REGISTRATION RIGHTS AGREEMENT
BETWEEN
INSIGHT HEALTH SERVICES CORP.
AND
GENERAL ELECTRIC COMPANY
DATED AS OF OCTOBER 14, 1997
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into as of October 14, 1997, between InSight Health Services Corp., a
Delaware corporation (the "Company"), and General Electric Company, a New
York corporation (together with its Affiliates, "GE"). In order to induce GE
to enter into the Purchase Agreement, the Company has agreed to provide the
registration rights set forth in this Agreement. The execution of this
Agreement is a condition to the closing under the Purchase Agreement.
The parties hereby agree as follows:
Section 1. DEFINITIONS
Capitalized terms not otherwise defined herein shall have the respective
meanings given them in the Purchase Agreement. As used in this Agreement,
the following capitalized terms shall have the following meanings:
"Board of Directors" shall mean the Board of Directors of the Company.
"Carlyle Investors" shall mean Carlyle Partners II, L.P., a Delaware
limited partnership ("CP II"), Carlyle Partners III, L.P., a Delaware limited
partnership ("CP III"), Carlyle International Partners II, L.P., a Cayman
Islands exempted limited partnership ("CIP II"), Carlyle International
Partners III, L.P., a Cayman Islands exempted limited partnership ("CIP
III"), C/S International Partners, a Cayman Islands general partnership
("C/S"), the State Board of Administration of Florida ("SBAF"), Carlyle
Investment Group, L.P., a Delaware limited partnership ("CIG"),
Carlyle-Insight International Partners, L.P., a Cayman Islands exempted
limited partnership ("C-IIP"), and Carlyle-Insight Partners, L.P., a Delaware
limited partnership ("C-IP").
"Carlyle Investors' Registrable Securities" shall mean (a) the shares of
Common Stock issued or issuable upon conversion of the Series B Preferred
Stock or Series D Preferred Stock, whether or not owned by the Carlyle
Investors; (b) the shares of Common Stock issued or issuable upon exercise of
any Carlyle Investors' Warrants, whether or not owned by Carlyle Investors;
(c) any securities issued or issuable with respect to such Common Stock by
way of a stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or reorganization; and (d)
any shares of Common Stock or securities issued or issuable with respect to
such Common Stock as provided in (c) above, acquired by the Carlyle Investors
from the Company subsequent to the date hereof, whether or not owned by the
Carlyle Investors at the time of a Registration; provided that any such share
or other security shall be deemed to be Registrable Securities only if and so
long as it is a Transfer Restricted Security.
"Carlyle Investors' Registration Rights Agreement" shall mean a
Registration Rights Agreement substantially in the form of this Agreement
entered into between the Carlyle Investors and the Company as of the date
hereof.
"Carlyle Investors' Warrants" shall mean the warrants to purchase Common
Stock issued pursuant to a Warrant Agreement dated of even date herewith by
and between the Company and the Carlyle Investors.
"Claim" shall mean any loss, claim, damages, liability or expense
(including the reasonable costs of investigation and reasonable legal fees
and expenses).
"Common Stock" shall mean the Common Stock, par value $.001 per share,
of the Company.
"Demand Registration" shall mean a registration pursuant to Section 2
hereof.
"Equity Security" shall mean any capital stock of the Company or any
security convertible, with or without consideration, into any such stock, or
any security carrying any warrant or right to subscribe for or purchase any
such stock, or any such warrant or right.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as from
time to time amended.
"Firm Commitment Underwritten Offering" shall mean an offering in which
the underwriters agree to purchase securities for distribution pursuant to a
Registration Statement under the Securities Act and in which the obligation
of the underwriters is to purchase all the securities being offered if any
are purchased.
"Holder" shall mean the beneficial owner of a security. For all
purposes of this Agreement, the Company shall be entitled to treat the record
owner of a security as the beneficial owner of such security unless the
Company has been given written notice of the existence and identity of a
different beneficial owner. A Holder of Preferred Stock shall be deemed to
be the Holder of the Common Stock into which such Preferred Stock could be
converted.
"Indemnified Holder" shall mean any Holder of Registrable Securities,
any officer, director, employee or agent of any such Holder and any Person
who controls any such Holder within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act.
"Misstatement" shall mean an untrue statement of a material fact or an
omission to state a material fact required to be stated in a Registration
Statement or Prospectus or necessary to make the statements in a Registration
Statement, Prospectus or preliminary prospectus not misleading.
"Person" shall mean a natural person, partnership, corporation, business
trust, association, joint venture or other entity or a government or agency
or political subdivision thereof.
"Piggyback Registration" shall mean a registration pursuant to Section 3
hereof.
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"Preferred Stock" shall mean the Series A Preferred Stock, the Series C
Convertible Preferred Stock of the Company being issued pursuant to the
Purchase Agreement and Series D Preferred Stock of the Company issued or
issuable upon conversion of the Series C Convertible Preferred Stock.
"Prospectus" shall mean the prospectus included in any Registration
Statement, as supplemented by any and all prospectus supplements and as
amended by any and all post-effective amendments and including all material
incorporated by reference in such prospectus.
"Purchase Agreement" shall mean that certain Securities Purchase
Agreement dated as of the date hereof between the Company and GE.
"Registrable Securities" shall mean (a) the shares of Common Stock
issued or issuable upon conversion of the Preferred Stock, whether or not
owned by GE, (b) the shares of Common Stock issued or issuable upon exercise
of any Warrants, whether or not owned by GE, (c) any securities issued or
issuable with respect to such Common Stock by way of a stock dividend or
stock split or in connection with a combination of shares, recapitalization,
merger, consolidation or reorganization; and (d) any shares of Common Stock
or securities issued or issuable with respect to such Common Stock as
provided in (c) above, acquired by GE from the Company subsequent to the date
hereof, whether or not owned by GE at the time of a Registration; provided
that any such share or other security shall be deemed to be Registrable
Securities only if and so long as it is a Transfer Restricted Security.
"Registration" shall mean a Demand Registration or a Piggyback
Registration.
"Registration Expenses" shall mean the out-of-pocket expenses of a
Registration, including:
(1) all registration and filing fees (including fees with respect
to filings required to be made with the National Association of
Securities Dealers);
(2) fees and expenses of compliance with securities or blue sky laws
(including fees and disbursements of counsel for the underwriters
or selling holders in connection with blue sky qualifications of
the Registrable Securities and determinations of their
eligibility for investment under the laws of such jurisdictions
as the managing underwriters or holders of a majority of the
Registrable Securities being sold may designate);
(3) printing, messenger, telephone and delivery expenses;
(4) fees and disbursements of counsel for the Company and of not more
than one firm of attorneys for the sellers of the Registrable
Securities;
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(5) expenses of the underwriters and fees and disbursements of
counsel for the underwriters, in each case, to the extent
required to be paid pursuant to an underwriting agreement
relating to a Registration;
(6) fees and disbursements of all independent certified public
accountants of the Company incurred in connection with such
Registration (including the expenses of any special audit and
"cold comfort" letters incident to such registration);
(7) premiums and other costs of securities acts liability insurance
if the Company so desires or if the underwriters so require or
selling holders of Registrable Securities reasonably so require;
and
(8) fees and expenses of any other Persons retained by the Company.
"Registration Statement" shall mean any registration statement under the
Securities Act on an appropriate form (which form shall be available for the
sale of the Registrable Securities in accordance with the intended method or
methods of distribution thereof and shall include all financial statements
required by the SEC to be filed therewith) which covers Registrable
Securities pursuant to the provisions of this Agreement, including the
Prospectus included in such registration statement, amendments (including
post-effective amendments) and supplements to such registration statement,
and all exhibits to and all material incorporated by reference in such
registration statement.
"Securities Act" shall mean the Securities Act of 1933, as from time to
time amended.
"SEC" shall mean the Securities and Exchange Commission.
"Series A Preferred Stock" shall mean the Series A Convertible Preferred
Stock of the Company.
"Series B Preferred Stock" shall mean the Series B Convertible Preferred
Stock of the Company.
"Series D Preferred Stock" shall mean the Series D Convertible Preferred
Stock of the Company.
"Transfer Restricted Security" shall mean a security that has not been
sold to or through a broker, dealer or underwriter in a public distribution
or other public securities transaction or sold in a transaction exempt from
the registration and prospectus delivery requirements of the Securities Act
under Rule 144 promulgated thereunder (or any successor rule). The foregoing
notwithstanding, a security shall remain a Transfer Restricted Security until
all stop transfer instructions or notations and restrictive legends with
respect to such security have been lifted or removed.
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"Underwriters' Commissions" shall mean discounts of and commissions to
underwriters, selling brokers, dealer managers or similar securities
professionals relating to the distribution of the Registrable Securities.
"Underwritten Registration" or "Underwritten Offering" shall mean a
registration in which securities of the Company are sold to an underwriter
for distribution to the public.
"Warrants" shall mean the warrants to purchase Common Stock issued
pursuant to a Warrant Agreement dated of even date herewith by and between
the Company and GE.
Section 2. DEMAND REGISTRATIONS
(a) TIMING OF DEMAND REGISTRATIONS.
GE (on behalf of itself and all permitted assignees who are Holders of
Registrable Securities) may request at any time that the Company file a
Registration Statement under the Securities Act on an appropriate form (which
form shall be available for the sale of the Registrable Securities in
accordance with the intended method or methods of distribution thereof and
shall include all financial statements required by the SEC to be filed
herewith) covering the shares of Registrable Securities that are the subject
of such request.
(b) NUMBER OF DEMAND REGISTRATIONS; REQUIRED THRESHOLD.
The Company shall be obligated to prepare, file and cause to become
effective pursuant to this Section 2 no more than two (2) Registration
Statements in the aggregate for GE (on behalf of itself and all permitted
assignees who are Holders of Registrable Securities); provided, however, that
a Registration Statement shall not be counted as one of the two (2) Demand
Registrations hereunder unless it becomes effective and is maintained
effective in accordance with the requirements specified in Section 5(a). The
Company shall not be obligated to prepare, file and cause to become effective
pursuant to this Section 2 a Registration Statement unless the proposed
aggregate public offering price of the Registrable Securities to be included
in such Demand Registration is at least $5 million.
(c) DEFERRAL BY COMPANY.
Notwithstanding anything in this Section 2 to the contrary, the Company
shall not be obligated to prepare, file and cause to become effective
pursuant to this Section 2 a Registration Statement if the Company furnishes
GE a certificate signed by the President of the Company that in the good
faith judgment of the Board of Directors it would be detrimental in any
material respect to the Company and its shareholders for the Company to
comply with the Demand Registration, and it is therefore essential to defer
the filing of the Registration Statement relating thereto. Any such deferral
shall be for a period of not more than six (6) months after the Company's
receipt of GE's written request for registration pursuant to this Section 2;
PROVIDED, HOWEVER, that the Company may not exercise this right more than
once with respect to a Demand Registration and that any requested
registration deferred, and not ultimately effected, by the Company pursuant
to the provisions of this Section 2(c) shall thereafter not be deemed to be a
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requested registration for purposes of the limitation to two (2) Demand
Registrations pursuant to Section 2(a) above.
(d) PARTICIPATION.
The Company shall promptly give written notice to all Holders of
Registrable Securities and to the Carlyle Investors upon receipt of a request
for a Demand Registration pursuant to Section 2(a) above. The Carlyle
Investors may, by written notice to the Company and GE, within thirty (30)
business days of the Company's notice, elect to join in a request for a
Demand Registration pursuant to Section 2(a) above, with respect to a number
of shares of the Carlyle Investors' Registrable Securities that is less than
or equal to the number of shares of Registrable Securities requested to be
registered in such Demand Registration by GE. The Carlyle Investors'
Registrable Securities being offered by the Carlyle Investors in such Demand
Registration shall be treated pari passu with the Registrable Securities
being offered by GE for all purposes including "underwriter's cutbacks" under
subsection (e) of this Section and any such request by the Carlyle Investors
shall not be treated as either a request for "piggyback" rights under Section
3 hereof or be treated as the exercise of a demand registration right by the
Carlyle Investors under the Carlyle Investors' Registration Rights Agreement.
In addition, the Company shall include in such Demand Registration such
shares of Registrable Securities for which it has received written requests
to register such shares within thirty (30) days after such written notice has
been given.
(e) UNDERWRITER'S CUTBACK.
If the public offering of Registrable Securities and/or Carlyle
Investors' Registrable Securities is to be underwritten and, in the good
faith judgment of the managing underwriter, the inclusion of all the
Registrable Securities and/or Carlyle Investors' Registrable Securities
requested to be registered hereunder would interfere with the successful
marketing of a smaller number of such shares of Registrable Securities and/or
Carlyle Investors' Registrable Securities, the number of shares of
Registrable Securities and/or Carlyle Investors' Registrable Securities to be
included shall be reduced to such smaller number with the participation in
such offering to be pro rata among the Holders of Registrable Securities
and/or Carlyle Investors' Registrable Securities requesting such
registration, based upon the number of shares of Registrable Securities
and/or Carlyle Investors' Registrable Securities owned by such Holders.
Any shares that are thereby excluded from the offering shall be withheld
from the market by the Holders thereof for a period (not to exceed thirty
(30) days prior to the effective date and one hundred twenty (120) days
thereafter) that the managing underwriter reasonably determines is reasonably
necessary in order to successfully market the securities to be offered in the
Underwritten Offering.
The Company and, subject to the requirements of Section 11 hereof, other
Holders of securities of the Company may include such securities in such
Registration if, but only if, the managing underwriter concludes that such
inclusion will not interfere with the successful marketing of all the
Registrable Securities requested to be included in such registration.
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(f) MANAGING UNDERWRITER.
The managing underwriter or underwriters of any Underwritten Offering
covered by a Demand Registration shall be selected by GE (if GE owns a
majority of the shares of Common Stock to be offered therein), subject to the
approval of the Board of Directors (by a majority of the Directors not
elected by the holders of the Preferred Stock and the Series B Preferred
Stock), which approval shall not be unreasonably withheld.
3. PIGGYBACK REGISTRATIONS
(a) PARTICIPATION.
Each time the Company decides to file a Registration Statement under the
Securities Act (other than registrations on Forms S-4 or S-8 or any successor
form thereto, and other than a Demand Registration) covering the offer and
sale by it or any of its security holders of any of its securities for money,
the Company shall give written notice thereof to all Holders of Registrable
Securities. The Company shall include in such Registration Statement such
shares of Registrable Securities for which it has received written requests
to register such shares within twenty (20) days after such written notice has
been given. If the Registration Statement is to cover an Underwritten
Offering, such Registrable Securities shall be included in the underwriting
on the same terms and conditions as the securities otherwise being sold
through the underwriters.
(b) UNDERWRITER'S CUTBACK.
Subject to the requirements of Section 11 hereof, if in the good faith
judgment of the managing underwriter of such offering the inclusion of all of
the shares of Registrable Securities and any other Common Stock requested to
be registered would interfere with the successful marketing of a smaller
number of such shares, then the number of shares of Registrable Securities
and other Common Stock to be included in the offering shall be reduced to
such smaller number with the participation in such offering to be in the
following order of priority: (1) first, the shares of Common Stock which the
Company proposes to sell for its own account, (2) second, the shares of
Registrable Securities of all Holders of Registrable Securities requested to
be included, PARI PASSU with all shares of Carlyle Investors' Registrable
Securities requested by the Carlyle Investors to be included and all shares
of any Person granted "piggyback" registration rights by the Company prior to
the date hereof with respect to the Company's securities, as set forth in
Schedule A attached hereto, requested by such Person to be included, and (3)
third, any other shares of Common Stock requested to be included. Any
necessary allocation among the Holders of shares within each of the foregoing
groups shall be pro rata among such Holders requesting such registration
based upon the number of shares of Common Stock and Registrable Securities
owned by such Holders.
All shares so excluded from the Underwritten Offering shall be withheld
from the market by the Holders thereof for a period (not to exceed thirty
(30) days prior to the effective date and one hundred twenty (120) days
thereafter) that the managing underwriter reasonably determines is reasonably
necessary in order to successfully market the securities to be offered in the
Underwritten Offering.
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(c) COMPANY CONTROL.
The Company may decline to file a Registration Statement after giving
notice to Holders pursuant to Section 3(a) above, or withdraw a Registration
Statement after filing and after such notice, but prior to the effectiveness
thereof; provided that the Company shall promptly notify each Holder of
Registrable Securities in writing of any such action and provided further
that the Company shall bear all expenses incurred by each Holder or otherwise
in connection with such withdrawn Registration Statement.
4. HOLD-BACK AGREEMENTS
(a) BY HOLDERS OF REGISTRABLE SECURITIES
Upon the written request of the managing underwriter of any Underwritten
Offering of the Company's securities, a Holder of Registrable Securities shall
not sell, make any short sale of, loan, grant any option for the purchase of, or
otherwise dispose of any Registrable Securities (other than those included in
such registration) without the prior written consent of such managing
underwriter for a period (not to exceed thirty (30) days before the effective
date and one hundred twenty (120) days thereafter) that such managing
underwriter reasonably determines is necessary in order to effect the
Underwritten Offering; provided that each of the officers and directors of the
Company shall have entered into substantially similar holdback agreements with
such managing underwriter covering at least the same period.
(b) BY THE COMPANY AND OTHERS.
The Company agrees:
(1) not to effect any public or private sale or distribution
of its Equity Securities during the 30-day period prior to, and during
the 60-day period after, the effective date of each Underwritten
Offering made pursuant to a Demand Registration or a Piggyback
Registration, if so requested in writing by the managing underwriter
(except as part of such Underwritten Offering, pursuant to registrations
on Forms S-4 or S-8 or any successor forms thereto or private issuances
of Equity Securities as consideration for any acquisition by the Company
or a subsidiary of assets or capital stock of any unaffiliated third
party), and
(2) not to issue any Equity Securities other than for sale in
a registered public offering unless each of the Persons to which such
securities are issued has entered a written agreement binding on its
transferees not to effect any public sale or distribution of such
securities (except for employee stock options issued to Persons other
than: directors or officers; or shareholders owning five percent (5%) or
more of the Company's Equity Securities) during such period, including
without limitation a sale pursuant to Rule 144 under the Securities Act
(except as part of such Underwritten Registration, if and to the extent
permitted hereunder).
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5. REGISTRATION PROCEDURES
If and whenever the Company is required to register Registrable Securities
in a Demand Registration, the Company will use all commercially reasonable
efforts to effect such registration to permit the sale of such Registrable
Securities in accordance with the intended plan of distribution thereof. With
respect to both Demand Registrations and Piggyback Registrations (except as
otherwise specifically provided), the Company will as expeditiously as
practicable:
(a) prepare and file with the SEC as soon as practicable a Registration
Statement with respect to such Registrable Securities and use all commercially
reasonable efforts to cause such Registration Statement to become effective and
remain continuously effective until the date that is the earlier to occur of (i)
the date six months from the date such Registration Statement was declared
effective, and (ii) the date the last of the Registrable Securities covered by
such Registration Statement have been sold, provided that before filing a
Registration Statement or Prospectus or any amendments or supplements thereto,
the Company shall furnish to Holders of Registrable Securities covered by such
Registration Statement and the underwriters, if any, draft copies of all such
documents proposed to be filed, which documents will be subject to the review of
GE and such underwriters, and the Company shall not file any Registration
Statement or amendment thereto or any Prospectus or any supplement thereto to
which GE or the underwriters, if any, shall reasonably object;
(b) prepare and file with the SEC such amendments and post-effective
amendments to the Registration Statement, and such supplements to the
Prospectus, as may be requested by any underwriter of Registrable Securities or
as may be required by the rules, regulations or instructions applicable to the
registration form used by the Company or by the Securities Act or rules and
regulations thereunder to keep the Registration Statement effective until all
Registrable Securities covered by such Registration Statement are sold in
accordance with the intended plan of distribution set forth in such Registration
Statement or supplement to the Prospectus;
(c) promptly notify the selling Holders of Registrable Securities and the
managing underwriter, if any, and (if requested by any such Person) confirm such
advice in writing,
(1) when the Prospectus or any supplement or post-effective
amendment has been filed, and, with respect to the Registration Statement
or any post-effective amendment, when the same has become effective,
(2) of any request by the SEC for amendments or supplements to
the Registration Statement or the Prospectus or for additional information,
(3) of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose,
(4) if at any time the representations and warranties of the
Company contemplated by clause (1) of paragraph (o) below cease to be
accurate in all material respects,
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(5) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose, and
(6) of the existence of any fact which results in the
Registration Statement, the Prospectus or any document incorporated therein
by reference containing a Misstatement;
(d) make all commercially reasonable efforts to obtain the withdrawal of
any order suspending the effectiveness of the Registration Statement at the
earliest practicable time;
(e) unless the Company objects in writing on reasonable grounds, if
requested by the managing underwriter or GE (if GE holds more than 50% of the
Registrable Securities then outstanding) (on behalf of itself and all permitted
assignees who are Holders of Registrable Securities), as promptly as practicable
incorporate in a supplement or post-effective amendment such information as the
managing underwriter and GE agree should be included therein relating to the
sale of the Registrable Securities, including, without limitation, information
with respect to the number of shares of Registrable Securities being sold to
underwriters, the purchase price being paid therefor by such underwriters and
with respect to any other terms of the Underwritten Offering of the Registrable
Securities to be sold in such offering; and make all required filings of such
supplement or post-effective amendment as soon as notified of the matters to be
incorporated in such supplement or post-effective amendment;
(f) only with respect to Demand Registrations, promptly prior to the
filing of any document which is to be incorporated by reference into the
Registration Statement or the Prospectus (after initial filing of the
Registration Statement) provide copies of such document to counsel to GE (on
behalf of itself and all permitted assignees who are Holders of Registrable
Securities) and to the managing underwriter, if any, and make the Company's
representatives available for discussion of such document and make such changes
in such document prior to the filing thereof as counsel for GE or underwriters
may reasonably request;
(g) furnish to each selling Holder of Registrable Securities and the
managing underwriter, without charge, at least one signed copy of the
Registration Statement and any post-effective amendments thereto, including
financial statements and schedules, all documents incorporated therein by
reference and all exhibits (including those incorporated by reference);
(h) deliver to GE (on behalf of each selling Holder of Registrable
Securities) and the underwriters, if any, without charge, as many copies of each
Prospectus (and each preliminary prospectus) as such Persons may reasonably
request (the Company hereby consenting to the use of each such Prospectus (or
preliminary prospectus) by each of the selling Holders of Registrable Securities
and the underwriters, if any, in connection with the offering and sale of the
Registrable Securities covered by such Prospectus (or preliminary prospectus));
(i) prior to any public offering of Registrable Securities, use all
commercially reasonable efforts to register or qualify or cooperate with the
selling Holders of Registrable Securities, the underwriters, if any, and their
respective counsel in connection with the
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registration or qualification of such Registrable Securities for offer and
sale under the securities or blue sky laws of such jurisdictions as GE or
such underwriters may designate in writing and do anything else necessary or
advisable to enable from a legal perspective the disposition in such
jurisdictions of the Registrable Securities covered by the Registration
Statement; provided that the Company shall not be required to qualify
generally to do business in any jurisdiction where it is not then so
qualified or to take any action which would subject it to general service of
process in any such jurisdiction where it is not then so subject;
(j) cooperate with the selling Holders of Registrable Securities and the
managing underwriter, if any, to facilitate the timely preparation and delivery
of certificates not bearing any restrictive legends representing the Registrable
Securities to be sold and cause such Registrable Securities to be in such
denominations and registered in such names as the managing underwriter may
request at least three business days prior to any sale of Registrable Securities
to the underwriters;
(k) use all commercially reasonable efforts to cause the Registrable
Securities covered by the Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to enable the seller or sellers thereof or the underwriters, if any, to
consummate the disposition of such Registrable Securities;
(l) if the Registration Statement or the Prospectus contains a
Misstatement, prepare a supplement or post-effective amendment to the
Registration Statement or the related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities, the Prospectus will
not contain a Misstatement;
(m) use all commercially reasonable efforts to cause all Registrable
Securities covered by the Registration Statement to be listed on any national
securities exchange on which the Company's securities are listed or authorized
for quotation on Nasdaq, if requested by GE (on behalf of itself and all
permitted assignees who are Holders of Registrable Securities) or the managing
underwriter, if any; provided, however, that the payment of any required listing
or other fee shall always be deemed to be "commercially reasonable" for purposes
of this Section 5(m);
(n) provide a CUSIP number for all Registrable Securities not later than
the effective date of the Registration Statement;
(o) enter into such agreements (including an underwriting agreement) and
do anything else reasonably necessary or advisable in order to expedite or
facilitate the disposition of such Registrable Securities, and in such
connection, whether or not the registration is an Underwritten Registration:
(1) make such representations and warranties to the Holders of
such Registrable Securities and the underwriters, if any, in form,
substance and scope as are customarily made by issuers to holders and
underwriters, respectively, in similar Underwritten Offerings;
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(2) obtain opinions of counsel to the Company and updates
thereof (which counsel and opinions (in form, scope and substance) shall be
reasonably satisfactory to the managing underwriter, if any, and GE (on
behalf of itself and all permitted assignees who are Holders of Registrable
Securities)) addressed to each selling Holder and the underwriter, if any,
covering the matters customarily covered in opinions delivered to holders
and underwriters, respectively, in similar Underwritten Offerings and such
other matters as may be reasonably requested by GE or such underwriters;
(3) obtain "cold comfort" letters and updates thereof from the
Company's independent certified public accountants addressed to the selling
Holders of Registrable Securities and the underwriters, if any, such
letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters to holders and underwriters,
respectively, in connection with similar Underwritten Offerings;
(4) if an underwriting agreement is entered into, cause the same
to include customary indemnification and contribution provisions and
procedures with respect to such underwriters; and
(5) deliver such documents and certificates as may be reasonably
requested by GE (on behalf of itself and all permitted assignees who are
Holders of Registrable Securities) and the managing underwriter, if any, to
evidence compliance with clause (1) above and with any customary conditions
contained in the underwriting agreement or other agreement entered into by
the Company.
The above shall be done at each closing under such underwriting or similar
agreement or as and to the extent otherwise reasonably requested by GE (on
behalf of itself and all permitted assignees who are Holders of Registrable
Securities);
(p) make available for inspection by representatives of GE (on behalf of
itself and all permitted assignees who are Holders of Registrable Securities),
any underwriter participating in any disposition pursuant to such Registration
Statement, and any attorney or accountant retained by the sellers or any such
underwriter, all financial and other records and pertinent corporate documents
and properties of the Company, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any such seller or
underwriter in connection with the Registration; provided that any records,
information or documents that are designated by the Company in writing as
confidential shall be kept confidential by such Persons unless disclosure of
such records, information or documents is required by court or administrative
order; and
(q) otherwise use all commercially reasonable efforts to comply with all
applicable rules and regulations of the SEC relating to such Registration, and
make generally available to its security holders earnings statements satisfying
the provisions of Section 11(a) of the Securities Act, no later than forty-five
(45) days after the end of any 12-month period (or ninety (90) days, if such
period is a fiscal year) commencing at the end of any fiscal quarter in which
Registrable Securities are sold to underwriters in an Underwritten Offering, or,
if not sold to underwriters in such an offering, beginning with the first month
of the Company's first fiscal quarter
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commencing after the effective date of the Registration Statement, which
statements shall cover said 12-month period.
6. REGISTRATION EXPENSES
(a) DEMAND REGISTRATIONS.
The Company shall bear all Registration Expenses incurred in connection
with any Demand Registrations and of any Registrations which do not become or
are not maintained effective in accordance with the requirements specified in
Section 5(a) other than any Registration terminated prior to effectiveness at
the request of, or primarily as a result of, the actions of Holders whose
Registrable Securities are included in such registration. Notwithstanding the
foregoing, the Underwriters' Commissions incurred in connection with a Demand
Registration that becomes effective shall be shared by the Holders of the
Registrable Securities whose Registrable Securities are included in such
Registration and the Holders of the Carlyle Investors' Registrable Securities
whose Carlyle Investors' Registrable Securities are included in such
Registration, pro rata, in accordance with the aggregate amount of Registrable
Securities and Carlyle Investors' Registrable Securities sold by such Holders.
(b) PIGGYBACK REGISTRATIONS.
The Company shall bear all Registration Expenses incurred in connection
with any Piggyback Registrations, except that each Holder of the Registrable
Securities whose Registrable Securities are included in such Registration shall
pay its pro rata share of the Underwriters' Commissions incurred in such
Registration, in accordance with the amount of Registrable Securities sold by
all such Holders.
(c) COMPANY EXPENSES.
The Company also will, in any event, pay its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit, the
fees and expenses incurred in connection with any listing of the securities to
be registered on a securities exchange, and the fees and expenses of any Person,
including special experts, retained by the Company.
7. INDEMNIFICATION
(a) INDEMNIFICATION BY COMPANY.
The Company agrees to indemnify and hold harmless each Indemnified Holder
from and against all Claims arising out of or based upon any Misstatement or
alleged Misstatement, except insofar as such Misstatement or alleged
Misstatement was based upon information furnished in writing to the Company by
such Indemnified Holder expressly for use in the document containing such
Misstatement or alleged Misstatement. This indemnity shall not be exclusive and
shall be in addition to any liability which the Company may otherwise have.
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The foregoing notwithstanding, the Company shall not be liable to the
extent that any such Claim arises out of or is based upon a Misstatement or
alleged Misstatement made in any preliminary prospectus if (i) such Indemnified
Holder failed to send or deliver a copy of the Prospectus with or prior to the
delivery of written confirmation of the sale of Registrable Securities giving
rise to such Claim and (ii) the Prospectus would have corrected such untrue
statement or omission.
In addition, the Company shall not be liable to the extent that any such
Claim arises out of or is based upon a Misstatement or alleged Misstatement in a
Prospectus, (x) if such Misstatement or alleged Misstatement is corrected in an
amendment or supplement to such Prospectus and (y) having previously been
furnished by or on behalf of the Company with copies of the Prospectus as so
amended or supplemented, such Indemnified Holder thereafter fails to deliver
such Prospectus as so amended or supplemented prior to or concurrently with the
sale to the person who purchased a Registrable Security from such Indemnified
Holder and who is asserting such Claim.
The Company shall also provide customary indemnifications to underwriters,
selling brokers, dealer managers and similar securities industry professionals
participating in a distribution covered by a Registration Statement, their
officers and directors and each Person who controls such Persons (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act).
(b) INDEMNIFICATION PROCEDURES.
If any action or proceeding (including any governmental investigation or
inquiry) shall be brought or asserted against an Indemnified Holder in respect
of which indemnity may be sought from the Company, such Indemnified Holder shall
promptly notify the Company in writing, and the Company may assume the defense
thereof, including the employment of counsel reasonably satisfactory to such
Indemnified Holder and the payment of all expenses.
Such Indemnified Holder shall have the right to employ separate counsel in
any such action and to participate in the defense thereof, but the fees and
expenses of such separate counsel shall be at the expense of such Indemnified
Holder unless (i) the Company has agreed to pay such fees and expenses, (ii) the
Company shall have failed to assume the defense of such action or proceeding or
has failed to employ counsel reasonably satisfactory to such Indemnified Holder
in any such action or proceeding, or (iii) the named parties to any such action
or proceeding (including any impleaded parties) include both such Indemnified
Holder and the Company, and such Indemnified Holder shall have been advised in
writing by counsel that there may be one or more legal defenses available to
such Indemnified Holder that are different from or additional to those available
to the Company.
If such Indemnified Holder notifies the Company in writing that it elects
to employ separate counsel at the expense of the Company as permitted by the
provisions of the preceding paragraph, the Company shall not have the right to
assume the defense of such action or proceeding on behalf of such Indemnified
Holder. The foregoing notwithstanding, the Company shall not be liable for the
reasonable fee and expenses of more than one separate firm of attorneys
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at any time for such Indemnified Holder and any other Indemnified Holders
(which firm shall be designated in writing by such Indemnified Holders) in
connection with any one such action or proceeding or separate but
substantially similar or related actions or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances.
The Company shall not be liable for any settlement of any such action or
proceeding effected without its written consent, but if settled with its written
consent, or if there be a final judgment for the plaintiff in any such action or
proceeding, the Company agrees to indemnify and hold harmless such Indemnified
Holders from and against any loss or liability by reason of such settlement or
judgment.
(c) INDEMNIFICATION BY HOLDER OF REGISTRABLE SECURITIES.
Each Holder of Registrable Securities agrees to indemnity and hold harmless
the Company, its directors and officers and each Person, if any, who controls
the Company within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Company to such Holder, but only with respect to information relating
to such Holder furnished in writing by such Holder expressly for use in any
Registration Statement, Prospectus or preliminary prospectus. In no event,
however, shall the liability hereunder of any selling Holder of Registrable
Securities be greater than the dollar amount of the proceeds received by such
Holder upon the sale of the Registrable Securities giving rise to such
indemnification obligation.
In case any action or proceeding shall be brought against the Company or
its directors or officers or any such controlling person, in respect of which
indemnity may be sought against a Holder of Registrable Securities, such Holder
shall have the rights and duties given the Company and the Company or its
directors or officers or such controlling person shall have the rights and
duties given to each Holder by Sections 7(a) and 7(b) above.
The Company shall be entitled to receive indemnities from underwriters,
selling brokers, dealer managers and similar securities industry professionals
participating in the distribution, to the same extent as provided above with
respect to information so furnished in writing by such Persons specifically for
inclusion in any Prospectus or Registration Statement.
(d) CONTRIBUTION.
If the indemnification provided for in this Section 7 is unavailable to an
indemnified party under Section 7(a) or Section 7(c) above (other than by reason
of exceptions provided in those Sections) in respect of any Claims referred to
in such Sections, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such Claims in such proportion
as is appropriate to reflect the relative fault of the Company on the one hand
and of the Holder on the other in connection with the statements or omissions
which resulted in such Claims as well as any other relevant equitable
considerations. The amount paid or payable by a party as a result of the Claims
referred to above shall be deemed to include, subject to the limitations set
forth in
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Section 7(b), any legal or other fees or expenses reasonably incurred
by such party in connection with investigating or defending any action or claim.
The relative fault of the Company on the one hand and of the Holder on the
other shall be determined by reference to, among other things, whether the
Misstatement or alleged Misstatement relates to information supplied by the
Company or by the Holder and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such Misstatement or alleged
Misstatement.
The Company and each Holder of Registrable Securities agree that it would
not be just and equitable if contribution pursuant to this Section 7(d) were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this Section 7(d), an Indemnified Holder
shall not be required to contribute any amount in excess of the amount by which
(i) the total price at which the securities that were sold by such Indemnified
Holder and distributed to the public were offered to the public exceeds (ii) the
amount of any damages which such Indemnified Holder has otherwise been required
to pay by reason of such Misstatement.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
8. EXCHANGE ACT REPORTING REQUIREMENTS
From and after the date hereof, the Company shall (whether or not it shall
then be required to do so) timely file such information, documents and reports
as the Commission may require or prescribe under Section 13 or 15(d) (whichever
is applicable) of the Exchange Act. In addition, the Company shall use all
commercially reasonable efforts to file such other information, documents and
reports, as shall hereafter be required by the Commission as a condition to the
availability of Rule 144 under the Securities Act (or any successor provision)
and the use of Form S-3.
From and after the date hereof, the Company shall forthwith upon reasonable
request furnish any Holder of Registrable Securities (i) a written statement by
the Company that it has complied with such reporting requirements, (ii) a copy
of the most recent annual or quarterly report of the Company, and (iii) such
other reports and documents filed by the Company with the Commission as such
Holder may reasonably request in availing itself of an exemption for the sale of
Registrable Securities without registration under the Securities Act pursuant to
Rule 144 thereunder.
The purpose of the foregoing requirements are (a) to enable any such
Holder to comply with the current public information requirements contained
in paragraph (c) of Rule 144 under the Securities Act (or any successor
provision) and (b) to qualify the Company for the use of Registration
Statements on Form S-3.
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9. REQUIREMENTS FOR PARTICIPATION IN UNDERWRITTEN OFFERINGS
No Person may participate in any Underwritten Offering pursuant to a
Registration hereunder unless such Person (a) agrees to sell such Person's
securities on the basis provided in any underwriting arrangements approved by
the Persons entitled hereunder to approve such arrangements, and (b) completes
and executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements
10. SUSPENSION OF SALES
Upon receipt of written notice from the Company that (i) a Registration
Statement or Prospectus contains a Misstatement, or (ii) in the reasonable
determination of the Company, there exist circumstances not yet disclosed to the
public which would be required to be disclosed in such Registration Statement
and the disclosure of which would be materially harmful to the Company, each
Holder of Registrable Securities shall forthwith discontinue disposition of
Registrable Securities until such Holder has received copies of the supplemented
or amended Prospectus required by Section 5(l) hereof, or until such Holder is
advised in writing by the Company that the use of the Prospectus may be resumed,
and, if so directed by the Company, such Holder shall deliver to the Company (at
the Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice. The Company shall use all
commercially reasonable efforts to minimize the length of such suspension of
sales, provided, that the Company may require the suspension of sales for a
period of ninety (90) days in the event that the disclosure of any
circumstances, in the reasonable determination of the Company, would be harmful
in any material respect to the Company. In no event, however, shall the
aggregate period of time that the Company postpones the filing or declaration of
effectiveness of any Registration Statement pursuant to Section 5, or suspends
sales of Registrable Securities pursuant to Section 10 under any Registration
Statement, taken together with all such other periods with respect to such
Registrations Statement exceed, in the aggregate, ninety (90) days.
11. FUTURE REGISTRATION RIGHTS AGREEMENTS
Except for an underwriting agreement between the Company and one or more
professional underwriters of securities, the Company shall not agree to register
any Equity Securities under the Securities Act unless such agreement
specifically provides that:
(a) the Holder of such Equity Securities may not participate in any Demand
Registration without the consent of GE unless:
(i) the offering of the Registrable Securities is to be a Firm
Commitment Underwritten Offering and the managing underwriter concludes
that the public offering or sale of such Equity Securities would not
interfere with the successful marketing of all Registrable Securities
requested to be sold and
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(ii) the Holders of Registrable Securities shall have the right
to participate, to the extent they may request, in any Registration
Statement initiated under a Demand Registration right exercised GE (if GE
holds more than 50% of the Registrable Securities then outstanding), except
that if the managing underwriter of a public offering made pursuant to such
a Demand Registration limits the number of shares of Common Stock to be
sold, the participation of the Holders of the Registrable Securities and
the Holders of all other Common Stock (other than the Equity Securities
held by such Holder of Equity Securities) shall be determined as set forth
in Section 3 hereof.
(b) the Holder of such Equity Securities may not participate in any
Piggyback Registration if the sale of Registrable Securities is to be
underwritten unless, if the managing underwriter limits the total number of
shares to be sold, the Holders of such Equity Securities and the Holders of
Registrable Securities are entitled to participate in such underwritten
distribution based on the order of priority set forth in Section 3 hereof, and
(c) all Equity Securities excluded from any Registration as a result of
the foregoing limitations may not be publicly offered or sold for a period (not
to exceed at least thirty (30) days prior to the effective date and sixty (60)
days thereafter) that the managing underwriter reasonably determines is
necessary in order to effect the underwritten public offering of Registrable
Securities registered pursuant to this Agreement.
12. TRANSFER OF REGISTRATION RIGHTS
The rights of Holders of Registrable Securities hereunder may be
transferred as permitted in the Purchase Agreement. The Company shall be given
written notice by the Holder at the time of any such transfer permitted by the
Purchase Agreement stating the name and address of the transferee, including a
writing by such transferee to the effect that such transferee agrees to be bound
by the terms hereof and identifying the securities with respect to which the
rights hereunder are being transferred.
13. MISCELLANEOUS
(a) REMEDIES.
Each Holder of Registrable Securities, in addition to being entitled to
exercise all rights provided herein, in the Purchase Agreement and granted by
law, including recovery of damages, shall be entitled to specific performance of
its rights under this Agreement. The Company agrees that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach by it
of the provisions of this Agreement and hereby agrees to waive the defense in
any action for specific performance that a remedy at law would be adequate.
(b) NO INCONSISTENT AGREEMENTS.
The Company shall not, on or after the date of this Agreement, enter into
any agreement with respect to its securities that is inconsistent with the
rights granted to the Holders of Registrable Securities in this Agreement or
otherwise conflicts with the provisions hereof.
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Other than as disclosed on Schedule A attached hereto, the Company has not
previously entered into any agreement with respect to its securities granting
any "piggy back" registration rights to any Person. The Company represents and
warrants to GE that, except as set forth in this Agreement and the Carlyle
Investors' Registration Rights Agreement, as of the date hereof, there are no
outstanding "demand" registration rights with respect to the Company's
securities. The rights granted to the Holders of Registrable Securities
hereunder do not in any way conflict with and are not inconsistent with the
rights granted to the holders of the Company's securities under any such
agreements.
(c) AMENDMENTS AND WAIVERS.
The provisions of this Agreement, including the provisions of this
sentence, may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given unless the Company has
obtained the written consent of the Carlyle Investors (but such consent of the
Carlyle Investors shall only be necessary if, at the time such consent is
sought, the Carlyle Investors own the Carlyle Investors' Registrable Securities)
and of GE (if GE holds more than 50% of the Registrable Securities then
outstanding) (on behalf of itself and all permitted assignees who are Holders of
Registrable Securities). The foregoing notwithstanding, a waiver or consent to
departure from the provisions hereof that relates exclusively to the rights of
Holders of shares of Registrable Securities whose shares are being sold pursuant
to a Registration Statement and that does not directly or indirectly affect the
rights of other Holders of shares of Registrable Securities may be given by the
Holders of a majority of the shares of Registrable Securities being sold.
(d) NOTICES.
All notices and other communications provided for or permitted hereunder
shall be made in writing by hand-delivery, registered first-class mail, telex,
facsimile, or air courier guaranteeing overnight delivery:
(i) if to a Holder of Registrable Securities who is GE, at the
address of the Purchaser (as such term is defined in the Purchase
Agreement) set forth in Section 9.4 of the Purchase Agreement, with a copy
to Gibson, Dunn & Crutcher LLP, 333 South Grand Avenue, Los Angeles, CA
90071-3197, Facsimile: (213) 229-7250, Attention: Ronald S. Beard;
(ii) if to a Holder of Registrable Securities who is not GE, at
the most current address given by the Holder to the Company in accordance
with the provisions hereof, which address initially is the address of the
Purchaser (as such term is defined in the Purchase Agreement) set forth in
the Purchase Agreement, with a copy to Gibson, Dunn & Crutcher LLP, 333
South Grand Avenue, Los Angeles, CA 90071-3197, Facsimile:
(213) 229-7250, Attention: Ronald S. Beard; and
(iii) if to the Company, initially at its address set forth
in the Purchase Agreement and thereafter at such other address, notice of
which is given in accordance with the provisions hereof, with a copy to
McDermott, Will & Emery, 2049 Century Park
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East, Los Angeles, CA 90067, Facsimile: 310.277.4730, Attn: Mark J.
Mihanovic, Esq., and Arent, Fox, Kintner, Plotkin & Kahn, 1050 Connecticut
Avenue, N.W., Suite 600, Washington, D.C. 20036, Facsimile: 202.857.6395,
Attn: Gerald P. McCartin, Esq.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if telecopied; and on the
next business day, if timely delivered to an air courier guaranteeing overnight
delivery. The Company shall promptly provide a list of the most current
addresses of the Holders of Registrable Securities given to it in accordance
with the provisions hereof to any such Holder for the purpose of enabling such
Holder to communicate with other Holders in connection with this Agreement.
(e) SUCCESSORS AND ASSIGNS.
This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties.
(f) COUNTERPARTS.
This Agreement may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.
(g) HEADINGS.
The headings in this Agreement are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.
(h) GOVERNING LAW.
This Agreement shall be construed, interpreted and the rights of the
parties determined in accordance with the internal laws of the State of New
York, without regard to the conflict of law principles thereof; except with
respect to matters of law concerning the internal corporate affairs of any
corporate entity which is a party to or the subject of this Agreement, and as to
those matters the law of the jurisdiction under which the respective entity
derives its powers shall govern.
(i) SEVERABILITY.
In the event that any one or more of the provisions contained herein, or
the application thereof in any circumstance, is held invalid, illegal or
unenforceable, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby.
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(j) FORMS.
All references in this Agreement to particular forms of Registration
Statements are intended to include all successor forms which are intended to
replace, or to apply to similar transactions as, the forms herein referenced.
(k) ENTIRE AGREEMENT.
This Agreement and the Purchase Agreement are intended by the parties as
the final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein or therein with respect to the registration rights granted by the Company
with respect to the securities sold pursuant to the Purchase Agreement. This
Agreement and the Purchase Agreement supersede all prior agreements and
understandings between the parties with respect to such subject matter
(including any prior agreements and understandings with respect to registration
rights regarding the Series A Preferred Stock).
(l) CARLYLE INVESTORS' REGISTRATION RIGHTS AGREEMENT.
If Holders elect to join in a request for Demand Registration pursuant to
Section 2(d) of the Carlyle Investors' Registration Rights Agreement, then such
registration of Holders' shares shall, with respect to the terms and conditions
of this Agreement, be treated as if such registration were a Demand Registration
pursuant to Section 2 of this Agreement; PROVIDED, HOWEVER, that such
registration of Holders' shares pursuant to Section 2(d) of the Carlyle
Investors' Registration Rights Agreement shall not: (i) count as one of the two
Demand Registrations available to Holders pursuant to this Agreement, or (ii) be
subject in any way whatsoever to the $5 million threshold of Section 2(b) of
this Agreement.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
INSIGHT HEALTH SERVICES CORP.,
a Delaware corporation
By: __________________________________
Name: ___________________________
Title: ___________________________
GENERAL ELECTRIC COMPANY,
a New York corporation
By: __________________________________
Name: ___________________________
Title: ___________________________
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