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. L-1
Certificate for 15,000 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 Anthony J. LeVecchio, or his 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 $5.50 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, 4400
MacArthur Boulevard, Suite 800, Newport Beach, California 92660 (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 vest
cumulatively and be exercisable at the rate of 5,000 Warrants on each of March
11, 1998, March 11, 1999 and March 11, 2000 and shall expire at 5:00 p.m.
Newport Beach, California time, on March 11, 2001 ("Expiration Date").
(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
-1-
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 (1) 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
PURCHASABLE PER NUMBER OF WARRANTS. The Exercise Price and the number of Common
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
subsection (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.
-2-
(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 subsection (a) hereof need be made if
such adjustment, together with other adjustments carried forward pursuant to
this subsection (c), would amount to a change in such Exercise Price of less
than 1%; PROVIDED, HOWEVER, that the amount by which any adjustment is not made
by reason of this subsection (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 subsection (e), upon each adjustment of the Exercise Price as a result of the
calculations made in subsection (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 subsection (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, "Reorganization"), all vested
Warrants shall be exercisable, and any unvested Warrants shall become
immediately exercisable, after such Reorganization, 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
-3-
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.
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.
(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.
-4-
(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
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
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 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 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.
-5-
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 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, as a selling security holder, 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 subsection (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 subsection (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
-6-
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 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 the Company'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;
-7-
(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;
(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
Registration 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 Shares included in such Registration Statement
-8-
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).
(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 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 a 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 a 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.
-9-
(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
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.
SECTION 18. CERTAIN REPRESENTATIONS.
The Warrantholder, by his acceptance of this Warrant Certificate, as
evidenced by delivery of the Warrant Certificate to the Warrantholder, has made
the following representations to the Company and agreed as follows:
The Warrantholder is not an executive officer or director of the
Company and understands that, in connection with complying with
California law, the Company (i) may issue Warrants to no more than
thirty-five (35) purchasers in connection with an offering of such
Warrants, excluding executive officers and directors of the Company and
certain other persons as provided under California law, (ii) the
Warrantholder is included in the foregoing thirty-five (35) purchaser
number, and (iii) the Company, in compliance with California law, is
granting the Warrants pursuant to this Warrant Certificate in part in
reliance on Warrantholder's representations made herein. The
Warrantholder represents that the Warrantholder either has a preexisting
personal or business relationship with the Company or any of his
partners or controlling persons, or, by reason of the Warrantholder's
business or financial experience or the business or financial experience
of the Warrantholder's professional advisor is unaffiliated with and who
is not compensated by the Company or any affiliate or selling agent of
the Company, directly or indirectly, the Warrantholder can be reasonably
assumed by the Company to have the capacity to protect the
Warrantholder's
-10-
interests in connection with the issuance of Warrants pursuant to this
Warrant Certificate. The Warrantholder understands that in making the
foregoing representation the term "preexisting personal or business
relationship" includes any relationship consisting of personal or business
contacts of a nature and duration such as would enable a reasonably prudent
purchaser to be aware of the character, business acumen and general
business and financial circumstances of the person with whom such
relationship exists, and that a relationship of employer-employee, or as a
security holder of the Company does not necessarily involve contacts of a
nature which are sufficient to establish a preexisting personal or business
relationship as required under California law.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed.
INSIGHT HEALTH SERVICES CORP.
Attest:
/s/ Thomas V. Croal BY. /s/ Larry Atkins
- ------------------------------- -----------------------------------
Thomas V. Croal, Secretary Name: E. Larry Atkins
Title: President and Chief Executive
Officer
-11-
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
-12-
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)
-13-