Exhibit 4.5
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY STATE SECURITIES LAWS AND MAY NOT BE PLEDGED, SOLD, OFFERED FOR SALE,
TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE REGISTRATION
REQUIREMENTS OF SUCH ACT AND SUCH STATE SECURITIES LAWS OR UNLESS EXEMPTIONS
THEREFROM ARE APPLICABLE WITH RESPECT TO SUCH PLEDGE, SALE, OFFER, TRANSFER OR
OTHER DISPOSITION.
[THIS NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") AS DEFINED BY SECTION
1273(a)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. THE FOLLOWING
INFORMATION IS PROVIDED PURSUANT TO THE INFORMATION REPORTING REQUIREMENTS SET
FORTH IN TREASURY REGULATION 1.1275-3.
THE ISSUE PRICE OF THIS DEBT INSTRUMENT IS [$___________]. THE AMOUNT OF OID ON
THIS DEBT INSTRUMENT IS [$___________]. THE ISSUE DATE OF THIS DEBT INSTRUMENT
IS [_______________]. THE PER ANNUM YIELD TO MATURITY OF THIS DEBT INSTRUMENT IS
[___]% COMPOUNDED SEMI-ANNUALLY.]1
LABONE, INC.
Series A Senior Subordinated Note
Due August 31, 2008
$[__________]<2> Dated: [__________]<3>
FOR VALUE RECEIVED, the undersigned, LABONE, INC., a Missouri
corporation (the "Company"), hereby promises to pay, in accordance with Section
2 below, to [NAME OF PURCHASER] or the registered assigns thereof (the
"Holder"), the principal sum of [_________] DOLLARS ($[____])<2> as follows:
(i) [_________] DOLLARS ($[____])<4> shall be due and payable on August 31,
2006 (the "First Amoritization Date"), (ii) [_________] DOLLARS ($[____])<5>
shall be due and payable on August 31, 2007 (the "Second Amortization Date")
and (iii) [_________] DOLLARS ($[____])5 shall be due and payable on August 31,
2008
-------------------------
<1> OID legend to appear in Series B Notes only.
<2> Principal sum of the Note.
<3> Date of issuance of the Note.
<4> Twenty-five percent of the principal sum of the Note.
<5> Fifty percent of the principal sum of the Note.
(the "Maturity Date"), and to pay interest on the principal sum of this Note in
accordance with Sections 2 and 3 below.
1. Notes.
[This Note is one of a duly authorized and issued series of Notes of
the Company, consisting of $15,000,000 in aggregate principal amount of Notes
designated "Series A Senior Subordinated Notes due August 31, 2008" that have
been issued pursuant to a Securities Purchase Agreement dated as of August 31,
2001 among the Company, Welsh, Carson, Xxxxxxxx & Xxxxx IX, L.P. and the other
purchasers named on Schedule I thereto (the "Securities Purchase Agreement"). As
used herein, the term "Note" or "Notes" includes all of such Series A Senior
Subordinated Notes due August 31, 2008 as well as (i) all Series B Senior
Subordinated Notes due August 31, 2008 that are from time to time issued by the
Company as contemplated by Section 6.05 of the Securities Purchase Agreement,
(ii) all Deferred Interest Notes (as defined in Section 3(d) below) issued in
respect of any Notes and (iii) all Notes subsequently issued upon exchange or
transfer of any Notes or otherwise in substitution therefor.]<6>
[This Note is one of a duly authorized and issued series of Notes of
the Company, consisting of up to $15,000,000 in aggregate principal amount of
Notes designated "Series B Senior Subordinated Notes due August 31, 2008" that
have been or will be issued as contemplated by Section 6.05 of the Securities
Purchase Agreement dated as of August 31, 2001 among the Company, Welsh, Carson,
Xxxxxxxx & Xxxxx IX, L.P. and the other purchasers named on Schedule I thereto
(the "Securities Purchase Agreement"). As used herein, the term "Note" or
"Notes" includes all of such Series B Senior Subordinated Notes due August 31,
2008 as well as (i) all Series A Senior Subordinated Notes due August 31, 2008
that were issued by the Company on August 31, 2001 pursuant to the Securities
Purchase Agreement, (ii) all Deferred Interest Notes (as defined in Section 3(d)
below) issued in respect of any Notes and (iii) all Notes subsequently issued
upon exchange or transfer of any Notes or otherwise in substitution
therefor.]<7>
2. Payments of Principal and Interest.
(a) Subject to Section 3(d) below, all payments of principal and
interest on this Note shall be in such coin or currency of the United States of
America as at the time of payment shall be legal tender for payment of public
and private debts. All such payments shall be made by check mailed to the person
deemed the Holder of this Note in accordance with Section 6 below at the address
for such person appearing in the Register (as defined in Section 4 below) or, if
arrangements reasonably satisfactory to the Company are made, by wire transfer
of immediately available funds to an account specified by such Holder.
--------------------------
<6> For inclusion in Series A Notes.
<7> For inclusion in Series B Notes.
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(b) If any payment of principal or interest on this Note is due on a
day which is not a Business Day, it shall be due on the next succeeding Business
Day. For purposes of this Note, "Business Day" shall mean any day other than a
Saturday, Sunday or a legal holiday or day on which banks are authorized or
required to be closed in Kansas City, Missouri or New York, New York.
3. Interest on the Note.
(a) The Company shall pay interest on the unpaid principal amount
from time to time outstanding under this Note at the rate of 11% per annum;
provided, that once any principal amount hereof or interest hereon shall have
become due and payable, if such amount is not timely paid, the Company shall
thereafter pay interest on any such overdue principal amount and, to the extent
permitted by applicable law, on any such overdue interest, at the rate of 13%
per annum until such amounts shall have been paid in full in cash. Interest on
this Note shall be computed on the basis of actual days elapsed over a 360-day
year.
(b) Interest on this Note shall be payable in cash semi-annually in
arrears on each June 30 and December 31 hereafter (each an "Interest Payment
Date") and on the Maturity Date; provided, that with respect to any principal
amount of this Note that shall at any time become due and payable prior to the
Maturity Date (whether by means of amortization, acceleration or otherwise), all
accrued and unpaid interest on such principal amount hereof shall also become
due and payable on such earlier date; provided, further, that interest on
overdue amounts shall be payable on demand.
(c) Notwithstanding anything to the contrary contained above, the
Company may elect (by providing not less than ten days prior written notice of
such election to the Holder at the address for such Holder appearing in the
Register) to pay the interest that would otherwise be due and payable in cash
hereunder on December 31, 2001 and/or June 30, 2002 in-kind rather than in cash
(any such election, an "Interest Deferral Election"). If any Interest Deferral
Election is made pursuant to this Section 3(c), the Company shall satisfy its
obligation to pay interest hereunder by issuing to the Holder a Note in a
principal amount equal to the product of (A) such unpaid amount of interest and
(B) 14/11 (each a "Deferred Interest Note"). Deferred Interest Notes shall be in
substantially the form hereof and shall be dated as of the Interest Payment Date
to which such Interest Deferral Election applies.
4. Transfer, Etc. of Notes. The Company shall keep at its office or
agency maintained as provided in Section 9(a) a register in which the Company
shall provide for the registration of this Note and for the registration of
transfer and exchange of this Note (the "Register"). The Holder may, at its
option, and either in person or by its duly authorized attorney, surrender the
same for registration of transfer or exchange at the office or agency of the
Company maintained as provided in Section 9(a) and, without expense to such
Holder (except for taxes or governmental charges imposed in connection
therewith), receive in exchange therefor a Note or Notes each in such
denomination or denominations as such Holder may request, dated as of the date
to which interest has been paid on the Note or Notes so surrendered for transfer
or exchange, for the same aggregate principal amount as the then unpaid
principal
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amount of the Note or Notes so surrendered for transfer or exchange, and
registered in the name of such person or persons as may be designated by such
Holder. Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed, or shall be accompanied by a written instrument
of transfer, satisfactory in form to the Company, duly executed by the Holder or
its attorney duly authorized in writing. Every Note so made and delivered in
exchange for such Note shall in all other respects be in the same form and have
the same terms and legends thereon as such Note. No transfer or exchange of any
Note shall be valid unless (x) made in the foregoing manner at such office or
agency and (y) registered under the Securities Act of 1933, as amended, or any
applicable state securities laws or unless an exemption from registration is
available.
5. Loss, Theft, Destruction or Mutilation of Note. Upon receipt of
evidence satisfactory to the Company of the loss, theft, destruction or
mutilation of this Note, and, in the case of any such loss, theft or
destruction, upon receipt of an affidavit of loss and an indemnity reasonably
acceptable in form and substance to the Company from the Holder, or in the case
of any such mutilation, upon surrender and cancellation of this Note, the
Company will make and deliver, in lieu of this Note, a new Note of like tenor
and unpaid principal amount and dated as of the date to which interest has been
paid on this Note.
6. Persons Deemed Holders. The Company may deem and treat the person
in whose name this Note is registered in the Register as the Holder of this Note
for the purpose of receiving payment of principal of and interest on this Note
and for all other purposes whatsoever, whether or not this Note shall be
overdue.
7. Optional Prepayments.
(a) Optional Prepayment. Subject to Section 7(c) below, upon notice
given as provided in Section 7(b) below, the Company may, at any time and from
time to time after August 31, 2003, at its option, prepay all or any portion of
the principal amount of this Note, without premium or penalty, together with any
accrued and unpaid interest thereon through the date of such prepayment. Except
as provided in Section 8 below, prior to August 31, 2003, the Company shall have
no right to prepay this Note without the prior written consent of the Holder.
(b) Notice of Optional Prepayment. The Company shall give written
notice of any prepayment of this Note or any portion hereof pursuant to Section
7(a) not less than ten nor more than 60 days prior to the date fixed for such
prepayment. Such notice of prepayment and all other notices to be given to the
Holder of this Note shall be given by registered or certified mail at its
address designated on the Register on the date of mailing such notice of
prepayment or other notice. Upon notice of prepayment being given as aforesaid,
the Company covenants and agrees that it will prepay, on the date therein fixed
for prepayment, this Note or the portion hereof, as the case may be, so called
for prepayment. Any prepayment of less than all of the outstanding principal
amount of this Note and all accrued but unpaid interest hereon pursuant to this
Section 7 shall be applied as follows: first, to the payment of accrued and
unpaid interest on the principal amount being repaid, second, to reduce the
amount of principal otherwise payable on the Maturity Date, third, to reduce the
amount of principal otherwise payable on the Second
4
Amortization Date, and fourth, to reduce the amount of principal otherwise
payable on the First Amortization Date.
(c) Pro Rata Treatment of Notes. Any prepayment of some but less than
all of the principal of and accrued interest on the Notes or any purchase,
redemption or retirement of less than all of the principal of and accrued
interest on the Notes shall be made on a pro rata basis among all of the Notes
based on the aggregate principal amounts thereof.
(d) Interest After Date Fixed for Prepayment. If this Note or a
portion hereof is called for prepayment as herein provided, this Note or such
portion shall cease to bear interest on and after the date fixed for such
prepayment unless, upon presentation for such purpose, the Company shall fail to
pay this Note or such portion, as the case may be, in which event this Note or
such portion, as the case may be, and, so far as may be lawful, any overdue
installment of interest, shall bear interest on and after the date fixed for
such prepayment and until paid in full in cash at the rate per annum provided
herein for overdue amounts.
(e) Surrender of Note; Notation Thereon. Upon any prepayment of a
portion of the principal amount of this Note, the Holder, at its option, may
require the Company to execute and deliver at the expense of the Company (other
than for transfer taxes, if any), upon surrender of this Note, a new Note
registered in the name of such person or persons as may be designated by the
Holder for the principal amount of this Note then remaining unpaid, dated as of
the date to which the interest has been paid on the principal amount of this
Note then remaining unpaid, or may present this Note to the Company for notation
hereon of the payment of the portion of the principal amount of this Note so
prepaid.
8. Mandatory Prepayments. (a) If at any time while any of the Notes
shall be outstanding, a Change of Control (as hereinafter defined) shall occur,
then, the Company shall take such action as may be necessary, to provide funds
sufficient to, and obtain any consent necessary to, prepay the entire principal
amount of this Note on the Change of Control Payment Date (as hereinafter
defined) and, in connection with such prepayment, pay to such Holders (x) all
interest accrued thereon through the date of prepayment and (y) a premium equal
to 1% of the principal amount of this Note. Notwithstanding anything to the
contrary contained in this Section 8, the Holders of not less than a majority in
principal amount of the Notes then outstanding may waive any mandatory
prepayment otherwise required pursuant to this Section 8 by giving prior written
notice of such waiver to the Company within ten Business Days after written
notice of the Change of Control is given to the Holders.
(b) As used herein, the following terms shall have the
following meanings:
"Change of Control" shall mean (i) the sale, lease, transfer,
conveyance or other disposition (other than by way of merger or
consolidation), in one or a series of related transactions, of all or
substantially all the assets of the Company and its subsidiaries taken as
a whole to any "person" (as such term is used in Section 13(d)(3) of the
Exchange Act), (ii) the consummation of any transaction (including any
merger or consolidation) the result of which is that any "person" (as
defined above), becomes the
5
beneficial owner (as determined in accordance with Rules 13d-3 and 13d-5
under the Exchange Act except that a person will be deemed to have
beneficial ownership of all shares that such person has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of more than fifty percent (50%)
of the Voting Securities (as hereinafter defined) of the Company, or (iii)
the first day on which a majority of the members of the board of directors
are not Continuing Directors (as hereinafter defined). "Person" as used in
clauses (i) and (ii) shall not include any Purchaser (as defined in the
Securities Purchase Agreement).
"Change of Control Payment Date" shall mean (i) in the case of
any Change of Control resulting from a transaction to which the Company is
a party, the date of consummation of such transaction and (ii) in the case
of any other Change of Control, the date which is 30 days after the
occurrence of such Change of Control.
"Continuing Directors" shall mean individuals who constituted
the Board of Directors of the Company on August 31, 2001 after giving
effect to the issuance of the Series B-1 Preferred Shares (as defined in
the Securities Purchase Agreement) (the "Incumbent Directors"); provided,
that any individual becoming a director during any year shall be
considered to be an Incumbent Director if (i) such individual's election,
appointment or nomination was recommended or approved by at least
two-thirds of the other Incumbent Directors continuing in office following
such election, appointment or nomination present, in person or by
telephone, at any meeting of the Board of Directors of the Company, after
the giving of a sufficient notice to each Incumbent Director so as to
provide a reasonable opportunity for such Incumbent Directors to be
present at such meeting or (ii) such individual was nominated, appointed
or selected by the holders of the Series B-1 Preferred Shares or
nominated, appointed or selected in accordance with Section 6.02 of the
Securities Purchase Agreement.
"Voting Securities" means securities of the Company ordinarily
having the power to vote for the election of directors of the Company.
9. Affirmative Covenants. The Company covenants and agrees that so
long as any of the Notes shall be outstanding:
(a) Maintenance of Office. The Company will maintain an office or
agency in such place in the United States of America as the Company may
designate in writing to the Holder where this Note may be presented for
registration of transfer and for exchange as herein provided, where notices and
demands to or upon the Company in respect of this Note may be served and where
this Note may be presented for payment. Until the Company otherwise notifies the
Holder, said office shall be the principal office of the Company located at
00000 Xxxxxx Xxxxxxxxx, Xxxxxx, Xxxxxx 00000-9752.
(b) Payment of Taxes. The Company will promptly pay and discharge or
cause to be paid and discharged, before the same shall become in default, all
material lawful taxes and assessments imposed upon the Company or any of its
subsidiaries or upon the income and profits
6
of the Company or any of its subsidiaries, or upon any property, real, personal
or mixed, belonging to the Company or any of its subsidiaries, or upon any part
thereof by the United States or any State thereof, as well as all material
lawful claims for labor, materials and supplies which, if unpaid, would become a
lien or charge upon such property or any part thereof; provided, however, that
neither the Company nor any of its subsidiaries shall be required to pay and
discharge or to cause to be paid and discharged any such tax, assessment,
charge, levy or claim so long as both (x) the Company has established adequate
reserves for such tax, assessment, charge, levy or claim and (y)(i) the Company
or a subsidiary shall be contesting the validity thereof in good faith by
appropriate proceedings or (ii) the Company shall, in its good faith judgment,
deem the validity thereof to be questionable and the party to whom such tax,
assessment, charge, levy or claim is allegedly owed shall not have made written
demand for the payment thereof.
(c) Corporate Existence. The Company will do or cause to be done all
things necessary and lawful to preserve and keep in full force and effect (i)
its corporate existence and the corporate existence of each of its subsidiaries
and (ii) the material rights and franchises of the Company and each of its
subsidiaries under the laws of the United States or any State thereof, or, in
the case of subsidiaries organized and existing outside the United States, under
the laws of the applicable jurisdiction; provided, however, that nothing in this
paragraph (c) shall prevent (x) a consolidation or merger of, or a sale,
transfer or disposition of all or any substantial part of the property and
assets of, the Company not prohibited by the provisions of Section 6.09(e) of
the Securities Purchase Agreement or (y) the abandonment or termination of any
rights or franchises of the Company, or the abandonment or termination of the
corporate existence, rights and franchises of any subsidiary of the Company, if
such abandonment or termination is not disadvantageous to the Holder and, in the
good faith business judgment of the Company, in the best interests of the
Company.
(d) Maintenance of Property. The Company will at all times maintain
and keep, or cause to be maintained and kept, in good repair, working order and
condition (reasonable wear and tear excepted) all significant properties of the
Company and its subsidiaries used in the conduct of the business of the Company
and its subsidiaries, and will from time to time make or cause to be made all
needful and proper repairs, renewals, replacements, betterments and improvements
thereto, so that the business of the Company and its subsidiaries may be
conducted at all times in the ordinary course consistent with past practice;
provided, however, that nothing in this subsection (d) shall require (i) the
making of any repair or renewal or (ii) the continuance of the operation and
maintenance of any property or (iii) the retention of any assets (the sale or
other disposition of which would not be prohibited by Section 6.09(e) of the
Securities Purchase Agreement), if such action (or inaction) is not
disadvantageous to the Holder and, in the good faith business judgment of the
Company, in the best interests of the Company.
(e) Insurance. The Company will, and will cause each of its
subsidiaries to, (i) keep adequately insured, by financially sound and reputable
insurers, all property of a character usually insured by corporations engaged in
the same or a similar business similarly situated against loss or damage of the
kinds customarily insured against by such corporations and (ii) carry, with
financially sound and reputable insurers, such other insurance (including
without
7
limitation liability insurance) in such amounts as are available at reasonable
expense and to the extent believed advisable in the good faith business judgment
of the Company.
(f) Keeping of Books. The Company will at all times keep, and cause
each of its subsidiaries to keep, proper books of record and account in which
proper entries will be made of its transactions in accordance with generally
accepted accounting principles consistently applied.
(g) Notice of Certain Events. The Company shall, immediately after it
becomes aware of the occurrence of (i) any Event of Default (as hereinafter
defined) or any event which, upon notice or lapse of time or both, would
constitute such an Event of Default or (ii) any action, suit or proceeding at
law or in equity or by or before any governmental instrumentality or agency
which, if adversely determined, would materially impair the right of the Company
to carry on its business substantially as now or then conducted, or would
reasonably be expected to have a material adverse effect on the business,
operations, properties, assets, results of operations, condition (financial or
other) or prospects of the Company and its subsidiaries taken as a whole, give
notice to the holder of this Note, specifying the nature of such event.
(h) Payment of Principal and Interest on the Note. Subject to
applicable law and the provisions of any agreements governing Senior
Indebtedness (as hereinafter defined), the Company will provide funds from its
subsidiaries by means of dividend, advance or otherwise that are sufficient to
permit payment by the Company of the principal of and interest on this Note in
accordance with its terms.
(i) Inspection of Property. The Company will permit the Holder and
its agents and representatives to visit and inspect the properties of the
Company and its subsidiaries and their books and records and to discuss the
affairs, finances and accounts of the Company and its subsidiaries with their
principal officers and independent public accountants, all at such reasonable
times and as often as such Holders may reasonably request.
10. Modification by Holders; Waiver. The Company may, with the
written consent of the Holders of not less than a majority in principal amount
of the Notes then outstanding, modify the terms and provisions of this Note or
the rights of the Holder or the obligations of the Company hereunder, and the
observance by the Company of any term or provision of this Note may be waived
with the written consent of the Holders of not less than a majority in principal
amount of the Notes then outstanding.
Any such modification or waiver shall apply equally to each Holder of
the Notes and shall be binding upon them, upon each future Holder of any Note
and upon the Company, whether or not such Note shall have been marked to
indicate such modification or waiver, but any Note issued thereafter shall bear
a notation referring to any such modification or waiver. Promptly after
obtaining the written consent of the Holders as herein provided, the Company
shall transmit a copy of such modification or waiver to the Holders of the Notes
at the time outstanding.
8
11. Events of Default. (a) If any one or more of the following events
(herein called "Events of Default") shall occur (for any reason whatsoever, and
whether such occurrence shall, on the part of the Company or any of its
subsidiaries, be voluntary or involuntary or come about or be effected by
operation of law or pursuant to or in compliance with any judgment, decree or
order of a court of competent jurisdiction or any order, rule or regulation of
any administrative or other governmental authority) and such Event of Default
shall be continuing:
(i) default shall be made in the payment of all or any portion of the
principal of this Note when the same shall have become due and payable,
whether on a scheduled amoritization date, at maturity, on any date fixed
for prepayment (including default of any optional prepayment in accordance
with the requirements of Section 7 hereof or any mandatory prepayment in
accordance with the requirements of Section 8 hereof), by acceleration or
otherwise; or
(ii) default shall be made in the payment of any installment
of interest on this Note according to its terms when and as the same shall
become due and payable, and such default shall continue for three Business
Days; or
(iii) default shall be made in the due observance or performance of
any covenant, condition or agreement on the part of the Company contained
in Section 6.09 of the Securities Purchase Agreement; or
(iv) default shall be made in the due observance or performance of
any other covenant, condition or agreement on the part of the Company to
be observed or performed pursuant to the terms hereof, and such default
shall continue for thirty Business Days after written notice thereof,
specifying such default and requesting that the same be remedied, is given
by any Holder to the Company; or
(v) the entry of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Company or any of its
subsidiaries in any involuntary case under the federal bankruptcy laws, as
now constituted or hereafter amended, or any other applicable federal or
state bankruptcy, insolvency or other similar laws, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of the Company or any of its subsidiaries for any
substantial part of any of their property or ordering the winding-up or
liquidation of any of their affairs and the continuance of any such decree
or order unstayed and in effect for a period of 30 consecutive days; or
(vi) the commencement by the Company or any of its material
subsidiaries of a voluntary case under the federal bankruptcy laws, as now
constituted or hereafter amended, or any other applicable federal or state
bankruptcy, insolvency or other similar laws, or the consent by any of
them to the appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator (or other similar official) of
the Company or any of its material subsidiaries for any substantial part
of any of their property, or the making by any of them of any general
assignment for the benefit of creditors, or the failure of the Company or
of any of its material subsidiaries generally to
9
pay its debts as such debts become due, or the taking of corporate action
by the Company or any of its material subsidiaries in furtherance of or
which might reasonably be expected to result in any of the foregoing; or
(vii) a default or an event of default as defined in any instrument
evidencing or under which the Company or any of its material subsidiaries
has outstanding at the time any Indebtedness in excess of $500,000 in
aggregate principal amount shall occur and as a result thereof the
maturity of any such Indebtedness (as defined in the Securities Purchase
Agreement) shall have been accelerated so that the same shall have become
due and payable prior to the date on which the same would otherwise have
become due and payable and such acceleration shall not have been rescinded
or annulled within xxxxxx days; or
(viii) final judgment (not reimbursed by insurance policies of the
Company or any of its subsidiaries) for the payment of money in excess of
$500,000 shall be rendered against the Company or any of its subsidiaries
and the same shall remain undischarged for a period of thirty days during
which execution shall not be effectively stayed;
then the Holders of at least fifty percent in aggregate principal amount of the
Notes at the time outstanding may, at their option, by a notice in writing to
the Company declare this Note to be, and this Note shall thereupon be and become
immediately due and payable together with interest accrued thereon, without
diligence, presentment, demand, protest or further notice of any kind, all of
which are expressly waived by the Company to the extent permitted by law. For
purposes of clauses (vi) and (vii), the term "material subsidiary" shall mean
each subsidiary of the Company, other than subsidiaries that are dormant, or
conduct no business other than the holding of assets of insignificant value or
have less than $5 million in annual revenues at such time (collectively
"non-material subsidiaries"); provided, however, for purposes of clauses (vi)
and (vii), in the event that an Event of Default shall relate to one or more
non-material subsidiaries which have greater than $5 million in annual revenues
in the aggregate such Event of Default shall be deemed to be an Event of Default
that relates to material subsidiaries.
(b) At any time after any declaration of acceleration has been made
as provided in this Section 11, the Holders of a majority in principal amount of
the Notes then outstanding may, by notice to the Company, rescind such
declaration and its consequences, provided, however, that no such rescission
shall extend to or affect any subsequent default or Event of Default or impair
any right consequent thereon.
12. Suits for Enforcement. Subject to the provisions of Section 15
below, in case any one or more of the Events of Default specified in Section 11
of this Note shall happen and be continuing (subject to any applicable cure
period expressly set forth herein), the Holder may proceed to protect and
enforce its rights by suit in equity, action at law and/or by other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Note or in aid of the exercise of any power granted in this
Note, or may proceed to enforce the payment of this Note or to enforce any other
legal or equitable right of the Holder.
10
In case of any default under this Note, the Company will pay to the Holder
hereof reasonable collection costs and reasonable attorneys' fees, to the extent
actually incurred.
13. Remedies Cumulative. No remedy herein conferred upon the Holder
is intended to be exclusive of any other remedy and each and every such remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or
otherwise.
14. Remedies Not Waived. No course of dealing between the Company
and the Holder or any delay on the part of the Holder in exercising any rights
hereunder shall operate as a waiver of any right of the Holder.
15. Subordination. (a) Anything contained in this Note to the
contrary notwithstanding, the indebtedness evidenced by the Notes shall be
subordinate and junior, to the extent set forth in the following paragraphs (A),
(B), (C) and (D), to all Senior Indebtedness of the Company. "Senior
Indebtedness" shall mean the principal of, premium, if any, and interest on
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable law), and all
reasonable fees, reimbursement and indemnity obligations, and all other
obligations due and payable under (x) any and all "Senior Indebtedness" (as
defined in Section 6.09(a)(i)(D) of the Securities Purchase Agreement) and (y)
any and all "Additional Indebtedness" (as defined in Section 6.09(a)(i)(L) of
the Securities Purchase Agreement) that is not subordinated to any other
Indebtedness of the Company.
(A) In the event of any insolvency, bankruptcy, liquidation,
reorganization or other similar proceedings, or any receivership
proceedings in connection therewith, relative to the Company or its
creditors or its property, and in the event of any proceedings for
voluntary liquidation, dissolution or other winding up of the Company,
whether or not involving insolvency or bankruptcy proceedings, then all
Senior Indebtedness shall first be paid in full in cash (or such payment
is duly provided for), before any payment, whether on account of
principal, interest or otherwise, is made upon the Notes.
(B) In any of the proceedings referred to in paragraph (A) above, any
payment or distribution of any kind or character, whether in cash,
property, stock or obligations which may be payable or deliverable in
respect of the Notes shall be paid or delivered directly to the holders of
Senior Indebtedness for application in payment thereof, unless and until
all Senior Indebtedness shall have been paid in full in cash (or such
payment is duly provided for).
(C) No payment shall be made, directly or indirectly, on account of
the Notes (i) upon maturity of any Senior Indebtedness obligation, by
lapse of time, acceleration (unless waived), or otherwise, unless and
until all principal thereof and interest thereon and all other obligations
in respect thereof shall first be paid in full in cash (or such payment is
duly provided for), or (ii) upon the happening of any default in payment
of
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any principal of, premium, if any, or interest on or any other amounts
payable in respect of Senior Indebtedness when the same becomes due and
payable whether at maturity or at a date fixed for prepayment or by
declaration or otherwise (a "Senior Payment Default"), unless and until
such Senior Payment Default shall have been cured or waived or shall have
ceased to exist.
(D) Upon the happening of a default (other than one described in
clause (A), (B) or (C) above) with respect to any Senior Indebtedness
permitting (after notice or lapse of time or both) one or more holders of
such Senior Indebtedness to declare such Senior Indebtedness due and
payable prior to the date on which it is otherwise due and payable (a
"Nonmonetary Default"), upon the occurrence of (i) receipt by the Holders
of the Notes of written notice from the holders of said Senior
Indebtedness of a Nonmonetary Default (any such notice, a "Blockage
Notice"), or (ii) if such Nonmonetary Default results from the
acceleration of the Notes, the date of such acceleration; then (x) the
Company will not make, directly or indirectly, to the Holder of the Notes
any payment of any kind of or on account of all or any part of the Notes
(other than Deferred Interest Notes); (y) the Holders of the Notes will
not accept from the Company any payment of any kind of or on account of
all or any part of the Notes (other than Deferred Interest Notes) and (z)
the Holders of the Notes may not take, demand, receive, sue for,
accelerate or commence any remedial proceedings with respect to any amount
payable under the Notes, unless and until in each case described in
clauses (x), (y) and (z) all such Senior Indebtedness shall have been paid
in full in cash (or such payment is duly provided for) or such Nonmonetary
Default shall have been cured or waived or such acceleration of the Notes
shall have been rescinded; provided, however, that if such Nonmonetary
Default shall have occurred and be continuing for a period (a "Blockage
Period") commencing on the earlier of the date of receipt of such Blockage
Notice or the date of the acceleration of the Notes and ending 179 days
thereafter (it being understood that not more than one Blockage Period may
be commenced with respect to the Notes during any period of 360
consecutive days), and during such Blockage Period (i) such Nonmonetary
Default shall not have been cured or waived, (ii) the holder of such
Senior Indebtedness shall not have made a demand for payment and commenced
an action, suit or other proceeding against the Company and (iii) none of
the events described in subsection (A) above shall have occurred, then (to
the extent not otherwise prohibited by subsections (A), (B) or (C) above)
the Company may make and the Holders of all of the Notes may accept from
the Company all past due and current payments of any kind of or on account
of the Notes, and such Holder may demand, receive, retain, sue for or
otherwise seek enforcement or collection of all amounts payable on account
of principal of or interest on the Notes.
(b) Subject to the payment in full in cash of all Senior Indebtedness
(or the provision for such payment) as aforesaid, the Holders of the Notes shall
be subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of any kind or character, whether in cash, property,
stock or obligations, which may be payable or deliverable to the holders of
Senior Indebtedness, until the principal of, and interest on, the Notes shall be
paid in full, and, as between the Company, its creditors other than the holders
of Senior
12
Indebtedness, and the Holders of the Notes, no such payment or distribution made
to the holders of Senior Indebtedness by virtue of this Section 15 which
otherwise would have been made to the Holder of the Notes shall be deemed a
payment by the Company on account of the Senior Indebtedness, it being
understood that the provisions of this Section 15 are and are intended solely
for the purposes of defining the relative rights of the Holders of the Notes, on
the one hand, and the holders of the Senior Indebtedness, on the other hand.
Subject to the rights, if any, under this Section 15 of holders of Senior
Indebtedness to receive cash, property, stock or obligations otherwise payable
or deliverable to the Holders of the Notes, nothing herein shall either impair,
as between the Company and the Holder of the Notes, the obligation of the
Company, which is unconditional and absolute, to pay to the Holder thereof the
principal thereof and interest thereon in accordance with its terms or prevent
(except as otherwise specified therein) the Holders of the Notes from exercising
all remedies otherwise permitted by applicable law or hereunder upon default
hereunder.
(c) If any payment or distribution of any character or any security,
whether in cash, securities or other property, shall be received by any Holders
of the Notes in contravention of any of the terms hereof or before all the
Senior Indebtedness obligations have been paid in full in cash (or such payment
is duly provided for), such payment or distribution or security shall be
received in trust for the benefit of, and shall be paid over or delivered and
transferred to, the holders of the Senior Indebtedness at the time outstanding
in accordance with the priorities then existing among such holders for
application to the payment of all Senior Indebtedness remaining unpaid, to the
extent necessary to pay all such Senior Indebtedness in full in cash. In the
event of the failure of any such Holder to endorse or assign any such payment,
distribution or security, each holder of any Senior Indebtedness is hereby
irrevocably authorized to endorse or assign the name.
(d) The rights under these subordination provisions of the holders of
any Senior Indebtedness as against any Holders of the Notes shall remain in full
force and effect without regard to, and shall not be impaired or affected by:
(i) Any act or failure to act on the part of the Company; or
(ii) Any extension or indulgence in respect of any payment or
prepayment of any Senior Indebtedness or any part thereof or in respect of
any other amount payable to any holder of any Senior Indebtedness; or
(iii)Any amendment, modification or waiver of, or addition or
supplement to, or deletion from, or compromise, release, consent or other
action in respect of, any of the terms of any Senior Indebtedness or any
other agreement which may be made relating to any Senior Indebtedness;
provided, that such Holders of the Notes shall have received a copy of the
instrument evidencing any of the foregoing promptly (and in any event
within 5 days after the effectiveness thereof); or
(iv) Any exercise or non-exercise by the holder of any Senior
Indebtedness of any right, power, privilege or remedy under or in respect
of such Senior Indebtedness or of any default in respect of such Senior
Indebtedness or any receipt by the holder of any
13
Senior Indebtedness of any security, or any failure by such holder to
perfect a security interest in, or any release by such holder of, any
security for the payment of such Senior Indebtedness; or
(v) Any merger or consolidation of the Company or any of its
subsidiaries into or with any other person, or any sale, lease or transfer
of any or all of the assets of the Company or any of its subsidiaries to
any other person; or
(vi) Absence of any notice to or knowledge by, any holder of any
claim hereunder of the existence or occurrence of any of the matters or
events set forth in the foregoing clauses (i), (ii), (iv) or (v).
(e) The Holders of the Notes unconditionally waive (i) notices of any
of the matters referred to in Section 15(d)(vi), (ii) all notices which may be
required, whether by statute, rule of law or otherwise, to preserve intact any
rights of any holder of any Senior Indebtedness, including, without limitation,
any demand, presentment and protest, proof of notice of nonpayment under any
Senior Indebtedness, and notice of any failure on the part of the Company to
perform and comply with any covenant, agreement, term or condition of any Senior
Indebtedness, (iii) any right to the enforcement, assertion or exercise by any
holder of any Senior Indebtedness of any right, power, privilege or remedy
conferred in such Senior Indebtedness or otherwise, (iv) any requirements of
diligence on the part of any holder of any of the Senior Indebtedness, (v) any
requirement on the part of any holder of any Senior Indebtedness to mitigate
damages resulting from any default under such Senior Indebtedness and (vi) any
notice of any sale, transfer or other disposition of any Senior Indebtedness by
any holder thereof.
(f) The obligations of the Holder under these subordination
provisions shall continue to be effective, or be reinstated, as the case may be,
if at any time any payment in respect of any Senior Indebtedness, or any other
payment to any holder of any Senior Indebtedness in its capacity as such, is
rescinded or must otherwise be restored or returned by the holder of such Senior
Indebtedness upon the occurrence of any proceeding referred to in paragraph
13(a)(A) or upon or as a result of the appointment of a receiver, intervenor or
conservator of, or trustee or similar officer for, the Company or any
substantial part of its property or otherwise, all as though such payment had
not been made.
(g) Notwithstanding anything to the contrary herein, the Company
shall not at any time offer (and the Holder hereof shall not at any time accept)
(i) any pledge of collateral or (ii) any guaranty by any parent or subsidiary of
the Company, in each case with respect to the obligations of the Company under
this Note.
16 Covenants Bind Successors and Assigns. All the covenants,
stipulations, promises and agreements in this Note contained by or on behalf of
the Company shall bind its successors and assigns, whether so expressed or not.
17 Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of New York.
14
18 Third Party Beneficiaries. The provisions of Section 15 are
intended to be for the benefit of, and shall be enforceable directly by each
holder of, the Senior Indebtedness.
IN WITNESS WHEREOF, the Company has caused this Note to be signed in
its corporate name by one of its officers thereunto duly authorized and to be
dated as of the day and year specified above.
LABONE, INC.
By
Name:
Title:
