Exhibit 4.8
THIS WARRANT AND THE SHARES OF COMMON STOCK PURCHASABLE HEREUNDER HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS AND CANNOT BE OFFERED, SOLD, HYPOTHECATED, TRANSFERRED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION OR THE AVAILABILITY OF
AN EXEMPTION FROM REGISTRATION UNDER SUCH LAWS AS PROVIDED IN THIS WARRANT
No. of Shares: 250,000 Warrant No.
----
Original Issue Date: November 5, 1999
WARRANT
To Purchase Shares of Common Stock of
LABONE, INC.
This certifies that, for value received, Xxxxx Xxxxx ("Xxxxx") is
entitled to purchase from LABONE, INC., a Missouri corporation, from time to
time prior to the Expiration Date in accordance with the terms and conditions
hereof, up to 250,000 shares of Common Stock of the Company at a Purchase
Price per share set forth below. The number of shares of Common Stock
purchasable hereunder and the Purchase Price therefor are subject to
adjustment as hereinafter set forth in Section 6.
1. Certain Definitions. For all purposes of this Warrant the following
terms shall have the meanings indicated:
(a) "Common Stock" shall mean the Company's presently authorized
shares of Common Stock, par value $.01 per share, and any other securities
into which or for which the Common Stock may be converted or exchanged
pursuant to a plan of recapitalization, reorganization, merger, sale of
assets or otherwise.
(b) "Company" shall mean LABONE, INC., a Missouri corporation, and
any company that shall succeed to, or assume, the obligations of said
corporation hereunder.
(c) "Expiration Date" shall mean 12:01 o'clock a.m. Central Time on
November 5, 2004, which is the fifth anniversary of the Original Issue Date.
(d) "Qualified Revenues" shall mean (i) sales revenues (sales net
of discount) of World Wide Health Services, Inc. ("World Wide"), a wholly-
owned subsidiary of the Company, plus (ii) sales revenues on attending
physician statement accounts served by World Wide on the Original Issue Date
and earned by Systematic Business Services, Inc., a wholly-owned subsidiary
of the Company, by any other affiliate of the Company and by the Company,
plus (iii) all revenues from any physician and/or paramedical examination
business serving the insurance industry and conducted by the Company and/or
its affiliates except revenues attributable to any other physician and/or
paramedical examination business serving the insurance industry acquired by
the Company or its affiliates.
(e) "Purchase Price" or "Purchase Price per share" shall mean the
purchase price per Warrant Share (as defined below), which shall equal $9.97,
being the closing sale price of the Common Stock, as reported by the NASDAQ
Stock Market, on September 27, 1999, as such purchase price may thereafter be
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adjusted from time to time pursuant to the provisions of Section 6 hereof
(rounded to the nearest whole cent).
(f) "Warrantholder" or "Registered Holder" shall mean Xxxxx, or his
registered transferee.
(g) "Warrant" shall mean this Warrant and all Warrants issued in
exchange therefor or replacement thereof.
(h) "Warrant Shares" shall mean the shares of Common Stock
purchasable by the Registered Holder upon the exercise of this Warrant
pursuant to Section 2 hereof, as adjusted from time to time pursuant to
Section 6 hereof.
All terms used in this Warrant which are not defined in Section 1 have the
meanings respectively set forth therefor elsewhere in this Warrant.
2. Exercise of Warrant.
(a) Subject to the terms and conditions hereof, from and after the
Original Issue Date and prior to the Expiration Date, this Warrant may be
exercised in whole or in part in respect of vested shares. Shares of Common
Stock shall become vested under this Warrant as follows:
(i) with respect to 83,333 shares of Common Stock if the
Company earns Qualified Revenues of three million seven hundred fifty
thousand dollars ($3,750,000) or more in any calendar quarter within three
years after the Original Issue Date ("Threshold #1"),
(ii) with respect to an additional 83,333 shares of Common
Stock if the Company earns Qualified Revenues of five million dollars
($5,000,000) or more in any calendar quarter within three years after the
Original Issue Date ("Threshold #2") and
(iii) with respect to the remaining 83,334 shares of Common
Stock subject to this Warrant if the Company earns Qualified Revenues of six
million two hundred fifty thousand ($6,250,000) or more in any calendar
quarter within three years after the Original Issue Date ("Threshold #3").
The rights to exercise shall not be cumulative. Once a Threshold is achieved
in a calendar quarter, this Warrant will not become exercisable with respect
to additional shares solely by reason of the same Threshold being achieved in
a subsequent calendar quarter.
(b) In order to exercise this Warrant in whole or in part, the
Registered Holder shall complete the "Notice of Intention to Exercise
Warrant" attached hereto (the "Notice Form"), and deliver this Warrant, the
completed Notice Form and either cash, a cashier's check payable to the order
of the Company or a wire transfer of funds in an amount equal to the then
aggregate Purchase Price of the Warrant Shares being purchased, to the
Corporate Secretary of the Company at the Company's office located at 00000
Xxxxxx Xxxx, Xxxxxx, Xxxxxx 00000 (or such other office or agency of the
Company as the Company may designate by notice in writing to the Registered
Holder). In no event may the Warrantholder exercise the Warrant with respect
to more than 250,000 shares of Common Stock in the aggregate, subject to
adjustment as provided in this Warrant.
PAGE 56
3. Delivery of Stock Certificate, Etc. Upon Exercise. As soon as
practicable after exercise of this Warrant, the Company shall cause to be
issued and delivered to the Registered Holder (a) a certificate or
certificates representing the aggregate number of shares of Common Stock
specified in said Notice Form, all of which shares shall be duly authorized
and validly issued, fully paid and nonassessable, (b) cash in lieu of any
fractional share based upon the fair market value of a share of Common Stock,
as determined by the Company and (c) any other securities or property
(including cash) to which such Registered Holder is entitled upon such
exercise pursuant to the terms of this Warrant. Each stock certificate
representing shares of Common Stock so issued and delivered shall be
registered in the name of the Registered Holder or, subject to the provisions
of Sections 4 and 5 hereof, such other name as shall be designated by the
Registered Holder. Such certificate or certificates shall be deemed to have
been issued and the Warrantholder or any other person so designated to be
named therein shall be deemed to have become a holder of record of such
shares of Common Stock only as of the date the certificate representing such
shares is issued by the Company.
4. Ownership and Transfer of Warrant and Warrant Shares.
(a) Registered Holder. The Company may deem and treat the
Registered Holder of this Warrant as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by anyone
other than the Company) for all purposes, notwithstanding any notice to the
contrary, until presentation of this Warrant for registration of transfer as
provided in this Section 4.
(b) Transfer. This Warrant may not be sold, transferred, or
assigned by the Registered Holder in whole or in part at any time, except
pursuant to (i) registration of the Warrant under the Securities Act of 1933
and any applicable state securities laws (collectively, the "Securities
Laws") or (ii) receipt by LabOne and the Company of an opinion, in the form
and substance acceptable to LabOne and the Company, from counsel of the
transferee reasonably satisfactory to LabOne and the Company, to the effect
that registration under the Securities Laws is not required.
5. Compliance with Securities Laws.
(a) Accredited Investor. By acceptance of this Warrant, the
Registered Holder represents and warrants that he is an "accredited investor"
within the meaning of Rule 501(a) of Regulation D promulgated under the
Securities Act of 1933, as amended (the "Securities Act"), the Registered
Holder being a natural person that either (i) has an individual net worth, or
joint net worth with his spouse, in excess of $1,000,000 or (ii) had an
individual net income in excess of $200,000 in each of the two most recent
years or joint income with his spouse of $300,000 in each of those years and
has a reasonable expectation of reaching the same income level in the current
year.
(b) Investment Intent. By acceptance of this Warrant, the
Registered Holder represents and warrants that he is acquiring this Warrant
and any Warrant Shares for his own account and for the purpose of investment
and not with a view to the sale or distribution thereof. The Registered
Holder understands that this Warrant and the Warrant Shares that may be
issued upon exercise of this Warrant will not have been registered under the
PAGE 57
Securities Act of 1933, as amended (the "Securities Act") or any state
securities laws (the Company being under no obligation to effect such
registration) and that this Warrant and the Warrant Shares must be held
indefinitely unless a subsequent disposition thereof is registered under the
Securities Act and applicable state securities laws or is exempt from
registration as provided herein.
(c) Limitation on Transfer. By acceptance of this Warrant, the
Registered Holder represents, covenants, and agrees that he will not sell or
otherwise dispose of this Warrant or of the Warrant Shares in the absence of
(i) registration under the Securities Act and applicable state securities
laws or (ii) an opinion acceptable in form and substance to the Company from
counsel reasonably satisfactory to the Company, or an opinion of counsel to
the Company, to the effect that no registration is required for such
disposition.
(d) Restrictive Legend. Each Warrant shall bear on the face thereof
a legend substantially in the form of the notice set forth on the first page
of this Warrant. Upon exercise of any part of the Warrant and the issuance
of any Warrant Shares, the Company shall instruct its transfer agent to enter
stop transfer orders with respect to such Warrant Shares, and the
certificates representing such Warrant Shares shall have stamped or imprinted
thereon or affixed thereto a legend to the following effect:
The securities represented by this certificate have not been
registered under the Securities Act of 1933 or any state securities laws
(collectively, the "Securities Laws") and may not be sold, transferred or
otherwise disposed of in the absence of registration under the Securities
Laws or receipt by LabOne and the Company of an opinion, in the form and
substance acceptable to LabOne and the Company, from counsel of the
transferee reasonably satisfactory to LabOne and the Company, to the
effect that registration under the Securities Laws is not required.
(e) State Securities Laws. This Warrant has been offered to and
accepted by the Registered Holder at his principal residence in the State of
New Jersey and has not been offered to the Registered Holder in any other
State.
6. Adjustments to the Purchase Price and Number of Warrant Shares.
(a) Subdivision of Stock, etc. In the event of a stock dividend or
other distribution payable in Common Stock, or any stock split or subdivision
of Common Stock into a greater number of shares, the number of Warrant Shares
subject to the Warrant immediately prior to such event shall be
proportionately increased and the Purchase Price in effect immediately prior
to such event shall be proportionately reduced, and in the event that the
outstanding shares of Common Stock of the Company shall be combined into a
smaller number of shares, the number of Warrant Shares subject to the Warrant
immediately prior to such combination shall be proportionately reduced and
the Purchase Price in effect immediately prior to such combination shall be
proportionately increased.
(b) Reorganization, Consolidation, Merger, etc. In the event that
the Company shall (i) effect a reorganization or recapitalization pursuant to
which all of the outstanding shares of Common Stock are converted into or
exchanged for other securities or property (including cash), (ii) consolidate
with or merge into any other person, or (iii) transfer all or substantially
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all of its properties or assets to any other person in such a way that
holders of Common Stock shall be entitled to receive securities or property
(including cash) with respect to or in exchange for Common Stock; then, in
each such case, the Warrantholder, upon the exercise hereof as provided in
Section 2 at any time after the consummation of such reorganization or
recapitalization, consolidation, merger or sale of assets, as the case may
be, shall be entitled to receive (and the Company shall be required to
deliver), in lieu of the Warrant Shares issuable upon such exercise, such
other securities and property (including cash) into which such Warrant Shares
shall have been converted or exchanged pursuant to such transaction. The
above provision shall apply to successive reorganizations, recapitalizations,
consolidations, mergers or transfers described therein.
7. Notice of Record Date, Etc. In the event of any of the following
occurring prior to the Expiration Date and while this Warrant is exercisable
in respect of vested shares:
(a) any taking by the Company of a record of the holders of Common
Stock for the purpose of determining the holders thereof who are entitled to
receive any dividend (excluding any cash dividend payable out of earnings or
earned surplus of the Company), or any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities or
property, or to receive any other right, or
(b) any transfer of all or substantially all of the assets of the
Company to or consolidation or merger of the Company with or into any other
person, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
then and in each event the Company shall cause to be mailed to the
Warrantholder a notice containing a brief description of the proposed action
and stating the date on which either a record is to be taken for the purpose
of such dividend, distribution or rights, or the date upon which such
transfer, consolidation, merger, dissolution, liquidation or winding-up is to
take place and the time, if any is to be fixed, as of which the holders of
Common Stock or other securities shall receive cash or other property
deliverable upon such transfer, consolidation, merger, dissolution,
liquidation or winding-up. Such notice shall also state that the action in
question or the record date is subject to the effectiveness of a registration
statement under the Securities Act or a favorable vote of stockholders, if
either is required. Such notice shall be mailed to the Warrantholder at
least ten (10) days prior to the date specified in such notice on which any
such action is to be taken or the record date, whichever is earlier.
8. Required Payments. If this Warrant becomes exercisable with respect
to Threshold #1, and does not become exercisable with respect to Thresholds
#2 and #3 within three (3) years after the Original Issue Date, the Company
agrees to pay to Warrantholder promptly after the fifth anniversary of the
Original Issue Date an amount in cash equal to the amount, if any, by which
$120,000 exceeds the Threshold #1 Spread. The Threshold #1 Spread shall
equal 83,333 multiplied by the amount by which the Highest Closing Price for
Threshold #1 (as defined below) exceeds the exercise price per share. If
this Warrant becomes exercisable with respect to Threshold #2 and does not
become exercisable with respect to Threshold #3 within three (3) years after
PAGE 59
the Original Issue Date, the Company agrees to pay to Warrantholder promptly
after the fifth anniversary of the Original Issue Date an amount in cash
equal to the amount, if any, by which $400,000 exceeds the sum of the
Threshold #1 Spread and the Threshold #2 Spread. The Threshold #2 Spread
shall equal 83,333 multiplied by the amount by which the Highest Closing
Price for Threshold #2 exceeds the exercise price per share. If this Warrant
becomes exercisable with respect to Threshold #3 within three (3) years after
the Original Issue Date, the Company agrees to pay to Warrantholder promptly
after the fifth anniversary of the Original Issue Date an amount equal to the
amount, if any, by which $1,000,000 exceeds the sum of the Threshold #1
Spread, the Threshold #2 Spread and the Threshold #3 Spread. The Threshold
#3 Spread shall equal 83,334 multiplied by the Highest Closing Price for
Threshold #3 over the exercise price per share. The Highest Closing Price
for a Threshold shall equal the highest closing price per share of the Common
Stock during the period beginning on the first day that the shares subject to
that Threshold become exercisable and ending on the fifth anniversary of the
Original Issue Date. The foregoing notwithstanding, if the Highest Closing
Price per share of the Common Stock of the Company does not exceed the
exercise price per share during such period, the Threshold Spread for that
Threshold shall equal zero.
9. Reservation of Warrant Shares; Authority; Validity. During the term
of this Warrant, the Company shall at all times reserve and keep available
from its authorized but unissued or treasury shares such number of shares of
its Common Stock as shall be issuable upon exercise of the Warrant. The
Company has all requisite corporate power and authority to execute, deliver,
and perform its obligations under this Warrant. Upon the Company's execution
of this Warrant, this Warrant shall have been duly authorized, executed, and
delivered, and shall constitute legal, valid, and binding obligations of the
Company, enforceable in accordance with its terms.
10. Listing or Qualification for Trading. The Company shall use its best
efforts to cause the Warrant Shares, immediately upon official notice of
issuance upon exercise of this Warrant, to be listed or admitted for trading
on such principal securities exchange, interdealer quotation system or market
within the United States of America, if any, on which other shares of Common
Stock are then listed or quoted, and to maintain such listing or
qualification for trading for so long as other shares of Common Stock are
listed or quoted thereon. The Company is under no obligation to register or
qualify this Warrant or the Warrant Shares under the Securities Act or any
state securities laws.
11. Notices. Any notice or other document required or permitted to be
given or delivered to the Registered Holder shall be delivered at, or sent by
certified or registered mail to the Registered Holder at the last address
shown on the books of the Company maintained for the registry and transfer of
the Warrants.
12. No Rights as Stockholder. This Warrant shall not entitle the
Registered Holder to any voting or other rights as a stockholder of the
Company.
13. Replacement of Warrant. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
PAGE 60
this Warrant and, in the case of such loss, theft or destruction, upon
delivery of an indemnity bond reasonably satisfactory in form and amount to
the Company or, in the case of any such mutilation, upon surrender and
cancellation of such Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
14. Law Governing. This Warrant shall be governed by, and construed and
enforced in accordance with, the laws of the State of Missouri (excluding the
choice of law provisions thereof).
15. Miscellaneous. This Warrant and any provision hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by
the party (or any predecessor in interest thereof) against which enforcement
of the same is sought. The headings in this Warrant are for purposes of
reference only and shall not affect the meaning or construction of any of the
provisions hereof.
IN WITNESS WHEREOF, this Warrant is executed effective as of the day
and year first above written.
LABONE, INC.
By:
----------------------------------
Its:
---------------------------------
Accepted and agreed to:
-------------------------------------
Xxxxx Xxxxx
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NOTICE OF INTENTION TO EXERCISE WARRANT
The undersigned hereby notifies LabOne, Inc. that he has elected to exercise
his right under the within Warrant to purchase shares of Common
Stock, and has effected a wire transfer to LabOne, Inc. or enclosed herewith
cash or a cashier's check payable to LabOne, Inc. in the total amount of
$ in payment of the Purchase Price for such shares. The
certificate(s) representing the shares of Common Stock being purchased should
be delivered in the denominations and to the persons described below:
No. of
Name Address Shares
---- ------- ------
Date:
-------------------- -------------------------------
Xxxxx Xxxxx
PAGE 62
