWER:
	QUEST DIAGNOSTICS RECEIVABLES INC.
	By:	/s/ Robert F. O’Keef
		Name: Robert F. O’Keef
		Title: Vice President & Treasurer
SERVICER:
	QUEST DIAGNOSTICS INCORPORATED
	By:	/s/ Robert F. O’Keef
		Name: Robert F. O’Keef
		Title: Vice President & Treasurer

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AGENTS:
	WACHOVIA BANK, NATIONAL ASSOCIATION, as VFCC
	Agent
	By:	/s/ Elizabeth R. Wagner
		Name: Elizabeth R. Wagner
		Title: Managing Director
	THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK
	BRANCH, as Gotham Agent
	By:	/s/ Aditya Reddy
		Name: Aditya Reddy
		Title: VP and Manager
	THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK
	BRANCH, as Administrative Agent
	By:	/s/ Aditya Reddy
		Name: Aditya Reddy
		Title: VP and Manager
LENDERS:
	VARIABLE FUNDING CAPITAL COMPANY LLC
	BY:	WACHOVIA CAPITAL MARKETS, LLC, ITS ATTORNEY-
		IN-FACT
	By:	/s/ Douglas R. Wilson, Sr.
		Name: Douglas R. Wilson, Sr.
		Title: Director
	Initial Commitment: not applicable

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WACHOVIA BANK, NATIONAL ASSOCIATION
By:	/s/ Elizabeth R. Wagner
	Name: Elizabeth R. Wagner
	Title: Managing Director
	Initial Commitment: $125,000,000

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GOTHAM FUNDING CORPORATION
By:	/s/ R. Douglas Donaldson
	Name: R. Douglas Donaldson
	Title: Treasurer
	Initial Commitment: not applicable

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THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK
BRANCH, as a Liquidity Bank
By:	/s/ J. Carlos
	Name: J. Carlos
	Title: Authorized Signatory
	Initial Commitment: $275,000,000

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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 Fourth Amended and Restated 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 VFCC Allocation Limit and the Gotham Allocation Limit.

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                              “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 30^th day.

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

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                              “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.

                              “Borrower” has the meaning provided in the preamble of this Agreement.

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

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

                              “Borrowing Request” is defined in Section 2.1.

                              “Broken Funding Costs” means, for any CP Rate Loan which: (a) has its principal reduced without compliance by the Borrower with the notice requirements hereunder or (b) is not prepaid in the amount specified in a Prepayment Notice on the date specified therein or (c) is assigned or otherwise transferred by the applicable Conduit to its respective LiquidityBanks under its respective Liquidity Agreement or terminated prior to the date on which it was originally scheduled to end or (d) in the case of Gotham while it is not a Pool Funded Conduit, is prepaid in an aggregate principal amount in excess of the aggregate Face Value of Gotham’s Commercial Paper Notes issued to fund its CP Rate Loan which matures on the date of prepayment, an amount equal to:

(i)      in the case of any Pool Funded Conduit, 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 applicable Co-Agent to relate to such Loan subsequent to the date of such reduction, assignment or termination (or in respect of clause (b) 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; and

(ii)      in the case of Gotham when it is not acting as a Pool Funded Conduit, the excess, if any, of (A) the Interest at the CP Rate that would have accrued during the remainder of the applicable CP Tranche Periods as determined by the Gotham Agent to relate to such CP Rate Loan subsequent to the date of such reduction, assignment or termination (or in respect of clause (b) 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 Interest at the CP Rate actually

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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.

                              “BTMU” has the meaning provided in the preamble of this Agreement.

                              “BTMU Roles” has the meaning set forth in Section 11.10(b).

                              “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 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

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

                              “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) .

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                              “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 form reasonably acceptable to the Administrative Agent and the Borrower 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 (either directly or as assignee of the Borrower).

                              “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.

                              “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 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” means, collectively, VFCC and Gotham.

                              “Constituent” means (a) as to the Gotham Agent, any member of the Gotham Group from time to time party hereto, and (b) as to the VFCC Agent, any member of the VFCC Group from time to time party hereto, and when used as an adjective, “Constituent” shall have a correlative meaning.

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                              “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 VFCC, 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 VFCC 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 VFCC Agent in its sole discretion to result in incrementally higher CP Costs applicable to VFCC’s Loan included in such Advance, the principal associated with any such Loan of VFCC shall, during such period, be deemed to be funded by VFCC 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 each of the Pool Funded Conduits for any CP Tranche Period, the per annum interest rate that, when applied to the outstanding principal balance of such Pool Funded Conduits’ 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 such Pool Funded Conduits’ CP Costs for such CP Tranche Period; and

               (b) with respect to Gotham, unless it has notified the Loan Parties that it will be pool funding its Loans, for any CP Tranche Period and with respect to any Loan (or portion thereof) funded by Commercial Paper Notes issued by Gotham, a rate per annum calculated by the Gotham Agent to reflect Gotham’s cost of funding such Loan (or

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portion thereof), taking into account the weighted daily average interest rate payable in respect of such Commercial Paper Notes during such CP Tranche Period (determined in the case of discount commercial paper by converting the discount to an interest-bearing equivalent rate per annum), applicable placement fees and commissions, and such other costs and expenses as the Gotham Agent in good faith deems appropriate. Such Commercial Paper Notes may be issued in such maturities as the Gotham Agent may choose in accordance with Article II hereof. Gotham’s CP Rate shall be determined by the Gotham Agent, in its sole discretion.

                              “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 the Pool Funded Conduits, an Accrual Period, and

               (b) with respect to Gotham, a period selected by the Gotham 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 Credit Agreement dated as of May 31, 2007 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.

                              “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 Originatorsduring 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

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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 prior to the Termination Date which is not 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 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, excluding transfers between client and patient billing categories, 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

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during the onemonth ending on such Cut-Off Date, by (ii) the Net Pool Balance as of such CutOff 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 VFCC 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 BTMU (or any Affiliate of Wachovia or BTMU) or any 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 VFCC, any Downgraded Liquidity Bank whose liquidity commitment has been fully drawn by the VFCC 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

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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;

               (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

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(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 60days 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.

                              “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.

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                              “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) with respect to any Pension Plan of a failure to meet the applicable minimum funding standard (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 303(j) of ERISA 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(c) of the Code or Section 302(c) 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.

                              “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 “US001M <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

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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 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,

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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.

                              “Face Value” means, when used with reference to any Commercial Paper Notes issued by Gotham that are not Pooled Commercial Paper, the face amount stated therein in the case of any Commercial Paper Note issued on a discount basis, and the principal amount stated therein plus the amount of all interest accruing on such Commercial Paper Note from the date of its issue to its stated maturity date in the case of any Commercial Paper Note issued on an interest-bearing basis.

                              “Federal Funds Rate” means, for any day, the rate per annum (rounded upwards, if necessary, to the next higher 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day, provided that (i) if the day for which such rate is to be determined is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (ii) if such rate is not so published for any day, the Federal Funds Rate for such day shall be the average rate charged to the applicable Co-Agent on such day on such transactions, as reasonably determined by such Co-Agent.

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

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                              “Fee Letters” means, collectively, the Gotham Fee Letter and the VFCC 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.

                               “Gotham” has the meaning provided in the preamble of this Agreement.

                               “Gotham Agent” has the meaning provided in the preamble of this Agreement.

                               “Gotham Allocation Limit” has the meaning set forth in Section 1.1(b).

                              “Gotham Fee Letter” means that certain Gotham Fee Letter dated as of June 11, 2008 by and among Quest Diagnostics, the Borrower, Gotham and BTMU, as Gotham Agent and as Administrative Agent, as the same may be amended, restated, supplemented, replaced or otherwise modified from time to time.

                              “Gotham Group” has the meaning provided in the preamble of this Agreement.

                              “Gotham Liquidity Agreement” means, collectively, any liquidity agreement pursuant to which any of the Gotham LiquidityBanks provides liquidity to Gotham and any related asset purchase agreement, as each may be amended, restated, supplemented, replaced or otherwise modified from time to time.

                              “Gotham Liquidity Bank” means any Liquidity Bank that now or hereafter enters into this Agreement and the Gotham Liquidity Agreement.

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                             “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,

               (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 VFCC Group or the Gotham 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

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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 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 a Pool Funded Conduit, each Settlement Date, and with respect to any CP Rate Loan of Gotham while it is not a Pool Funded Conduit, 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;

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               (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;

               (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; and

               (e) with respect to all Loans of the VFCC Group, the VFCC Group Termination Date.

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

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

                              “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.

                              “LabOne Receivable,” means a Receivable that arises out of a sale of goods or services by any of LabOne, Inc., ExamOne World Wide, Inc., Central Plains Laboratories, LLC, LabOne of Ohio, Inc., and Systematic Business Services, Inc.

                              “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, VFCC, the VFCC Liquidity Banks, Gotham, the Gotham 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.

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                              “Liquidity Agreements” means, collectively, the Gotham Liquidity Agreement and the VFCC Liquidity Agreement.

                              “Liquidity Bank” means (a) with respect to VFCC, Wachovia or any Eligible Assignee of Wachovia’s Commitment and Liquidity Commitment, and (b) with respect to Gotham, BTMU or any Eligible Assignee of BTMU’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.

                              “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

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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 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 20^th 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

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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) a requested waiver to this Agreement or the Credit Agreement, or (b) a requested amendment to this Agreement or the Credit Agreement.

                              “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:

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S&P Rating	Moody’s Rating	Allowable % of Eligible
		Receivables
A-1+	P-1	10%
A-1	P-1	8%
A-2	P-2	6%
A-3	P-3	3%
Below A-3 or Not Rated	Below P-3 or Not Rated	2%

                              “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.

                              “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;

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               (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.

                              “PHI” has the meaning set forth in Section 14.14.

                              “Pooled Commercial Paper” means for each of the Pool Funded Conduits the Commercial Paper Notes of such Pool Funded Conduit subject to any particular pooling arrangement by such Conduit, but excluding Commercial Paper Notes issued by the Pool Funded Conduits for a tenor and in an amount specifically requested by any Person in connection with any agreement effected by such Pool Funded Conduit.

                               “Pool Funded Conduits” means VFCC and, during any time as to which it has notified the Loan Parties that it will be pool funding its Loans, Gotham.

                              “Prepayment Notice” has the meaning set forth in Section 1.5(a) .

                              “Prime Rate” means the rate of interest per annum publicly announced from time to time by BTMU as its “prime rate.” (The “prime rate” is a rate set by BTMU based upon various factors including BTMU’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 BTMU 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.

                              “Proceedings” means, collectively, lawsuits, arbitrations, mediations and Congressional or regulatory hearings.

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                              “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’s 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, if required under a Conduit’s program documents, each such Conduit has received written notice from S&P, Moody’s and, at any time while Fitch is rating such Conduit’s Commercial Paper, 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.

                              “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.

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                              “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, all balances and instruments from time to time therein, and any and all Collection Account Agreements with respect thereto that may exist in favor of the Borrower, (e) payments due in respect of the Demand Advances, and (f) all proceeds and insurance proceeds of any of the foregoing.

                              “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:

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AGGREGATE REDUCTION	REQUIRED NOTICE PERIOD
< 25% of the Aggregate	2 Business Days
Commitment
25%-50% of the Aggregate	5 Business Days
Commitment
> 50% of Aggregate	10 Business Days
Commitment

                              “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.

                              “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.

                              “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.

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                              “Scheduled Termination Date” means (a) as to each VFCC Liquidity Bank, the VFCC Group Termination Date, and (b) as to each other Liquidity Bank, the earlier to occur of June 10, 2009 and the date on which its Liquidity Commitment(s) terminate(s) in accordance with the Liquidity Agreement to which it is a party.

                              “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 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

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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, 5% 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 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, as to each Group, the earliest to occur of: (a) the last Scheduled Termination Date of any Liquidity Bank in that Group; (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 90^th 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

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receipt; and (e) the 90^th 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 30^th 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.

                              “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.

                              “VFCC” has the meaning provided in the preamble of this Agreement.

                              “VFCC Agent” has the meaning provided in the preamble of this Agreement.

                              “VFCC Allocation Limit” has the meaning set forth in Section 1.1(a).

                              “VFCC Fee Letter” means that certain Second Amended and Restated VFCC Fee Letter dated as of May 23, 2008 by and among Quest Diagnostics, the Borrower, VFCC and the VFCC Agent.

                              “VFCC Group” has the meaning provided in the preamble of this Agreement.

                              “VFCC Group Termination Date” means December 13, 2008.

                              “VFCC Liquidity Agreement” means the Fourth Amended and Restated Liquidity Asset Purchase Agreement dated as of April 20, 2004 among VFCC, the VFCC 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.

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                              “VFCC Liquidity Bank” means any Liquidity Bank that enters into this Agreement and the VFCC Liquidity Agreement.

                              “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”.

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EX-10.4

Exhibit 10.4

Quest Diagnostics Incorporated
Grant Certificate

Employee Name: «Name»
Employee Address: («Address_1» «Address_2», «City», «State», «Postal»)
Grant Date: March 4, 2008

OPTION TERMS:
Option Grant:	«Options» Options
Exercise Price:	$47.49
Option Expiration Date:	March 4, 2015
Vesting Schedule:
Vesting Dates	Vesting Percent	Incremental	Cumulative
March 4, 2009	33.3%	;«NQ_Vesting_1»	«Cummulative_1»
March 4, 2010	33.3%	;«NQ_Vesting_2»	«Cummulative_2»
March 4, 2011	33.4%	;«NQ_Vesting_3»	«Cummulative_3»
RESTRICTED SHARE TERMS:
Restricted Share Grant:	«RES» Shares
Vesting Schedule:
Vesting Dates	Vesting Percent	Incremental	Cumulative
March 4, 2009	25%	;«Res_Vesting_1»	«Res_Cummulative_1»
March 4, 2010	25%	;«Res_Vesting_2»	«Res_Cummulative_2»
March 4, 2011	50%	;«Res_Vesting_3»	«Res_Cummulative_3»
TARGET PERFORMANCE SHARES: Target Performance Shares: «TPS» Shares Performance Period: January 1, 2008 through December 31, 2010 Vesting Period: February 1, 2008 through January 31, 2011

This grant is subject in all respects to the terms of the attached Equity Award Agreement dated March 4, 2008 and to the terms of the Quest Diagnostics Incorporated Amended and Restated Employee Long-Term Incentive Plan (the “Plan”), which is incorporated by reference in the Agreement.

By execution of this Grant Certificate, the Employee agrees that he or she has received and reviewed a copy of (a) the Prospectus relating to the Plan (link to Prospectus), (b) the Quest Diagnostics Incorporated 2007 Annual Report to Shareholders on Form 10-K (link to 2007 Annual Report), and (c) the Company’s Policy regarding Purchasing and Selling Securities (“the Policy”) (link to Trading Policy). The Employee further agrees to fully comply with the terms of the Policy.

Employee:

By:
	«Name»

Equity Award Agreement
March 4, 2008
Page 2.

QUEST DIAGNOSTICS INCORPORATED
EQUITY AWARD AGREEMENT

This Equity Award Agreement (the “Agreement”) dated as of March 4, 2008 between Quest Diagnostics Incorporated, 3 Giralda Farms, Madison, NJ 07940 (the “Company”) and the employee named in the attached grant certificate (the “Employee”) is subject in all respects to the Company’s Amended and Restated Employee Long-Term Incentive Plan (the “Plan”). All references to “Shares” means shares of the Company’s Common Stock.

	This Agreement shall become effective only after the Employee has executed and returned to the Executive Compensation Department (to the attention of Lisa Zajac (3 Giralda Farms, Madison, NJ 07940)) a signed copy of this Agreement (the signature page appears on the grant certificate) and shall be revoked if not executed and received by Lisa Zajac within thirty (30) days of receipt by the Employee.
1.	Award of Stock Options. The Company hereby awards to the Employee under the Plan the number of stock options (each, an “Option”) set forth in the attached grant certificate. Each Option entitles the Employee, subject to the terms and conditions of this Agreement and the Plan, to purchase from the Company at the exercise price set forth in the attached grant certificate (the “Exercise Price”) one Share (an “Option Share”). The Options shall vest and become exercisable on the terms set forth in Section 4. The Options shall expire on, and no Option Shares may be purchased pursuant to this Agreement after, the expiration date set forth in the attached grant certificate (the “Option Expiration Date”). The Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”) may, in its sole discretion, convert any or all of the Options at any time to a stock settled stock appreciation grant. The Options are not intended to be “incentive stock options” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), and this Agreement shall be construed and interpreted in accordance with such intention.
2.	Restricted Shares. The Company hereby awards to the Employee under the Plan the number of Shares set forth in the attached grant certificate (the “Restricted Shares”). The Restricted Shares shall vest on the terms set forth in Section 4.
3.	Performance Shares. The Employee shall be eligible to receive and vest in Shares as provided in this Section 3 and Section 5 based on (a) the number of number of target performance shares set forth in the attached grant certificate (“Target Performance Shares”) and (b) the Company’s performance during the Performance Period. Performance will be measured as of the end of the performance period set forth in the attached grant certificate (the “Performance Period”) based on the compound annual growth rate (“CAGR”) of the Company’s fully diluted earnings per share from continuing operations (“EPS”) during the Performance Period, by comparing the Company’s EPS during the Final Year of the Performance Period with the Company’s EPS during the Baseline Year (see Appendix A for these defined terms). After the Performance Period, the CAGR will be calculated and the number of Shares to be issued (subject to vesting under Section 5 and withholding of taxes under Section 16) shall be based upon the following formula (such number of Shares being the “Earned Performance Shares”):
	CAGR*	“Earnings Multiple”* multiplied by Target Performance Shares = Earned Performance Shares
	Greater Than or Equal to 20%	2 x Target Performance Shares = Earned Performance Shares
	Equal to 10%	1 x Target Performance Shares = Earned Performance Shares
	Less Than or Equal to 3%	0 x Target Performance Shares = 0 Shares
	*The Earnings Multiple for CAGR between 3% and 20% will be interpolated.
For example, if the Company’s CAGR from the Baseline Year to the Final Year of the Performance Period (fiscal year 2010) is 6.5%, an Earnings Multiple of 0.5 will be applied to the Target Performance Shares to calculate the Earned Performance Shares. The maximum Earnings Multiple is 2.0.

Equity Award Agreement
March 4, 2008
Page 3.

4.	Vesting of Stock Options and Restricted Shares.
	(a)	General Vesting Requirements. Except as otherwise provided below, the Options shall vest and become exercisable, and the Restricted Shares shall vest, on the vesting dates set forth in the attached grant certificate (the “Vesting Dates”) provided that the Employee is still in the employ of the Company on the applicable Vesting Date. Options shall be exercisable only to the extent vested. Vested Restricted Shares, net of required tax withholding as described in Section 16 below, will be transferred into the Employee’s account at the Company’s dedicated broker as soon as practicable after the date on which the Restricted Shares vest whether vesting occurs on a Vesting Date or as provided in Sections 4(b) through 4(j).
	(b)	Termination of Employment Generally. If the Employee’s employment is terminated (other than for one of the reasons set forth elsewhere in this Section 4) three months or more after the Grant Date but prior to the third anniversary of the Grant Date, the Employee will vest in a number of Options and a number of Restricted Shares determined by multiplying the number of Options or Restricted Shares, as the case may be, that are scheduled to vest on the next Vesting Date by a fraction, (i) the numerator of which is the number of whole months from the most recent March 4 to the termination date of the Employee’s employment and (ii) the denominator of which is 12; and any unvested Options and any unvested Restricted Shares will be canceled. No Options or Restricted Shares shall vest under this Section 4(b) if the Employee’s termination of employment occurs less than three months after the Grant Date.
	(c)	Leave of Absence. Notwithstanding anything to the contrary contained herein, if the Employee is on a leave of absence approved by the Company for medical, personal, educational and/or other permissible purposes pursuant to policies of the Company as in effect from time to time, for a consecutive twelve-month period, such Employee will be deemed terminated for purposes of this Agreement (including under Sections 4(b) and 5(c)) on the first anniversary of the commencement of such leave of absence and the Options and the Restricted Shares shall cease to vest at the end of such twelve-month period (with the result that the Employee shall immediately vest in a number of Options and a number of Restricted Shares as provided in Section 4(b)) and any unvested Options and any unvested Restricted Shares will be canceled); provided, however, that on or before the first anniversary of the commencement of the leave of absence, the Compensation Committee may, in its absolute discretion, determine to waive the application of this Section 4(c), in which case the Employee will not be deemed terminated for purposes of this Agreement and the Options and the Restricted Shares will continue to vest in accordance with this Agreement. Notwithstanding the foregoing, if the Employee’s employment is terminated pursuant to this Section 4(c) at the end of a medical or disability leave, then the Options and the Restricted Shares shall cease to vest as of the end of the twelve-month leave but shall not be canceled until the first anniversary of the Employee’s termination of employment unless, prior to such first anniversary, the Employee delivers to the Company evidence satisfactory to the Company that the Social Security Administration has determined that the Employee is disabled as provided in Section 4(e).
	(d)	Death. If the Employee shall die while employed, on the date of the Employee’s death, all Options and all Restricted Shares shall vest.
	(e)	Disability. If the Employee’s employment shall terminate pursuant to Section 4(c) at the end of a medical or disability leave and if, on or before the first anniversary of the Employee’s termination of employment, the Employee delivers to the Company evidence satisfactory to the Company that the Social Security Administration has determined that the Employee is disabled (as defined in Section 22(e)(3) of the Code), on the date that such evidence is provided to the Company all Options and all Restricted Shares shall vest.
	(f)	Retirement. If the Employee’s employment shall terminate with the consent of the Company on or after the Employee’s attaining age 60, on the effective termination date of the Employee’s employment all Options and all Restricted Shares shall vest.
	(g)	Change in Control. All Options and all Restricted Shares shall vest on the effective date of a change in control, provided the Employee was employed by the Company on such date. For purposes of this Agreement the term “change in control” shall mean and shall be deemed to occur if and when:
		(i)	Any person (as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934) is or becomes the beneficial owner, directly or indirectly, of securities of the Company representing 40% or more of the combined voting power of the Company’s then outstanding securities; or

Equity Award Agreement
March 4, 2008
Page 4.

		(ii)	The individuals who, as of the Grant Date, constituted the Company’s Board of Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual (other than any individual whose initial assumption of office is in connection with an actual or threatened election contest (as such term is used in Rule 14a-11 of Regulation 14A promulgated under the Securities Exchange Act of 1934)), becoming a director subsequent to the Grant Date, whose election, or nomination for election by the stockholders of the Company, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board, shall be considered as though such individual was a member of the Incumbent Board; or
		(iii)	The Company consummates any of the following transactions that are required to be approved by shareholders: (a) a transaction in which the Company ceases to be an independent publicly owned corporation, or (b) the sale or other disposition of all or substantially all of the Company’s assets, or (c) a plan of partial or complete liquidation of the Company.
	(h)	Involuntary Termination with Severance or Divestiture. If prior to the third anniversary of the Grant Date, the Employee’s employment is terminated by the Company as a result of (1) a separation which would entitle the Employee to severance benefits under one of the Company’s severance plans or an employment agreement between the Employee and the Company or (2) a divestiture and the Employee is employed by the purchasing entity, the Employee will immediately vest in a number of Options and a number of Restricted Shares equal to (i) the number of Options or Restricted Shares, as the case may be, that are scheduled to vest on the next Vesting Date plus (if the termination occurs prior to the second Vesting Date) (ii) the number of Options or Restricted Shares, as the case may be, that would have vested under Section 4(b) if the Employee had remained an employee for an additional one year after his/her actual termination of employment; and any unvested Options and any unvested Restricted Shares will be canceled.
	(i)	Transfers. If the Employee shall be transferred from the Company to a subsidiary company (being a 50% owned entity within the meaning of Section 424(f) of the Code), or joint venture or similar entity existing as of the date of this Agreement in which the Company has at least a 33.33% interest (“joint venture”) or vice versa or from one subsidiary company (or joint venture) to another, the Employee’s employment shall not be deemed to have terminated for purposes of this Agreement. If, while the Employee is employed by such a subsidiary company or joint venture, such subsidiary company or joint venture shall cease to be a subsidiary company or joint venture as described above and the Employee is not thereupon transferred to and employed by the Company or another subsidiary company or joint venture as described above, then the Employee’s employment will be treated as a termination due to a divestiture under Section 4(h) and Section 5(c)(ii) on the date that the Employee’s employer ceases to be such a subsidiary company or joint venture of the Company.
	(j)	Loss of Equity Award Eligibility Status. Notwithstanding the provisions of Section 4(a), if the Employee’s employment status in the Company is changed such that the Employee will no longer be eligible to receive options pursuant to the Equity Award Eligibility Policy of the Company as in effect on the date hereof and attached as Appendix B to this Agreement (the “Eligibility Policy”) and such changed status continues for a consecutive 90 day period, then (i) the Options and the Restricted Shares shall cease to vest at the end of such 90-day period; (ii) the Employee will immediately vest in a number of Options and a number of Restricted Shares equal to the number that would have vested under Section 4(b) if the Employee had terminated employment at the end of such 90-day period (including any Shares that would be vested on any intervening Vesting Date that occurs between the date of such change in employment status and the 90th day); and (iii) any unvested Options and any unvested Restricted Shares will be canceled. Notwithstanding the foregoing, the Options and the Restricted Shares shall continue to vest (and shall not be canceled under this Section 4(j) if, (x) before the end of such 90-day period, the Employee has attained age 60; or (y) before the end of such 90-day period, the Compensation Committee, in its absolute discretion, determines to waive the application of this Section 4(j).
5.	Vesting of Performance Shares.
	(a)	Performance Share Vesting Period. Subject to the exceptions enumerated in Section 5, Earned Performance Shares will vest at the end of the vesting period as set forth in the attached grant certificate (the “Performance Share Vesting Period”) provided that the Employee is still in the employ of the Company at the end of the Performance Share Vesting Period. Earned Performance Shares, net of required tax withholding as described in Section 16 below, will be transferred into the Employee’s account at the Company’s dedicated broker as soon as practicable after the final calculation of the number of Earned Performance Shares but in any event on or prior to March 15, 2011.

Equity Award Agreement
March 4, 2008
Page 5.

(b)	Change in Control. If a change in control (as defined in Section 4(g)) of the Company occurs prior to the end of the Performance Share Vesting Period then the number of Earned Performance Shares to be awarded to the Employee shall be equal to the greater of: (1) the number of Earned Performance Shares that would be awarded if the calculation under Section 3 is based on the most recent fiscal year end results of the Company (rather than the Final Year of the Performance Period) and (2) the number of Target Performance Shares. The number of Shares (if any) calculated in accordance with the preceding sentence, net of required tax withholding as described in Section 16 below, will be transferred to the Employee's account at the Company's dedicated broker within five business days after the consummation of the change in control. In the event that (and only in the event that), following such payment, the Company continues to file annual reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, including for the Final Year of the Performance Period, then following the end of the Performance Period, to the extent that the number of Earned Performance Shares calculated pursuant to Section 3 exceeds the number of Earned Performance Shares as calculated pursuant to the preceding sentence, then any additional Shares resulting from the calculation in accordance with Section 3 (net of the number of Shares previously delivered under the preceding sentence) will be so transferred as provided in Section 5(a). If the Employee terminated employment prior to the change in control, the Earned Performance Shares will vest or be pro-rated, as applicable, in accordance with Section 5(c).
(c)	Adjustments to Earned Performance Shares and Vesting of Earned Performance Shares on Termination of Employment. The Employee (or, in the case of death, the Employee’s beneficiary or estate) shall be entitled to receive 100% of the Earned Performance Shares calculated pursuant to Section 3, and such Earned Performance Shares shall not be subject to a service-based vesting requirement, if prior to the end of the Performance Share Vesting Period the Employee’s employment terminates by reason of death or disability (under circumstances in which the Options and Restricted Shares vest under Section 4(e)) or retirement under Section 4(f)). The number of Earned Performance Shares calculated pursuant to Section 3 to which the Employee is entitled will be adjusted in the following circumstances if:
	(i)	the Employee’s employment with the Company ends three months or more after the Grant Date but prior to the end of the Performance Share Vesting Period (other than by reason of death, disability (under circumstances in which the Options and Restricted Shares vest under Section 4(e)) or retirement under Section 4(f). In the event of such termination, the Employee shall vest in the number of Earned Performance Shares determined by multiplying the Earned Performance Shares by a fraction, (A) the numerator of which is the number of full months that the Employee was employed by the Company during the Performance Share Vesting Period and (B) the denominator of which is the number of months in the Performance Share Vesting Period; and the balance of the Earned Performance Shares will be canceled; provided, however, that no Earned Performance Shares shall vest under this sentence if the Employee’s termination of employment occurs less than three months after the Grant Date; or
	(ii)	the Employee’s employment with the Company ends prior to the end of the Performance Share Vesting Period as a result of (1) a separation which would entitle the Employee to severance benefits under one of the Company’s severance plans or an employment agreement between such Employee and the Company or (2) a divestiture and the Employee is employed by the purchasing entity. In that event, notwithstanding the provision of Section 5(c)(i), the Employee shall vest in the number of Earned Performance Shares determined by multiplying the Earned Performance Shares by a fraction, (A) the numerator of which is the number of full months that the Employee was employed by the Company during the Performance Share Vesting Period plus twelve (but in no event shall the numerator exceed the number of months in the Performance Share Vesting Period) and (B) the denominator of which is the number of months in the Performance Share Vesting Period; and the balance of the Earned Performance Shares will be canceled; or

Equity Award Agreement
March 4, 2008
Page 6.

		(iii)	if prior to the end of the Performance Share Vesting Period, the Employee’s employment status in the Company is changed such that the Employee will no longer be eligible to receive equity awards pursuant to the Eligibility Policy and such changed status continues for a consecutive 90-day period, then, notwithstanding any other provision in this Agreement to the contrary, the Employee shall vest in the number of Earned Performance Shares determined by multiplying the Earned Performance Shares by a fraction, (A) the numerator of which is the number of full months that the Employee was employed by the Company during the Performance Share Vesting Period through such 90th day (but in no event shall the numerator exceed the number of months in the Performance Share Vesting Period) and (B) the denominator of which is the number of months in the Performance Share Vesting Period; and the balance of the Earned Performance Shares will be canceled. Notwithstanding the foregoing, there will be no pro-ration under the first sentence of this Section 5(c)(iii) (and no Earned Performance Shares will be canceled as a result of the Employee being no longer eligible to receive equity awards pursuant to the Eligibility Policy) if, (i) before the end of such 90-day period, the Employee has attained age 60 or (ii) the Compensation Committee in its absolute discretion determines to waive the application of this Section 5(c)(iii); or
		(iv)	Notwithstanding anything to the contrary contained herein, if the Employee is on a leave of absence approved by the Company for medical, personal, educational and/or other permissible purposes pursuant to policies of the Company in effect from time to time, for a consecutive twelve-month period, the Employee will be deemed terminated for purposes of this Agreement on the first anniversary of the commencement of such leave of absence (with the result that the Earned Performance Shares will be pro-rated in accordance with Section 5(c)(i)) as of the end of such twelve-month period; provided, however, that on or before the first anniversary of the commencement of the leave of absence, the Compensation Committee may, in its absolute discretion, determine to waive the application of this Section 5(c)(iv), in which case the Employee will not be deemed terminated for purposes of this Agreement and the Performance Shares will continue to vest in accordance with this Agreement. Notwithstanding the foregoing, if the Employee’s employment is terminated pursuant to this Section 5(c)(iv) at the end of a medical or disability leave, then the Earned Performance Shares shall cease to vest as of the end of the twelve-month leave but shall not be canceled until the first anniversary of the Employee’s termination of employment unless, prior to such first anniversary, the Employee delivers to the Company evidence satisfactory to the Company that the Social Security Administration has determined that the Employee is disabled as provided in Section 4(e).
6.	Cancellation. Notwithstanding anything to the contrary contained herein, this Agreement shall expire and be canceled, the Employee will not vest in any additional Options, the Employee may not exercise any Options, whether or not vested, and all Restricted Shares and Target Performance Shares (whether or not vested or earned) shall be canceled if
	(a)	the Employee shall cause the Company to suffer financial harm or damage to its reputation (either before or after termination of employment) through (x) dishonesty, (y) violation of law in the course of the Employee’s employment or violation of the Company’s Corporate Compliance Manual and compliance bulletins or other written policies, or (z) material deviation from the duties owed the Company by the Employee; or
	(b)	the Employee is subject to the Executive Share Ownership Policy, as such policy may be amended from time to time (the “Ownership Policy”), and the Employee makes any false attestation under the Ownership Policy; or
	(c)	the Employees violates (i) the terms of Sections 12 and/or 13 of this Agreement and/or (ii) the confidentiality, non solicit or non-compete obligations or any other restrictive covenant set forth in any agreement between the Employee and the Company or otherwise pursuant to any written policy of the Company (the “Other Restrictive Covenant”), in addition to any equitable and legal rights the Company has or may have.
The Employee understands that the cancellation of any awards or rights under this Agreement is only one element of the damages potentially sustained by the Company for (i) any action described in this Section 6 or (ii) a violation of Sections 12 and/or 13 of this Agreement or any Other Restrictive Covenant, and such cancellation shall not constitute a release of any claim that the Company may have for damages, past, present, or future. In addition, a breach by the Employee of any provisions of Sections 12 and/or 13 of this Agreement or any Other Restrictive Covenant that occurs after any exercise of any Option or delivery of Shares pursuant to this Agreement (including any breach occurring after termination of employment) shall cause the exercise of the Option and the delivery of any Option Shares, Restricted Shares or Earned Performance Shares under this Agreement to be rescinded (and if the Employee has previously sold the Shares issued pursuant to this Agreement, the Employee would be required to pay back to the Company the pre-tax proceeds received from the sale of such Shares).

Equity Award Agreement
March 4, 2008
Page 7.

7.	Executive Share Ownership Policy.
	(a)	The Employee is subject to the Ownership Policy if the Employee is or becomes a Vice President or executive officer of the Company. In consideration of the grant of the awards under this Agreement, the Employee agrees that, if the Employee is or becomes subject to the Ownership Policy, the Options and all Option Shares, Restricted Shares and Performance Shares shall be subject to cancellation pursuant to Section 6(b) of this Agreement and all Options, Option Shares, Restricted Shares and Performance Shares granted to the Employee by the Company prior to the date hereof (the “Prior Awards”) shall be subject to cancellation pursuant to Section 6(b) of this Agreement (for false attestation under the Ownership Policy), the Shares obtained on exercise of such Prior Awards after the date hereof shall be subject to the Ownership Policy pursuant to Section 7(b) of this Agreement and the terms of Sections 6(b), 7(a) and 7(b) hereof are made a part of the terms of each of the Prior Awards.
	(b)	If the Employee is subject to the Ownership Policy, any Shares issued under this Agreement or pursuant to any Prior Award (in each case net of tax withholdings) issued under this Agreement are subject to such policy. The Employee hereby acknowledges and agrees that the investment risk associated with the retention of any Shares, whether pursuant to the Ownership Policy or otherwise, is the sole responsibility of the Employee and the Employee hereby holds the Company harmless against any claim of loss related to the retention of the Shares.
8.	Non-Transferability; Voting Rights and Dividends.
	(a)	The awards and rights under this Agreement shall not be transferable other than by will or the laws of descent and distribution. The Options may be exercised during the lifetime of the Employee only by the Employee except to the extent of a disability (as defined in Section 22(e) (3) of the Code), in which case the Options may be exercised by the Employee’s legal representative.
	(b)	Restricted Shares shall be registered in book entry in the name of the Employee and shall not be transferred to the Company’s dedicated broker on the Employee’s behalf or otherwise released to the Employee until the Restricted Shares have vested in accordance with this Agreement. The Employee acknowledges that the certificates representing Restricted Shares may be stamped with a legend indicating the possibility of cancellation and the restrictions on transfer. The Employee may vote the Restricted Shares and receive all dividends declared and paid by the Company on the Restricted Shares subject to withholding to satisfy applicable tax requirements.
	(c)	The Employee will not have any voting, dividend or other rights as a stockholder with respect to any Option Shares, Target Performance Shares or Earned Performance Shares prior to the date on which he/she is recorded as the holder of such Option Shares or Earned Performance Shares on the records of the Company. The Employee understands that the Option Shares will not be issued to the Employee until after (and to the extent that) Options are exercised. The Employee also understands that, except as provided in Section 5(b), Earned Performance Shares (net of required tax withholding as described in Section 16 below) will not be issued to the Employee until after the final calculation of the Earnings Multiple as contemplated by Section 3 and any adjustment under Section 5, it being understood that such issuance shall occur in any event on or prior to March 15, 2011. Until Shares have been delivered to or on behalf of the Employee in respect of any Earned Performance Shares, the Employee shall have only the rights of a general unsecured creditor.
	(d)	Until Shares are transferred to the Employee’s account at the Company’s dedicated broker or the Employee otherwise receives physical possession of any such Shares, the Employee shall have no right to sell, assign, transfer, pledge or otherwise encumber Shares in any manner. Any purported attempt to sell, assign, transfer, pledge or otherwise encumber any award under this Agreement will be void and shall result in the cancellation of such award. Unless otherwise provided at the time of such transfer or delivery to the Employee of any Vested Restricted Shares or any Shares issued in respect of any Earned Performance Shares or Shares issued upon full or partial exercise of the Options, upon such transfer or delivery to the Employee the Shares will not be subject to any restrictions on transfer other than those that may arise under the securities laws or the Company’s policies, but the Shares shall remain subject to cancellation as provided in Section 6.

Equity Award Agreement
March 4, 2008
Page 8.

9.	Exercise of Options. The Employee may exercise Options in accordance with the procedures specified by the Company from time to time. The Exercise Price of Options shall be paid in full with, or in a combination of (a) cash or (b) Shares that have been owned by the Employee, and have been fully vested and are freely transferable by the Employee, for at least six months preceding the date of exercise of the Option, duly endorsed or accompanied by stock powers executed in blank. The Company in its discretion may permit the Employee (if the Employee owns Shares that have been owned by the Employee, and have been fully vested and fully transferable by the Employee, for at least six months preceding the date of exercise) to “attest” to his/her ownership of the number of Shares required to pay all or part of the purchase price (and not require delivery of the Shares), in which case the Company will deliver to the Employee the number of Shares to which the Employee is entitled, net of the “attested” Shares. If payment is made in whole or in part with Shares, the value of such Shares shall be the mean between its high and low prices on the day of purchase as reported by The New York Times or another newspaper or information source designated by the Company following the close of business on the date of exercise. No “reload” or other option will be granted by reason of any such exercise.
10.	Exercise of Option After Termination of Employment, Death or Disability. The provisions covering the exercise of the Options following termination of employment are as follows, provided that in no event may any Options be exercised after the Option Expiration Date:
	(a)	Termination in General. If the Employee shall terminate his/her employment for any reason other than those described in Section 10(b) through (e), the Options that have vested simultaneously with or before the Employee’s termination of employment may be exercised for ninety (90) days following such termination (but not beyond the Option Expiration Date) and such vested Options shall thereafter expire and cease to be exercisable.
	(b)	Death. If the Employee shall die while employed, the Options may be exercised through the Option Expiration Date. If the Employee shall die after termination of employment but while all or any portion of the Options are still exercisable, they shall remain exercisable through the first anniversary of the date of death but not beyond the Option Expiration Date.
	(c)	Disability. If the Employee’s employment shall terminate at the end of a medical or disability leave under Section 4(e) and if, on or before the first anniversary of the Employee’s termination of employment, the Employee delivers to the Company evidence satisfactory to the Company that the Social Security Administration has determined that the Employee is disabled (as defined in Section 22(e) (3) of the Code), the Options shall remain exercisable through the Option Expiration Date.
	(d)	Retirement. If the Employee’s employment shall terminate as a result of retirement pursuant to Section 4(f) of this Agreement, the Options shall remain exercisable through the Option Expiration Date.
	(e)	Involuntary Termination with Severance or Divestiture. If the Employee’s employment is terminated by the Company as a result of (1) a separation which would entitle the Employee to severance benefits under one of the Company’s severance plans or an employment agreement between the Employee and the Company or (2) a divestiture and the Employee is employed by the purchasing entity, then any Options that are vested and exercisable (including any Options that become vested and exercisable under Section 4(h)) may be exercised through the first anniversary of the date of termination (but not beyond the Option Expiration Date) and shall thereafter expire.
11.	Consideration. In consideration for the awards under this Agreement, the Employee hereby agrees to be bound by the Nondisclosure of Confidential Information provisions set forth in Section 12 of this Agreement, the Nonsolicitation and Noncompetition provision set forth in Section 13 of this Agreement and any restrictive covenant obligations set forth in any agreement between the Employee and the Company or otherwise pursuant to any written policy of the Company, including without limitation any Other Restrictive Covenants. For purposes of Sections 6, 12 and 13, the term “Company” shall mean the Company, its affiliates, divisions and subsidiaries, or any other entity in which the Company, directly or indirectly, controls or has an ownership or equity interest equal to or greater than 25.0% of the combined voting power of the entity's then outstanding securities, and their respective successors and assigns.

Equity Award Agreement
March 4, 2008
Page 9.

12.	Nondisclosure of Confidential Information.
	(a)	For purposes of this Agreement, the term “Confidential Information” shall mean all ideas, inventions, data, databases, know-how, processes, methods, practices, specifications, raw materials and preparations, compositions, designs, devices, fabrication techniques, technical plans, algorithms, computer programs, protocols, client information, medical records, documentation, customer names and lists, supplier names and lists, price lists, supplier names and lists, apparatus, business plans, marketing plans, financial information, chemical and biological reagents, business methods and systems, literary and graphical and audiovisual works and sound recordings, mask works, computer programs, and the like, and potential trade names, trademarks, and logos, in whatever form or medium and which have commercial value, and whether or not designated or marked “Confidential” or the like, which the Employee learns, acquires, conceives, creates, develops, or improves while employed by the Company and which (1) relate to the past, current, or prospective business of the Company or its subsidiaries and (a) which have not previously been publicly disclosed without restrictions on use by the Company, or (b) which Employee knows or has good reason to know are not generally publicly known; or (2) are received by the Company from a third party under an obligation of confidentiality to the third party which the Employee knows or reasonably should have known are confidential to such third party. “Confidential Information” shall not include any information known generally to the public (other than as a result of an unauthorized disclosure by the Employee).
	(b)	The Employee recognizes and acknowledges that during his or her employment with the Company, the Employee may be given access to or develop Confidential Information. The Employee shall not use or disclose (directly or indirectly) any Confidential Information (whether or not developed by the Employee) at any time or in any manner, except as authorized and required in the course of employment with the Company. The Employee shall not disclose to the Company or use on behalf of the Company any Confidential Information obtained from any former employer or any other third party. All documents and things embodying Confidential Information, whether prepared by the Employee or otherwise coming into the Employee’s possession, are the exclusive property of the Company, and must not be removed from any of its premises except as required in the course of employment with the Company. All such documents and things shall be promptly returned by the Employee to the Company upon the request of the Company and on any termination of employment with the Company. The Employee will not remove any Confidential Information such as documents or things or retain them in whole or part in any manner. The Employee shall ensure that any export of Confidential Information undertaken by the Employee or with his/her knowledge or approval shall be in compliance with all applicable laws.
	(c)	The Employee shall promptly disclose to the Company all Confidential Information which the Employee creates, conceives, develops, or improves (either alone or with others) referred to below as a “Creation” while in the employment of the Company, if the Creation either: (1) relates to any actual or demonstrably contemplated business, or research or development project, of the Company or its subsidiaries, or to any reasonable extension or variation thereof; or (2) results from any work performed by the Employee for the Company; or (3) was created utilizing any of the Company’s equipment, supplies, facilities, time, or Confidential Information. The Employee shall keep complete, accurate, and authentic records on all Creations in the manner and form requested by the Company. The Employee shall promptly disclose to the Company, in confidence, all patent, copyright, and trademark applications filed by the Employee within one (1) year after termination of employment with the Company and which relate to any field in which the Employee worked at the Company. The Employee agrees that any such application for a patent, copyright registration, trademark registration, mask work registration, or similar right filed within one (1) year after termination of employment with the Company shall be presumed to relate to a Creation of the Employee created during employment at the Company, unless the Employee can prove otherwise.
	(d)	The Employee hereby assigns to the Company all of the Employee’s rights in all of the above-described Creations. All such Creations that are subject to copyright or mask work protection are explicitly considered by the Employee and the Company to be works made for hire to the extent permitted by law. To the extent that any such Creations are subject to copyright protection and are not works made for hire, any and all of the Employee’s copyright and mask work interest therein are hereby assigned by the Employee to the Company, and are the exclusive property of the Company.

Equity Award Agreement
March 4, 2008
Page 10.

	(e)	The Employee agrees to assist the Company in obtaining and/or maintaining patents, copyrights, trademarks, mask work rights, and similar rights to any Creations assigned by the Employee to the Company, if and to the extent that the Company, in its sole discretion, requests such assistance, the Employee shall sign all documents and do all other things deemed necessary by the Company, at the Company’s expense, to obtain and/or maintain such rights, to provide confirmatory evidence of the Employee’s assignment of such Creations to the Company, to defend them from invalidation, and to protect them against infringement by other parties. The obligations of this Section 12(e) are continuing and survive the termination of the Employee’s employment with the Company. The Employee irrevocably appoints the Chief Executive Officer of the Company (with powers of delegation) to act as the Employee’s agent and attorney-in-fact to perform all acts as the Employee’s agent and to file, prosecute, and maintain applications and registrations for patents, trademarks, copyrights, mask work rights, and similar rights to any Creations assigned by the Employee to the Company under this Agreement, such appointment being effective both during the Employee’s employment by Company, and thereafter if the Employee (1) refuses to perform those acts, or (2) is unavailable, within the meaning of any applicable laws. The Employee acknowledges that the grant of the foregoing power of attorney is coupled with an interest, is irrevocable, and shall survive his/her death or disability.
13.	Nonsolicitation and Noncompetition.
	(a)	During his/her employment with the Company and for a period of one year (or two years in the case of any services provided to Laboratory Corporation of America Holdings) following the date of the Employee’s termination of employment for any reason, the Employee will not provide services, in any capacity, whether as an employee, consultant, independent contractor, or otherwise, in any country in which the Company conducts business at any time to any person or entity that provides products or services that compete with the Business of the Company, including but not limited to: Aurora Diagnostics; ARUP Laboratory; Bayer Diagnostics; Bio Reference Laboratories, Inc.; Bostwick Laboratories, Inc.; Boule Nordic AB; Caris Diagnostics; CBLPath Inc.; Cerner Corporation; Chempaq, Denmark; Chi Systems, Inc.; Clarient, Inc; EKF Diagnostics; Endocare Services Inc.; Enzo Biochem, Inc., Enzon, Inc.; EPIC Systems Corporation (subsidiary of Quality Systems Inc.); GenOptics; GenPath (Bio-Reference Laboratories Inc.); Genomic Health Inc.; Genzyme Corporation; Global Pathology Laboratory Services; GI Pathology; IMPATH Inc.; Inverness Medical; Laboratory Corporation of America Holdings; LifeScan Inc.; Mayo Laboratory; McKesson Corporation; MedTox Scientific Inc.; Microbiology Reference Laboratory; Monogram Biosciences, Inc.; Myriad Genetics, Inc.;. NeoGenomics Inc.; NextGen Healthcare Information Systems, Inc.; Nu- Tech Bio-Med, Inc.; Physicians Clinical Laboratory Inc.; ProPath Laboratory; Psychemedics Corp; QBC Inc.; Roche Diagnostics; Siemens Healthcare Information; Sonic Healthcare; Stanbio Laboratory; Westcliff Medical Laboratories, Inc.; and such additional persons or entities that provide products or services that compete with the Business of the Company as the Company may communicate in writing from time to time; and their subsidiaries or their successors or assigns.
	(b)	During his/her employment with the Company and for a period of one (1) year following the termination of the Employee’s employment for any reason, the Employee will not directly or indirectly solicit the Business of any customer of the Company of whom the Employee acquired knowledge and/or had direct or indirect contact during the one (1) year period prior to the termination of Employee’s employment relationship with the Company for any purpose other than to obtain, maintain and/or service the customer’s Business for the Company.
	(c)	During his/her employment with the Company and for a period of one (1) year following the termination of the Employee’s employment for any reason, the Employee agrees not to, directly or indirectly, recruit or solicit any employees of the Company to work for the Employee or any other person or entity.

Equity Award Agreement
March 4, 2008
Page 11.

	(d)	As used in this Agreement, the following terms shall have these respective definitions:
		(i)	“Business” shall include the Current Business; and any other product or service which the Company provided during the one-year period prior to Employee’s termination of employment and during the one (1) year period following Employee’s termination of employment, but the restriction on products and services introduced after Employee’s termination of employment shall exclude products and services that were not planned, discussed or contemplated prior to Employee’s termination of employment.
		(ii)	“Current Business” shall mean and include: providing clinical testing information products or services for the diagnosis, monitoring and treatment of disease; providing clinical laboratory management services; providing medical informatics services (i.e., the statistical analysis of medical information) and consulting services based on such analysis; providing data analysis, medical information services and database management services for the health care industry; providing clinical testing information services and other services in support of clinical trials, and clinical testing products for use in clinical trials; providing services of storage, retrieval and communication of medical information via interactive computer networks; providing to managed care organizations, hospitals, employers and other institutional healthcare providers, access to a network of clinical diagnostic laboratories; providing services of processing requests for diagnostic tests, performing tests, reporting test results, and paying claims to network laboratories; providing quality and utilization management; providing consolidated chronological reports in graphical and/or numerical form, representing the results of clinical diagnostic tests performed on individual patients and groups of patients over monitored periods of time, together with analysis of the results; and manufacturing and selling clinical diagnostic assay kits, apparatus and reagents.
		(iii)	“Indirectly solicit” shall include, but are not be limited to, providing Company’s Confidential Information to another individual, or entity, allowing the use of Employee’s name by any company (or any employees of any other company) other than the Company, in the solicitation of the Business of Company’s customers.
14.	Damages and Injunctive Relief. The Employee understands that if the terms of Section 12 and/or 13 of this Agreement are violated, the Company would be seriously and irreparably damaged, and agrees that the Company will be entitled to seek appropriate remedies for those damages, including, without limitation, injunctive relief to enforce any provision of this Agreement and all reasonable attorney’s fees incurred by the Company to enforce the terms of these Sections.
15.	The Plan. The Plan is incorporated herein by reference. The Employee acknowledges that he/she has read the terms of the Plan and that those terms shall govern in the event of any conflict with the terms of this Agreement.
16.	Taxes. The partial or full exercise of any Option, the vesting of any Restricted Shares and the delivery of any Earned Performance Shares under this Agreement will result in the Employee’s recognition of income for U.S. federal income tax purposes and shall be subject to tax and tax withholdings as appropriate. The Company may make such provisions and take such steps as it may deem necessary or appropriate for the withholding of all federal, state, local and other taxes required or permitted by law to be withheld with respect to the exercise of the Option. On the vesting of any Restricted Shares and payment of any Earned Performance Shares, the Company will reduce the number of Shares to be delivered to the Employee by the amount of the taxes due (with the Shares valued at the mean between the high and low selling prices on the date that the Shares are valued for purposes of reporting compensation for Federal income tax purposes).
17.	Consent Requirement. If the Company shall at any time determine that any consent (as hereinafter defined) is necessary or desirable as a condition of, or in connection with, the granting of the Options, the issuance or purchase of Shares or other rights hereunder, or the taking of any other action hereunder (a “Plan Action”), then no such Plan Action shall be taken, in whole or in part, unless and until such consent shall have been effected or obtained to the full satisfaction of the Company. The term “consent” as used herein with respect to any action referred to in this Section 17 means (i) any and all listings, registrations or qualifications in respect thereof upon any securities exchange or under any federal, state or local law, rule or regulation, (ii) any and all written agreements and representations by the Employee with respect to the disposition of Shares, or with respect to any other matter, which the Company shall deem necessary or desirable to comply with the terms of any such listing, registration or qualification or to obtain an exemption from the requirement that any such listing, qualification or registration be made, (iii) any and all consents, clearances and approvals in respect of a Plan Action by any governmental or other regulatory bodies, and (iv) any and all consents or authorizations required to comply with, or required to be obtained under, applicable local law or otherwise required by the Company. Nothing herein shall require the Company to list, register or qualify the Shares of its common stock on any securities exchange.

Equity Award Agreement
March 4, 2008
Page 12.

18.	Invalidity and Enforcement. If any provision of this Agreement is deemed invalid or unenforceable, either in whole or in part, this Agreement will be deemed amended to delete or to modify, as set forth in this Section, the offending provision or provisions and to alter the bounds of this Agreement in order to render it valid and enforceable. The Company and the Employee specifically request that any court having jurisdiction over any dispute relating to this Agreement modify, if possible, any offending provision so that such provision will be enforceable to the maximum extent permitted by law.
19.	No Entitlements. This Agreement is not an employment agreement, and nothing in this Agreement or the Plan shall alter an Employee’s status as an “at-will” employee of the Company subject to the rights (if any) that the Employee may have under any employment agreement existing between the Company (or any subsidiary) and the Employee.
20.	Enforcement by Successors and Assigns. The Company and any of its successors or assignees may enforce the Company’s rights under this Agreement.
21.	Entire Agreement. Other than with respect to any existing nonsolicitation, non competition, nonuse, and non-disclosure obligations of the Employee, this Agreement constitutes the entire agreement between the Company and the Employee regarding the Options, the Restricted Shares and the Performance Shares. No modification of this Agreement will have any force or effect unless such modification is in writing, signed by the Chief Executive Officer (or Vice President, Human Resources) of the Company and the Employee, and expressly indicates an intent to modify this Agreement.
22.	Interpretation. Any dispute, disagreement or matter of interpretation which shall arise under the Agreement shall be finally determined by the Compensation Committee in its absolute discretion.
23.	Governing Law. This Agreement and all rights hereunder shall be governed by, and construed and interpreted in accordance with, the laws of the state of New York applicable to contracts made and to be performed entirely within such state. Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of any New York state court or federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in any such New York state court or, to the extent permitted by law, in such federal court. Each of the parties hereto 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. Each of the parties hereto irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in state or federal court in New York City. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
24.	Acknowledgements. By execution of this Equity Award Agreement, the Employee agrees that he/she has received and reviewed a copy of:
	(a) the Prospectus (link to Prospectus:
	http://questnet1.qdx.com/Business_Groups/Legal/policies/stock_option/stock_option.htm) relating to the Company’s Employee Equity Participation Program and;
	(b) the Quest Diagnostics Incorporated 2007 Annual Report (link to 2007 Annual Report:
	http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=DGX&script=700 to Shareholders and Form 10-K);
	(c) the Company’s Policy for Purchasing and Selling Securities (“the Policy”) (link to Trading Policy:
	http://questnet1.qdx.com/Business_Groups/Legal/policies/policies.htm.) The Employee further agrees to fully comply with the terms of the Policy; and
	(d) the Eligibility Policy.

Equity Award Agreement
March 4, 2008
Page 13.

Appendix A
Quest Diagnostics Incorporated
Performance Shares Award Terms
2008 – 2010 Performance Period

Baseline Year – 2007.

EPS- Fully diluted earnings per share from continuing operations. The Company’s EPS during the Baseline Year was $2.84.

Final Year – The Company’s Fiscal Year ended December 31, 2010.

Performance Period –January 1, 2008 through December 31, 2010.

Performance Goal(s) - Compound Annual Growth Rate (CAGR) in EPS for the Company from the Baseline Year through the end of the Final Year.

• The reported EPS results will include the annual compensation cost of the Company’s equity awards.

• Earnings (loss) from discontinued operations will be excluded from the Baseline Year and the Final Year in the calculation of CAGR.

• Final awards will be determined and paid by the March 15 following the end of the Performance Period based on the Company’s publicly filed information.

• The Earnings Multiple is determined pursuant to Section 3 of the Agreement based on CAGR.

Performance Share Vesting Period –February 1, 2008 through January 31, 2011.

Equity Award Agreement
March 4, 2008
Page 14.

Appendix B
Quest Diagnostics Incorporated
"Equity Award Eligibility Policy"

Equity Award Eligibility

Unreduced Work Schedule
One of the following salary grades:
	Corporate VP or Higher
	Salary Grade 53 or Higher
	Research & Development - Grade RD6 or Higher
	Medical Director - Grade MD2

For employees whose salary is administered outside the standard Quest structure (e.g., MedPlus, International, Clinical Trials Europe), a Quest Diagnostics salary grade has been assigned consistent with the above requirements. This grade is stored within the Company's Stock Administration System.

IMPORTANT: Meeting the criteria for “Equity Award Eligibility” does not guarantee an award. All grants are subject to a separate approval process.

EX-10.5

Exhibit 10.5

Quest Diagnostics Incorporated
Grant Certificate (CEO)

Employee Name: Surya N. Mohapatra
Employee Address:
Grant Date: March 4, 2008

OPTION TERMS:
Option Grant:	173,334 Options
Exercise Price:	$47.49
Option Expiration Date:	March 4, 2015
Vesting Schedule:
Vesting Dates	Vesting Percent	Incremental	Cumulative
March 4, 2009	33.3%	57,778	57,778
March 4, 2010	33.3%	57,778	115,556
March 4, 2011	33.4%	57,778	173,334
RESTRICTED SHARE TERMS:
Restricted Share Grant:	47,850 Shares
Vesting Schedule:
Vesting Dates	Vesting Percent	Incremental	Cumulative
March 4, 2009	25%	11,962	11,962
March 4, 2010	25%	11,963	23,925
March 4, 2011	50%	23,925	47,850
TARGET PERFORMANCE SHARES: Target Performance Shares: 47,850 Shares Performance Period: January 1, 2008 through December 31, 2010 Vesting Period: February 1, 2008 through January 31, 2011
This grant is subject in all respects to the terms of the attached Equity Award Agreement dated March 4, 2008 and to the terms of the Quest Diagnostics Incorporated Amended and Restated Employee Long-Term Incentive Plan (the “Plan”), which is incorporated by reference in the Agreement. Terms not defined in the Equity Award Agreement shall have the meaning ascribed in the Plan except for the terms “Cause”, “Change in Control”, “Date of Termination”, “Disability”, and “Good Reason”, which terms shall have the meanings set forth in the Employment Agreement dated as of July 31, 2006 (the “Employment Agreement”) between the Company and the Employee. Subject to the foregoing, except for the provisions of Section 4(d) of the Equity Award Agreement, the terms of the Employment Agreement dated as of July 31, 2006 between the Company and the Employee (the “Employment Agreement”) shall govern in the event of any conflict between them and the terms of the attched Equity Award Agreement.

By execution of this Grant Certificate, the Employee agrees that he has received and reviewed a copy of (a) the Prospectus relating to the Plan (link to Prospectus), (b) the Quest Diagnostics Incorporated 2007 Annual Report to Shareholders on Form 10-K (link to 2007 Annual Report), and (c) the Company’s Policy regarding Purchasing and Selling Securities (“the Policy”) (link to Trading Policy). The Employee further agrees to fully comply with the terms of the Policy.

Employee:

By:
	Surya N. Mohapatra

QUEST DIAGNOSTICS INCORPORATED
EQUITY AWARD AGREEMENT (CEO)

This Equity Award Agreement (the “Agreement”) dated as of March 4, 2008 between Quest Diagnostics Incorporated, 3 Giralda Farms, Madison, NJ 07940 (the “Company”) and the employee named in the attached grant certificate (the “Employee”) is subject in all respects to the Company’s Amended and Restated Employee Long-Term Incentive Plan (the “Plan”). All references to “Shares” means shares of the Company’s Common Stock.

	This Agreement shall become effective only after the Employee has executed and returned to the Executive Compensation Department (to the attention of Lisa Zajac (3 Giralda Farms, Madison, NJ 07940)) a signed copy of this Agreement (the signature page appears on the grant certificate) and shall be revoked if not executed and received by Lisa Zajac within thirty (30) days of receipt by the Employee.
1.	Award of Stock Options. The Company hereby awards to the Employee under the Plan the number of stock options (each, an “Option”) set forth in the attached grant certificate. Each Option entitles the Employee, subject to the terms and conditions of this Agreement and the Plan, to purchase from the Company at the exercise price set forth in the attached grant certificate (the “Exercise Price”) one Share (an “Option Share”). The Options shall vest and become exercisable on the terms set forth in Section 4. The Options shall expire on, and no Option Shares may be purchased pursuant to this Agreement after, the expiration date set forth in the attached grant certificate (the “Option Expiration Date”). The Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”) may, in its sole discretion, convert any or all of the Options at any time to a stock settled stock appreciation grant. The Options are not intended to be “incentive stock options” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), and this Agreement shall be construed and interpreted in accordance with such intention.
2.	Restricted Shares. The Company hereby awards to the Employee under the Plan the number of Shares set forth in the attached grant certificate (the “Restricted Shares”). The Restricted Shares shall vest on the terms set forth in Section 4.
3.	Performance Shares. The Employee shall be eligible to receive and vest in Shares as provided in this Section 3 and Section 5 based on (a) the number of number of target performance shares set forth in the attached grant certificate (“Target Performance Shares”) and (b) the Company’s performance during the Performance Period. Performance will be measured as of the end of the performance period set forth in the attached grant certificate (the “Performance Period”) based on the compound annual growth rate (“CAGR”) of the Company’s fully diluted earnings per share from continuing operations (“EPS”) during the Performance Period, by comparing the Company’s EPS during the Final Year of the Performance Period with the Company’s EPS during the Baseline Year (see Appendix A for these defined terms). After the Performance Period, the CAGR will be calculated and the number of Shares to be issued (subject to vesting under Section 5 and withholding of taxes under Section 16) shall be based upon the following formula (such number of Shares being the “Earned Performance Shares”):
	CAGR*	“Earnings Multiple”* multiplied by Target Performance Shares = Earned Performance Shares
	Greater Than or Equal to 20%	2 x Target Performance Shares = Earned Performance Shares
	Equal to 10%	1 x Target Performance Shares = Earned Performance Shares
	Less Than or Equal to 3%	0 x Target Performance Shares = 0 Shares
	*The Earnings Multiple for CAGR between 3% and 20% will be interpolated.
For example, if the Company’s CAGR from the Baseline Year to the Final Year of the Performance Period (fiscal year 2010) is 6.5%, an Earnings Multiple of 0.5 will be applied to the Target Performance Shares to calculate the Earned Performance Shares. The maximum Earnings Multiple is 2.0.

4.	Vesting of Stock Options and Restricted Shares.
	(a)	General Vesting Requirements. Except as otherwise provided below, the Options shall vest and become exercisable, and the Restricted Shares shall vest, on the vesting dates set forth in the attached grant certificate (the “Vesting Dates”) provided that the Employee is still in the employ of the Company on the applicable Vesting Date. Options shall be exercisable only to the extent vested. Vested Restricted Shares, net of required tax withholding as described in Section 16 below, will be transferred into the Employee’s account at the Company’s dedicated broker as soon as practicable after the date on which the Restricted Shares vest whether vesting occurs on a Vesting Date or as provided in Sections 4(b) through 4(g).

(b)	Termination of Employment Generally. If the Employee’s employment is terminated by the Company (other than for one of the reasons set forth in Sections 4(c) through 4(f) or the Employee terminates his employment for Good Reason prior to the third anniversary of the Grant Date, the Options and Restricted Shares scheduled to vest within the 24 month period (or 36 month period if the termination occurs within 90 days prior to a Change in Control) following the Date of Termination will vest on the appropriate date(s) as if the Employee remained an employee; and any other unvested Options and Restricted Shares shall be canceled on the Employee’s Date of Termination.
(c)	Non-Renewal of Employment Agreement. If the Employee’s employment is terminated as a result of the non-renewal of the Employment Agreement, the Options and the Restricted Shares scheduled to vest within the 24 -month period (or 36 month period if the termination occurs within 90 days prior to a Change in Control) following the Date of Termination will vest on the appropriate date(s) as if the Employee remained an employee; and any other unvested Options and the Restricted Shares shall be canceled on the Date of Termination.
(d)	Other Voluntary Termination. If the Employee terminates his employment other than for Good Reason or Disability or following non-renewal of the Employment Agreement, the Employee will vest on the Date of Termination in a number of Options and Restricted Shares determined by multiplying the number of Options (or Restricted Shares, as the case may be) that are scheduled to vest on the next Vesting Date by a fraction, (i) the numerator of which is the number of whole months from the most recent March 4 to the Date of Termination and (ii) the numerator of which is 12; and any other unvested Options and Restricted Shares will be canceled on the Date of Termination. No Options or Restricted Shares shall vest under this Section 4(d) if the Date of Termination occurs less than three months after the Grant Date.

	(e)	Death. If the Employee shall die while employed, on the date of the Employee’s death, all Options and all Restricted Shares shall vest.
	(f)	Disability. If the Employee’s employment shall terminate as a result of Disability, all Options and all Restricted Shares shall vest on the Date of Termination.
	(g)	Change in Control. All Options and all Restricted Shares shall vest immediately on a Change in Control, provided the Employee was employed by the Company on such date.
5.	Vesting of Performance Shares.
	(a)	Performance Share Vesting Period. Subject to the exceptions enumerated in Section 5, Earned Performance Shares will vest at the end of the vesting period as set forth in the attached grant certificate (the “Performance Share Vesting Period”) provided that the Employee is still in the employ of the Company at the end of the Performance Share Vesting Period. Earned Performance Shares, net of required tax withholding as described in Section 16 below, will be transferred into the Employee’s account at the Company’s dedicated broker as soon as practicable after the final calculation of the number of Earned Performance Shares but in any event on or prior to March 15, 2011.
	(b)	Change in Control. If a Change in Control occurs prior to the end of the Performance Share Vesting Period, then the number of Earned Performance Shares to be awarded to the Employee shall be equal to the greater of: (1) the number of Earned Performance Shares that would be awarded if the calculation under Section 3 is based on the most recent fiscal year end results of the Company (rather than the Final Year of the Performance Period) and (2) the number of Target Performance Shares. The number of Shares (if any) calculated in accordance with the preceding sentence, net of required tax withholding as described in Section 16 below, will be transferred to the Employee's account at the Company's dedicated broker within five business days after the consummation of the Change in Control. In the event that (and only in the event that), following such payment, the Company continues to file annual reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, including for the Final Year of the Performance Period, then following the end of the Performance Period, to the extent that the number of Earned Performance Shares calculated pursuant to Section 3 exceeds the number of Earned Performance Shares as calculated pursuant to the preceding sentence, then any additional Shares resulting from the calculation in accordance with Section 3 (net of the number of Shares previously delivered under the preceding sentence) will be so transferred as provided in Section 5(a). If the Employee terminated employment prior to the Change in Control, the Earned Performance Shares will vest or be pro-rated, as applicable, in accordance with Section 5(c).
	(c)	Adjustments to Earned Performance Shares and Vesting of Earned Performance Shares on Termination of Employment. The Employee (or, in the case of death, the Employee’s beneficiary or estate) shall be entitled to receive 100% of the Earned Performance Shares calculated pursuant to Section 3, and such Earned Performance Shares shall not be subject to a service-based vesting requirement, if prior to the end of the Performance Share Vesting Period the Employee’s employment terminates by reason of death or Disability. The number of Earned Performance Shares calculated pursuant to Section 3 to which the Employee is entitled will be adjusted in the following circumstances if:

		(i)	the Employee’s employment with the Company ends prior to the end of the Performance Share Vesting Period by reason of involuntary termination (other than for Cause) or voluntary termination for Good Reason or following non-renewal of the Employment Agreement, the Employee shall vest in the number of Earned Performance Shares determined by multiplying the Earned Performance Shares by a fraction, (A) the numerator of which is the number of full months that the Employee was employed by the Company during the Performance Share Vesting Period plus 24 (but in no event shall the numerator exceed the number of months in the Performance Share Vesting Period) and (B) the denominator of which is the number of months in the Performance Share Vesting Period; and the balance of the Earned Performance Shares will be canceled; provided, however, that if the Date of Termination occurs within 90 days prior to a Change in Control, then the Employee shall vest in all of the Earned Performance Shares; or
		(ii)	the Employee terminates his employment with the Company other than by reason of death or Disability or as contemplated by Section 5(c)(i) prior to the end of the Performance Share Vesting Period, the Employee shall vest in the number of Earned Performance Shares determined by multiplying the Earned Performance Shares by a fraction, (A) the numerator of which is the number of full months that the Employee was employed by the Company during the Performance Share Vesting Period and (B) the denominator of which is the number of months in the Performance Share Vesting Period; and the balance of the Earned Performance Shares will be canceled.
6.	Cancellation. Notwithstanding anything to the contrary contained herein, and to the extent not inconsistent with the terms of the Employment Agreement, the Employee will not vest in any additional Options, the Employee may not exercise any Options, whether or not vested, and all Restricted Shares and Target Performance Shares (whether or not vested or earned) shall be canceled under the following circumstances:
	(a)	If the Employee is terminated for Cause; or
	(b)	if the Employee is subject to the Executive Share Ownership Policy, as such policy may be amended from time to time (the “Ownership Policy”), and the Employee makes any false attestation under the Ownership Policy; or
	(c)	if the Employees violates (i) the terms of Section 12 of this Agreement and/or (ii) the non solicit or non-compete obligations set forth in the Employment Agreement (the “Other Restrictive Covenant”), it being understood that cancellation pursuant to this Section 16 shall be in addition to any equitable and legal rights the Company has or may have.
		The Employee understands that the cancellation of any awards or rights under this Agreement is only one element of the damages potentially sustained by the Company for (i) any action described in this Section 6 or (ii) a violation of Section 12 of this Agreement or any Other Restrictive Covenant, and such cancellation shall not constitute a release of any claim that the Company may have for damages, past, present, or future. In addition, a breach by the Employee of any provisions of Section 12 of this Agreement or any Other Restrictive Covenant that occurs after any exercise of the Option or delivery of Shares pursuant to this Agreement (including any breach occurring after the Date of Termination) shall cause the exercise of any Option and the delivery of any Option Shares, Restricted Shares or Earned Performance Shares under this Agreement to be rescinded (and if the Employee has previously sold the Shares issued pursuant to this Agreement, the Employee would be required to pay back to the Company the pre-tax proceeds received from the sale of such Shares).
7.	Executive Share Ownership Policy.
	(a)	The Employee is subject to the Ownership Policy. In consideration of the grant of the awards under this Agreement, the Employee agrees that the Options and all Option Shares, Restricted Shares and Performance Shares shall be subject to cancellation pursuant to Section 6(b) of this Agreement and all Options, Option Shares, Restricted Shares and Performance Shares granted to the Employee by the Company prior to the date hereof (the “Prior Awards”) shall be subject to cancellation pursuant to Section 6(b) of this Agreement (for false attestation under the Ownership Policy), the Shares obtained on exercise of such Prior Awards after the date hereof shall be subject to the Ownership Policy pursuant to Section 7(b) of this Agreement and the terms of Sections 6(b), 7(a) and 7(b) hereof are made a part of the terms of each of the Prior Awards.
	(b)	Any Shares issued under this Agreement or pursuant to any Prior Award (in each case net of tax withholdings) issued under this Agreement are subject to the Ownership Policy. The Employee hereby acknowledges and agrees that the investment risk associated with the retention of any Shares, whether pursuant to the Ownership Policy or otherwise, is the sole responsibility of the Employee and the Employee hereby holds the Company harmless against any claim of loss related to the retention of the Shares.
8.	Non-Transferability; Voting Rights and Dividends.
	a)	The awards and rights under this Agreement shall not be transferable other than by will or the laws of descent and distribution. The Options may be exercised during the lifetime of the Employee only by the Employee except to the extent of a disability (as defined in Section 22(e) (3) of the Code), in which case the Options may be exercised by the Employee’s legal representative.

	b)	Restricted Shares shall be registered in book entry in the name of the Employee and shall not be transferred to the Company’s dedicated broker on the Employee’s behalf or otherwise released to the Employee until the Restricted Shares have vested in accordance with this Agreement. The Employee acknowledges that the certificates representing Restricted Shares may be stamped with a legend indicating the possibility of cancellation and the restrictions on transfer. The Employee may vote the Restricted Shares and receive all dividends declared and paid by the Company on the Restricted Shares subject to withholding to satisfy applicable tax requirements.
	(c)	The Employee will not have any voting, dividend or other rights as a stockholder with respect to any Option Shares, Target Performance Shares or Earned Performance Shares prior to the date on which he is recorded as the holder of such Option Shares or Earned Performance Shares on the records of the Company. The Employee understands that the Option Shares will not be issued to the Employee until after (and to the extent that) the Options are exercised. The Employee also understands that, except as provided in Section 5(b), Earned Performance Shares (net of required tax withholding as described in Section 16 below) will not be issued to the Employee until after the final calculation of the Earnings Multiple as contemplated by Section 3 and any adjustment under Section 5, it being understood that such issuance shall occur in any event on or prior to March 15, 2011. Until Shares have been delivered to or on behalf of the Employee in respect of any Earned Performance Shares, the Employee shall have only the rights of a general unsecured creditor.
	(d)	Until Shares are transferred to the Employee’s account at the Company’s dedicated broker or the Employee otherwise receives physical possession of any such Shares, the Employee shall have no right to sell, assign, transfer, pledge or otherwise encumber Shares in any manner. Any purported attempt to sell, assign, transfer, pledge or otherwise encumber any award under this Agreement will be void and shall result in the cancellation of such award. Unless otherwise provided at the time of such transfer or delivery to the Employee of any Vested Restricted Shares or any Shares issued in respect of any Earned Performance Shares or Shares issued upon full or partial exercise of the Options, upon such transfer or delivery to the Employee the Shares will not be subject to any restrictions on transfer other than those that may arise under the securities laws or the Company’s policies, but the Shares shall remain subject to cancellation as provided in Section 6.
9.	Exercise of Options. The Employee may exercise Options in accordance with the procedures specified by the Company from time to time. The Exercise Price of Options shall be paid in full with, or in a combination of (a) cash or (b) Shares that have been owned by the Employee, and have been fully vested and freely transferable by the Employee, for at least six months preceding the date of exercise of the Option, duly endorsed or accompanied by stock powers executed in blank. The Company in its discretion may permit the Employee (if the Employee owns Shares that have been owned by the Employee, and have been fully vested and fully transferable by the Employee, for at least six months preceding the date of exercise) to “attest” to his ownership of the number of Shares required to pay all or part of the purchase price (and not require delivery of the Shares), in which case the Company will deliver to the Employee the number of Shares to which the Employee is entitled, net of the “attested” Shares. If payment is made in whole or in part with Shares, the value of such Shares shall be the mean between its high and low prices on the day of purchase as reported by The New York Times or another newspaper or information source designated by the Company following the close of business on the date of exercise. No “reload” or other option will be granted by reason of any such exercise.
10.	Exercise of Option After Termination of Employment, Death or Disability. The provisions covering the exercise of the Options following the Date of Termination are as follows, provided that in no event may any Options be exercised after the Option Expiration Date:

	(a)	Termination of Employment Generally. If the Employee’s employment is terminated by the Company (other than for one of the reasons set forth in Sections 10(b) through 10(e)) or the Employee terminates employment for Good Reason, the Options that were vested as of the Date of Termination, and any Options that pursuant to this Agreement vest after the Date of Termination, may be exercised (to the extent vested) through the Option Expiration Date.
	(b)	Non-Renewal of Employment Agreement. If the Employee’s employment is terminated as a result of the non-renewal of the Employment Agreement, the Options that were vested as of the Date of Termination, and any Options that pursuant to this Agreement vest after the Date of Termination, may be exercised (to the extent vested) through the Option Expiration Date.
	(c)	Other Voluntary Termination. If the Employee terminates his employment other than as contemplated by Sections 10(a), 10(b), 10(d) or 10(e), the Options that have vested simultaneously with or before the Employee’s Date of Termination may be exercised for ninety (90) days following such termination.
	(d)	Termination as a result of death or Disability. If the Employee’s employment is terminated by reason of death or Disability, the Options may be exercised through the Option Expiration Date.
	(e)	Termination after a Change in Control. If the Employee’s employment is terminated for any reason other than for Cause (whether voluntary or involuntary) after a Change in Control, the Options may (to the extent vested) be exercised through the Option Expiration Date.
11.	Consideration. In consideration for the awards under this Agreement, the Employee hereby agrees to be bound by the Nondisclosure of Confidential Information provisions set forth in Section 12 of this Agreement and the Other Restrictive Covenant. For purposes of Sections 6 and 12, the term “Company” shall mean the Company, its affiliates, divisions and subsidiaries, or any other entity in which the Company, directly or indirectly, controls or has an ownership or equity interest equal to or greater than 25.0% of the combined voting power of the entity's then outstanding securities, and their respective successors and assigns.
12.	Nondisclosure of Confidential Information.
	(a)	For purposes of this Agreement, the term “Confidential Information” shall mean all ideas, inventions, data, databases, know-how, processes, methods, practices, specifications, raw materials and preparations, compositions, designs, devices, fabrication techniques, technical plans, algorithms, computer programs, protocols, client information, medical records, documentation, customer names and lists, supplier names and lists, price lists, supplier names and lists, apparatus, business plans, marketing plans, financial information, chemical and biological reagents, business methods and systems, literary and graphical and audiovisual works and sound recordings, mask works, computer programs, and the like, and potential trade names, trademarks, and logos, in whatever form or medium and which have commercial value, and whether or not designated or marked “Confidential” or the like, which the Employee learns, acquires, conceives, creates, develops, or improves while employed by the Company and which (1) relate to the past, current, or prospective business of the Company or its subsidiaries and (a) which have not previously been publicly disclosed without restrictions on use by the Company, or (b) which Employee knows or has good reason to know are not generally publicly known; or (2) are received by the Company from a third party under an obligation of confidentiality to the third party which the Employee knows or reasonably should have known are confidential to such third party. “Confidential Information” shall not include any information known generally to the public (other than as a result of an unauthorized disclosure by the Employee).
	(b)	The Employee recognizes and acknowledges that during his employment with the Company, the Employee may be given access to or develop Confidential Information. The Employee shall not use or disclose (directly or indirectly) any Confidential Information (whether or not developed by the Employee) at any time or in any manner, except as authorized and required in the course of employment with the Company. The Employee shall not disclose to the Company or use on behalf of the Company any Confidential Information obtained from any former employer or any other third party. All documents and things embodying Confidential Information, whether prepared by the Employee or otherwise coming into the Employee’s possession, are the exclusive property of the Company, and must not be removed from any of its premises except as required in the course of employment with the Company. All such documents and things shall be promptly returned by the Employee to the Company upon the request of the Company and on any termination of employment with the Company. The Employee will not remove any Confidential Information such as documents or things or retain them in whole or part in any manner. The Employee shall ensure that any export of Confidential Information undertaken by the Employee or with his knowledge or approval shall be in compliance with all applicable laws. Notwithstanding the foregoing, the Employee shall be permitted to retain documents and information to the extent permitted by Section 12(g) and Section 14 of the Employment Agreement and shall have other rights set forth in Section 12(g) of the Employment Agreement.
	(c)	The Employee shall promptly disclose to the Company all Confidential Information which the Employee creates, conceives, develops, or improves (either alone or with others) referred to below as a “Creation” while in the employment of the Company, if the Creation either: (1) relates to any actual or demonstrably contemplated business, or research or development project, of the Company or its subsidiaries, or to any reasonable extension or variation thereof; or (2) results from any work performed by the Employee for the Company; or (3) was created utilizing any of the Company’s equipment, supplies, facilities, time, or Confidential Information. The Employee shall keep complete,

		accurate, and authentic records on all Creations in the manner and form requested by the Company. The Employee shall promptly disclose to the Company, in confidence, all patent, copyright, and trademark applications filed by the Employee within one (1) year after termination of employment with the Company and which relate to any field in which the Employee worked at the Company. The Employee agrees that any such application for a patent, copyright registration, trademark registration, mask work registration, or similar right filed within one (1) year after termination of employment with the Company shall be presumed to relate to a Creation of the Employee created during employment at the Company, unless the Employee can prove otherwise.
	(d)	The Employee hereby assigns to the Company all of the Employee’s rights in all of the above-described Creations. All such Creations that are subject to copyright or mask work protection are explicitly considered by the Employee and the Company to be works made for hire to the extent permitted by law. To the extent that any such Creations are subject to copyright protection and are not works made for hire, any and all of the Employee’s copyright and mask work interest therein are hereby assigned by the Employee to the Company, and are the exclusive property of the Company.
	(e)	The Employee agrees to assist the Company in obtaining and/or maintaining patents, copyrights, trademarks, mask work rights, and similar rights to any Creations assigned by the Employee to the Company, if and to the extent that the Company, in its sole discretion, requests such assistance, the Employee shall sign all documents and do all other things deemed necessary by the Company, at the Company’s expense, to obtain and/or maintain such rights, to provide confirmatory evidence of the Employee’s assignment of such Creations to the Company, to defend them from invalidation, and to protect them against infringement by other parties. The obligations of this Section 12(e) are continuing and survive the termination of the Employee’s employment with the Company. The Employee irrevocably appoints the Chairman of the Compensation Committee (with powers of delegation) to act as the Employee’s agent and attorney-in-fact to perform all acts as the Employee’s agent and to file, prosecute, and maintain applications and registrations for patents, trademarks, copyrights, mask work rights, and similar rights to any Creations assigned by the Employee to the Company under this Agreement, such appointment being effective both during the Employee’s employment by Company, and thereafter if the Employee (1) refuses to perform those acts, or (2) is unavailable, within the meaning of any applicable laws. The Employee acknowledges that the grant of the foregoing power of attorney is coupled with an interest, is irrevocable, and shall survive his death or disability.
13.	[Intentionally Omitted]
14.	Damages and Injunctive Relief. The Employee understands that if the terms of Section 12 of this Agreement are violated, the Company would be seriously and irreparably damaged, and agrees that the Company will be entitled to seek appropriate remedies for those damages, including, without limitation, injunctive relief to enforce any provision of this Agreement and all reasonable attorney’s fees incurred by the Company to enforce the terms of Section 12 of this Agreement.
15.	The Plan. The Plan is incorporated herein by reference. The Employee acknowledges that he has read the terms of the Plan and that those terms shall govern in the event of any conflict with the terms of this Agreement.
16.	Taxes. The partial or full exercise of any Option, the vesting of any Restricted Shares and the delivery of any Earned Performance Shares under this Agreement will result in the Employee’s recognition of income for U.S. federal income tax purposes and shall be subject to tax and tax withholdings as appropriate. The Company may make such provisions and take such steps as it may deem necessary or appropriate for the withholding of all federal, state, local and other taxes required or permitted by law to be withheld with respect to the exercise of the Option. On the vesting of any Restricted Shares and payment of any Earned Performance Shares, the Company will reduce the number of Shares to be delivered to the Employee by the amount of the taxes due (with the Shares valued at the mean between the high and low selling prices on the date that the Shares are valued for purposes of reporting compensation for Federal income tax purposes).
17.	Consent Requirement. If the Company shall at any time determine that any consent (as hereinafter defined) is necessary or desirable as a condition of, or in connection with, the granting of the Options, the issuance or purchase of Shares or other rights hereunder, or the taking of any other action hereunder (a “Plan Action”), then no such Plan Action shall be taken, in whole or in part, unless and until such consent shall have been effected or obtained to the full satisfaction of the Company. The term “consent” as used herein with respect to any action referred to in this Section 17 means (i) any and all listings, registrations or qualifications in respect thereof upon any securities exchange or under any federal, state or local law, rule or regulation, (ii) any and all written agreements and representations by the Employee with respect to the disposition of Shares, or with respect to any other matter, which the Company shall deem necessary or desirable to comply with the terms of any such listing, registration or qualification or to obtain an exemption from the requirement that any such listing, qualification or registration be made, (iii) any and all consents, clearances and approvals in respect of a Plan Action by any governmental or other regulatory bodies, and (iv) any and all consents or authorizations required to comply with, or required to be obtained under, applicable local law or otherwise required by the Company. Nothing herein shall require the Company to list, register or qualify the Shares of its common stock on any securities exchange.

18.	Invalidity and Enforcement. If any provision of this Agreement is deemed invalid or unenforceable, either in whole or in part, this Agreement will be deemed amended to delete or to modify, as set forth in this Section, the offending provision or provisions and to alter the bounds of this Agreement in order to render it valid and enforceable. The Company and the Employee specifically request that any court having jurisdiction over any dispute relating to this Agreement modify, if possible, any offending provision so that such provision will be enforceable to the maximum extent permitted by law.
19.	No Entitlements. This Agreement is not an employment agreement, and nothing in this Agreement or the Plan shall alter an Employee’s status as an “at-will” employee of the Company subject to the rights of Employee under the Employment Agreement.
20.	Enforcement by Successors and Assigns. The Company and any of its successors or assignees may enforce the Company’s rights under this Agreement.
21.	Entire Agreement. Except as otherwise provided in the Employment Agreement, this Agreement constitutes the entire agreement between the Company and the Employee regarding the Options, the Restricted Shares and the Performance Shares. No modification of this Agreement will have any force or effect unless such modification is in writing, signed by the Chairman of the Compensation Committee and the Employee, and expressly indicates intent to modify this Agreement.
22.	Interpretation. Any dispute, disagreement or matter of interpretation which shall arise under the Agreement shall be finally determined by the Compensation Committee in its absolute discretion.
23.	Governing Law. This Agreement and all rights hereunder shall be governed by, and construed and interpreted in accordance with, the laws of the state of New York applicable to contracts made and to be performed entirely within such state. Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of any New York state court or federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in any such New York state court or, to the extent permitted by law, in such federal court. Each of the parties hereto 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. Each of the parties hereto irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in state or federal court in New York City. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
24.	Acknowledgements. By execution of this Equity Award Agreement, the Employee agrees that he has received and reviewed a copy of: (a) the Prospectus (link to Prospectus: http://questnet1.qdx.com/Business_Groups/Legal/policies/stock_option/stock_option.htm) relating to the Company’s Employee Equity Participation Program and; (b) the Quest Diagnostics Incorporated 2007 Annual Report (link to 2007 Annual Report: http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=DGX&script=700 to Shareholders and Form 10-K); and (c) the Company’s Policy for Purchasing and Selling Securities (“the Policy”) (link to Trading Policy: http://questnet1.qdx.com/Business_Groups/Legal/policies/policies.htm.) The Employee further agrees to fully comply with the terms of the Policy.

Appendix A
Quest Diagnostics Incorporated
Performance Shares Award Terms
2008 – 2010 Performance Period

Baseline Year- 2007.

EPS- Fully diluted earnings per share from continuing operations. The Company’s EPS during the Baseline Year was $2.84.

Final Year – The Company’s Fiscal Year ended December 31, 2010.

Performance Period –January 1, 2008 through December 31, 2010.

Performance Goal(s) - Compound Annual Growth Rate (CAGR) in EPS for the Company from the Baseline Year through the end of the Final Year.

• The reported EPS results will include the annual compensation cost of the Company’s equity awards.

• Earnings (loss) from discontinued operations will be excluded from the Baseline Year and the Final Year in the calculation of CAGR.

• Final awards will be determined and paid by the March 15 following the end of the Performance Period based on the Company’s publicly filed information.

• The Earnings Multiple is determined pursuant to Section 3 of the Agreement based on CAGR.

Performance Share Vesting Period –February 1, 2008 through January 31, 2011.

EX-10.6

Exhibit 10.6

CONFIDENTIAL

Amendment #2 to the
Letter of Agreement between
SmithKline Beecham Corporation and
Quest Diagnostics Incorporated

1.	The purpose of this Amendment #2 to the Letter of Agreement effective January 1, 2008 between SmithKline Beecham Corporation d/b/a GlaxoSmithKline and Quest Diagnostics Incorporated (hereinafter the “LOA”) is to extend the term referenced in section 2 of the LOA to the earlier of (i) June 30, 2008, or (ii) the full execution of a new comprehensive Global Clinical Trials Agreement.
2.	All other terms and conditions of the LOA shall remain in full force and effect.
3.	The parties hereto agree to this Amendment #2 to the LOA by their authorized signatures below.

SMITHKLINE BEECHAM CORPORATION	QUEST DIAGNOSTICS INCORPORATED
/s/ Paula M. Russella	/s/ Daniel P. Megronigle
Paula M. Russella	Daniel P. Megronigle
Sourcing Group Manager	Executive Director, Sales & Marketing
May 21, 2008	May 15, 2008
Date	Date

EX-10.7

Exhibit 10.7

CONFIDENTIAL

Amendment #3 to the
Letter of Agreement between
SmithKline Beecham Corporation and
Quest Diagnostics Incorporated

1.	The purpose of this Amendment #3 to the Letter of Agreement effective January 1, 2008 between SmithKline Beecham Corporation d/b/a GlaxoSmithKline and Quest Diagnostics Incorporated (hereinafter the “LOA”) is to extend the term referenced in section 2 of the LOA to the earlier of (i) July 31, 2008, or (ii) the full execution of a new comprehensive Global Clinical Trials Agreement.
2.	All other terms and conditions of the LOA shall remain in full force and effect.
3.	The parties hereto agree to this Amendment #3 to the LOA by their authorized signatures below.

SMITHKLINE BEECHAM CORPORATION	QUEST DIAGNOSTICS INCORPORATED
/s/ Paula M. Russella	/s/ Daniel P. Megronigle
Paula M. Russella	Daniel P. Megronigle
Sourcing Group Manager	Executive Director, Sales & Marketing
June 26, 2008	25 June 2008
Date	Date

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Surya N. Mohapatra, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Quest Diagnostics Incorporated;
2.	Based on my knowledge, this 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 report;
3.	Based on my knowledge, the financial statements, and other financial information included in this 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 report;
4.	The registrant’s other certifying officer 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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 report is being prepared;
	b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this 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
	d)	disclosed in this 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 officer 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 the 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.

July 24, 2008

By	/s/	Surya N. Mohapatra
		Surya N. Mohapatra, Ph.D.
		Chairman of the Board, President and
		Chief Executive Officer

EX-31.2

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 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 report;
3.	Based on my knowledge, the financial statements, and other financial information included in this 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 report;
4.	The registrant’s other certifying officer 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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 report is being prepared;
	b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this 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
	d)	disclosed in this 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 officer 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 the 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.

July 24, 2008

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

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. § 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

          Pursuant to 18 U.S.C. § 1350, the undersigned certifies that, to the best of my knowledge, the Quarterly Report on Form 10-Q for the period ended June 30, 2008 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. § 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: July 24, 2008	/s/	Surya N. Mohapatra
		Surya N. Mohapatra, Ph.D.
		Chairman of the Board,
		President and
		Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. § 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

          Pursuant to 18 U.S.C. § 1350, the undersigned certifies that, to the best of my knowledge, the Quarterly Report on Form 10-Q for the period ended June 30, 2008 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. § 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: July 24, 2008	/s/	Robert A. Hagemann
		Robert A. Hagemann
		Senior Vice President and
		Chief Financial Officer