EXHIBIT 10.8
SCHEDULE TO EXHIBIT 10.8
The following holders of Series B Senior Convertible Preferred Stock ("Series B
Preferred Stock") of American Health Services Corp. have entered into Agreements
relating to Warrants for Common Stock of InSight Health Services Corp. with
InSight Health Services Corp. and American Health Services Corp.:
Frank E. Egger (1,716.31 shares of Series B Preferred Stock)
Roz Kovens (5,800 shares of Series B Preferred Stock)
Estate of Cal Kovens (25,458.64 shares of Series B Preferred Stock)
Marc Kovens (2,860.52 shares of Series B Preferred Stock)
Lloyd G. Glazer (572.1 shares of Series B Preferred Stock)
Philip D. Green (1,144.21 shares of Series B Preferred Stock)
Harvey M. Silets (286.05 shares of Series B Preferred Stock)
AGREEMENT
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THIS AGREEMENT is made as of February 26, 1996, by and among InSight Health
Services Corp., a Delaware corporation ("InSight"), American Health Services
Corp., a Delaware corporation ("AHSC") and ___________________ (the
"Stockholder"), and is consented to by Maxum Health Corp., a Delaware
corporation ("MHC") (InSight, AHSC and MHC are collectively referred to as the
"Restructure Parties").
WHEREAS, InSight, AHSC and MHC are entering into an Agreement and Plan
of Merger dated the date hereof (the "Merger Agreement"), a copy of which is
attached hereto as Exhibit 1, which, when consummated, will result in AHSC and
Maxum becoming wholly owned subsidiaries of InSight (the "Merger");
WHEREAS, concurrent with the consummation of the Merger, General
Electric Company, a New York corporation acting through General Electric Medical
Systems ("GE Medical") and General Electric Capital Corporation, a New York
corporation, will agree to certain financial accommodations to AHSC and MHC in
exchange for the issuance to GE Medical of preferred stock of AHSC and MHC
(which will be converted into InSight preferred stock pursuant to the Merger
Agreement) pursuant to certain debt restructuring agreements (the "Debt
Restructuring Agreements");
WHEREAS, the Stockholder owns 1,716.31 of the outstanding shares of
Series B Senior Convertible Preferred Stock of AHSC (the "Preferred Stock")
issued pursuant to a Certificate of Designation, Preferences, Relative,
Participating, Optional and Other Special Rights relating thereto (the
"Certificate of Designation");
WHEREAS, it is a condition precedent to the consummation of the Merger
and the Debt Restructuring Agreements that each of the holders of the Preferred
Stock enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing, the parties hereby
agree as follows:
1. Waiver. In consideration of the agreement to issue warrants set
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forth in Section 2 hereof, the Stockholder agrees as follows:
(a) Stockholder shall vote his shares of Preferred Stock and all
shares of AHSC common stock ("Common Stock") over which he has voting power in
favor of the Merger Agreement and any matters related thereto which are approved
by the Board of Directors of AHSC (the "AHSC Board").
(b) In the event that all conditions precedent to the
consummation of the Merger have been satisfied, Stockholder shall, in accordance
with the terms set forth in the Merger Agreement, exchange all shares of
Preferred Stock and Common Stock over which he has dispositive power as of the
date hereof and thereof for InSight common stock.
(c) Stockholder hereby waives (i) solely in connection with the
transactions contemplated by the Merger Agreement and the Debt Restructuring
Agreements, all of his preferences as they relate to dividend, liquidation,
voting and redemption rights as set forth in Sections 3, 4, 5 and 9 of the
Certificate of Designation and (ii) until such time, if any, as this Agreement
shall terminate pursuant to Section 6 hereof, his registration rights as set
forth in Section 10 of the Certificate of Designation.
(d) Stockholder shall not sell, pledge or otherwise transfer the
Preferred Stock or Common Stock over which he has dispositive power unless the
transferee acknowledges in writing that the transfer is made subject to the
terms of this Agreement. Any purported transfer of such Preferred Stock or
Common Stock made in contravention of this provision shall be void.
(e) Stockholder shall execute such further documents, including,
but not limited to, proxies and exchange documentation, as are appropriate and
typical to implement the agreements set forth herein.
2. Issuance of Warrants. In consideration of the Stockholder's
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agreements in Section 1 hereof, and in acknowledgment of the rights and
preferences associated with the Preferred Stock which will be eliminated as a
result of the Merger, InSight hereby agrees to issue to the Stockholder,
concurrent with and conditioned upon the effectiveness of the Merger, warrants
(the "Warrants") to purchase 2,268 shares of InSight common stock, at a per
share purchase price equal to the Exercise Price (as defined below), expiring on
the fifth anniversary of the date of such issuance, which Warrants shall be in
the form of Exhibit 2 hereto; provided, however, that InSight's obligation under
this Section 2 is conditioned upon the approval of the terms of this Agreement
by (i) the disinterested members of the AHSC Board and (ii) the Board of
Directors of MHC, in each case further conditioned upon the receipt of a
fairness opinion issued by a financial advisor in a form reasonably acceptable
to such disinterested members or Board, as applicable. The Exercise Price shall
be (a) if the InSight common stock is traded on a national securities exchange
or through the Nasdaq Stock Market, the average of the closing prices of such
stock on such exchange over the 20-trading-day period commencing with the
eleventh trading day after the effective date of the Merger (the
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"Trading Period"); (b) if such stock is actively traded over-the-counter, the
average of the closing bid or sale prices (whichever is applicable) of such
stock over the Trading Period; and (c) if there is no active public market for
such stock, the average fair market value of such stock over the Trading Period
as mutually determined by InSight and the holders of a majority of the Warrants.
3. Consent. The Restructure Parties (other than InSight) hereby
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acknowledge and consent to the agreements of InSight and the Stockholder herein.
4. Successors; Continuing Effect. This Agreement is being entered
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for the benefit of and shall be binding upon each of the parties and their
respective successors, transferees and assigns.
5. Governing Law. This Agreement, which may be executed in any
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number of counterparts, shall be governed by and construed in accordance with
the laws of the State of Delaware without regard to its conflict of laws rules.
6. Termination. Unless extended by agreement of the parties, this
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Agreement shall terminate upon termination of the Merger Agreement.
IN WITNESS WHEREOF, the Stockholder has executed this Agreement, and
the Restructure Parties have caused this Agreement to be executed by their duly
authorized officers, in counterparts all as of the date and year first written
above.
INSIGHT HEALTH SERVICES CORP.
By:_________________________________
AMERICAN HEALTH SERVICES CORP.
By:_________________________________
[Signatures continued on the following page]
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THE STOCKHOLDER
____________________________________
Consented to:
GENERAL ELECTRIC COMPANY
By:_________________________________
GENERAL ELECTRIC CAPITAL CORPORATION
By:________________________________
MAXUM HEALTH CORP.
By:_____________________________________
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THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED,
OFFERED OR OTHERWISE DISPOSED OF UNLESS THEY HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
No. W - 1
Certificate for _______ Warrants
EXERCISABLE COMMENCING ON THE DATE OF ISSUANCE
HEREOF AND ENDING
5:00 P.M., NEWPORT BEACH, CALIFORNIA TIME, ON THE EXPIRATION DATE
INSIGHT HEALTH SERVICES CORP.
WARRANT CERTIFICATE
THIS CERTIFIES that ________________ or registered assigns is the
registered holder (the "Warrantholder") of the number of warrants (the
"Warrants") set forth above, each of which represents the right to purchase one
fully paid and non-assessable share of common stock, par value $.001 per share
(the "Common Shares"), of InSight Health Services Corp., a Delaware corporation
(the "Company"), at the exercise price of $______ per share (the "Exercise
Price"), at any time prior to the Expiration Date hereinafter referred to, by
surrendering this Warrant Certificate, with the form of election to purchase set
forth hereon duly executed, at the Company's principal executive office,
________________________________________________________ (the "Office"), and by
paying in full the Exercise Price, plus transfer taxes, if any, in United States
currency by certified check, bank cashier's check or money order payable to the
order of the Company.
SECTION 1. DURATION AND EXERCISE OF WARRANTS.
---------------------------------
(a) The Warrants represented by this Warrant Certificate shall be
issued and exercisable as of ___________, 1996 and shall expire at 5:00 p.m. Los
Angeles time, on ___________, 2001 (the "Expiration Date"). Any Warrant
Certificate not surrendered to the Company for exercise prior to the close of
business on the Expiration Date shall be void.
(b) Subject to the provisions of this Warrant Certificate, after
the date of this Warrant Certificate and prior to the close of business on the
Expiration Date, the Warrantholder shall have the right to purchase from the
Company the number of Common Shares specified above at the Exercise Price. In
order to exercise such right, the Warrantholder shall surrender the Warrant
Certificate(s) evidencing such Warrants to the Company at the Office with the
form of Election to Purchase set forth hereon duly completed and signed, and
shall tender payment in full to the Company for the Company's account of the
Exercise Price, together with such taxes as are specified in Section 4 hereof,
for each Common Share with respect to which such Warrants are being exercised.
Such Exercise Price and taxes shall be paid in full by certified check, bank
cashier's check or money order, payable in United States currency to the order
of the Company. In addition, if the Common Shares deliverable upon exercise have
not been registered
pursuant to the Securities Act, the Warrantholder shall deliver a duly executed
certificate substantially in the form of Exhibit A hereto.
(c) The Warrants evidenced by this Warrant Certificate shall be
exercisable only in multiples of one (l) Warrant. If less than all of the
Warrants evidenced by this Warrant Certificate are exercised at any time prior
to the close of business on the Expiration Date, a new Warrant Certificate(s)
shall be issued to the Warrantholder, or his duly authorized assigns, by the
Company for the remaining number of Warrants evidenced by the Warrant
Certificate so surrendered.
SECTION 2. ISSUANCE OF SHARE CERTIFICATES. Upon surrender of this Warrant
------------------------------
Certificate and payment of the Exercise Price, and, if the Common Shares
deliverable on exercise have not been registered under the Securities Act, upon
delivery of a certificate in the form of Exhibit A hereto, the Company shall
issue certificates representing Common Shares ("Share Certificates") for the
number of full Common Shares to which the holder of such Warrants is entitled,
registered in accordance with the instructions set forth in the Election to
Purchase. If such Common Shares have not been registered under the Securities
Act, the Share Certificates shall bear a legend substantially similar to the
legend on this Warrant Certificate.
SECTION 3. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF COMMON SHARES
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PURCHASABLE PER NUMBER OF WARRANTS. The Exercise Price and the number of Common
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Shares purchasable upon the exercise of each Warrant are subject to adjustment
from time to time upon the occurrence of the events specified in this Section 3:
(a) If the Company at any time after the date of this Warrant
Certificate (i) declares a dividend or makes a distribution on the outstanding
Common Shares payable in Common Shares, (ii) subdivides or reclassifies the
outstanding Common Shares into a greater number of shares or (iii) combines or
reclassifies the outstanding Common Shares into a smaller number of Common
Shares, the Exercise Price in effect immediately after the record date for such
dividend or distribution or at the effective date of such subdivision,
combination or reclassification, shall be adjusted to equal the quotient
obtained by multiplying the Exercise Price in effect immediately prior to such
date by a fraction, the numerator of which shall be the number of Common Shares
outstanding immediately prior to such dividend, distribution, subdivision,
combination or reclassification, and the denominator of which shall be the
number of Common Shares outstanding immediately after such dividend,
distribution, subdivision, combination or reclassification. Such adjustment
shall be made successively whenever any event listed above shall occur.
(b) If at any time, as a result of an adjustment made pursuant to
paragraph (a), the holder of any Warrant thereafter exercised shall become
entitled to receive any additional Common Shares (the "New Shares"), thereafter
the number of such New Shares so receivable upon exercise of any Warrant shall
be subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Common Shares
contained in paragraph (a), and the provisions of this Warrant Certificate with
respect to the Common Shares shall apply on like terms to any such New Shares.
(c) All calculations of the Exercise Price under this Section 3
shall be made to the nearest one hundredth of a cent. No adjustment in the
Exercise Price in accordance with the provisions of paragraph (a) hereof need be
made if such adjustment, together with other adjustments carried forward
pursuant to this paragraph (c), would amount to a change in such Exercise Price
of less than 1%; provided,
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however, that the amount by which any adjustment is not made by reason of this
paragraph (c) shall be carried forward and taken into account at the time of any
subsequent adjustment in the Exercise Price.
(d) Unless the Company shall have exercised its election as
provided in paragraph (e), upon each adjustment of the Exercise Price as a
result of the calculations made in paragraph (a), each Warrant outstanding
immediately prior to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Exercise Price that number of Common Shares
obtained by (i) multiplying (A) the number of Common Shares purchasable upon
exercise of a Warrant immediately prior to such adjustment of the Exercise Price
by (B) the Exercise Price in effect immediately prior to such adjustment of the
Exercise Price and (ii) dividing the product so obtained by the Exercise Price
in effect immediately after such adjustment of the Exercise Price.
(e) The Company may elect, on or after the date of any adjustment
of the Exercise Price, to adjust the number of Warrants in substitution for an
adjustment in the number of Common Shares purchasable upon the exercise of a
Warrant as provided in paragraph (d).
(f) In case of any reorganization of the Company, or in case of the
consolidation or merger of the Company with or into any other legal entity or of
the sale of the properties and assets of the Company as, or substantially as, an
entirety to any other legal entity (collectively, "Reorganizations"), each
Warrant shall after such Reorganization be exercisable, upon the terms and
conditions specified in this Warrant Certificate, for the stock or other
securities or property (including cash) to which a holder of the number of
Common Shares purchasable (at the time of such Reorganization) upon exercise of
such Warrant would have been entitled upon such Reorganization if such Warrant
had been exercised in full immediately prior to such Reorganization; and in any
such case, if necessary, the provisions set forth in this Section 3 with respect
to the rights and interests thereafter of the holders of the Warrants shall be
appropriately adjusted so as to be applicable, as nearly as may reasonably be,
to any such stock or other securities or property thereafter deliverable upon
exercise of the Warrants. The Company shall not effect any such Reorganization
unless prior to or simultaneously with the consummation thereof the successor
(if other than the Company) resulting from such Reorganization or the legal
entity purchasing such assets shall assume, by written instrument executed and
delivered to the holder of each Warrant, the obligation to deliver to the holder
of each Warrant such stock, securities or assets as, in accordance with the
foregoing provisions, such holders may be entitled to purchase, and the other
obligations under this Warrant Certificate.
SECTION 4. PAYMENT OF TAXES. The Company will pay all documentary stamp
----------------
taxes that may be imposed by the United States of America or any state or
territory thereof ("Taxes") attributable to the initial issuance of Common
Shares upon the exercise of Warrants prior to the close of business on the
Expiration Date; provided, however, that the Company shall not be required to
pay any Taxes which may be payable in respect of any transfer involved in the
issuance of any Warrant Certificates or any Share Certificates in a name other
than that of the Warrantholder of record surrendered upon the exercise of a
Warrant, and the Company shall not be required to issue or deliver such Share
Certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Company the amount of such Taxes or shall have
established to the satisfaction of the Company that such Taxes have been paid.
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SECTION 5. REGISTRATION.
------------
(a) This Warrant Certificate shall be registered in the name of the
record holder to whom it is distributed; and the Company shall maintain a list
showing the name, address and number of Warrants held by each of the
Warrantholders of record.
(b) The Company may deem and treat the Warrantholder of record as
the absolute owner of this Warrant Certificate (notwithstanding any notation of
ownership or other writing thereon made by anyone) for the purpose of any
exercise thereof and any distribution to the holder thereof and for all other
purposes, and the Company shall not be affected by any notice to the contrary.
SECTION 6. REGISTRATION OF TRANSFERS AND EXCHANGES.
---------------------------------------
(a) The Company shall register the transfer of this Warrant
Certificate upon the records to be maintained by it for that purpose, upon
surrender of this Warrant Certificate accompanied (if so required by the
Company) by (i) a written instrument or instruments of transfer in form
satisfactory to the Company, duly executed by the registered holder(s) thereof
or by the duly appointed legal representative thereof or by a duly authorized
attorney, and (ii) an opinion of counsel, reasonably satisfactory to the
Company, that such transfer is exempt from registration under the Securities
Act. Upon any such registration or transfer, a new Warrant Certificate shall be
issued to the transferee, and the surrendered Warrant Certificate shall be
cancelled by the Company.
(b) This Warrant Certificate may be exchanged at the option of the
holder, when surrendered to the Company at the Office, for another Warrant
Certificate or other Warrant Certificates of like tenor and representing in the
aggregate a like number of Warrants. Warrant Certificates surrendered for
exchange, transfer or exercise shall be cancelled by the Company.
SECTION 7. MUTILATED OR MISSING WARRANT CERTIFICATES. In case this
-----------------------------------------
Warrant Certificate shall be mutilated, lost, stolen or destroyed, the Company
shall issue and deliver, in exchange and substitution for and upon cancellation
of the mutilated Warrant Certificate, or in lieu of and substitution for any
Warrant Certificate lost, stolen or destroyed, a new Warrant Certificate of like
tenor and representing an equivalent number of Warrants, but only upon receipt
of evidence satisfactory to the Company of such loss, theft or destruction of
such Warrant Certificate and an indemnity or bond, if requested, also
satisfactory to the Company. Applicants for such substitute Warrant Certificate
shall also comply with such other reasonable charges as the Company may
prescribe.
SECTION 8. NOTICES.
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(a) Any notice or demand authorized by this Warrant Certificate to
be given or made by the Warrantholder to or on the Company shall be in writing
and shall be sufficiently given or made if personally delivered or sent by mail
or by telegram or telex confirmed by letter addressed (until another address is
given in writing by the Company) to the Office.
(b) Any notice pursuant to this Warrant Certificate to be given by
the Company to the Warrantholder shall be in writing and shall be sufficiently
given if personally delivered or sent by mail or telegram or telex confirmed by
letter, addressed (until another address is filed in writing by the
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Warrantholder with the Company) to the address specified in the Warrant register
maintained by the Company.
SECTION 9. RIGHTS OF WARRANTHOLDERS; VOTING. Nothing contained in this
--------------------------------
Warrant Certificate shall be construed as conferring upon the Warrantholder any
of the rights of a stockholder of the Company, including without limitation the
right to vote, to receive dividends and other distributions, to receive any
notice of, or to attend, meetings of stockholders or any other proceedings of
the Company.
SECTION 10. SUPPLEMENTS AND AMENDMENTS. The Company may from time to time
--------------------------
supplement or amend this Warrant Certificate without the consent or concurrence
of the Warrantholder in order to cure any ambiguity, manifest error or other
mistake in this Warrant Certificate, or to make provision in regard to any
matters or questions arising hereunder which the Company may deem necessary or
desirable and which shall not adversely affect, alter or change the interests of
the Warrantholder.
SECTION 11. WARRANT AGENT. The Company may, by written notice to the
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Warrantholder, appoint an agent for the purpose of issuing Common Shares on the
exercise of the Warrants, exchanging Warrants, replacing Warrants or any of the
foregoing, and thereafter any such issuance, exchange or replacement shall be
made at such office by such agent.
SECTION 12. SUCCESSORS. All the representations, warranties, covenants
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and provisions of this Warrant Certificate by or for the benefit of the Company
or the Warrantholder shall bind and inure to the benefit of their respective
successors and assigns hereunder.
SECTION 13. GOVERNING LAW. This Warrant Certificate shall be deemed to be
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a contract made under the laws of the State of Delaware and for all purposes
shall be governed in accordance with the laws of said State, regardless of the
laws that might be applied under applicable principles of conflicts of laws.
SECTION 14. BENEFITS OF THIS WARRANT CERTIFICATE. Nothing in this Warrant
------------------------------------
Certificate shall be construed to give to any person or entity other than the
Company and the Warrantholder any legal or equitable right, remedy or claim
under this Warrant Certificate, and this Warrant Certificate shall be for the
sole and exclusive benefit of the Company and the Warrantholder.
SECTION 15. INTERPRETATION. The headings contained in this Warrant
--------------
Certificate are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Warrant Certificate.
SECTION 16. INVALIDITY OF PROVISIONS. If any provision of this Warrant
------------------------
Certificate is or becomes invalid, illegal or unenforceable in any respect, such
provision shall be amended to the extent necessary to cause it to express the
intent of the parties and be valid, legal and enforceable. The amendment of
such provision shall not affect the validity, legality or enforceability of any
other provision hereof.
SECTION 17. REGISTRATION RIGHTS.
-------------------
(a) If at any time or from time to time the Company proposes to
file a registration statement on any appropriate form (a "Registration
Statement") (other than in connection with an exchange offer or a registration
statement on Form S-4 or S-8 or otherwise unsuitable registration statements)
under
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the Securities Act with respect to any Common Shares, whether or not for sale
for its own account, on a form and in a manner which would permit registration
of Common Shares received upon exercise of the Warrants ("Warrant Shares") for
sale to the public under the Securities Act, the Company shall
(i) promptly give to the Warrantholder written notice
thereof (which shall include a list of the jurisdictions in which the Company
intends to attempt to qualify such securities under the applicable blue sky or
other state securities law); and
(ii) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any underwriting
involved therein, all the Warrant Shares specified in a written request or
requests, made within 20 days after receipt of such written notice from the
Company, by the Warrantholder.
(b) If the registration of which the Company gives notice is for a
registered public offering involving an underwriting, the Company shall so
advise the Warrantholder as a part of the written notice given pursuant to
Section 17(a)(i). In such event the right of the Warrantholder to registration
pursuant to this Section 17 shall be conditioned upon the Warrantholder's
participation in such underwriting and the inclusion of the Warrant Shares in
the underwriting to the extent provided herein. The Warrantholder shall
(together with the Company and the other holders of Common Shares distributing
their securities through such underwriting) enter into an underwriting agreement
in customary form with the underwriters selected for such underwriting by the
Company. The Warrantholder shall not be required to make any representations or
warranties to the Company or the underwriters other than those relating to the
Warrantholder, the Warrant Shares and the intended method of distribution and
information about the Warrantholder provided by the Warrantholder for use in the
Registration Statement.
(c) Notwithstanding any other provision of this Section 17:
(i) subject to clause (iii) below, if the registration is an
underwritten primary registration on behalf of the Company and the managing
underwriters of such offering determine in good faith that the aggregate amount
of Common Shares which the Warrantholder and the Company propose to include in
such Registration Statement exceeds the maximum amount of Common Shares that
could practicably be included therein, the Company will include in such
registration, first, the Common Shares which the Company proposes to sell, and
second, the Warrant Shares and the Common Shares of any holders of other
piggyback registration rights, if any, which can practicably be included
therein, pro rata among all such holders, taken together, on the basis of the
relative amount of Common Shares owned by the Warrantholder and such other
holders who have requested that Common Shares owned by them be included;
(ii) subject to clause (iii) below, if the registration is an
underwritten secondary registration on behalf of any of the other security
holders of the Company and the managing underwriters determine in good faith
that the aggregate amount of Common Shares which the Warrantholder and such
security holders propose to include in such registration exceeds the maximum
amount of Common Shares that could practicably be included therein, the Company
will include in such registration, first, the Common Shares to be sold for the
account of any other holders entitled to demand registration and, second, the
Warrant Shares and other Common Shares to be sold for the account of other
holders electing to include (but not being entitled to demand inclusion of)
Common Shares in such registration, pro rata among all such holders, taken
together, on the basis of the relative amount of
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Common Shares owned by the Warrantholder and such other holders who have
requested that Common Shares owned by them be included; and
(iii) in the event of a conflict between the rights of the
Warrantholder set forth in this Section 17 and the registration rights of
General Electric Company, the rights hereunder shall be subordinate to such
other rights and the Company's obligations shall be limited to those that can be
performed without violating the terms of such other registration rights.
(d) The Company may withdraw any Registration Statement at any time
before it becomes effective, or postpone the offering of Common Shares, without
obligation or liability to the Warrantholder.
(e) With respect to a Registration Statement in which any of the
Warrant Shares are included, the Warrantholder agrees, if requested by the
managing underwriters in an underwritten offering, not to effect any public sale
or distribution of Common Shares, including a sale pursuant to Rule 144 under
the Securities Act (except as part of such registration), during the 180-day
period beginning on the effective date of such Registration Statement; provided,
--------
however, that such agreement shall be applicable only to the first three such
- -------
Registration Statements which cover Common Shares (or other securities) to be
sold on InSight's behalf to the public in an underwritten offering.
(f) All Registration Expenses (as defined below) incurred in
connection with any registration, qualification or compliance pursuant to this
Section 17 shall be borne by the Company. All Selling Expenses (as defined
below) incurred in connection with any registrations hereunder shall be borne by
the holders of the Common Shares so registered pro rata on the basis of the
number of shares so registered. For purposes of this Section 17, (i)
"Registration Expenses" shall mean all expenses incurred by the Company in
---------------------
complying with this Section 17, including, without limitation, all registration
and filing fees, printing expenses, fees and disbursements of counsel for the
Company, reasonable fees and disbursements of a single special counsel for the
Warrantholder and all other holders of Common Shares to be registered, blue sky
fees and expenses, and the expense of any special audits incident to or required
by any such registration (but excluding the compensation of the Company's
regular employees which shall be paid in any event by the Company) and (ii)
"Selling Expenses" shall mean all underwriting discounts and selling commissions
----------------
applicable to the sale.
(g) In the case of each registration, qualification or compliance
effected by the Company pursuant to this Section 17, the Company will keep the
Warrantholder advised in writing as to the qualification and compliance and as
to the completion thereof. At its expense the Company will:
(i) Keep such registration, qualification or compliance
effective for a period of 120 days or until the Warrantholder has completed the
distribution described in the Registration Statement relating thereto, whichever
first occurs;
(ii) Prepare and file with the SEC 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 requisite period;
(iii) Furnish such number of prospectuses and other documents
incident thereto as the Warrantholder from time to time may reasonably request;
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(iv) Use its reasonable efforts to register or qualify such
Warrant Shares under the securities or blue sky laws of such jurisdictions as
the Warrantholder reasonably requests and do any and all other acts and things
which may be reasonably necessary or advisable to enable the Warrantholder to
consummate the disposition in such jurisdictions of the Warrant Shares owned by
the Warrantholder (provided that the Company will not be required to (A) qualify
--------
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this Section 17, (B) subject itself to taxation in
any such jurisdiction, (C) consent to general service of process in any such
jurisdiction, or (D) qualify such Warrant Shares in a given jurisdiction where,
in the sole discretion of the Company, expressions of investment interest are
not sufficient in such jurisdiction to reasonably justify the expense of
qualification in that jurisdiction or where such qualification would require the
Company to register as a broker or dealer in such jurisdiction);
(v) Notify the Warrantholder at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of the
happening of any event known to the Company as a result of which the prospectus
included in such Registration Statement contains an untrue statement of a
material fact or omits any material fact necessary to make the statements
therein not misleading, and in such event, at the request of the Warrantholder,
the Company will prepare a supplement or amendment to such prospectus so that,
as thereafter delivered to the purchasers of such Warrant Shares, such
prospectus will not contain an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein not misleading;
(vi) Cause all such Warrant Shares to be listed on each
securities exchange on which similar securities issued by the Company are then
listed and qualify such Warrant Shares for trading on each system on which
similar securities issued by the Company are from time to time qualified;
(vii) Provide a transfer agent and registrar for all such
Warrant Shares not later than the effective date of such Registration Statement
and thereafter maintain such a transfer agent and registrar;
(viii) Permit the Warrantholder, if in the Company's sole and
exclusive judgment, such holder might be deemed to be an underwriter or a
controlling person of the Company, to participate in the preparation of such
Rregistration Statement and to require the insertion therein of material,
furnished to the Company in writing, which in the reasonable judgment of such
holder and his counsel should be included; and
(ix) In the event of the issuance of any stop order
suspending the effectiveness of a Registration Statement, or of any order
suspending or preventing the use of any related prospectus or suspending the
qualification of any common stock included in such Registration Statement for
sale in any jurisdiction, the Company will use its reasonable efforts promptly
to obtain the withdrawal of such order.
(h) The Warrantholder agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Sections
17(g)(v) or (ix), such holder will forthwith discontinue disposition of Warrant
Shares pursuant to a registration hereunder until receipt of the copies of an
appropriate supplement or amendment to the prospectus under Section 17(g)(ii) or
until the withdrawal of such order under Section 17(g)(ix).
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(i) No person may participate in any underwritten registration
hereunder unless such person (i) agrees to sell such person's Common Shares on
the basis provided in any underwriting arrangements approved by the persons
entitled to approve such arrangements, (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements and
(iii) furnishes to the Company such information regarding such person and the
distribution proposed by such person as the Company may request in writing and
as shall be required in connection with any registration, qualification or
compliance referred to in this Section 17.
(j) The Company agrees to indemnify, to the extent permitted by
law, the Warrantholder, its officers, directors and trustees and each person who
controls (within the meaning of the Securities Act) such holder against all
losses, claims, damages, liabilities and expenses caused by any untrue or
alleged untrue statement of material fact contained in any Registration
Statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as the same are caused by or contained in any
information furnished in writing to the Company by such holder expressly for use
therein or by such holder's failure to deliver a copy of the Registration
Statement or prospectus or any amendments or supplements thereto after the
Company has furnished such holder with a sufficient number of copies of the
same. In connection with an underwritten offering, the Company will indemnify
such underwriters, their officers and directors and each person who controls
(within the meaning of the Securities Act) such underwriters at least to the
same extent as provided above with respect to the indemnification of the
Warrantholder.
(k) In connection with any Registration Statement in which
Warrantholder is participating, such Warrantholder will furnish to the Company
in writing such information as the Company reasonably requests for use in
connection with any such Registration Statement or prospectus and, to the extent
permitted by law, will indemnify the Company, its directors and officers and
each person who controls (within the meaning of the Securities Act) the Company
against any losses, claims, damages, liabilities and expenses resulting from any
untrue or alleged untrue statement of material fact contained in the
Registration Statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, but only to the extent that such untrue statement or omission is
contained in any information so furnished in writing by such Holder; provided
--------
that the obligation to indemnify will be limited to the net amount of proceeds
received by such holder from the sale of Warrant Shares pursuant to such
Registration Statement. In connection with an underwritten offering, such holder
will indemnify such underwriters, their officers and directors and each person
who controls (within the meaning of the Securities Act) such underwriters at
least to the same extent as provided above with respect to the indemnification
of the Company.
(l) Any person entitled to indemnification hereunder will (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification and (ii) unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party will not be subject to any liability for any settlement made
by the indemnified party without its consent (but such consent will not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
- 9 -
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.
(m) The indemnification provided for under this Section 17 will
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director or controlling person
of such indemnified party and will survive the transfer of securities. The
Company also agrees to make such provisions, as are reasonably requested by any
indemnified party, for contribution to such party in the event the Company's
indemnification is unavailable for any reason. The Warrantholder also agrees to
make such provisions, as are reasonably requested by any indemnified party, for
contribution to such party in the event such holder's indemnification is
unavailable for any reason.
(n) The provisions of this Section 17 shall apply until such time
as all Warrant Shares that have not been resold to the public may be resold
pursuant to Rule 144 under the Securities Act within a three month period.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed.
INSIGHT HEALTH SERVICES CORP.
Attest:
By:
, Secretary Name:
Title:
- 10 -
ELECTION TO PURCHASE
The undersigned hereby irrevocably elects to exercise ____________________
of the Warrants represented by this Warrant Certificate and to purchase the
Common Shares issuable upon the exercise of said Warrants, and requests that
Certificates for such shares be issued and delivered as follows:
ISSUE TO:
(Name)
(Address, Including Zip Code)
(Social Security or Tax Identification Number)
DELIVER TO:
(Name)
at
(Address, Including Zip Code)
If the number of Warrants hereby exercised is less than all the Warrants
represented by this Warrant Certificate, the undersigned requests that a new
Warrant Certificate representing the number of full Warrants not exercised be
issued and delivered as set forth above or otherwise as the undersigned shall
direct in writing.
In full payment of the purchase price with respect to the Warrants
exercised and transfer taxes, if any, the undersigned hereby tenders payment of
$_______________ by certified check, bank cashier's check or money order payable
in United States currency to the order of the Company.
Dated: ____________________, 19__
Signature
(Signature must conform in all respects to name of
holder as specified on the face of the Warrant
Certificate)
PLEASE INSERT SOCIAL SECURITY OR TAX
IDENTIFICATION NUMBER OF HOLDER
- 11 -
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto the Assignee named below all of the rights of the undersigned represented
by the within Warrant Certificate, with respect to the number of Warrants set
forth below:
Name of Social Security No. No. of
Assignee or Tax I.D. Address Warrants
-------- ----------- ------- --------
and does hereby irrevocably constitute and appoint ______________
____________________ Attorney, to make such transfer on the books of InSight
Health Services Corp. maintained for that purpose, with full power of
substitution in the premises.
Dated: ____________________, 19__
Signature
(Signature must conform in all respects to name of
holder as specified on the face of the Warrant
Certificate)
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EXHIBIT A
FORM OF STOCKHOLDERS CERTIFICATE
The undersigned (the "Purchaser") is exercising the warrants (the
"Warrants") tendered with this certificate, and in connection with such
exercise, hereby certifies to InSight Health Services Corp. (the "Company") that
the Purchaser understands and agrees that:
1. The shares of common stock of the Company (the "Common Shares")
deliverable upon exercise of the Warrants are not registered pursuant to the
Securities Act of 1933, as amended (the "Securities Act"), and the offering and
sale of the Common Shares is intended to be exempt from registration under the
Securities Act;
2. The Common Shares to be acquired by the Purchaser pursuant to exercise
of the Warrants are being acquired for its own account and without a view to the
distribution of such Common Shares or any interest therein; provided that (i)
--------
this representation shall not prejudice the Purchaser's right at all times to
sell or otherwise dispose of all or any part of the Common Shares so acquired by
the Purchaser pursuant to a registration under the Securities Act or an
exemption from such registration available under the Securities Act and (ii) the
disposition of the Purchaser's property shall be at all times within its
control;
3. The Purchaser has such knowledge and experience in financial and
business matters so as to be capable of evaluating the merits and risks of its
investment in the Common Shares and the Purchaser is capable of bearing the
economic risks of such investment and is able to bear a complete loss of its
investment in the Common Shares;
4. The Purchaser represents and warrants that the Company has made
available to the Purchaser or its agents all documents and information relating
to an investment in Common Shares requested by or on behalf of the Purchaser;
and
5. The Purchaser is an "Accredited Investor" as such term is defined in
Regulation D under the Securities Act.
6. All Common Shares issued on delivery of this certificate shall bear
the legend set forth on page 1 of the Warrant Certificate.
In witness whereof, the Purchaser has caused this Certificate to be duly
executed on this ____ day of ____________, ____.
[Name of Purchaser]
By:
Name:
Title:
A-1