Exhibit 10.28
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. TEMPLATE
Certificate for __________ Warrants
EXERCISABLE COMMENCING ON THE DATE OF ISSUANCE
HEREOF AND ENDING
5:00 P.M., NEWPORT BEACH, CALIFORNIA TIME, ON THE EXPIRATION DATE
INSIGHT HEALTH SERVICES CORP.
WARRANT CERTIFICATE
THIS CERTIFIES that __________ 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 $4.56 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 ______ Warrants each
month commencing on __________ until fully vested so long as continuously
during such time period the Warrantholder remains a director of the Company.
The Warrants shall expire at 5:00 p.m. Newport Beach, California time, on the
earlier of (i) 90 days after the Warrantholder ceases to be a director of the
Company (other than by death or permanent or total disability within the
meaning of the Internal Revenue Code of 1986, as amended, ("Internal Revenue
Code")), (ii) twelve months after the Warrantholder's death or permanent or
total disability within the meaning of the Internal Revenue Code or (iii) on
__________ (the "Expiration Date"); provided however, that if the
Warrantholder ceases to be a director of the Company, other than by death or
permanent or total disability within the meaning of the Internal Revenue
Code, the Warrantholder shall have the right until the Expiration Date to
purchase from the Company the Common Shares issuable upon exercise of the
Warrants which shall have vested prior to such termination.
A-1
(b) Subject to the provisions of this Warrant Certificate,
after the date of this Warrant Certificate and prior to the close of business
on the Expiration Date, the Warrantholder shall have the right to purchase
from the Company the number of Common Shares specified above at the Exercise
Price. In order to exercise such right, the Warrantholder shall surrender
the Warrant Certificate(s) evidencing such Warrants to the Company at the
Office with the form of Election to Purchase set forth hereon duly completed
and signed, and shall tender payment in full to the Company for the Company's
account of the Exercise Price, together with such taxes as are specified in
Section 4 hereof, for each Common Share with respect to which such Warrants
are being exercised. Such Exercise Price and taxes shall be paid in full by
certified check, bank cashier's check or money order, payable in United
States currency to the order of the Company. In addition, if the Common
Shares deliverable upon exercise have not been registered pursuant to the
Securities Act, the Warrantholder shall deliver a duly executed certificate
substantially in the form of Exhibit A hereto.
(c) The Warrants evidenced by this Warrant Certificate shall be
exercisable only in multiples of one (l) Warrant. If less than all of the
Warrants evidenced by this Warrant Certificate are exercised at any time
prior to the close of business on the Expiration Date, a new Warrant
Certificate(s) shall be issued to the Warrantholder, or his duly authorized
assigns, by the Company for the remaining number of Warrants evidenced by the
Warrant Certificate so surrendered.
SECTION 2. ISSUANCE OF SHARE CERTIFICATES. Upon surrender of this
Warrant Certificate and payment of the Exercise Price, and, if the Common
Shares deliverable on exercise have not been registered under the Securities
Act, upon delivery of a certificate in the form of Exhibit A hereto, the
Company shall issue certificates representing Common Shares ("Share
Certificates") for the number of full Common Shares to which the holder of
such Warrants is entitled, registered in accordance with the instructions set
forth in the Election to Purchase. If such Common Shares have not been
registered under the Securities Act, the Share Certificates shall bear a
legend substantially similar to the legend on this Warrant Certificate.
SECTION 3. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF COMMON SHARES
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
A-2
Shares (the "New Shares"), thereafter the number of such New Shares so
receivable upon exercise of any Warrant shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to
the provisions with respect to the Common Shares contained in paragraph (a),
and the provisions of this Warrant Certificate with respect to the Common
Shares shall apply on like terms to any such New Shares.
(c) All calculations of the Exercise Price under this Section 3
shall be made to the nearest one hundredth of a cent. No adjustment in the
Exercise Price in accordance with the provisions of 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
A-3
Expiration Date; PROVIDED, HOWEVER, that the Company shall not be required to
pay any Taxes which may be payable in respect of any transfer involved in the
issuance of any Warrant Certificates or any Share Certificates in a name
other than that of the Warrantholder of record surrendered upon the exercise
of a Warrant, and the Company shall not be required to issue or deliver such
Share Certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such Taxes or
shall have established to the satisfaction of the Company that such Taxes
have been paid.
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 canceled 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 canceled
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.
A-4
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.
(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.
A-5
SECTION 16. INVALIDITY OF PROVISIONS. If any provision of this Warrant
Certificate is or becomes invalid, illegal or unenforceable in any respect,
such provision shall be amended to the extent necessary to cause it to
express the intent of the parties and be valid, legal and enforceable. The
amendment of such provision shall not affect the validity, legality or
enforceability of any other provision hereof.
SECTION 17. REGISTRATION RIGHTS.
(a) If at any time or from time to time the Company proposes to
file a registration statement on any appropriate form (a "Registration
Statement") (other than in connection with an exchange offer or a
registration statement on Form S-4 or S-8 or otherwise unsuitable
registration statements) under 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
A-6
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 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:
A-7
(i) Keep such registration, qualification or compliance
fefective for a period of 120 days or until the Warrantholder has completed the
distribution described in the Registration Statement relating thereto, whichever
first occurs;
(ii) Prepare and file with the SEC such amendments and
supplements to such Registration Statement and the prospectus used in
connection therewith as may be necessary to keep such Registration Statement
effective for the requisite period;
(iii) Furnish such number of prospectuses and other
documents incident thereto as the Warrantholder from time to time may
reasonably request;
(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
A-8
(ix) In the event of the issuance of any stop order
suspending the effectiveness of a Registration Statement, or of any order
suspending or preventing the use of any related prospectus or suspending the
qualification of any common stock included in such Registration Statement for
sale in any jurisdiction, the Company will use its reasonable efforts
promptly to obtain the withdrawal of such order.
(h) The Warrantholder agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in
Sections 17(g)(v) or (ix), such holder will forthwith discontinue disposition
of Warrant Shares pursuant to a registration hereunder until receipt of the
copies of an appropriate supplement or amendment to the prospectus under
Section 17(g)(ii) or until the withdrawal of such order under Section
17(g)(ix).
(i) No person may participate in any underwritten registration
hereunder unless such person (i) agrees to sell such person's Common Shares
on the basis provided in any underwriting arrangements approved by the
persons entitled to approve such arrangements, (ii) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements
and other documents required under the terms of such underwriting
arrangements and (iii) furnishes to the Company such information regarding
such person and the distribution proposed by such person as the Company may
request in writing and as shall be required in connection with any
registration, qualification or compliance referred to in this Section 17.
(j) The Company agrees to indemnify, to the extent permitted by
law, the Warrantholder, its officers, directors and trustees and each person
who controls (within the meaning of the Securities Act) such holder against
all losses, claims, damages, liabilities and expenses caused by any untrue or
alleged untrue statement of material fact contained in any Registration
Statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as the same are caused by or contained in any
information furnished in writing to the Company by such holder expressly for
use therein or by such holder's failure to deliver a copy of the Registration
Statement or prospectus or any amendments or supplements thereto after the
Company has furnished such holder with a sufficient number of copies of the
same. In connection with an underwritten offering, the Company will
indemnify such underwriters, their officers and directors and each person who
controls (within the meaning of the Securities Act) such underwriters at
least to the same extent as provided above with respect to the
indemnification of the Warrantholder.
(k) In connection with any Registration Statement in which
Warrantholder is participating, such Warrantholder will furnish to the
Company in writing such information as the Company reasonably requests for
use in connection with any such Registration Statement or prospectus and, to
the extent permitted by law, will indemnify the Company, its directors and
officers and each person who controls (within the meaning of the Securities
Act) the Company against any losses, claims, damages, liabilities and
expenses resulting from any untrue or alleged untrue statement of material
fact contained in the Registration Statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto or any omission or
alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only to the
extent that such untrue statement or omission is contained in any information
so furnished in writing by such Holder; PROVIDED that the obligation to
indemnify will be limited to the net amount of proceeds received by such
holder from the sale of Warrant Shares pursuant to such Registration
Statement. In connection with an underwritten offering, such holder will
indemnify such underwriters, their officers and directors and each
A-9
person who controls (within the meaning of the Securities Act) such
underwriters at least to the same extent as provided above with respect to
the indemnification of the Company.
(l) Any person entitled to indemnification hereunder will (i)
give prompt written notice to the indemnifying party of any claim with
respect to which it seeks indemnification and (ii) unless in such indemnified
party's reasonable judgment a conflict of interest between such indemnified
and indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed,
the indemnifying party will not be subject to any liability for any
settlement made by the indemnified party without its consent (but such
consent will not be unreasonably withheld). An indemnifying party who is not
entitled to, or elects not to, assume the defense of a claim will not be
obligated to pay the fees and expenses of more than one counsel for all
parties indemnified by such 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 a 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 not 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.
A-10
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed.
INSIGHT HEALTH SERVICES CORP.
Attest:
By:
- ---------------------------- ---------------------------------
Tammy M. Morita Thomas V. Croal
Assistant Secretary Executive Vice President
and Chief Financial Officer
A-11