EXHIBIT I
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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated as of August 31, 2001 among
LABONE, INC., a Missouri corporation (the "Company"), WELSH, CARSON, XXXXXXXX &
XXXXX IX, L.P., a Delaware limited partnership ("WCAS"), and the several other
persons listed on the signature pages hereto (together with WCAS and their
respective successors and assigns, each individually an "Investor" and
collectively, the "Investors"). Defined terms used herein but not otherwise
defined herein shall have the meanings provided for them in the Securities
Purchase Agreement referred to below.
W I T N E S S E T H:
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WHEREAS, the Investors and the Company are party to a Securities
Purchase Agreement dated as of August 31, 2001 (the "Securities Purchase
Agreement") pursuant to which the Company has agreed to (A) sell to the
Investors, the Series B-1 Preferred Shares, the Series B-2 Preferred Shares, the
Initial Warrants and the Series A Notes and (B) grant to the Investors certain
rights to acquire, subject to the terms and conditions set forth in the
Securities Purchase Agreement, (i) the Series C-1 Preferred Shares and/or the
Series C-2 Preferred Shares and (ii) the Series B Notes and the Additional
Warrants (together with the Initial Warrants, the "Warrants"); and
WHEREAS, in order to induce the Investors to enter into the Securities
Purchase Agreement and to consummate the transactions contemplated thereby, the
Company has agreed to grant to the Investors the registration rights set forth
herein with respect to (A) the Series B-1 Preferred Shares, the Series B-2
Preferred Shares, the Series C-1 Preferred Shares, the Series C-2 Preferred
Shares (collectively, the "Preferred Shares") and (B) the shares of common
stock, par value $.01 per share, of the Company ("Common Stock") issuable upon
conversion of the Preferred Shares and the exercise of the Warrants;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings set forth below:
"Commission" means the Securities and Exchange Commission, or any
other federal agency at the time administering the Securities Act.
"Exchange Act" means the Securities Exchange Act of 1934, or any
successor federal statute, and the rules and regulations of the Commission
thereunder, as the same shall be in effect at the time.
"Registrable Stock" means, at any time, (i) the Series B-1 Preferred
Shares, the Series B-2 Preferred Shares, the Series C-1 Preferred Shares
and the Series C-2 Preferred Shares, (ii) the Series B-1 Preferred Shares
issuable upon conversion of the Series B-2 Preferred Shares, (iii) the
Series C-1 Preferred Shares issuable upon conversion of the Series C-2
Preferred Shares, (iv) the Common Stock issuable upon conversion or
exchange of the Series B-1 Preferred Shares (including any shares issued
upon conversion of the Series B-2 Preferred Shares) and/or the Series C-1
Preferred Shares (including any shares issued upon conversion of the Series
C-2 Preferred Shares) under the terms of the certificates of designation
relating thereto, (v) the Common Stock issuable upon exercise of the
Warrants and (vi) any shares of stock issuable with respect to the
foregoing by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise, in each case only so long as such shares have
not been sold by the Investors to the public pursuant to an effective
registration statement under, or pursuant to Rule 144 under, the Securities
Act.
"Securities Act" means the Securities Act of 1933, or any successor
federal statute, and the rules and regulations of the Commission
thereunder, as the same shall be in effect at the time.
SECTION 2. Registration Rights.
(a) Demand Registration Rights. Subject to paragraph 2(c) below, if
the Company shall at any time be requested by a majority-in-interest of the
Investors, in a writing that states the number and kind of shares of Registrable
Stock to be sold and the intended method of disposition thereof (each such
written request, a "Demand Request"), to effect a registration under the
Securities Act of all or any portion of the Registrable Stock then held by such
requesting Investors, the Company shall immediately notify in writing (each such
notice, a "Demand Registration Notice") each Investor (other than the requesting
Investors) of such proposed registration and shall use its reasonable best
efforts to register under the Securities Act (each such registration, a "Demand
Registration"), for public sale in accordance with the method of disposition
specified in such Demand Request, the number and kind of shares of Registrable
Stock specified in such Demand Request (plus the number and kind of shares of
Registrable Stock specified in any written requests for registration of shares
of Registrable Stock that are received from other Investors receiving the Demand
Registration Notice within 30 days after receipt by such other Investors of such
Demand Registration Notice); provided, that no Investor or group of Investors
shall have the right to request a Demand Registration unless the reasonably
anticipated aggregate net proceeds to the requesting Investor(s) (which shall be
specified in the Demand Request delivered in connection therewith) exceeds
$2,500,000. The Company shall not be obligated pursuant to this paragraph 2(a)
to effect more than two Demand Registrations.
(b) Short-Form Registration Rights. The Company shall use its
reasonable best efforts to continue to qualify at all times for registration of
secondary offerings on Form S-3 or any successor thereto. Subject to Section
2(c) below, if (x) the Company is eligible to register shares of Registrable
Stock on Form S-3 or a successor form and (y) it is requested by one or more
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Investor(s), in a writing that states the number and kind of shares of
Registrable Stock to be sold and the intended method of disposition thereof
(each such written request, a "Short Form Request"), to effect a registration on
Form S-3 or such successor form (a "Short Form Registration") of all or any
portion of the Registrable Stock then held by such requesting Investor, the
Company shall immediately notify in writing (each such notice, a "Short Form
Registration Notice") each Investor (other than the requesting Investors) of
such proposed registration and shall use its reasonable best efforts to register
on Form S-3 or such successor form, for public sale in accordance with the
method of disposition specified in such Short Form Request, the number and kind
of shares of Registrable Stock specified in such Short Form Request (plus the
number and kind of shares of Registrable Stock specified in any written requests
for registration of shares of Registrable Stock that are received from other
Investors receving the Short Form Registration Notice within 30 days after
receipt by such other Investors of such Short Form Registration Notice);
provided, that no Investor or group of Investors shall have the right to request
a Short Form Registration unless the reasonably anticipated aggregate net
proceeds to the requesting Investor(s) (which shall be specified in the Short
Form Request delivered in connection therewith) exceeds $2,500,000.
(c) Certain Provisions Relating to Demand Registrations and Short Form
Registrations. Notwithstanding anything to the contrary contained in this
Agreement, the Company shall not be obligated to effect any registration under
Section 2(a) or 2(b) above except in accordance with the following provisions:
(i) the obligations of the Company under Section 2(a) or 2(b) above,
as the case may be, to effect a registration shall be deemed satisfied only
(A) when a registration statement covering all of the shares of Registrable
Stock specified (except that such number of shares may be reduced, if
necessary, pursuant to Section 2(c)(iii) by up to twenty (20%) percent) in
the applicable Demand Request or Short Form Request, as the case may be,
and in each notice delivered by any other Investor requesting registration
of Registrable Stock in response to the Demand Registration Notice or Short
Form Registration Notice, as the case may be, for sale in accordance with
the intended method of disposition specified by the requesting Investors,
shall have become effective and, if such method of disposition is a firm
commitment underwritten public offering, (x) all such shares of Registrable
Stock shall have been sold pursuant thereto or (y) all of the conditions to
closing specified in the underwriting agreement shall have been satisfied
or shall not have been satisfied solely as a result of an act or omission
of an Investor or (B) if a Demand Request or Short-Form Demand Request is
withdrawn at any time by Investors other than as a result of a material
adverse change in the business, results of operations, financial condition
or prospects of the Company or other than pursuant to paragraph 2(f) hereof
following receipt of a Deficiency Notice;
(ii) so long as the Company has provided written notice to each
Investor in compliance with Section 2(d) below of a prior registration
statement or of its good faith intention to file within thirty (30) days
thereafter a registration statement pursuant to which shares of Common
Stock or any other equity securities (or other securities convertible into
equity securities) of the Company are to be (or were to be) sold to the
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public (other than a registration statement on Form S-4 or Form S-8
promulgated under the Securities Act (or any successor forms thereto) or
any other form not available for registering the Registrable Stock for sale
to the public), the Company shall not be obligated under Section 2(a) or
2(b) above to file and cause to become effective any registration statement
if such prior registration statement was filed prior to the delivery of the
applicable Demand Request or Short Form Request or is filed within thirty
(30) days after such Demand Request or Short Form Request, as the case may
be (and such prior registration statement has not been withdrawn);
provided, that the Company shall not be permitted to delay a requested
registration under Section 2(a) or 2(b) above in reliance on this Section
2(c)(ii) for more than 90 days following the effective date of such
registration statement or more than once in any twelve month period;
(iii) if the proposed method of disposition specified by the
requesting Investors shall be an underwritten public offering, the number
of shares of Registrable Stock to be included in such an offering may be
reduced (pro rata among the Investors seeking to include Registrable Stock
in such offering based on the number of shares of Registrable Stock so
requested to be registered by such Investors) if and to the extent that, in
the good faith opinion of the managing underwriter of such offering,
inclusion of all shares would adversely affect the marketing (including,
without limitation, the offering price) of the Registrable Stock to be
sold; provided, that the number of shares of Registrable Stock to be
included therein by the Investors may not be reduced if any other
securities are to be included in such offering on behalf of Company or any
other person;
(iv) in the event that the proposed method of disposition specified by
the requesting Investors shall be an underwritten public offering, the
managing underwriter (which shall be a nationally recognized investment
banking firm reasonably acceptable to the Company) shall be selected by a
majority-in-interest of the Investors seeking to include Registrable Stock
in such offering;
(v) the Company shall be entitled to include in any registration
referred to in Section 2(a) or 2(b) above, as the case may be, for sale in
accordance with the method of disposition specified by the requesting
Investors, shares of Common Stock to be sold by the Company for its own
account, except as and to the extent that, in the opinion of the managing
underwriter of such offering (if such method of disposition shall be an
underwritten public offering), such inclusion would adversely affect the
marketing (including, without limitation, the offering price) of the
Registrable Stock to be sold;
(vi) except as provided in Section 2(c)(ii) and Section 2(c)(v) above
and except for registrations on Forms S-4 or S-8 or any successor form, the
Company will not effect any other registration of its Common Stock or any
other equity securities (or other securities convertible into equity
securities) of the Company, whether for its own account or that of other
holder(s), from the date of receipt of a Demand Request or the date of
receipt of a Short Form Request, as the case may be, until the completion
of the period of distribution of the registration contemplated thereby;
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(vii) if any Investor (other than the requesting Investors) requests
that some or all of such Investor's shares of Registrable Stock be included
in an offering initiated pursuant to Section 2(a) or 2(b) above, and the
registration is to be, in whole or in part, an underwritten public
offering, such request by such other Investor shall specify that such
Investor's Registrable Stock is to be included in the underwriting on the
same terms and conditions as the shares of Registrable Stock otherwise
being sold through the underwriter; and
(viii) if, while a Demand Request or Short-Form Request is pending,
the Company determines in good faith that the filing of a registration
statement would require the disclosure of a material transaction or another
set of material facts and such disclosure would either have a material
adverse effect on such material transaction or the Company and its
subsidiaries (taken as a whole), then the Company shall not be required to
effect a registration pursuant to Section 2(a) or 2(b) above, as the case
may be, until the earlier of (A) the date upon which such material
information is otherwise disclosed to the public or ceases to be material
and (B) 90 days after the Company makes such good faith determination;
provided, that the Company shall not be permitted to delay a requested
registration under Section 2(a) or 2(b) above in reliance on this Section
2(c)(viii): (x) more than twice in any consecutive twelve-month period or
for more than an aggregate of 90 days in any consecutive twelve-month
period, (y) unless all directors and senior officers of the Company have
also agreed to refrain from selling, exercising, or converting any equity
securities, or other securities convertible into equity securities, of the
Company they may own during the period of such delay and (z) within a
six-month period after the Company has delayed a requested registration
pursuant to Section 2(c)(ii) above or an Investor is required to refrain
from selling Registrable Stock pursuant to Section 2(e) hereof.
(d) Piggyback Registration Rights. If at any time the Company proposes
to register any of its Common Stock or any other equity securities (or other
securities convertible into equity securities) of the Company under the
Securities Act for sale to the public, whether for its own account or for the
account of other security holders or both (other than a registration on Form S-4
or Form S-8 promulgated under the Securities Act (or any successor forms
thereto) or any other form not available for registering the Registrable Stock
for sale to the public), it will give written notice (each such notice a
"Piggyback Notice") at such time to each Investor of its intention to do so.
Upon the written request of any Investor, given within 30 days after receipt by
such Investor of the Piggyback Notice, to register any of its Registrable Stock
(which request shall state the amount and kind of Registrable Stock to be so
registered and the intended method of disposition thereof), the Company will use
its reasonable best efforts to cause the Registrable Stock, as to which
registration shall have been so requested, to be included in the securities to
be covered by the registration statement proposed to be filed by the Company,
all to the extent required to permit the sale or other disposition by such
Investor (in accordance with its written request) of such Registrable Stock so
registered; provided, that nothing herein shall prevent the Company from
abandoning or delaying such registration at any time. In the event that any
registration referred to in this Section 2(d) shall be, in whole or in part, an
underwritten public offering, such Registrable Stock shall be included in the
underwriting on the same terms and
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conditions as the shares otherwise being sold through underwriters under such
registration. The number of shares of Registrable Stock to be included in such
an underwritten offering may be reduced (pro rata among the requesting Investors
based upon the number of shares of Registrable Stock so requested to be
registered), but only after any amounts requested to be included by security
holders other than the Company have been reduced to zero and if and to the
extent that the managing underwriter of such offering shall be of the good faith
opinion that such inclusion would adversely affect the marketing (including,
without limitation, the offering price) of the securities to be sold by the
Company in such offering.
(e) Holdback Agreement. Notwithstanding anything to the contrary
contained in this Agreement, (A) if there is a firm commitment underwritten
public offering of securities of the Company pursuant to a registration covering
Registrable Stock and an Investor is offered an opportunity to sell in
compliance with Section 2(a), 2(b) or 2(d) above, as applicable, but does not
elect to sell its Registrable Stock to the underwriters of the Company's
securities in connection with such offering, such Investor shall refrain from
selling such Registrable Stock during the period of distribution of the
Company's securities by such underwriters and the period in which the
underwriting syndicate participates in the after market; provided, that such
Investor shall, in any event, be entitled to sell its Registrable Stock
commencing on the 90th day after the effective date of such registration
statement; and (B) if there is a firm commitment underwritten public offering of
securities of the Company by the Company, each Investor agrees that, except to
the extent otherwise permitted to participate in such offering pursuant to
Section 2(d) above, upon the request of the managing underwriter in such
offering, such Investor shall not sell Registrable Stock held by such Investor
for a period of 90 days from the effective date of the registration statement
relating thereto.
(f) Certain Registration Procedures. If and whenever the Company is
required by the provisions of this Section 2 to use its reasonable best efforts
to effect the registration of Registrable Stock under the Securities Act, the
Company will, as expeditiously as possible:
(i) prepare (and afford counsel for the selling Investors reasonable
opportunity to review and comment thereon) and file with the Commission a
registration statement with respect to such securities and use its
reasonable best efforts to cause such registration statement to become and
remain effective for the period of distribution contemplated thereby
(determined as hereinafter provided);
(ii) prepare (and afford counsel for the selling Investors reasonable
opportunity to review and comment thereon) and file with the Commission
such amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to keep such
registration statement effective for the period of distribution
contemplated thereby (determined as hereinafter provided) and comply with
the provisions of the Securities Act with respect to the disposition of all
Registrable Stock covered by such registration statement in accordance with
the selling Investors' intended method of disposition set forth in such
registration statement for such period of distribution;
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(iii) furnish to each selling Investor and to each underwriter such
number of copies of the registration statement and the prospectus included
therein (including, without limitation, each preliminary prospectus) as
such persons may reasonably request in order to facilitate the public sale
or other disposition of the Registrable Stock covered by such registration
statement;
(iv) use its reasonable best efforts to register or qualify the
Registrable Stock covered by such registration statement under the
securities or blue sky laws of such jurisdictions as the sellers of
Registrable Stock or, in the case of an underwritten public offering, the
managing underwriter, shall reasonably request; provided, that the Company
will not be required to (x) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for
this Section 2(f)(iv), (y) subject itself to taxation in any such
jurisdiction or (z) consent to general service of process in any
jurisdiction;
(v) immediately notify each selling Investor under such registration
statement and each underwriter, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the
happening of any event as a result of which the prospectus contained in
such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing;
(vi) use its reasonable best efforts (if the offering is underwritten)
to furnish, at the request of any selling Investor, on the date that
Registrable Stock is delivered to the underwriters for sale pursuant to
such registration: (A) an opinion dated such date of counsel representing
the Company for the purposes of such registration, addressed to the
underwriters and to each selling Investor, stating that such registration
statement has become effective under the Securities Act and that (1) to the
best knowledge of such counsel, no stop order suspending the effectiveness
thereof has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the Securities Act, (2) the
registration statement, the related prospectus, and each amendment or
supplement thereof, comply as to form in all material respects with the
requirements of the Securities Act and the applicable rules and regulations
of the Commission thereunder (except that such counsel need express no
opinion as to financial statements, the notes thereto, and the financial
schedules and other financial and statistical data contained therein) and
(3) to such other effects as may reasonably be requested by counsel for the
underwriters or by the selling Investors or their counsel, and (B) a letter
dated such date from the independent public accountants retained by the
Company, addressed to the underwriters, stating that they are independent
public accountants within the meaning of the Securities Act and that, in
the opinion of such accountants, the financial statements of the Company
included in the registration statement or the prospectus, or any amendment
or supplement thereof, comply as to form in all material respects with the
applicable accounting requirements of the Securities Act, and such letter
shall additionally cover such other financial matters (including, without
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limitation, information as to the period ending no more than five business
days prior to the date of such letter) with respect to the registration in
respect of which such letter is being given as such underwriters or such
selling Investors may reasonably request; and
(vii) make available for inspection by each selling Investor, any
underwriter participating in any distribution pursuant to such registration
statement, and any attorney, accountant or other agent retained by the
selling Investors or underwriters, all financial and other records,
pertinent corporate documents and properties of the Company, and cause the
Company's officers, directors and employees to supply all information
reasonably requested by any of such selling Investors, underwriters,
attorneys, accountants or agents in connection with such registration
statement and permit such selling Investors, underwriters, attorneys,
accountants or agents to participate in the preparation of such
registration statement.
For purposes of Sections 2(f)(i) and 2(f)(ii) above (as well as Sections
2(c)(vi) and 2(e) above), the "period of distribution" of Registrable Stock in a
firm commitment underwritten public offering shall be deemed to extend until
each underwriter has completed the distribution of all securities purchased by
it, and the period of distribution of Registrable Stock in any other
registration shall be deemed to extend until the sale of all Registrable Stock
covered thereby, but in either case, such period shall not extend beyond the
90th day after the effective date of the registration statement filed in
connection therewith. If an Investor receives a notification from the Company
pursuant to Section 2(f)(v) that a registration statement or prospectus contains
an untrue statement or omission (a "Deficiency Notice"), then such Investor
shall: (i) keep the fact of such notification and its contents confidential and
(ii) immediately suspend all sales of securities of the Company and any use of
the registration statement or prospectus as to which the notification applies,
until such time as such Investor receives notification (a "Cure Notice") from
the Company that an amendment to the registration statement or a supplement to
the prospectus has been filed correcting said untrue statement or omission. In
the event the Company shall give a Deficiency Notice, (x) the maximum time
period for the period of distribution set forth above shall be extended by the
number of days during the period from and including the date of the giving of
the Deficiency Notice to and including the date when each such Investor shall
have received the copies of the supplemented or amended prospectus and (y)
unless each such Investor receives a Cure Notice within two (2) business days
following its receipt of such Deficiency Notice, then, in the case of a Demand
Registration, the majority-in-interest of the Investors requesting such Demand
Registration may withdraw their Demand Request and preserve it for use at a
later date.
(g) Information From Selling Investors. In connection with each
registration hereunder, Investors selling Registrable Stock will furnish to the
Company in writing such information with respect to themselves and the proposed
distribution by them as shall be reasonably necessary in order to assure
compliance with federal and applicable state securities laws.
(h) Underwriting Agreement. In connection with any registration
pursuant to this Section 2 that covers an underwritten public offering, the
Company and Investors selling Registrable Stock each agree to enter into a
written agreement with the managing underwriter
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selected in the manner herein provided in such form and containing such
provisions as are customary in the securities business for such an arrangement
between major underwriters, selling stockholders and a company of the Company's
size and investment stature; provided, that (i) such agreement shall not contain
any such provision applicable to the Company which is inconsistent with the
provisions hereof and (ii) the time and place of the closing under said
agreement shall be as mutually agreed upon among the Company, such managing
underwriter and, except in the case of a registration pursuant to Section 2(d)
above, Investors holding a majority of the Registrable Stock being sold in such
offering.
(i) Expenses. The Company will pay all Registration Expenses (as
defined below) incurred in complying with Section 2 of this Agreement. All
Selling Expenses (as defined below) incurred in connection with any registered
offering of securities that, pursuant to this Section 2, includes Registrable
Stock, shall be borne by the participating sellers in proportion to the number
of shares sold by each, or by such persons other than the Company (except to the
extent the Company shall be a seller) as they may agree. All expenses incident
to performance of or compliance by the Company with Section 2 hereof, including,
without limitation, all Commission, stock exchange, Nasdaq or National
Association of Securities Dealers, Inc. ("NASD") registration and filing fees
(including, without limitation, fees and expenses incurred in connection with
the listing of the Common Stock of the Company on any securities exchange or
exchanges or Nasdaq), printing, distribution and related expenses, fees and
disbursements of counsel and independent public accountants for the Company, all
fees and expenses incurred in connection with compliance with state securities
or blue sky laws and the rules of the NASD or any securities exchange, transfer
taxes and fees of transfer agents and registrars, but excluding any Selling
Expenses, are herein called "Registration Expenses". All underwriting discounts
and selling commissions and stock transfer taxes applicable to the sale of
Registrable Stock are herein called "Selling Expenses".
SECTION 3. INDEMNIFICATION RIGHTS AND OBLIGATIONS IN RESPECT OF
REGISTERED OFFERINGS OF REGISTRABLE STOCK.
(a) Company Indemnification of Selling Investors. In the event of a
registration of any of the Registrable Stock under the Securities Act pursuant
to Section 2 of this Agreement, the Company will indemnify and hold harmless
each seller of Registrable Stock thereunder and each other person, if any, who
controls such seller within the meaning of the Securities Act, against any
losses, claims, damages or liabilities, joint or several, (or actions in respect
thereof) to which such seller or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any registration statement under which such Registrable Stock was registered
under the Securities Act, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each such seller and each such controlling person
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, that
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the Company will not be liable in any such case if and to the
extent that any such loss, claim, damage, liability or action arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information furnished by such seller
or such controlling person in writing specifically for use in such registration
statement or prospectus, and provided, further, that the indemnity agreement
contained in this Section 3(a) shall not apply to amounts paid in settlement of
any such loss, claim, damage, liability, or action if such settlement is
effected without the consent of the Company (which consent shall not be
unreasonably withheld).
(b) Selling Investor Indemnification of the Company and the Other
Selling Stockholders. In the event of a registration of any of the Registrable
Stock under the Securities Act pursuant to Section 2 of this Agreement, each
seller of such Registrable Stock thereunder, severally and not jointly, will
indemnify and hold harmless the Company and each person, if any, who controls
the Company within the meaning of the Securities Act, each officer of the
Company who signs the registration statement, each director of the Company, each
underwriter and each person who controls any underwriter within the meaning of
the Securities Act, and each other seller of Registrable Stock and each person
who controls any such other seller of Registrable Stock, against all losses,
claims, damages or liabilities, joint or several, (or actions in respect
thereof) to which the Company or such officer or director or underwriter or
other seller or controlling person may become subject under the Securities Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the registration
statement under which such Registrable Stock was registered under the Securities
Act, any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereof, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse the Company and each such officer, director, underwriter, other seller
of Registrable Stock and controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, that such seller will
be liable hereunder in any such case if and only to the extent that any such
loss, claim, damage, liability or action arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in reliance upon and in conformity with information pertaining to such
seller, as such, furnished in writing to the Company by such seller specifically
for use in such registration statement or prospectus; provided, further, that
the liability of each seller hereunder shall be limited to the proportion of any
such loss, claim, damage, liability or expense which is equal to the proportion
that the public offering price of shares sold by such seller under such
registration statement bears to the total public offering price of all
securities sold thereunder, but not to exceed the proceeds (net of underwriting
discounts and commissions) received by such seller from the sale of Registrable
Stock covered by such registration statement; provided, further, that the
indemnity agreement contained in this Section 3(b) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of such seller of Registrable Stock
(which consent shall not be unreasonably withheld).
10
(c) Indemnification Procedures. Promptly after receipt by an
indemnified party hereunder of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party hereunder, notify the indemnifying party in writing thereof,
but the omission so to notify the indemnifying party shall not relieve it from
any liability which it may have to any indemnified party other than under this
Section 3. In case any such action shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate in and, to the extent it
shall wish, to assume and undertake the defense thereof with counsel reasonably
satisfactory to such indemnified party, and, after notice from the indemnifying
party to such indemnified party of its election so to assume and undertake the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under this Section 3 for any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation and of liaison with counsel so selected; provided, that
if the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be reasonable defenses available to it which are different from
or additional to those available to the indemnifying party, or if the interests
of the indemnified party reasonably may be deemed to conflict with the interests
of the indemnifying party, the indemnified party (together with all other
indemnified parties that may be represented without conflict by one counsel)
shall have the right to select a separate counsel and to assume such legal
defenses and otherwise to participate in the defense of such action, with the
expenses and fees of such separate counsel and other expenses related to such
participation to be reimbursed by the indemnifying party as incurred.
Notwithstanding the foregoing, any indemnified party shall have the right to
retain its own counsel in any such action, but the fees and disbursements of
such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party shall have failed to retain counsel for the indemnified
person as aforesaid or (ii) the indemnifying party and such indemnified party
shall have mutually agreed to the retention of such counsel. It is understood
that the indemnifying party shall not, in connection with any action or related
actions in the same jurisdiction, be liable for the fees and disbursements of
more than one separate firm qualified in such jurisdiction to act as counsel for
the indemnified party. No indemnifying party, in the defense of any such claim
or litigation, shall, except with the consent of such indemnified party, which
consent shall not be unreasonably withheld, consent to entry of any judgment or
enter into any settlement of any pending or threatened action in respect of
which any indemnified party is or could have been a party and indemnity was
sought hereunder by such indemnified party unless such judgment or settlement
includes as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in respect
to such claim or litigation. The indemnification of underwriters provided for in
this Section 3 shall be on such other terms and conditions as are at the time
customary and reasonably required by such underwriters.
(d) Contribution. If the indemnification provided for in Sections 3(a)
and 3(b) above is unavailable or insufficient to hold harmless an indemnified
party under such Sections in respect of any losses, claims, damages or
liabilities or actions in respect thereof referred to therein, then each
indemnifying party shall in lieu of indemnifying such indemnified party
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims,
11
damages, liabilities or actions in such proportion as appropriate to reflect the
relative fault of the Company, on the one hand, and the underwriters and the
sellers of such Registrable Stock, on the other, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or actions as well as any other relevant equitable considerations,
including, without limitation, the failure to give any notice under Section 3(c)
above. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact
relates to information supplied by the Company, on the one hand, or the
underwriters and the sellers of such Registrable Stock, on the other, and to the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and each of the
Investors agrees that it would not be just and equitable if contributions
pursuant to this Section were determined by pro rata allocation (even if all of
the sellers of such Registrable Stock were treated as one entity for such
purpose) or by any other method of allocation which did not take account of the
equitable considerations referred to above in this Section. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages,
liabilities or action in respect thereof, referred to above in this Section,
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section, the sellers of
such Registrable Stock shall not be required to contribute any amount in excess
of the amount, if any, by which the total price at which the Registrable Stock
sold by each of them was offered to the public exceeds the amount of any damages
which they are otherwise required to pay by reason of such untrue or alleged
untrue statement or omission. No person guilty of fraudulent misrepresentations
(within the meaning of Section 11(f) of the Securities Act), shall be entitled
to contribution from any person who is not guilty of such fraudulent
misrepresentation.
SECTION 4. Rule 144. The Company agrees with the Investors it shall
file any and all reports required to be filed by it under the Securities Act and
the Exchange Act and the rules and regulations adopted by the Commission
thereunder, or, if the Company is not required to file any such reports, it
shall, upon the written request of any Investor, make publicly available such
information as is necessary to permit sales pursuant to Rule 144 under the
Securities Act. Upon the written request of any Investor, the Company shall
promptly furnish to such Investor a written statement by the Company as to its
compliance with the reporting requirements set forth in this Section 4.
SECTION 5. Duration of Agreement. The provisions of Section 2 of this
Agreement shall terminate at such time as the Investors own in the aggregate
Registrable Stock or securities convertible into or exerciseable for Registrable
Stock constituting less than one percent (1%) of the outstanding Common Stock
(on a Common Stock equivalent basis).
SECTION 6. Miscellaneous.
(a) Additional Registration Rights. Without the consent of a
majority-in-interest of the Investors, the Company shall not grant any
registration rights to any other person that are inconsistent or conflict with
the registration rights granted hereunder.
12
(b) Headings. Headings of sections of this Agreement are inserted for
convenience of reference only and shall not affect the interpretation hereof.
(c) Severability. Each provision of this Agreement shall be treated as
a separate and independent clause, and the unenforceability of any one clause
shall in no way impair the enforceability of any of the other clauses contained
herein. If one or more of the provisions contained in this Agreement shall for
any reason be held to be unenforceable, such provision or provisions shall be
construed by the appropriate judicial body by limiting or reducing it or them,
so as to be enforceable to the maximum extent compatible with applicable law,
and no other provision hereof shall be affected by such holding, limitation or
reduction.
(d) Benefits of Agreement. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors and
permitted assigns and nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the parties hereto, their respective
successors and permitted assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement. The rights and obligations of
the parties hereto shall not be assigned without the consent of the Company, in
the case of any assignment by an Investor, or a majority-in-interest of the
Investors, in the case of any assignment by the Company, and any attempted
assignment in violation of this Section 6(d) shall be null and void; provided,
that, the Investors' rights hereunder are assignable to any transferee of the
Preferred Shares or the Warrants or any Registrable Stock issued or issuable
upon conversion thereof other than (i) transfers pursuant to an effective
registration statement under, or pursuant to Rule 144 under, the Securities Act
and (ii) transfers of less than one percent (1%) of the Registrable Stock then
issued or issuable upon conversion or exercise of outstanding securities,
determined on a Common Stock equivalent basis (except any such transfer to any
other Investor, any Affiliate of WCAS or, in the case of any Investor other than
WCAS, to any family member or trust for the benefit of such Investor or such
family members). Notwithstanding the foregoing, such rights may only be assigned
provided that the following additional conditions are satisfied: (a) such
transfer is effected in accordance with applicable securities laws, (b) such
transferee agrees in writing to be subject to the terms of this Agreement as an
"Investor" hereunder and (c) the Company is given written notice of such
transfer, specifying the name and address of the transferee and identifying the
securities transferred with respect to which rights are being assigned.
(e) Entire Agreement; Modification. This Agreement together with the
Securities Purchase Agreement supercede all prior agreements and understandings,
oral and written, between the parties hereto with respect to the subject matter
hereof. This Agreement may not be modified or amended except by a writing signed
by the Company and a majority-in-interest of the Investors. Any waiver of any
provision of this Agreement must be in a writing signed by the party against
whom enforcement of such waiver is sought.
(f) Notices. All notices, requests, instructions and other documents
that are required to be or may be given or delivered pursuant to the terms of
this Agreement shall be in writing and shall be sufficient in all respects if
delivered by hand or national overnight courier
13
service, transmitted by facsimile or mailed by registered or certified mail,
postage prepaid, as follows:
If to the Company, to it at:
00000 Xxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxxx LLP
0000 Xxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
If to any Investor, to such Investor:
c/o Welsh, Carson, Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx X. Xxxxxxx
Facsimile: (000) 000-0000
with a copy to:
Reboul, MacMurray, Xxxxxx, Xxxxxxx & Kristol
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
or such other address or addresses as any party hereto shall have designated by
notice in writing to the other parties hereto. Such notices, requests,
instructions and other documents shall be deemed given or delivered (i) five
business days following sending by registered or certified mail, postage
prepaid, (ii) one business day following sending by national overnight courier
service, (iii) when sent, if sent by facsimile (but only if such facsimile is
actually received) or (iv) when delivered, if delivered by hand.
(g) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Any or all such
counterparts may be executed by facsimile.
14
(h) Changes in Registrable Stock. If, and as often as, there are any
changes in the Registrable Stock by way of stock split, stock dividend,
combination or reclassification, or through merger, consolidation,
reorganization or recapitalization, or by any other means, appropriate
adjustment shall be made in the provisions hereof as may be required so that the
rights and privileges granted hereby shall continue with respect to the
Registrable Stock as so changed and the Company shall make appropropriate
provision in connection with any merger, consolidation, reorganization or
recapitalization that any successor to the Company (or resulting Parent thereof)
shall agree, as a condition to the consummation of any such transaction, to
expressly assume the Company's obligations hereunder.
(i) Specific Performance. Each party hereto agrees that a remedy at
law for any breach or threatened breach by such party of this Agreement would be
inadequate and therefore agrees that any other party hereto shall be entitled to
specific performance of this Agreement in addition to any other available rights
and remedies in case of any such breach or threatened breach.
(j) Governing Law. This Agreement and all disputes arising out of or
relating to this Agreement, its subject matter, the performance by the parties
of their respective obligations hereunder or the claimed breach hereof, whether
in tort, contract or otherwise, shall be governed by and construed in accordance
with the internal laws of the State of New York without giving effect to its
choice of law principles.
(k) Interpretation. As used herein, the words "hereof", "herein",
"herewith" and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement as a whole and not to any particular
provision of this Agreement, and the word "Section" refers to a Section of this
Agreement unless otherwise specified. Whenever the words "include", "includes"
or "including" are used in this Agreement they shall be deemed to be followed by
the words "without limitation". The definitions contained in this Agreement are
applicable to the singular as well as the plural forms of such terms and to the
masculine as well as to the feminine and neuter genders of such terms.
References herein to a "majority-in-interest" of the Investors or to
a"majority-in-interest" of the requesting Investors shall refer to those
Investors holding a majority of the shares of Registrable Stock or securities
convertible into or exchangeable for Registrable Stock (determinated on a Common
Stock equivalent (i.e., as converted, as exercised) basis) held by all such
Investors or requesting Investors, as the case may be.
[signature pages follow]
15
IN WITNESS WHEREOF, the Company and the Investors have
executed this Registration Rights Agreement as of the day and year first above
written.
The Company:
-----------
LABONE, INC.
By: /s/ W. Xxxxxx Xxxxx XX
----------------------------------
Name: W. Xxxxxx Xxxxx XX
Title: President
The Investors:
-------------
WELSH, CARSON, XXXXXXXX &
XXXXX IX, L.P.
By: WCAS IX Associates LLC,
Its General Partner
By: /s/ Xxxxxxxx X. Rather
----------------------------------
Xxxxxxxx X. Rather
Managing Member
WCAS MANAGEMENT CORPORATION
By: /s/ Xxxxxxxx X. Rather
----------------------------------
Xxxxxxxx X. Rather
Treasurer
Xxxxxxx X. Xxxxx
Xxxxxx Xxxxxx
Xxxxx X. Xxxxxxxx
Xxxxxx X. XxXxxxxxx
Xxxxxx X. Xxxxxxxxx
Xxxxxxxx X. Xxxxxx
Xxxxxxx X. Xx Xxxxxx
Xxxx X. Xxxxxxx
XXX FBO Xxxxxxxx X. Rather
D. Xxxxx Xxxxxxx
Xxxxxx Xxxxx
Xxxx X. Xxxxx
XXX FBO Xxxxx X. Xxxxxxx
Xxxx Xxxxxxx
Xxxx Xxxxxxx
Xxxx X. Xxx
By: /s/ Xxxxxxxx X. Rather
----------------------------------
Xxxxxxxx X. Rather
as Attorney-in-Fact
