NEITHER THIS NOTE, THE SECONDARY NOTES ISSUABLE IN RESPECT OF INTEREST HEREUNDER
NOR THE SHARES OF THE ISSUER'S COMMON STOCK ISSUABLE UPON CONVERSION HEREOF HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS. THIS NOTE HAS BEEN (AND ANY SUCH OTHER
NOTES AND SHARES WILL BE) ACQUIRED FOR THE ACCOUNT OF THE HOLDER AND NOT WITH A
VIEW TOWARDS, OR FOR RESALE IN CONNECTION WITH A PUBLIC OFFERING AND MAY NOT BE
OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR APPLICABLE STATE SECURITIES
LAW, OR AN EXEMPTION FROM SUCH REGISTRATION OR UNLESS SOLD PURSUANT TO RULE 144
UNDER THE SECURITIES ACT.
No. ___ $[ ]
UNILAB CORPORATION
7.50% NOTE
UNILAB CORPORATION, a Delaware corporation (together with its
successors, the "Issuer"), for value received, hereby promises to pay to
PHYSICIANS CLINICAL LABORATORIES, INC., a Delaware corporation doing business as
Bio-Cypher Laboratories (the "Holder"), and its successors, transferees and
permitted assigns the principal sum of TWENTY FIVE MILLION DOLLARS AND 00/100
CENTS ($25,000,000) in accordance with the terms and conditions hereof, plus
interest from and after the date hereof as provided herein.
The unpaid principal amount of this Note outstanding from time to time
shall bear interest at the rate of 7.50% per annum, subject to any limitations
on the rate of interest imposed by applicable law, which interest shall be
computed on the basis of the actual number of days elapsed over a year of 365
days, and shall be payable semiannually in arrears on each [ ] and [ ] after the
date hereof until such principal amount is paid in full as provided herein.
Subject to Section 6, the Issuer may pay interest on this Note either in cash or
through the issuance of additional Notes, at the Issuer's option, which
additional Notes (the "Secondary Notes") shall be dated the applicable interest
payment date, shall have the same terms and restrictions as this Note and shall
be in an aggregate principal amount equal to the amount of interest payable with
respect to this Note if such interest were paid in cash. The issuance of any
such Secondary Note to the Holder hereof will be considered payment of interest
on this Note on the applicable interest payment date. Each Secondary Note shall
bear a legend in a form substantially the same as the legend which appears on
the face hereof.
Any cash payments made to the Holder hereunder shall be made in United
States Dollars by wire transfer of immediately available funds to an account
designated by the Holder by notice to the Issuer (or, if no such notice is
received by the Issuer, by check delivered to such Holder's address as the same
appears on the Register (defined below)) in such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts.
This Note is a duly authorized Note of the Issuer referred to in the
Asset Purchase Agreement (the "Asset Purchase Agreement") dated as of April
[___], 1999 between the Issuer and Physicians Clinical Laboratories, Inc.
("Seller").
This Note may be transferred or assigned in whole and in part, but any
partial assignment must be in a minimum aggregate amount of $1,000,000; provided
that the initial holder of the Note issued on the Closing Date under the Asset
Purchase Agreement may assign partial interests in its Note of less than
$1,000,000 to no more than three persons. The Issuer agrees to issue to the
Holder or any permitted transferee of the Holder from time to time a replacement
Note or Notes in the form hereof, provided that the transfer or assignment is
made in compliance with applicable securities laws, and evidence of the transfer
or assignment reasonably satisfactory to the Issuer, together with the original
Note, are delivered to the Issuer. References to "Note" shall include the Note
or Notes issued following a permitted transfer or assignment of this Note in
whole or in part to a permitted transferee or transferees and shall also include
all Secondary Notes. In addition, after delivery of an indemnity in form and
substance satisfactory to the Issuer in its reasonable discretion, the Issuer
also agrees to issue a replacement Note if this Note has been lost, stolen,
mutilated or destroyed.
The Issuer agrees to record this Note on the Register referred to
below. A Note recorded on the Register ("Registered Note") may not be evidenced
by a note other than a Registered Note and, upon the registration of the Note,
any promissory note (other than a Registered Note) evidencing the same shall be
null and void and shall be returned to the Issuer. The Note, once recorded on
the Register, may not be removed from the Register so long as it remains
outstanding and a Registered Note may not be exchanged for a note that is not a
Registered Note.
The Issuer shall maintain, or cause to be maintained, a register (the
"Register") on which it enters the name of the Holder as the registered owner of
this Note and the outstanding principal amount of such Note. A Registered Note
may be assigned or sold in whole or in part, in a minimum aggregate amount of
$1,000,000 (or such lesser amount as explicitly provided in the paragraph two
paragraphs above), only by registration of such assignment or sale on the
Register (and each Registered Note shall expressly so provide). Any assignment
or sale of all or part of such Registered Note may be affected only by
registration of such assignment or sale on the Register, together with the
surrender of the Registered Note, if any, evidencing the same duly endorsed by
(or accompanied by a written instrument of assignment or sale duly executed by)
the holder of such Registered Note(s), whereupon, at the request of the
designated assignee(s) or transferee(s), one or more new Registered Note in the
same aggregate principal amount shall be issued to the designated assignee(s) or
transferee(s). Prior to the registration of assignment or sale of any Registered
Note, the Issuer shall treat the person in whose name such Registered Note is
registered as the owner thereof for the purpose of receiving all payments
thereon and for all other purposes.
In the event that the Holder sells participations in any Registered
Note, each in a minimum aggregate amount of $1,000,000, the Holder shall
maintain a register on which it enters the name of all participants in such
Registered Note (the "Participant Register"). A Registered Note may be
participated in whole or in part only by registration of such participation on
the Participant Register (and each Registered Note shall expressly so provide).
Any participation of such Registered Note may be effected only by the
registration of such participation on the Participant Register. No participant
will have any independent rights under this Note and any rights must be
exercised through the Holder.
Any foreign person who purchases or is assigned or participates in any
portion of any Registered Note shall provide the Issuer (in the case of a
purchase or assignment) or the Holder (in the case of a participation) with a
completed Internal Revenue Service Form W-8 (Certificate of Foreign Status) or a
substantially similar form for such purchaser, participant or any other
affiliate who is a holder of beneficial interests in any Registered Note.
SECTION 1. Certain Terms Defined. For all purposes of this Note, terms
defined in this Note shall have the meaning set forth herein. The following
terms shall have the respective meanings specified below. Terms defined in this
Note include the plural as well as the singular.
"Average Closing Price" means, for any date, the (i) sum of the Closing
Price of the Common Stock multiplied by the volume of Common Stock traded on
such day for the 20 consecutive Trading Days immediately preceding such date
divided by (ii) the aggregate volume of Common Stock traded during such 20
Consecutive Trading Days.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in the City of New York are authorized by law to close.
"Cash Premium" means, for any Sinking Fund Payment Date, (i) if the
Average Closing Price of the Common Stock for such Sinking Fund Payment Date
exceeds the Conversion Price, one plus the amount obtained by dividing the
amount of such excess by the Conversion Price, or (ii) otherwise, one.
"Closing Date" means the Closing Date under the Asset Purchase Agreement.
"Closing Price" of the Common Stock on a given Trading Day means the
average of the high and low price of the Common Stock for such Trading Day, as
reported on the AMEX, or if the Common Stock is not then listed on the AMEX, as
reported by the principal securities exchange or inter-dealer quotation system
or OTC Bulletin Board on which the Common Stock is then traded. If the Common
Stock is not reported in any manner described above, the Buyer and holders of
50% or more of the Notes shall agree on the fair market value of a share of
Common Stock (determined without giving effect to any discount for a minority
interest or any lack of liquidity of the Common Stock due to the fact that there
may be no public market for the Common Stock). If the parties fail to agree but
their calculation of the fair market value of a share of Common Stock differs by
less than 10%, the Closing Price shall be the average of the parties
calculations; otherwise the parties will select an arbitrator who will determine
the Closing Price by choosing the value presented by a party which most closely
resembles the fair market value of a share of Common Stock.
"Common Stock" means the Common Stock, par value $.01 per share,
of the Issuer.
"Conversion Price" means [$3.00] per share of Common Stock, subject to
certain adjustments as described in Section 5(g).
"Debt" of any Person means at any date, without duplication, (i) all
obligations, including accrued and unpaid interest and premium, of such Person
for borrowed money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all obligations of such
Person in respect of letters of credit, bankers' acceptance or other similar
instruments (or reimbursement obligations with respect thereto), (iv) all
obligations of such Person to pay the deferred purchase price of property or
services, except Trade Payables, (v) all obligations of such Person as lessee
which are capitalized in accordance with generally accepted accounting
principles, (vi) all Debt of others secured by a Lien on any asset of such
Person, whether or not such Debt is assumed by such Person, and (vii) all Debt
of others Guaranteed by such Person.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt of any
other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt of such other Person (whether arising by virtue of partnership
arrangements, by agreement to keep-well, to purchase assets, goods, securities
or services, to take-or-pay, or to maintain financial statement conditions or
otherwise) or (ii) entered into for the purpose of assuring in any other manner
the obligee of such Debt for the payment thereof or to protect such obligee
against loss in respect thereof (in whole or in part); provided that the term
Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
"Indenture" means the Indenture dated as of March 14, 1996 between
Issuer and Marine Midland Bank, as trustee.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Note, the Issuer shall be deemed to own subject to a
Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capitalized lease or
other title retention agreement relating to such asset.
"Market Disruption Event" means, with respect to the Common Stock (1) a
suspension, absence or material limitation of trading of the Common Stock on the
primary market for the Common Stock for more than two hours of trading or during
the one-half hour period preceding the close of trading in such market; (2) a
suspension or material limitation on the primary market for trading in options
contracts related to the Common Stock, if available, during the one-half hour
period preceding the close of trading in the applicable market; or (3) any
limitation pursuant to the rules of the American Stock Exchange, Section 3, Rule
117 (or any applicable rule or regulation enacted or promulgated by the AMEX,
any other self-regulatory organization or the Securities and Exchange Commission
of similar scope) on trading during significant market fluctuations. For
purposes of determining whether a Market Disruption Event has occurred: (1) a
limitation on the hours or number of days of trading will not constitute a
Market Disruption Event if it results from an announced change in the regular
business hours of the relevant exchange; and (2) a decision to permanently
discontinue trading in the relevant options contract will not constitute a
Market Disruption Event.
"Person" means an individual, corporation, limited liability company,
partnership, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Prepayment Date" means the date on which the Issuer makes any
prepayment on the Notes.
"Prepayment Price" means, for any Note on any Prepayment Date, an
amount in cash equal to the sum of (i) the product of (a) the principal amount
of such Note or portion thereof being prepaid on such Prepayment Date and (b)
one plus (1) if the Prepayment Date is on or prior to the first anniversary of
the Closing Date, 15%, or (2) if the Prepayment Date is after the first
anniversary of the Closing Date the greater of (x) 0.1 and (y) the product of
75% and a fraction, the numerator of which is the Average Closing Price of the
Common Stock on such Prepayment Notice Date minus the Conversion Price and the
denominator of which is the Conversion Price, plus (ii) all accrued but unpaid
interest on the principal amount of such Note or portion thereof being prepaid
on such Prepayment Date.
"Pro Rata Share" means the percentage that the outstanding principal
amount of this Note bears to the aggregate outstanding principal amount of all
Notes.
"Registration Rights Agreement" means the Registration Rights Agreement
made as of the date hereof between Issuer and Seller.
"Senior Debt" means (a) any Debt incurred by the Issuer pursuant to the
Healthcare Receivables Purchase Agreement dated as of July 31, 1996 between the
Issuer and Daiwa Healthco. - 2 L.L.C., as amended from time to time and any
refinancing or replacement thereof or additions thereto and (b) all other Debt
of the Issuer owed to any banking institution, other than the Senior Notes
issued pursuant to the Indenture.
"Sinking Fund Payment Amount" means, for any Sinking Fund Payment Date,
the lesser of (i) $10,000,000 and (ii) the aggregate principal amount of the
Notes then outstanding.
"Subsidiary" means any entity of which securities or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are at the time directly
or indirectly owned by the Issuer.
"Trade Payables" means accounts payable or any other indebtedness or
monetary obligations to trade creditors created or assumed by the Issuer or any
Subsidiary of the Issuer in the ordinary course of business in connection with
the obtaining of materials or services.
"Trading Day" means a day which is also a Business Day, on which
trading is generally conducted (i) on the American Stock Exchange, Inc. and (ii)
on any successor exchange on which the Common Stock is listed, and on which a
Market Disruption Event has not occurred.
SECTION 2. Events of Default and Remedies.
(a) Event of Default Defined; Acceleration of Maturity; Waiver of
Default. In case one or more of the following events ("Events of Default")
(whatever the reason for such Event of Default and whether it is voluntary or
involuntary or is effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body) shall have occurred and be continuing:
(i) default in payment when due of principal or premium on any
Note in accordance with the terms hereof; or
(ii) default in the payment when due of interest on any Note in
accordance with the terms hereof, which default continues for a period
of 10 calendar days after the due date of such payment; or
(iii) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Issuer in an involuntary
case under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of the
Issuer or for any substantial part of the property of the Issuer or
ordering the winding up or liquidation of the affairs of the Issuer,
and such decree or order shall remain unstayed and in effect for a
period of 60 days; or
(iv) the Issuer shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or consent to the entry of an order for relief in an
involuntary case under any such law, or consent to the appointment or
taking possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of the Issuer or for any
substantial part of the property of the Issuer, or the Issuer shall
make any general assignment for the benefit of creditors; or
(v) an event of default occurs under any Senior Debt, which
results in the acceleration of such indebtedness prior to its express
maturity, and the principal amount of any such indebtedness, together
with the principal amount of any other indebtedness of which the
maturity has been so accelerated, aggregates to $5.0 million or more;
or
(vi) the Issuer shall fail to perform its obligations under the
Registration Rights Agreement and such failure continues for the lesser
of (i) 30 calendar days or (ii) 5 days after a registration statement
is to be filed by Issuer or the effective date of a registration
statement, as applicable, in either case after notice thereof by
holders of a majority in principal amount of the Notes;
then, and in each and every such case, the holders of a majority in principal
amount of the Notes, by notice in writing to the Issuer, may declare
the aggregate outstanding principal amount of the Notes, together with
accrued interest thereon, to be due and payable immediately, and upon
any such declaration the same shall become immediately due and payable.
In such event, the Issuer shall pay each holder of a Note the
Prepayment Price for such Note, together with accrued interest thereon,
and the Prepayment Notice Date for purposes of calculating the
Prepayment Price will be deemed to be the date of such notice to
Issuer.
(b) Powers and Remedies Cumulative; Delay or Omission Not Waiver of
Default. No right or remedy herein conferred upon or reserved to the Holder is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy. No delay or omission of the
holder of any Note to exercise any right or power accruing upon any Default or
Event of Default occurring and continuing as aforesaid shall impair any such
right or power or shall be construed to be a waiver of any such Default or Event
of Default or an acquiescence therein; and every power and remedy given by this
Note or by law to the holder of any Note may be exercised from time to time, and
as often as shall be deemed expedient, by such holder.
(c) Waiver of Past Defaults. If a Default or Event of Default
hereunder is waived in accordance with Section 9, the Issuer and the holder of
each Note shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other Default
or impair any right consequent thereon. Upon any such waiver, such Default shall
cease to exist and be deemed to have been cured and not to have occurred, and
any Default or Event of Default arising therefrom shall be deemed to have been
cured, and not to have occurred for every purpose of the Notes; but no such
waiver shall extend to any subsequent or other Default or Event of Default or
impair any right consequent thereon.
SECTION 3. Covenants. The Issuer agrees that, so long as
any amount payable under this Note remains unpaid, the Issuer shall deliver
to the Holder:
(a) within five days after any officer of the Issuer obtains actual
knowledge of any Default, a certificate of the chief financial officer or the
chief accounting officer of the Issuer setting forth the details thereof and the
action which the Issuer is taking or proposes to take with respect thereto;
(b) promptly upon the filing thereof, the quarterly and annual
financial reports that the Issuer is required to file with the Securities and
Exchange Commission pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 or, in the event the Issuer is not required to file such
reports, reports containing substantially the same information as would be
required in such reports (it being understood that the foregoing shall not be
construed to require presentation in the manner required by such Act and the
regulations thereunder so long as the data required thereunder is so provided).
SECTION 4. Prepayments.
(a) Issuer's Option to Prepay. At any time and from time to time, the
Issuer may prepay the outstanding principal amount of the Notes, in whole or in
part, by paying to each holder of a Note the Prepayment Price for such Note on
the Prepayment Date, together with accrued but unpaid interest thereon, upon at
least ten Business Days' prior written notice to the holders of the Notes (such
date being the "Prepayment Notice Date").
(b) Prepayment on Asset Sale. Upon the sale by the Issuer of all or
substantially all of its assets and entry into a definitive plan to distribute
the proceeds of such asset sale to the holders of the Common Stock, the Issuer
shall pay to each holder of a Note prior to the distribution of such proceeds to
the holders of Common Stock, an amount in cash equal to the Prepayment Price for
such Note, together with accrued but unpaid interest thereon. For purposes of
calculating the Prepayment Price, the sum of the value of the proceeds
distributed in respect of each share of Common Stock in such distribution and
the expected value of each share of Common Stock after such distribution (each
as determined by the Issuer's board of directors in consultation with its
independent financial advisors) shall be deemed the Average Closing Price on the
Prepayment Notice Date.
(c) Prepayment on Tender Offer. Upon the consummation of a tender
offer that would result in the offeror or offerors owning 90% or more of the
Common Stock, the Issuer shall pay to each holder of a Note an amount in cash
equal to the Prepayment Price for such Note, together with accrued but unpaid
interest thereon. For purposes of calculating the Prepayment Price, the value of
the amount being paid in the tender offer for each share of Common Stock (as
determined by the Issuer's independent financial advisors) shall be deemed the
Average Closing Price on the Prepayment Notice Date. The Issuer shall pay each
Holder the Prepayment Price on or prior to the date holders of the Common Stock
receive their consideration for the tender offer.
(d) Notice of Prepayment; Subsequent Rights of Holders.
(i) The notice of prepayment pursuant to Sections 4(a), 4(b)
and 4(c) shall be given by first class mail, postage prepaid, to the
Holder at such Holder's address as the same appears on the Register.
Each such notice shall state: (i) the proposed Prepayment Date, (ii)
the aggregate principal amount of Notes to be prepaid and, if only a
portion of the Notes is to be prepaid, the aggregate principal of the
Notes to be prepaid; (iii) the place or places where the Notes are to
be surrendered for payment of the Prepayment Price; and (iv) that
interest on the portion of the Notes to be prepaid will cease to accrue
on the Prepayment Date.
(ii) Notice having been mailed as aforesaid, from and after the
Prepayment Date (unless default shall be made by the Issuer in
providing money for the payment of the Prepayment Price of the Note or
portion thereof called for prepayment), interest on the Note or portion
thereof so called for prepayment shall cease to accrue, and all rights
of the Holder with respect to the Note or portion thereof called for
prepayment (except the right to receive from the Issuer the Prepayment
Price with respect thereto) shall cease. Upon surrender in accordance
with said notice of the certificate for any Note so prepaid in full
(properly endorsed or assigned for transfer, if the Board of Directors
of the Issuer shall so require and the notice shall so state), such
Note (or portion thereof, as the case may be) shall be prepaid by the
Issuer at the aforesaid Prepayment Price. In case the Note is prepaid
in part, the Holder shall make an appropriate notation to evidence such
prepayment on Schedule A attached hereto.
SECTION 5. Sinking Fund Payments.
(a) Issuer's Obligation to Make Sinking Fund Payments; Conversion
Rights.
(i) The Issuer shall pay to each holder of any Note on each of
[Anniversary Date], 2000, [Anniversary Date], 2001, [Anniversary Date],
2002 and [Anniversary Date], 2003, if necessary (each a "Sinking Fund
Payment Date") such Note's Pro Rata Share of the Sinking Fund Payment
Amount for such Sinking Fund Payment Date, together with accrued but
unpaid interest thereon. Subject to Section 6, the Issuer may pay the
Sinking Fund Payment Amount on any Sinking Fund Payment Date, at the
Issuer's option, by (x) converting the entire Sinking Fund Payment
Amount into Common Stock as provided in Section 5(a)(ii) below or (y)
either paying cash for the entire Sinking Fund Payment Amount or paying
cash for a portion and converting the remaining portion of such Sinking
Fund Payment Amount into Common Stock, in each case as provided in
Section 5(a)(iii) below. The payment of a Sinking Fund Payment Amount
in accordance with Section 5(a)(ii) or (iii) shall constitute a
repayment of the outstanding principal amount of this Note by the
amount of this Note's Pro Rata Share of such Sinking Fund Payment
Amount, and the outstanding principal amount of this Note shall
thereupon be reduced by such amount.
(ii) If the Issuer elects to pay a Sinking Fund Payment Amount
by converting the entire Sinking Fund Payment Amount into Common Stock,
a portion of this Note equal to 75% of this Note's Pro Rata Share of
such Sinking Fund Payment Amount shall be converted into Common Stock
at a conversion price per share of Common Stock equal to the Conversion
Price and a portion of this Note equal to 25% of this Note's Pro Rata
Share of such Sinking Fund Payment Amount shall be converted into
Common Stock at a conversion price per share of Common Stock equal to
the Average Closing Price on such Sinking Fund Payment Date. The
delivery of such shares to the Holder in accordance with Section
5(b)(iii) shall constitute payment of this Note's Pro Rata Share of
such Sinking Fund Payment Amount on the applicable Sinking Fund Payment
Date.
(iii) If the Issuer elects to pay cash for an entire Sinking
Fund Payment Amount or to pay cash for a portion and to convert the
remaining portion of such Sinking Fund Payment Amount into Common Stock
the following shall apply:
(A) If the Issuer elects to pay cash for 25% or less
of the Sinking Fund Payment Amount, then (x) the Issuer shall
deliver to the Holder on the Sinking Fund Payment Date this
Note's Pro Rata share of such cash; (y) a portion of this Note
equal to this Note's Pro Rata Share of 75% of such Sinking
Fund Payment Amount shall be converted into Common Stock at a
conversion price equal to the Conversion Price per share of
Common Stock; and (z) a portion of this Note equal to its Pro
Rata Share of the remaining portion of such Sinking Fund
Payment Amount (after deducting the cash paid under clause (x)
and 75% of such Sinking Fund Payment Amount) shall be
converted into Common Stock at a conversion price equal to the
Average Closing Price on such Sinking Fund Payment Date.
(B) If the Issuer elects to pay cash for more than
25% of the Sinking Fund Payment Amount, then (x) the Issuer
shall deliver to the Holder on the Sinking Fund Payment Date
cash equal to this Note's Pro Rata Share of (I) 25% of the
Sinking Fund Payment Amount plus (II) the product of the Cash
Premium times the additional portion in excess of 25% of the
Sinking Fund Payment Amount that the Issuer elects to pay in
cash; and (y) a portion of this Note equal to its Pro Rata
Share of the remaining portion of the Sinking Fund Payment
Amount (after deducting the portion of the Sinking Fund
Payment Amount paid in cash under clause (x)) shall be
converted into Common Stock at a conversion price per share of
Common Stock equal to the Conversion Price.
(b) Exercise Procedure.
(i) The Issuer shall deliver written notice of its election to
convert or pay cash for the Notes in whole or in part pursuant to
Section 5(a)(ii) or (iii) by first class mail, postage prepaid, mailed
on the Sinking Fund Payment Date to the Holder at such Holder's address
as the same appears on the Register. Promptly upon receipt of any such
notice, the Holder shall surrender this Note at the office of the
Issuer if this Note shall thereby be paid in full.
(ii) As promptly as practicable, and in any event within ten
Business Days, after the surrender by the Holder as aforesaid if the
Note is paid in full or delivery of the written notice described in
Section 5(b)(i) above if the Note is paid in part, the Issuer shall
issue and deliver to such Holder (i) a certificate or certificates for
the number of shares of Common Stock issuable upon the conversion of
this Note in accordance with the provisions of this Section 5 and (ii)
cash in accordance with the provisions of this Section 5 and the third
paragraph of this Note. If the Note is not paid in full, the Holder
shall make an appropriate notation to evidence the Note's Pro-Rata
Share of the Sinking Fund Payment on Schedule A attached hereto and
deliver a copy of it to the Issuer.
(iii) Each payment or conversion pursuant to Section 5(a)(ii) or
(iii) and in accordance with this Section 5(b) shall be deemed to have
been effected on the Sinking Fund Payment Date, and the Person in whose
name or names any certificate or certificates for shares of Common
Stock shall be issuable upon such conversion shall be deemed to have
become the holder of record of the shares of Common Stock represented
thereby at such time on such date and such conversion shall be into the
number of shares of Common Stock determined by dividing the principal
amount of the Note being converted at such time by the applicable
conversion price specified therein (subject to Section 5(f) as it
relates to fractional shares). All shares of Common Stock delivered
upon conversion of this Note will upon delivery be duly and validly
issued and fully paid and non-assessable, free of all Liens and charges
and not subject to any preemptive rights. Upon the conversion of all or
any portion of this Note, the principal amount so converted shall no
longer be deemed to be outstanding and all rights of the Holder with
respect to this Note or portion thereof surrendered for conversion
shall immediately terminate except the right to receive the Common
Stock and other amounts, if any, issuable pursuant to this Section 5.
(c) Effect of Election. If the Issuer delivers a notice of its
election to exercise its right to convert or pay in cash all or any portion of
the Notes, interest shall cease to accrue on the applicable Sinking Fund Payment
Date with respect to the principal amount so converted or paid in cash. From and
after such Sinking Fund Payment Date, the Holder of this Note with respect to
the principal amount so converted shall participate equally and ratably with the
holders of shares of Common Stock in all dividends paid on the Common Stock as
if such principal amount had been converted into shares of Common Stock at such
time.
(d) Issuance of Shares.
(i) The Issuer covenants that it shall at all times reserve
and keep available, free from preemptive rights, such number of its
authorized but unissued shares of Common Stock as may be required for
the purpose of effecting any conversion hereunder.
(ii) Prior to the delivery of any securities which the Issuer
shall be obligated to deliver upon conversion of this Note, the Issuer
shall comply with respect to the issuance of such securities with all
applicable federal and state laws and regulations which require action
to be taken by the Issuer.
(e) Taxes on Conversion. The Issuer will pay any and all documentary,
stamp or similar issue or transfer taxes payable in respect of the issue or
delivery of shares of Common Stock on conversion of this Note pursuant hereto;
provided that the Issuer shall not be required to pay any tax which may be
payable in respect of any transfer involving the issue or delivery of shares of
Common Stock in a name other than that of the Holder and no such issue or
delivery of such Common Stock shall be made unless and until the Person
requesting such issue or delivery has paid to the Issuer the amount of any such
tax or has established, to the satisfaction of the Issuer, that such tax has
been paid.
(f) No Fractional Shares. In connection with the conversion of this
Note or a portion hereof, no fractions of shares of Common Stock shall be
issued, but in lieu thereof the Issuer shall pay a cash adjustment in respect of
such fractional interest in an amount equal to such fraction of a share
multiplied by the Average Closing Price on the applicable Sinking Fund Payment
Date.
(g) Anti-Dilution. The terms of conversion of all or a portion
of this Note pursuant to this Section 5 shall be subject to the following
adjustments:
(i) If the Issuer shall (A) declare and pay to the holders of
the Common Stock a dividend or other distribution payable in additional
shares of Common Stock or other securities or rights convertible into,
or entitling the holder thereof to receive additional shares of Common
Stock (hereinafter referred to as the "Common Stock Equivalents"), (B)
split or subdivide the outstanding shares of Common Stock into a
greater number of shares of Common Stock, (C) combine the outstanding
shares of Common Stock into a lesser number of shares, or (D) issue by
reclassification of its shares of Common Stock any other shares of the
Issuer, the Conversion Price in effect immediately prior thereto shall
be adjusted by multiplying the Conversion Price by a fraction, the
numerator of which shall be the number of shares of Common Stock and
Common Stock Equivalents outstanding immediately prior to such action,
and the denominator of which shall be the number of shares of Common
Stock and Common Stock Equivalents outstanding immediately following
such action. Such adjustment shall be made whenever any event listed
above shall occur and shall become effective immediately after the
record date in the case of a dividend or distribution and immediately
after the effective date in the case of any split, subdivision,
combination or reclassification.
(ii) If the Issuer shall effect a reorganization, equity
recapitalization, shall merge with or consolidate into another
corporation or entity, or shall sell, transfer or otherwise dispose of
all or substantially all of its property, assets or business and,
pursuant to the terms of such reorganization, equity recapitalization,
merger, consolidation or disposition of assets, shares of stock or
other securities, property or assets of the Issuer, or of its successor
or transferee or an affiliate of any thereof, or cash are to be
received by or distributed to the holders of Common Stock, the holder
of any Note thereafter surrendered for conversion pursuant to Section 5
shall be entitled to receive the number of shares of stock or other
securities, property or assets of the Issuer, or of its successor or
transferee or any affiliate thereof, or cash receivable upon or as a
result of such reorganization, equity recapitalization, merger,
consolidation or disposition of assets or the cash value thereof that
would have been received by a holder of the number of shares of Common
Stock equal to the number of shares the holder of the Note would have
received if the converted portion of such Note had been converted
immediately prior to such event at the applicable conversion price
immediately prior to such event. The provisions of this subparagraph
(ii) shall similarly apply to successive reorganizations, mergers,
consolidations or dispositions of assets and shall be effective
immediately after the effective date of any such event.
(iii) Whenever the terms of conversion shall be adjusted
pursuant to this Section 5(g), the Issuer shall forthwith obtain, and
cause to be delivered to the holders of the Notes, a certificate signed
by the principal financial or accounting officer of the Issuer, setting
forth in reasonable detail the event requiring the adjustment and the
method by which such adjustments were calculated and specifying the new
Conversion Price. In the cases referred to in subparagraph (ii), such a
certificate shall be issued describing the amount and kind of stock,
securities, property or assets or cash which shall be receivable upon
conversion of the Note after giving effect to the provisions of such
subparagraph.
(iv) No adjustment to the Conversion Price or conversion price
shall be required unless such adjustment would require a change of at
least 1% in such rate; provided, however, that any adjustments which by
reason of this paragraph (iv) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment.
SECTION 6. Limitation on Potential Issuance of Shares.
Notwithstanding any other provision herein to the contrary, the Issuer
shall not be permitted to pay interest on this Note through the
issuance of additional Notes or to convert all or any portion of a
Sinking Fund Payment Amount into Common Stock, but instead must pay
cash pursuant to the terms hereof, to the extent that any such issuance
or conversion (i) would have the result that the past, present and
potential issuance of Common Stock under the Asset Purchase Agreement
(including the Common Stock and Note issuable thereunder and any
Secondary Notes) could result in there having been, as of the Closing
Date under the Asset Purchase Agreement, a potential increase in
outstanding Common Shares of 20% or more, unless the Issuer shall have
obtained any required approval of its shareholders, or (ii) would
violate any applicable law, rule, regulation, judgment, injunction or
decree.
SECTION 7. Subordination.
(a) Subordination to Senior Debt. The Issuer and the Holder agree for
the benefit of the Senior Debt holders that all indebtedness evidenced by the
Notes, including principal, premium, if any, and interest, and all other amounts
payable to the holder of any Note (including any payment in respect of
prepayment or purchase or other acquisition hereof) shall, in the manner
hereinafter set forth, be subordinate and junior in right of payment to all
Senior Debt of the Issuer. All indebtedness evidenced by the Notes shall rank
pari passu to all Debt of the Issuer other than Senior Debt.
(b) Issuer Not to Make Payments Hereunder in Certain
Circumstances. Without limiting the generality of the foregoing:
(i) Upon the maturity of all or any part of the Senior Debt by
lapse of time, acceleration or otherwise, such Senior Debt shall first
be paid in full, or such payment shall be duly provided for in cash or
in a manner satisfactory to the holders of such Senior Debt, before any
payment by the Issuer or any Subsidiary is made on account of the
principal of or premium, if any, or interest on any Note or to prepay
any Note.
(ii) In the event and during the continuation of any default in
respect of any Senior Debt, including, without limitation, any default
arising from either a default in the payment of principal or interest
in respect of any Senior Debt (each such default being referred to
herein as a "Senior Debt Default"), no payment (other than in Common
Stock) shall be made by the Issuer on or with respect to the principal
of, or, premium, if any, or interest on, any Note or to prepay any Note
unless and until such Senior Debt Default shall have been remedied, nor
shall any such payment be made if after giving effect, as if paid, to
such payment, any Senior Debt Default would exist. In any such event,
no holder of any Note shall demand, accept or receive, any direct or
indirect payment (in cash or property other than Common Stock or by
setoff, exercise of contractual or statutory rights or otherwise) of or
on account of any Note, notwithstanding the terms of the Note or of any
agreement or instrument which governs the Note, and no such payment
shall be due, unless such payment is not prohibited by, and is made in
accordance with the terms of, any covenant or restriction in any
agreement or instrument governing the Senior Debt, and the failure to
make any payment on or with respect to the Notes by reason of any such
covenant or restriction shall not constitute a breach of, or default
under, any provision applicable to any Note.
(iii) At any time when a Senior Debt Default exists, the Issuer
shall not make, and no holder of any Note shall demand, accept or
receive (in cash or property or by setoff, exercise of contractual or
statutory rights or otherwise), or shall attempt to collect or commence
any legal proceedings to collect, any direct or indirect payment on
account of any Note prior to the date such payment becomes due and
payable pursuant to the terms thereof or, if later, prior to the first
date such amount is not prohibited from being paid pursuant to this
Section 7. Notwithstanding the foregoing, the holder of any Note shall
be entitled to accept and retain any Common Stock issuable upon
conversion of such Note, in whole and in part, pursuant to Section 5
hereof.
(iv) At any time when a Senior Debt Default exists, no holder
of any Note will commence or maintain any action, suit or any other
legal or equitable proceeding against the Issuer, or join with any
creditor in any such proceeding, under any insolvency, bankruptcy,
receivership, liquidation, reorganization or other similar law, unless
the holders of Senior Debt shall also join in bringing such proceeding,
provided that this Section 7(b) shall not prohibit a holder of any Note
from filing a proof of claim or otherwise participating in any such
proceeding not commenced by it.
(c) Note Subordinated to Prior Payment of all Senior Debt on
Dissolution, Liquidation or Reorganization of Issuer. In the event of any
insolvency or bankruptcy proceedings, and any receivership, liquidation,
reorganization or other similar proceedings, relative to the Issuer or to its
creditors, in their capacity as creditors of the Issuer, or to substantially all
of its property, and in the event of any proceedings for voluntary liquidation,
dissolution or other winding up of the Issuer, whether or not involving
insolvency or bankruptcy,
(i) the holders of all Senior Debt shall first be entitled to
receive payment in full of the principal thereof, premium, if any,
interest and all other amounts payable thereon (accruing before and
after the commencement of the proceedings, whether or not allowed or
allowable as a claim in such proceedings) before the holder of the
Notes shall be entitled to receive any payment on account of the
principal of, premium, if any, or interest on the Notes; and
(ii) the Notes shall forthwith (notwithstanding the terms of
Section 7(b)) become due and payable and any payment or distribution of
assets of the Issuer of any kind or character, whether in cash,
property or securities to which the holder of any Note would be
entitled, but for the provisions of this Section 7, shall be paid or
distributed by the liquidating trustee or agent or other person making
such payment or distribution, whether the debtor, a trustee in
bankruptcy, a receiver or liquidating trustee or other trustee or
agent, directly to any representative on behalf of the holders of
Senior Debt, to the extent necessary to make payment in full of all
principal, premium, if any, interest and all other amounts payable on
all Senior Debt remaining unpaid, after giving effect to any concurrent
payment or distribution to the holders of the Senior Debt.
(d) Rights of Holders of Senior Debt; Subrogation.
(i) Should any payment or distribution or security or the
proceeds of any thereof be collected or received by the holder of any
Note in respect of such Note, and such collection or receipt is
prohibited hereunder prior to the payment in full of the Senior Debt,
such holder will forthwith deliver the same to the holders of the
Senior Debt for the equal and ratable benefit of the holders of the
Senior Debt in precisely the form received (except for the endorsement
or the assignment of or by such holder where necessary) for application
to payment of all Senior Debt in full, after giving effect to any
concurrent payment or distribution to the holders of Senior Debt and,
until so delivered, the same shall be held in trust by such holder as
the property of the holders of the Senior Debt.
(ii) No holder of any Note shall be subrogated to the rights of
the holders of the Senior Debt to receive payments or distributions of
assets of the Issuer until all amounts payable with respect to the
Senior Debt shall be paid in full; and, for the purposes of such
subrogation, no payments or distributions to the holder of any Note of
any cash, property or securities to which such holder would be entitled
except for these provisions shall, as between the Issuer, its creditors
other than the holders of the Senior Debt, and such holders of Notes,
be deemed to be a payment by the Issuer to or on account of the Senior
Debt. The provisions of this Section 7 are and are intended solely for
the purpose of defining the relative rights of the holders of the
Notes, on the one hand, and the holders of the Senior Debt, on the
other hand.
(iii) Subject to the payment in full of all Senior Debt, the
holders of the Notes shall be subrogated (equally and ratably with the
holders of all subordinated indebtedness of the Issuer which, by its
terms, is not superior in right of payment to the Notes, and ranks on a
parity with the Notes) to the rights of the holders of Senior Debt to
receive payments or distributions of cash, property or securities of
the Issuer applicable to the Senior Debt until all amounts owing on the
Notes shall be paid in full. For purposes of such subrogation, no
payments or distributions to the holder of any Note of cash, property,
securities or other assets by virtue of the subrogation herein provided
which otherwise would have been made to the holders of the Senior Debt
shall, as between the Issuer, its creditors other than the holders of
Senior Debt and the holders of the Notes, be deemed to be a payment to
or on account of the Note. The Holder agrees that, in the event that
all or any part of any payment made on account of the Senior Debt is
recovered from the holders of Senior Debt as a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or similar
law, any payment or distribution received by the Holder of this Note on
account of the Note at any time after the date of the payment so
recovered, whether pursuant to the right of subrogation provided for in
this Section 7(d)(iii) or otherwise, shall be deemed to have been
received by such Holder in trust as the property of the holders of the
Senior Debt and such Holder shall forthwith deliver the same for the
equal and ratable benefit to the holders of the Senior Debt for
application to payment of all Senior Debt in full.
(e) Renewals, Extensions and Increases of Senior Debt. The holder of
each Note by its acceptance thereof thereby waives any and all notice of
renewal, extension, accrual or increase in the amount of Senior Debt, present or
future, and agrees and consents that without notice to or assent by the holder
of any Note:
(i) the Issuer shall be permitted to incur Senior Debt,
including, without limitation, Senior Debt not in existence on the date
hereof;
(ii) the obligation and liabilities of the Issuer or any other
party or parties for or upon the Senior Debt (or any promissory note,
security document or guaranty evidencing or securing the same) may,
from time to time, in whole or in part, be renewed, extended,
increased, modified, amended, accelerated, compromised, supplemented,
terminated, sold, exchanged, waived or released;
(iii) any representative acting on behalf of the holders of any
Senior Debt and any holder of the Senior Debt may exercise or refrain
from exercising any right, remedy or power granted by or in connection
with any agreements relating to the Senior Debt; and
(iv) any balance or balances of funds with any holder of the
Senior Debt at any time standing to the credit of the Issuer may, from
time to time, in whole or in part, be surrendered or released;
all as any representative or representatives acting on behalf of any holder of
the Senior Debt and any holder of the Senior Debt may deem advisable and all
without impairing, abridging, diminishing, releasing or affecting the
subordination of the Notes to the Senior Debt provided for herein.
(f) Obligation of Issuer Unconditional. Nothing contained in this
Section 7 or in any other provision of this Note is intended to or shall impair,
as between the Issuer, its creditors other than the holders of the Senior Debt,
and the holders of the Notes, the obligation of the Issuer, which is absolute
and unconditional, to pay to the holders of the Notes the principal of, premium,
if any, and interest on the Note, as and when the same shall become due and
payable (except as to the timing and procedures for payment as provided in this
Section 7), by lapse of time, acceleration or otherwise, in accordance with
their terms, or is intended to or shall affect the relative rights of the
holders of the Notes and other creditors of the Issuer other than the holders of
the Senior Debt, nor shall anything herein or therein prevent the holders of the
Notes (i) from taking all appropriate actions to preserve their rights under the
Notes not inconsistent with the rights of the holders of the Senior Debt under
this Section 7, or (ii) from exercising all remedies otherwise permitted by
applicable law upon default under the Note, subject to the rights, if any, under
this Section 7 of the holders of the Senior Debt in respect of cash, property or
securities of the Issuer otherwise payable or delivered to such holders upon the
exercise of any such remedy.
(g) Miscellaneous.
(i) The holder of each Note by its acceptance thereof thereby
acknowledges and agrees that the holders of the Senior Debt have relied
upon and will continue to rely upon the subordination provided for
herein in entering into the agreements relating to Senior Debt and in
extending credit to the Issuer pursuant thereto.
(ii) No present or future holder of Senior Debt shall be
prejudiced in its right to enforce the subordination contained herein
in accordance with the terms hereof by any act or failure to act on the
part of the Issuer or the holder of any Note. The subordination
provisions contained herein are for the benefit of the holders of the
Senior Debt from time to time and, so long as Senior Debt is
outstanding under any agreement, may not be rescinded, canceled or
modified in any way without the prior written consent thereto of all
holders of Senior Debt.
(iii) The subordination provisions hereof shall be binding upon
each holder of any Note and upon the heirs, legal representatives,
successors and assigns of each such holder; and, to the extent that the
holder of any Note is either a partnership or a corporation, all
references herein to the holder of any Note shall be deemed to include
any successor or successors, whether immediate or remote, to such
partnership or corporation.
SECTION 8. Representations by Holder. Each holder of a Note
by its acceptance thereof represents and warrants to the Issuer and
the prior holders of such Note as follows:
(a) Investment Purpose. Such holder (i) is acquiring the Note and any
Secondary Notes and (ii) upon conversion of the Note will acquire the Common
Stock then issuable for its own account and not with a view towards, or for
resale in connection with, the public sale or distribution thereof, except
pursuant to sales registered under or exempted from the 1933 Act.
(b) Accredited Investor Status. Such holder is an "accredited
investor" as that term is defined in Rule 501(a) of Regulation D as promulgated
by the Securities and Exchange Commission ("SEC") under the Securities Act of
1933, as amended ("1933 Act").
(c) Reliance on Exemptions. Such holder understands that the Note, any
Secondary Notes and any Common Stock issuable hereunder is being and shall be
issued to it in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and that the
Issuer is relying in part upon the truth and accuracy of, and such holder's
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of such holder set forth herein in order to determine the
availability of such exemptions and the eligibility of such holder to acquire
the Note and any Secondary Notes and Common Stock.
(d) Transfer or Resale. Such holder understands that except as
otherwise provided in the Registration Rights Agreement (i) the Note and the
Secondary Notes and Common Stock issuable hereunder have not been and are not
being registered under the 1933 Act or any state securities laws, and may not be
offered for sale, sold, assigned or transferred unless (A) registered
thereunder, (B) the Note and the Secondary Notes and Common Stock to be sold,
assigned or transferred may be sold, assigned or transferred pursuant to an
exemption from such registration, or (C) such Note, Secondary Notes and Common
Stock can be sold, assigned or transferred pursuant to Rule 144; (ii) any sale
of the Note, Secondary Notes or Common Stock issuable hereunder made in reliance
on Rule 144 may be made only in accordance with the terms of Rule 144 and
further, if Rule 144 is not applicable, any resale under circumstances in which
the seller (or the person through whom the sale is made) may be deemed to be an
underwriter (as that term is defined in the ▇▇▇▇ ▇▇▇) may require compliance
with some other exemption under the 1933 Act or the rules and regulations of the
SEC thereunder; and (iii) neither the Issuer nor any other person is under any
obligation to register such securities under the 1933 Act or any state
securities laws or to comply with the terms and conditions of any exemption
thereunder.
SECTION 9. Setoff in Asset Purchase Agreement. Each holder of
any Note by its acceptance thereof thereby acknowledges and agrees in
the event of a breach of Section 5.08 of the Asset Purchase Agreement,
that the Issuer has certain limited rights under the Asset Purchase
Agreement to set-off and recoup any principal, interest or other
amounts payable by it to the holder of any Note hereunder against any
amounts payable to the Issuer by Seller thereunder or in connection
therewith, whether or not the holder of any Note is the Seller, and
that such right may have the result of decreasing any or all amounts
payable by the Issuer to the holders of the Notes.
SECTION 10. Modification of the Notes. Any provision of this
Note may be amended or waived if, but only if, such amendment or waiver
is in writing and is signed by the Issuer and the holders of a majority
in principal amount of the Notes; provided that no such amendment or
waiver shall, unless signed by each holder: (a) reduce the principal
amount of any Note, the amount of any Sinking Fund Payment Amount or
the interest rate payable under the Notes, (b) postpone any Sinking
Fund Payment Date or any date fixed for any payment of interest
hereunder, (c) modify Section 5(a)(ii) or (iii), Section 5(g) or the
definition of any defined term used therein in such a manner as to be
materially disadvantageous to the holders of the Notes, or (d) modify
this Section 10 or otherwise change the percentage of the principal
amount of the Notes required for taking any action hereunder.
SECTION 11. Payments by Issuer. THE PRINCIPAL AMOUNT OF THIS
NOTE OUTSTANDING MAY BE LESS THAN THE AMOUNT SET FORTH IN SCHEDULE A.
THE ISSUER SHALL ONLY BE LIABLE TO THE HOLDER OF THIS NOTE FOR THE
AMOUNT LISTED ON THE REGISTER ABSENT MATHEMATICAL ERROR. THE HOLDER
ACKNOWLEDGES AND AGREES BY THE ACCEPTANCE OF THIS NOTE THAT THE AMOUNT
SET FORTH ON THE REGISTER SHALL BE THE OUTSTANDING PRINCIPAL AMOUNT OF
THIS NOTE ABSENT MATHEMATICAL ERROR.
SECTION 12. Governing Law. THIS NOTE SHALL BE GOVERNED BY AND
BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE CONFLICTS OF LAW RULES OF SUCH STATE.
SECTION 13. Miscellaneous. Each holder of any Note by its
acceptance thereof agrees to be bound by the provisions
of this Note. The Section headings herein are for convenience only
and shall not affect the construction hereof.
IN WITNESS WHEREOF, the Issuer has caused this instrument
to be duly executed as of this ____ day of ___________, 1999.
UNILAB CORPORATION
By: _____________________________________
Name:
Title:
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SCHEDULE A
Principal Amount of Note Paid Date