THIS COMMON STOCK PURCHASE WARRANT AND THE SECURITIES FOR WHICH IT CAN
BE EXERCISED HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE TRANSFERRED IN VIOLATION OF SUCH ACT OR STATE LAW,
THE RULES AND REGULATIONS THEREUNDER OR THE TRANSFER RESTRICTIONS OF THIS
WARRANT.
MEDICAL IMAGING CENTERS OF AMERICA, INC.
COMMON STOCK PURCHASE WARRANT
60,000 Shares, Subject to Adjustment
January 16, 1996
THIS IS TO CERTIFY THAT GENERAL ELECTRIC COMPANY, a New York corporation
acting through GE Medical Systems, or registered assigns, is entitled, at any
time on and after the Exercise Date (as such term is hereinafter defined) and
on or prior to the Expiration Date (as such term is hereinafter defined), to
purchase from MEDICAL IMAGING CENTERS OF AMERICA, INC., a California
corporation (the "Company"), 60,000 shares of Common Stock (as such term is
hereinafter defined), subject to adjustment as provided herein, of the
Company at a purchase price of $8.50 per share of Common Stock (subject to
adjustment as provided herein), all on the terms and conditions and pursuant
to the provisions hereinafter set forth.
1. DEFINITIONS
As used in this Warrant, the following terms have the respective
meanings set forth below.
"Additional Shares of Common Stock" shall mean all shares of Common
Stock issued by the Company following the date of this Warrant.
"Appraised Value" shall mean, in respect of any share of Common Stock on
any date herein specified, the fair market value of such share of Common
Stock (determined without giving effect to the discount for (i) a minority
interest or (ii) any lack of liquidity of the Common Stock or to the fact
that the Company may have no class of equity registered under the Exchange
Act) as of the last day of the most recent fiscal month to end within 60 days
prior to such date specified, based on the value of the Company as a whole,
as determined by a member or members of the NASD selected in accordance with
the definition below of "Current Market Price" on the basis of a sale between
a willing seller and buyer, neither acting under any compulsion, divided by
the number of Fully Diluted Outstanding shares of Common Stock.
"Book Value" shall mean, in respect of any share of Common Stock on any
date herein specified, the consolidated book value of the Company applicable
to Common Stock as of the last day of any month immediately preceding such
date, divided by the number of Fully Diluted Outstanding shares of Common
Stock as determined in accordance with GAAP by a firm of independent
certified public accountants of recognized national standing selected by the
Company and reasonably acceptable to the Holder.
"Business Day" shall mean any day that is not a Saturday or Sunday or a
day on which banks are required or permitted to be closed in the States of
New York or California.
"Commission" shall mean the Securities and Exchange Commission or any
other federal agency then administering the Securities Act and other federal
securities laws.
"Common Stock" shall mean (except where the context otherwise indicates)
the Common Stock of the Company, and any capital stock into which such Common
Stock may thereafter be changed, and shall also include capital stock of the
Company of any other class (regardless of how denominated) issued to the
holders of shares of Common Stock upon any reclassification thereof which is
not preferred as to dividends or assets over any other class of stock of the
Company and which is not subject to redemption.
"Convertible Securities" shall mean evidences of indebtedness, options,
warrants or other rights to receive shares of stock or other securities which
are convertible into or exchangeable, with or without payment of additional
consideration in cash or property, for Common Stock, either immediately or
upon the occurrence of a specified date or a specified event.
"Current Market Price" shall mean, in respect of any share of Common
Stock on any date herein specified, the highest of (a) the Book Value per
share of Common Stock at such date, and (b) the Appraised Value per share of
Common Stock as at such date, or if there shall then be a public market for
the Common Stock, the highest of (x) the Book Value per share of Common Stock
at such date, and (y) the average of the daily market prices for 30
consecutive Business Days commencing 45 days before such date. The daily
market price for each such day shall be (i) if the Common Stock is listed or
admitted to trading on a stock exchange in the United States (including
Nasdaq), the last sale price on such day on the principal stock exchange on
which such Common Stock is then listed or admitted to trading, or (ii) if no
sale takes place on such day on any such exchange, the average of the last
reported closing bid and asked prices on such day as officially quoted on any
such exchange.
"Current Warrant Price" shall mean, in respect of a share of Common
Stock at any date herein specified, the price at which a share of Common
Stock may be purchased pursuant to this Warrant on such date.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect from time to time.
"Exercise Date" shall mean the date hereof.
"Exercise Period" shall mean the period during which this Warrant is
exercisable pursuant to Section 2.1.
"Expiration Date" shall mean December 31, 1998.
"Fully Diluted Outstanding" shall mean, when used with reference to
Common Stock, at any date as of which the number of shares thereof is to be
determined, all shares of Common Stock Outstanding at such date and all
shares of Common Stock issuable in respect of this Warrant and all other
options, warrants, Convertible Securities or other rights to purchase or
receive Common Stock outstanding on such date.
"GAAP" shall mean generally accepted accounting principles in the United
States of America as from time to time in effect.
"GE Medical" shall mean General Electric Company, a New York corporation
acting through GE Medical Systems.
"Holder" shall mean the Person or Persons in whose name the Warrant set
forth herein is registered on the books of the Company maintained for such
purpose. In the event more than one Person is so registered, "Holder" for
purposes of consent, demand or other action allowed or required to be taken
hereunder by the Holders of this Warrant, the word "Holder" shall refer to a
simple majority in interest of such Persons.
"NASD" shall mean the National Association of
Securities Dealers, Inc., or any successor corporation thereto.
"Outstanding" shall mean, when used with reference to Common Stock, at
any date as of which the number of shares thereof is to be determined, all
issued shares of Common Stock, except shares then owned or held exclusively
by or for the account solely of the Company or any wholly-owned subsidiary
thereof (collectively, "Subsidiary-Held Shares"), and shall include all
shares issuable in respect of any certificates representing fractional
interests in shares of Common Stock. Subsidiary-Held Shares shall remain
Subsidiary-Held Shares even if held in pledge as security unless and until
such shares are foreclosed upon and record, beneficial or equitable ownership
transferred.
"Person" shall mean any individual, sole proprietorship, partnership,
joint venture, trust, incorporated organization, association, corporation,
institution, public benefit corporation, entity or government (whether
federal, state, county, city, municipal or otherwise, including, without
limitation, any instrumentality, division, agency, body or department
thereof).
"Preferred Stock" shall mean any class of the Company's stock having
rights, preferences or privileges senior or prior in right to any other
class.
"Restricted Common Stock" shall mean shares of Common Stock which are,
or which upon their issuance on the exercise of this Warrant would be,
evidenced by a certificate bearing the restrictive legend set forth in
Section 9.1(a).
"Securities Act" shall mean the Securities Act of 1933, as amended, or
any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Subsidiary" shall mean, with respect to any Person, any corporation of
which an aggregate of more than 50 percent of the outstanding stock having
ordinary voting power to elect a majority of the board of directors of such
corporation (irrespective of whether, at the time, stock of any other class
or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time, directly or
indirectly, owned legally or beneficially by such Person and/or one or more
Subsidiaries of such Person.
"Subsidiary-Held Shares" shall have the meaning set forth above in the
definition of "Outstanding."
"Transfer" shall mean any disposition of any Warrant or Warrant Stock or
of any interest in either thereof, which would constitute a sale thereof
within the meaning of the Securities Act.
"Transfer Notice" shall have the meaning set forth in Section 9.2.
"Warrants" shall mean this Warrant and all warrants issued upon
transfer, division or combination of, or in substitution for, this Warrant.
All Warrants shall at all times be identical as to terms and conditions and
date, except as to the percentage of Fully Diluted Outstanding Shares of
Common Stock for which they may be exercised. Collectively, all unexercised
Warrants shall be exercisable for the exact same number of shares as this
Warrant would be exercisable in the event any such Transfer or division had
not occurred. Exercise of any warrant shall not trigger any of the
adjustments contemplated by Section 4 of this Warrant.
"Warrant Price" shall mean an amount equal to (i) the number of shares
of Common Stock being purchased upon exercise of this Warrant pursuant to
Section 2.1, multiplied by (ii) the Current Warrant Price as of the date of
such exercise.
"Warrant Stock" shall mean the shares of Common Stock purchased by the
holders of the Warrants upon the exercise thereof.
2. EXERCISE OF WARRANT
2.1 Manner of Exercise. From and after the Exercise Date and until
5:00 p.m., California time, on the Expiration Date, the Holder may exercise
the Warrant on Business Days, for all or any portion of 60,000 shares
(subject to adjustment as provided hereunder) of Common Stock then
purchasable hereunder.
In order to exercise this Warrant, in whole or in part, Holder
shall deliver to the Company at its principal office at 0000 Xxxxxxx Xxxxxx,
Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx 00000 or at the office or agency designated
by the Company pursuant to Section 12, (i) a written notice of Holder's
election to exercise this Warrant, which notice shall specify the number of
shares of Common Stock to be purchased, (ii) payment of the Warrant Price in
the manner specified below, and (iii) this Warrant. Such notice shall be
substantially in the form of the subscription form appearing at the end of
this Warrant as Exhibit A, duly executed by Holder or its agent or attorney.
Upon receipt thereof, the Company shall, as promptly as practicable, and in
any event within five Business Days thereafter, execute or cause to be
executed and deliver or cause to be delivered to Holder a certificate or
certificates representing the aggregate number of full shares of Outstanding
shares of Common Stock issuable upon such exercise. The stock certificate or
certificates so delivered shall be, to the extent possible, in such
denomination or denominations as such Holder shall request in the notice and
shall be registered in the name of Holder or, subject to Section 9, such
other name as shall be designated in the notice. This Warrant shall be
deemed to have been exercised and such certificate or certificates shall be
deemed to have been issued, and Holder or any other Person so designated to
be named therein shall be deemed to have become a holder of record of such
shares for all purposes, as of the date the notice, together with the payment
as set forth below, and this Warrant are received by the Company as described
above and all taxes required to be paid by Holder, if any, pursuant to
Section 2.2 prior to the issuance of such shares have been paid or agreed to
be paid when finally determined.
Payment of the Warrant Price shall be made at the option of the
Holder by certified or official bank check, or by cancellation of
indebtedness, if any, owed by the Company to such Holder.
2.2 Payment of Taxes. All shares of Common Stock issuable upon the
exercise of this Warrant pursuant to the terms hereof shall be validly
issued, fully paid and nonassessable. The Company shall pay all expenses in
connection with, and all taxes and other governmental charges that may be
imposed with respect to, the issue or delivery thereof, unless such tax or
charge is imposed by law upon Holder, in which case such taxes or charges
shall be paid by Holder. The Company shall not be required, however, to pay
any tax or other charge imposed in connection with any transfer involved in
the issuance of any certificate for shares of Common Stock issuable upon
exercise of this Warrant in any name other than that of Holder, and in such
case the Company shall not be required to issue or deliver any stock
certificate until such tax or other charge has been paid or it has been
established to the satisfaction of the Company that no such tax or other
charge is due.
2.3 Fractional Shares. The Company shall not issue a fractional share
of Common Stock upon exercise of this Warrant. A fractional share otherwise
issuable shall be rounded up to the nearest whole share.
2.4 Continued Validity. A holder of shares of Common Stock issued upon
the exercise of this Warrant (other than a holder who acquires such shares
after the same have been publicly sold pursuant to a Registration Statement
under the Securities Act or sold pursuant to Rule 144 thereunder), shall
continue to be entitled with respect to such shares to all rights to which it
would have been entitled as Holder under Sections 9, 10, 13, and 16 of this
Warrant. The Company shall, at the time of each exercise of this Warrant
upon the request of the holder of the shares of Common Stock issued upon such
exercise hereof, acknowledge in writing, in form reasonably satisfactory to
such holder, its continuing obligation to afford to such holder all such
rights; provided, however, that if such holder shall fail to make any such
request, such failure shall not affect the continuing obligation of the
Company to afford to such holder all such rights.
3. TRANSFER, DIVISION AND COMBINATION
3.1 Transfer. This Warrant shall be nontransferable other than to a
division, subsidiary or affiliate of GE Medical except by merger of the
Holder with another entity or otherwise as contemplated in Section 9 hereof
or by operation of law. Subject to compliance with Section 9, transfer of
this Warrant and all rights hereunder, in whole or in part, shall be
registered on the books of the Company to be maintained for such purpose,
upon surrender of this Warrant at the principal office of the Company
referred to in Section 2.1 or the office or agency designated by the Company
pursuant to Section 12, together with a written assignment of this Warrant
substantially in the form of Exhibit B hereto duly executed by Holder or its
agent or attorney and funds sufficient to pay any transfer taxes payable upon
the making of such transfer. Upon such surrender and, if required, such
payment, the Company shall, subject to Section 9, execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees and in the
denomination specified in such instrument of assignment, and shall issue to
the assignor a new Warrant evidencing the portion of this Warrant not so
assigned, and this Warrant shall promptly be cancelled. A Warrant, if
properly assigned in compliance with Section 9, may be exercised by a new
Holder for the purchase of shares of Common Stock without having a new
Warrant issued. If requested by the Company, a new Holder shall acknowledge
in writing, in form reasonably satisfactory to the Company, such Holder's
continuing obligations under Section 9 of this Warrant.
3.2 Division and Combination. Subject to Section 9, this Warrant may
be divided or combined with other Warrants upon presentation hereof at the
aforesaid office or agency of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be
issued, signed by Holder or its agent or attorney. Subject to compliance
with Section 3.1 and with Section 9, as to any transfer which may be involved
in such division or combination, the Company shall execute and deliver a new
Warrant or Warrants in exchange for the Warrant or Warrants to be divided or
combined in accordance with such notice.
3.3 Expenses. The Company shall prepare, issue and deliver at its own
expense (other than transfer taxes) the new Warrant or Warrants under this
Section 3.
3.4 Maintenance of Books. The Company shall maintain, at its aforesaid
office or agency, books for the registration, and the registration of
transfer, of this Warrant.
4. ADJUSTMENTS
The number of shares of Common Stock for which this Warrant is
exercisable, or the price at which such shares may be purchased upon exercise
of this Warrant shall be subject to adjustment from time to time as set forth
in this Section 4. The Company shall give each Holder notice of any event
described below which requires an adjustment pursuant to this Section 4 at
the time of such event.
4.1 Stock Dividends, Subdivisions, Combinations and Reclassifications.
If at any time the Company shall with respect to its Common Stock or
Convertible Securities:
(a) pay a dividend or make distribution of Additional Shares of
Common Stock or Convertible Securities other than convertible
indebtedness or convertible Preferred Stock (in which event such
Additional Shares of Common Stock issuable upon exchange or conversion
shall be deemed distributed),
(b) subdivide its outstanding shares of Common Stock into a larger
number of shares of Common Stock,
(c) combine its outstanding shares of Common Stock into a smaller
number of shares of Common Stock, or
(d) reclassify its Common Stock (other than a change in par value,
or from par value to no par value) into shares of Common Stock and
shares of any other class of stock; and, if the Outstanding shares of
Common Stock shall be changed into a larger or smaller number of shares
of Common Stock as a part of such reclassification, such change shall be
deemed a subdivision or combination, as the case may be, of the
Outstanding shares of Common Stock within the meaning of this
Section 4.1.,
then (i) the number of shares of Common Stock for which this Warrant is
exercisable after the occurrence of any such event shall be equal to (A) the
maximum number of shares of Common Stock underlying this Warrant prior to the
occurrence of any such event, multiplied by (B) the number of Fully Diluted
Outstanding shares of Common Stock after any such event, divided by the
number of Fully Diluted Outstanding shares of Common Stock prior to any such
event, and (ii) the Current Warrant Price shall be adjusted to equal the
Current Warrant Price multiplied (A) by the number of shares of Common Stock
for which this Warrant is exercisable immediately prior to the adjustment
divided by (B) the number of shares for which this Warrant is exercisable
immediately after such adjustment. Any increased number of shares of Common
Stock subject to this Warrant resulting from application of the foregoing
shall be allocated ratably among all shares of Common Stock subject to this
Warrant prior to each such event and the shares (including the newly
allocated shares) not subject to clause (i) of Section 2.1 shall remain
subject to the conditions precedent to exercise described in clause (ii) of
Section 2.1.
4.2 Other Provisions Applicable to Adjustments under this Section. The
following provisions shall be applicable to the making of adjustments of the
number of shares of Common Stock for which this Warrant is exercisable
provided for in this Section 4:
(a) When Adjustments to Be Made. The adjustments required by this
Section 4 shall be made whenever and as often as any specified event
requiring an adjustment shall occur. For the purpose of any adjustment,
any specified event shall be deemed to have occurred at the close of
business on the date of its occurrence.
(b) When Adjustment Not Required. If the Company shall take a
record of the holders of its Common Stock for the purpose of entitling
them to receive a dividend or distribution or subscription or purchase
rights and shall, thereafter and before the distribution to stockholders
thereof, legally abandon its plan to pay or deliver such dividend,
distribution, subscription or purchase rights, then thereafter no
adjustment shall be required by reason of the taking of such record and
any such adjustment previously made in respect thereof shall be
rescinded and annulled.
5. NOTICES TO WARRANT HOLDERS
5.1 Notice of Adjustments. Whenever the number of shares of Common
Stock for which this Warrant is exercisable, or whenever the price at which a
share of such Common Stock may be purchased upon exercise of this Warrant,
shall be adjusted pursuant to Section 4, the Company shall forthwith prepare
a certificate to be executed by the chief financial officer of the Company
setting forth, in reasonable detail, the event requiring the adjustment and
the method by which such adjustment was calculated, specifying the number of
shares of Common Stock for which this Warrant is exercisable, and any change
in the purchase price or prices thereof, after giving effect to such
adjustment or change. The Company shall promptly cause a signed copy of such
certificate to be delivered to each Holder in accordance with Section 16.2.
The Company shall keep at its office or agency designated pursuant to Section
12 copies of all such certificates and cause the same to be available for
inspection at said office during normal business hours by any Holder or any
prospective purchaser of a Warrant designated by a Holder thereof.
5.2 Notice of Certain Corporate Action. The Holder shall be entitled
to the same rights to receive notice of corporate action as any holder of
Common Stock.
6. NO IMPAIRMENT
The Company shall not by any action including, without limitation,
amending its certificate of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at
all times in good faith assist in the carrying out of all such terms and in
the taking of all such actions as may be necessary or appropriate to protect
the rights of Holder against impairment. Without limiting the generality of
the foregoing, the Company will (a) not increase the par value, if any, of
any shares of Common Stock receivable upon the exercise of this Warrant above
the amount payable therefor upon such exercise immediately prior to such
increase in par value, (b) take all such action as may be reasonably
necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable shares of Common Stock upon the exercise
of this Warrant, and (c) use its best efforts to obtain all such
authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof as may be necessary to enable the Company to perform its
obligations under this Warrant.
Upon the request of Holder, the Company will at any time during the
period this Warrant is outstanding acknowledge in writing, in form
satisfactory to Holder, the continuing validity of this Warrant and the
obligations of the Company hereunder.
7. RESERVATION AND AUTHORIZATION OF COMMON STOCK; REGISTRATION WITH OR
APPROVAL OF ANY GOVERNMENTAL AUTHORITY
From and after the date hereof, the Company shall at all times reserve
and keep available for issuance upon the exercise of Warrants such number of
its authorized but unissued shares of Common Stock as will be sufficient to
permit the exercise in full of all outstanding Warrants. All shares of
Common Stock which shall be so issuable, when issued upon exercise of any
Warrant and payment therefor in accordance with the terms of such Warrant,
shall be duly and validly issued and fully paid and nonassessable, and not
subject to preemptive rights.
Before taking any action which would cause an adjustment reducing the
Current Warrant Price below the then par value, if any, of the shares of
Common Stock issuable upon exercise of the Warrants, the Company shall take
any corporate action which may be reasonably necessary in order that the
Company may validly and legally issue fully paid and nonassessable shares of
such Common Stock at such adjusted Current Warrant Price.
Before taking any action which would result in an adjustment in the
number of shares of Common Stock for which this Warrant is exercisable or in
the Current Warrant Price, the Company shall obtain all such authorizations
or exemptions thereof, or consents thereto, as may be reasonably necessary
from any public regulatory body or bodies having jurisdiction thereof.
If any shares of Common Stock required to be reserved for issuance upon
exercise of warrants require registration or qualification with any
governmental authority under any federal or state law (otherwise than as
provided in Section 9) before such shares may be so issued, the Company will
in good faith and as expeditiously as possible and at its expense endeavor to
cause such shares to be duly registered or qualified; provided that the
provisions of Section 9 shall govern with respect to Company's obligation to
effect the registration of its securities under the Securities Act.
8. TAKING OF RECORD; STOCK AND WARRANT TRANSFER BOOKS
In the case of all dividends or other distributions by the Company to
the holders of its Common Stock with respect to which any provision of
Section 4 refers to the taking of a record of such holders, the Company will
in each such case take such a record and will take such record as of the
close of business on a Business Day. The Company will not at any time,
except upon dissolution, liquidation or winding up of the Company, close its
stock transfer books or Warrant transfer books so as to result in preventing
or delaying the exercise or transfer of any Warrant.
9. RESTRICTIONS ON TRANSFERABILITY
This Warrant shall not be transferable except to a division, subsidiary
or affiliate of GE Medical or by merger of the Holder with another entity or
otherwise by operation of law. Furthermore, this Warrant and the Warrant
Stock shall not be transferred, hypothecated or assigned before satisfaction
of the conditions specified in this Section 9, which conditions are intended
to ensure compliance with the provisions of the Securities Act and state law,
with respect to the Transfer of this Warrant or any Warrant Stock. Holder,
by acceptance of this Warrant, agrees to be bound by the provisions of this
Section 9. Furthermore, Holder, by acceptance of this Warrant and by
acceptance and delivery of the Subscription Form in the form of Exhibit A
hereto, represents and warrants to the Company for its reliance in connection
with issuing this Warrant and the Warrant Stock, respectively, that
(i) Holder is acquiring the Warrant, and if applicable, the Warrant Stock for
Holder's own account for investment and not for sale or other disposition
thereof; (ii) Holder understands that such securities are not registered
under the Securities Act and must be held indefinitely unless subsequently
registered under the Securities Act or unless an exemption from such
registration is available; (iii) Holder, by reason of its business and
financial experience has the capacity to protect its own interests in
connection with purchase and transfer of such securities and is able to bear
the economic risk thereof; and (iv) the Company has made available to Holder
all documents and information regarding an investment in such securities
requested by or on behalf of Holder, including but not limited to all
publicly available information on file with the Commission.
9.1 Restrictive Legend.
(a) Except as otherwise provided in this Section 9, each
certificate for Warrant Stock initially issued upon the exercise of this
Warrant, and each certificate for Warrant Stock issued to any subsequent
transferee of any such certificate, shall be stamped or otherwise
imprinted with a legend in substantially the following form:
The shares represented by this certificate have
not been registered under the Securities Act of
1933, as amended, and are subject to the
conditions specified in a certain Common Stock
Purchase Warrant dated as of January 16, 1996,
originally issued by Medical Imaging Centers of
America, Inc. No transfer of the shares
represented by this certificate shall be valid
or effective until such conditions and any
requirements of state law have been fulfilled.
A copy of the form of such Warrant is on file
with the Secretary of Medical Imaging Centers
of America, Inc. The holder of this
certificate, by acceptance of this certificate,
agrees to be bound by the provisions of such
Warrant.
(b) Except as otherwise provided in this Section 9, each Warrant
shall be stamped or otherwise imprinted with a legend in substantially
the following form:
This Warrant and its underlying securities have
not been registered under the Securities Act of
1933, as amended, and may not be transferred in
violation of such Act or state law, the rules
and regulations thereunder or the provisions of
this Warrant.
9.2 Notice of Proposed Transfers.
(a) Prior to any Transfer or attempted Transfer of any Warrants or
any shares of Warrant Stock, the holder of such Warrants or Warrant
Stock shall give 10 days prior written notice (a "Transfer Notice") to
the Company of such holder's intention to effect such Transfer,
describing the manner and circumstances of the proposed Transfer, and
shall obtain and deliver to the Company an opinion in form and substance
reasonably satisfactory to the Company (addressed to the Company and
upon which the Company may rely) from counsel to such holder who shall
be reasonably satisfactory to the Company, that the proposed Transfer of
such Warrants or such Warrant Stock may be effected without registration
under the Securities Act and any applicable state securities laws.
After receipt of the Transfer Notice and opinion, the Company shall,
within five days thereof, so notify the holder of such Warrants or
Warrant Stock and such holder shall thereupon be entitled to Transfer
such Warrants or such Warrant Stock, in accordance with the terms of the
Transfer Notice. Each certificate, if any, evidencing such shares of
Warrant Stock issued upon such Transfer shall bear the restrictive
legend set forth in Section 9.1(a), and each Warrant issued upon such
Transfer shall bear the restrictive legend set forth in Section 9.1(b),
unless in the opinion of such counsel such legend is not required in
order to ensure compliance with the Securities Act and any applicable
state securities laws. The holder of the Warrants or the Warrant Stock,
as the case may be, giving the Transfer Notice shall not be entitled to
transfer and shall not transfer such Warrants or such Warrant Stock
until (i) the Company receives a written statement of investment intent
and sophistication from the proposed transferee of such Warrants or
Warrant Stock in substance substantially similar to the final sentence
of the first paragraph of Section 9 and (ii) such holder receives notice
from the Company under this Section 9.2.
(b) The Holders of Warrants and Warrant Stock shall have the right
to request registration of such Warrant Stock pursuant to Sections 9.3
and 9.4.
9.3 Required Registration. The rights ("Required Registration") of
holders of Warrants or Warrant Stock under this Section 9.3 shall expire on
the Expiration Date. After receipt of a written request from holders of
Warrants or Warrant Stock representing at least an aggregate of 50 percent of
the total of (i) all shares of Warrant Stock then subject to issuance upon
exercise of all Warrants or (ii) all shares of Warrant Stock then Outstanding
having an aggregate Current Market Price in excess of $400,000, requesting
that the Company effect the registration of Warrant Stock issuable upon the
exercise of such holder's Warrants or of any of such holder's Warrant Stock
under the Securities Act and specifying the intended method or methods of
disposition thereof, the Company shall promptly notify all holders of
Warrants and Warrant Stock in writing of the receipt of such request and each
such holder, in lieu of exercising its rights under Section 9.4, may elect
(by written notice specifying the intended method or methods of disposition
of Warrant Stock sent to the Company within 10 Business Days from the date of
such holder's receipt of the aforementioned Company's notice) to have such
holder's shares of Warrant Stock included in such registration thereof
pursuant to this Section 9.3. Thereupon the Company shall, as expeditiously
as is possible, use its best efforts to effect the registration under the
Securities Act of all shares of Warrant Stock which the Company has been so
requested to register by such holders for sale, all to the extent required to
permit the disposition (in accordance with the intended method or methods
thereof, as aforesaid) of the Warrant Stock so registered; provided, however,
that the Company shall not be required to effect more than one registration
of any Warrant Stock pursuant to this Section 9.3. No holder of any other
warrant, Convertible Securities or other right to purchase shares of Common
Stock shall receive or be entitled to receive registration rights that are
more favorable than the registration rights available to the Holder pursuant
to the terms of this Section 9.
(a) Suspension of Registration.
If the Company has been requested to effect a Required
Registration, whether or not a Registration Statement with respect
thereto has been filed or has become effective, and furnishes to
the Holder requesting such registration a copy of a resolution of
the Board of Directors of the Company certified by the Secretary of
the Company stating that in the good faith judgment of the Board of
Directors it would be seriously detrimental to the Company and its
stockholders for such Registration Statement (i) to be filed on or
before the date such filing would otherwise be required hereunder,
(ii) to become effective or (iii) to remain effective as long as
such Registration Statement would otherwise be required to remain
effective, the Company shall have the right to defer such filing or
effectiveness or to suspend such effectiveness for a period of not
more than 120 days; provided, however, that during such time the
Company may not file a Registration Statement for securities to be
issued and sold for its own account or that of anyone other than
the Holder or Holders requesting such Required Registration; and
provided, further, that if effectiveness of a Registration
Statement is suspended pursuant to this provision, the period of
such suspension shall be added to the end of the period that such
Registration Statement would otherwise be required to be effective
hereunder so that the aggregate number of days that such
Registration Statement is required to remain effective hereunder
shall remain unchanged.
(b) Hold-Back Agreements.
(i) Restrictions on Public Sale By Holder of Registrable
Securities. Each Holder whose registrable securities are covered
by a Registration Statement filed pursuant to this Warrant agrees,
if requested by the managing underwriters in an underwritten
offering, not to effect any public sale or distribution of
securities of the Company of the same class as the securities
included in such Registration Statement, including a sale pursuant
to Rule 144 under the Securities Act (except as part of such
underwritten registration), during the 10-day period prior to, and
during the 90-day period beginning on, the closing date of each
underwritten offering made pursuant to such Registration Statement,
to the extent timely notified in writing by the Company or the
managing underwriters; provided, however, that the foregoing
provisions shall not apply to any Holder if such Holder is
prevented by applicable statute or regulation from entering any
such agreement.
(ii) Restrictions on Sale of Equity Securities by the Company
and Others. The Company agrees (1) not to effect any public or
private offer, sale or distribution of its equity securities,
including a sale pursuant to Regulation D under the Securities Act
during the 10-day period prior to, and during the 90-day period
beginning with, the effectiveness of a Registration Statement filed
under this Warrant to the extent timely notified in writing by a
holder of registrable securities or the managing underwriters
(except as part of such registration, if permitted, or pursuant to
registrations on Forms S-4 or S-8 or any successor form to such
Forms or the issuance of Common Stock pursuant to warrants or
employee stock options outstanding on the date hereof) and (2) to
use its best efforts to cause each holder of its privately placed
equity securities purchased from the Company at any time on or
after the date of this Agreement to agree not to effect any public
sale or distribution of any such securities during such period,
including a sale pursuant to Rule 144 under the Securities Act
(except as part of such registration, if permitted).
9.4 Incidental Registration.
(a) The rights of holders of Warrants or Warrant Stock under this
Section 9.4 shall expire on the Expiration Date. If the Company at any
time proposes to file on its behalf or on behalf of any of its security
holders ("the demanding security holders") a Registration Statement
under the Securities Act on any form (other than a Registration
Statement required under section 9.3 or a Registration Statement on Form
S-4 or S-8 or any successor form for securities to be offered in a
transaction of the type referred to in Rule 145 under the Securities Act
or to employees of the Company pursuant to any employee benefit plan or
to existing holders of the Company's debt or equity securities in any
exchange or rights offering) for the general registration of securities
to be sold for cash with respect to its Common Stock or any other class
of equity security (as defined in Section 3(a)(11) of the Exchange Act)
of the Company, it will give written notice to all holders of Warrants
or Warrant Stock at least 30 days before the initial filing with the
Commission of such Registration Statement, which notice shall set forth
the intended method of disposition of the securities proposed to be
registered by the Company. The notice shall offer to include in such
filing the aggregate number of shares of Warrant Stock, and the number
of shares of Common Stock for which this Warrant is exercisable, as such
holders may request. Nothing herein shall preclude the Company from
discontinuing the registration of its securities being effected on its
behalf or on behalf of the demanding security holders at any time prior
to the effective date of the registration relating thereto.
(b) Each holder of any such Warrants or any such Warrant Stock
desiring to have Warrant Stock registered under this Section 9.4 shall
advise the Company in writing within 30 days after the date of receipt
of such offer from the Company, setting forth the amount of such Warrant
Stock for which registration is requested. The Company shall thereupon
include in such filing the number of shares of Warrant Stock for which
registration is so requested and shall use its best efforts to effect
registration under the Securities Act of such shares; provided, however,
that if the managing underwriter of a proposed public offering shall
advise the Company in writing that, in its opinion, the distribution of
the shares of Common Stock into which the Warrants are exercisable and
the Warrant Stock requested to be included in the registration
concurrently with the securities being registered by the Company or such
demanding security holder would materially and adversely affect the
distribution of such securities by the Company or such demanding
security holder, then all demanding security holders (other than any
selling security holder who requested such registration and the Company
(unless such Registration Statement was filed at the request of a
demanding security holder)) shall reduce the amount of securities each
intended to distribute through such offering on a pro rata basis.
Except as otherwise provided in Section 9.6 hereof, all expenses of such
registration shall be borne by the Company.
9.5 Registration Procedures. If the Company is required by the
provisions of this Section 9 to use its best efforts to effect the
registration of any of its securities under the Securities Act, the Company
will, as expeditiously as possible:
(a) prepare and file with the Commission a Registration Statement
with respect to such securities and use its best efforts to cause such
Registration Statement to become and remain effective for a period of
time required for the disposition of such securities by the holders
thereof;
(b) prepare and file with the Commission 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 and to comply with the provisions of the Securities
Act with respect to the sale or other disposition of all securities
covered by such Registration Statement until the earlier of such time as
all of such securities have been disposed of in a public offering or the
expiration of 180 days;
(c) furnish to any selling security holders such number of copies
of a summary prospectus or other prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act,
and such other documents, as such selling security holders may
reasonably request;
(d) use its best efforts to register or qualify the securities
covered by such Registration Statement under such other securities or
blue sky laws of such jurisdictions within the United States and Puerto
Rico as each Holder of such securities shall reasonably request in light
of such Holder's intended plan of distribution (provided, however, that
the Company shall not be obligated to qualify as a foreign corporation
to do business under the laws of any jurisdiction in which it is not
then qualified or to file any general consent to service of process or
subject itself to taxation in any such jurisdiction), and do such other
reasonable acts and things as may be required of it to enable such
holder to consummate the disposition in such jurisdiction of the
securities covered by such Registration Statement;
(e) if requested by a majority (in amount of underlying and
outstanding shares ) of the Holders of Warrants or Warrant Stock being
included in such registration, use its best efforts to obtain from
either a nationally recognized underwriter or investment banker or an
underwriter or investment banker reasonably acceptable to such Holders a
firm commitment (pursuant to an underwriting agreement in customary
form) to underwrite the public offering of the securities covered by
such Registration Statement;
(f) furnish, at the request of any holder requesting registration
of Warrant Stock pursuant to Section 9.3, on the date that such shares
of Warrant Stock are delivered to the underwriters for sale pursuant to
such registration or, if such Warrant Stock is not being sold through
underwriters, on the date that the Registration Statement with respect
to such shares of Warrant Stock becomes effective (1) a copy of an
opinion, dated such date, of the independent counsel representing the
Company for the purposes of such registration, addressed to the
underwriters, if any, and to the holders making such request, stating
that such Registration Statement has become effective under the
Securities Act and that (i) to the best knowledge of such counsel, no
stop order suspending the effectiveness thereof has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Securities Act, (ii) the Registration Statement,
the related prospectus and each amendment or supplement thereto comply
as to form in all material respects with the requirements of the
Securities Act and the applicable rules and regulations of the
Commission thereunder (except that such counsel need express no opinion
as to financial statements and data contained therein), (iii) the
descriptions in the Registration Statement or the prospectus, or any
amendment or supplement thereto, of all legal matters and contracts and
other legal documents or instruments are accurate and fairly present the
information required to be shown and (iv) such counsel does not know of
any legal or governmental proceedings, pending or contemplated, required
to be described in the Registration Statement or prospectus, or any
amendment or supplement thereto, which are not described as required,
nor of any contracts or documents or instruments of a character required
to be described in the Registration Statement or prospectus, or any
amendment or supplement thereto, or to be filed as exhibits to the
Registration Statement which are not described and filed or incorporated
by reference as required, and such counsel shall also confirm that
nothing has come to his attention to lead him to believe that either the
Registration Statement or the prospectus, or any amendment or supplement
thereto (other than financial material and data as to which such counsel
need make no statement), contains any untrue statement of a material
fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
in which made, not misleading and (2) a letter dated such date, from the
independent certified public accountants of the Company, addressed to
the underwriters, if any, and to the holder making such request and, if
such accountants refuse to deliver such letter to such holder, then to
the Company stating that they are independent certified public
accountants within the meaning of the Securities Act and that, in the
opinion of such accountants, the financial statements and other
financial data of the Company included in the Registration Statement or
the prospectus, or any amendment or supplement thereto, comply as to
form in all material respects with the applicable accounting
requirements of the Securities Act. Such opinion of counsel shall
additionally cover such other legal matters with respect to the
registration in respect of which such opinion is being given as the
holders holding a majority of the Warrant Stock so registered may
reasonably request. Such letter from the independent certified public
accountants shall additionally cover such other financial matters
(including information as to the period ending not more than five
Business Days prior to the date of such letter) with respect to the
registration in respect of which such letter is being given as the
holders holding a majority of the Warrant Stock being so registered may
reasonably request;
(g) enter into customary agreements (including an underwriting
agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition
of the securities covered by the Registration Statement;
(h) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, but not later than
18 months after the effective date of the Registration Statement, an
earnings statement covering the period of at least 12 months beginning
with the first full month after the effective date of such Registration
Statement, which earnings statements shall satisfy the provisions of
Section 11(a) of the Securities Act; and
(i) notify each selling Holder of such registrable securities, at
any time when a prospectus relating thereto is required to be delivered
under the Securities Act, of the occurrence of an event requiring the
preparation of a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of the securities covered by the
Registration Statement, such prospectus will not contain an untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading and promptly make available to each selling Holder any such
supplement or amendment.
It shall be a condition precedent to the obligation of the Company to take
any action pursuant to this Section 9 in respect of the securities which are
to be registered at the request of any holder of Warrants or Warrant Stock
that such holder shall furnish to the Company such information regarding the
securities held by such holder and the intended method of disposition thereof
as the Company shall reasonably request and as shall be required in
connection with the action taken by the Company. Each selling Holder agrees
that, upon receipt of any notice from the Company of the happening of any
event of the kind described in Section 9.5(i) hereof, such selling Holder
will forthwith discontinue disposition of Registrable Securities pursuant to
the Registration Statement until such selling Holder's receipt of the copies
of the supplemented or amended prospectus contemplated by Section
9.5(i) hereof, and, if so directed by the Company such selling Holder will
deliver to the Company all copies, other than permanent file copies then in
such selling Holder's possession, of the most recent prospectus covering the
securities covered by Registration Statement at the time of receipt of such
notice. If the Company shall give such notice, the Company shall extend the
period during which such Registration Statement shall be maintained effective
by the number of days during the period from and including the date of the
giving of notice pursuant to Section 9.5(i) hereof to the date when the
Company shall make available to the selling Holders of the securities covered
by such Registration Statement a prospectus supplemented or amended to
conform with the requirements of Section 9.5(i) hereof.
9.6 Expenses; Limitations on Registration. All expenses incurred in
complying with Section 9, including, without limitation, all registration and
filing fees (including all expenses incident to filing with the NASD,
printing expenses, fees and disbursements of counsel for the Company, the
reasonable fees and expenses of one counsel for the selling security holders
(selected by those holding a majority of the shares being registered),
expenses of any special audits incident to or required by any such
registration and expenses of complying with the securities or blue sky laws
of any jurisdictions pursuant to Section 9.5(d)), shall be paid by the
Company, except that the Company shall not be liable for any fees, discounts
or commissions to any underwriter or any fees or disbursements of counsel for
any underwriter in respect of the securities sold by such holder of Warrant
Stock.
9.7 Indemnification.
(a) In the event of any registration of any of the Warrant Stock
under the Securities Act pursuant to this Section 9, the Company shall
indemnify and hold harmless the holder of such Warrant Stock, such
holder's directors and officers and each other Person (including each
underwriter) who participated in the offering of such Warrant Stock and
each other Person, if any, who controls such holder or such
participating Person within the meaning of the Securities Act, against
any losses, claims, damages or liabilities, joint or several, to which
such holder or any such director or officer or participating Person or
controlling Person may become subject under the Securities Act or any
other statute or at common law, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based
upon (i) any alleged untrue statement of any material fact contained, on
the effective date thereof, in any Registration Statement under which
such securities were registered under the Securities Act, any
preliminary prospectus or final prospectus contained therein or any
amendment or supplement thereto or (ii) any alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and shall reimburse such
Holder or such director, officer or participating Person or controlling
Person for any legal or any other expenses reasonably incurred by such
holder or such director, officer or participating Person or controlling
Person in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any alleged
untrue statement or alleged omission made in such Registration
Statement, preliminary prospectus, prospectus or amendment or supplement
in reliance upon and in conformity with written information furnished to
the Company by such holder specifically for use therein. Such indemnity
shall remain in full force and effect regardless of any investigation
made by or on behalf of such holder or such director, officer or
participating Person or controlling Person and shall survive the
transfer of such securities by such holder.
(b) (i) Each holder of any Warrant Stock, by acceptance thereof,
agrees to indemnify and hold harmless the Company, its directors and
officers and each other Person, if any, who controls the Company within
the meaning of the Securities Act against any losses, claims, damages or
liabilities, joint or several, to which the Company or any such director
or officer or any such Person may become subject under the Securities
Act or any other statute or at common law, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon information in writing provided to the Company by
such Holder of such Warrant Stock, which information is contained, on
the effective date thereof, in any Registration Statement under which
securities were registered under the Securities Act at the request of
such holder, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto; provided, however, that
such Holder's obligation under this Section 9.7(b) to indemnify and hold
harmless the Company shall in no event exceed the damage attributable
solely to the inclusion of such written information in such Registration
Statement, preliminary prospectus, final prospectus, or amendment or
supplement suffered by the Person or Persons whose claims gave rise to
such losses, claims, damages or liabilities.
(ii) 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 furnished
in writing by persons specifically for inclusion in any prospectus or
Registration Statement.
(c) (i) If the indemnification provided for in this Section 9
from the indemnifying party is unavailable to an indemnified party
hereunder in respect of any losses, claims, damages, liabilities or
expenses referred to herein, then the 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 losses, claims,
damages, liabilities or expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party and indemnified
parties in connection with the actions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of such indemnifying party
and indemnified parties shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged
untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information
supplied by, such indemnifying party or indemnified parties, and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such action. The amount paid or
payable by a party under this Section 9 as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be
deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with any investigation or
proceeding.
(ii) The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 9.7(c) were
determined by pro rata allocation or by any other method of
allocation which does not take account the equitable considerations
referred to in paragraph (i) of this Section 9.7(c). 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.
9.8 Termination of Restrictions. Notwithstanding the provisions of
this Section 9, the restrictions imposed by this Section 9 upon the
transferability after the Exercise Date of the Warrants and the Warrant Stock
and the legend requirements of Section 9.1 shall terminate as to any
particular Warrant or share of Warrant Stock (i) when and so long as such
security shall have been effectively registered under the Securities Act and
disposed of pursuant thereto or (ii) when the Company shall have received an
opinion of counsel reasonably satisfactory to it that such legend is not
required in order to ensure compliance with the Securities Act. Whenever
after the Exercise Date the restrictions imposed by Section 9 shall terminate
as to this Warrant, as hereinabove provided, the Holder hereof shall be
entitled to receive from the Company, at the expense of the Company, a new
Warrant bearing the following legend in place of the restrictive legend set
forth hereon:
"THE RESTRICTIONS ON TRANSFERABILITY OF THE WITHIN
WARRANT CONTAINED IN SECTION 9 HEREOF TERMINATED ON
, , AND ARE OF NO FURTHER FORCE AND
EFFECT."
All Warrants thereafter issued upon registration of transfer, division or
combination of, or in substitution for, any Warrant or Warrants entitled to
bear such legend shall have a similar legend endorsed thereon. Whenever the
restrictions imposed by this Section shall terminate as to any share of
Warrant Stock, as hereinabove provided, the holder thereof shall be entitled
to receive from the Company, at the Company's expense, a new certificate
representing such Warrant Stock not bearing the restrictive legend set forth
in Section 9.1(a).
9.9 Listing on Securities Exchange. If and so long as the Company
shall list any shares of Common Stock on any securities exchange (including
Nasdaq), it will, at its expense, list thereon, maintain and, when necessary,
increase such listing of, all shares of Common Stock issued or, to the extent
permissible under the applicable securities exchange rules, issuable upon the
exercise of this Warrant so long as any shares of Common Stock shall be so
listed during any such Exercise Period.
9.10 Certain Limitations on Registration Rights. Notwithstanding the
other provisions of Section 9:
(i) the Company shall not be obligated to register the
Warrant Stock of any Holder if (x) in the opinion of counsel to the
Company reasonably satisfactory to the Holder and its counsel (or,
if the Holder has engaged an investment banking firm, to such
investment banking firm and its counsel), the sale or other
disposition of such Holder's Warrant Stock, in the manner proposed
by such Holder (or by such investment banking firm), may be
effected without registering such Warrant Stock under the
Securities Act, and (y) the failure of the Company to register such
Warrant Stock will not result in a reduction in the net proceeds to
be received by such Holder in connection with such sale or other
disposition; and
(ii) the Company shall not be obligated to register the
Warrant Stock of any Holder pursuant to Section 9.3, if the Company
has had a registration statement, under which such Holder had a
right to have its Warrant Stock included pursuant to Sections 9.3
or 9.4, declared effective within one year prior to the date of the
request pursuant to Section 9.3; provided, however, that if any
Holder elected to have shares of its Warrant Stock included under
such registration statement but some or all of such shares were
excluded pursuant to the provisions of Section 9.3 or Section 9.4,
then such one-year period shall be reduced to six months.
9.11 Selection of Managing Underwriters. The managing underwriter or
underwriters for any offering of Warrant Stock to be registered pursuant to
Section 9.3 shall be selected by the Company and shall be reasonably
acceptable to the Holders of a majority of the shares being so registered
(other than any shares being registered pursuant to Section 9.4).
10. SUPPLYING INFORMATION
The Company shall cooperate with each Holder of a Warrant and each
holder of Warrant Stock in supplying such information as may be reasonably
necessary for such Holder to complete and file any information reporting
forms presently or hereafter required by the Commission as a condition to the
availability of an exemption from the Securities Act for the sale of any
Warrant or Restricted Common Stock.
11. LOSS OR MUTILATION
Upon receipt by the Company from any Holder of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of this Warrant and indemnity reasonably satisfactory to it (it
being understood that the written agreement of GE Medical shall be sufficient
indemnity) and in case of mutilation upon surrender and cancellation hereof,
the Company will execute and deliver in lieu hereof a new Warrant of like
tenor to such Holder; provided, in the case of mutilation, no indemnity shall
be required if this Warrant in identifiable form is surrendered to the
Company for cancellation.
12. OFFICE OF THE COMPANY
As long as any of the Warrants remain outstanding, the Company shall
maintain an office or agency (which shall initially be the principal
executive offices of the Company) where the Warrants may be presented for
exercise, registration of transfer, division or combination as provided in
this Warrant. The Company shall notify Holder in writing prior to any change
of the address of the office at which the Warrants may be presented.
13. FINANCIAL AND BUSINESS INFORMATION
13.1 Information. Except during any period when the Company is a Public
Company (as hereinafter defined), it will deliver to each Holder, as soon as
practicable after the end of each month, and in any event within 30 days
thereafter, and after the end of each quarter and in any event within 45 days
thereafter, one copy of an unaudited consolidated balance sheet, statement of
income and statement of cash flow of the Company and its Subsidiaries for
such period setting forth in each case in comparative form the figures for
the corresponding periods in the previous fiscal years. Such financial
statements shall be prepared by the Company in accordance with GAAP and shall
be accompanied by the certification of the Company's chief executive officer
or chief financial officer that such financial statements are complete and
correct and present fairly the consolidated financial position, results of
operations and cash flow of the Company and its Subsidiaries as at the end of
such period and for such year-to-date period, as the case may be.
For purposes of this Section 13, the term "Public Company" shall
mean a company (i) that is subject to the reporting requirements of Section
15(d) of the Exchange Act, or (ii) any of whose securities are registered
pursuant to Section 12(b) or 12(g) of the Exchange Act.
13.2 Annual Information. Except during any period when the Company is a
Public Company, it will deliver to each Holder as soon as practicable after
the end of each fiscal year of the Company, and in any event within 90 days
thereafter, one copy of:
(i) an audited consolidated balance sheet of the Company and
its Subsidiaries as at the end of such year, and
(ii) audited consolidated statements of income and retained
earnings and cash flow of the Company and its Subsidiaries for such
year;
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year; all prepared in accordance
with GAAP, and which audited financial statements shall be accompanied by (i)
an opinion thereon of the independent certified public accountants regularly
retained by the Company, or any other firm of independent certified public
accountants of recognized national standing selected by the Company and (ii)
a report of such independent certified public accountants confirming, or
describing the agreed upon procedures applied to the Company's schedules
computing, any adjustment, made pursuant to Section 4 during such year. Such
report shall include a description of any errors determined by the
accountants in the Company's schedules.
13.3 Filings. The Company will file on or before the required date all
required regular or periodic reports (pursuant to the Exchange Act) with the
Commission and will deliver to Holder promptly upon their becoming available
one copy of each report, notice or proxy statement sent by the Company to its
stockholders generally, and of each regular or periodic report (pursuant to
the Exchange Act) and any Registration Statement, prospectus or written
communication (other than transmittal letters) pursuant to the Securities
Act, filed by the Company with (i) the Commission or (ii) any securities
exchange on which shares of Common Stock are listed (provided, however, that
the Company may request filing extensions pursuant to Rule 12b-25 under the
Securities and Exchange Act of 1934, as amended).
14. APPRAISAL
The determination of the Appraised Value per share of Common Stock shall
be made by an investment banking firm of nationally recognized standing
selected by the Company and acceptable to the Holder. If the investment
banking firm selected by the Company is not acceptable to the Holder and the
Company and the Holder cannot agree on a mutually acceptable investment
banking firm, then the Holder and the Company shall each choose one such
investment banking firm and the respective chosen firms shall agree on
another investment banking firm which shall make the determination. The
Company shall retain, at its sole cost, such investment banking firm as may
be necessary for the determination of Appraised Value required by the terms
of this Warrant.
15. LIMITATION OF LIABILITY
No provision hereof, in the absence of affirmative action by the Holder
to purchase shares of Common Stock, and no enumeration herein of the rights
or privileges of Holder hereof, shall give rise to any liability of such
Holder for the purchase price of any Common Stock or as a stockholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.
16. MISCELLANEOUS
16.1 Nonwaiver and Expenses. No course of dealing or any delay or
failure to exercise any right hereunder on the part of the Company shall
operate as a waiver of such right or otherwise prejudice the Company's
rights, powers or remedies. No course of dealing or any delay or failure to
exercise any right hereunder on the part of the Holder shall operate as a
waiver of such right or otherwise prejudice the Holder's rights, powers or
remedies. If the Company fails to make, when due, any payments provided for
hereunder, or fails to comply with any other provision of this Warrant, the
Company shall pay to the Holder such amounts as shall be sufficient to cover
any costs and expenses including, but not limited to, reasonable attorneys'
fees, including those of appellate proceedings, incurred by the Holder in
collecting any amounts due pursuant hereto or in otherwise enforcing any of
its rights, powers or remedies hereunder.
16.2 Notice Generally. Any notice, demand, request, consent, approval,
declaration, delivery or other communication hereunder to be made pursuant to
the provisions of this Warrant shall be sufficiently given or made if in
writing and either delivered (i) in person with receipt acknowledged, (ii) by
facsimile transmission, with receipt electronically confirmed during normal
business hours of recipient, and that is confirmed by sending, no later than
one (1) Business Day following such transmission, a copy of such facsimile,
by registered or certified mail, return receipt requested, postage prepaid,
or (iii) by registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
(a) If to any Holder or holder of Warrant Stock, at its last known
address or facsimile transmission number appearing on the books of the
Company maintained for such purpose.
(b) If to the Company at
Medical Imaging Centers of America, Inc.
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
(000) 000-0000
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in
writing by the party entitled to receive such notice. Every notice, demand,
request, consent, approval declaration, delivery or other communication
hereunder shall be deemed to have been duly given or served on the date on
which personally delivered, with receipt acknowledged or sent by facsimile
with receipt electronically confirmed during normal business hours of
recipient, or three Business Days after the same shall have been deposited in
the United States mail. Failure or delay in delivering copies of any notice,
demand, request, approval, declaration, delivery or other communication to
the person designated above to receive a copy shall in no way adversely
affect the effectiveness of such notice, demand, request, approval,
declaration, delivery or other communication.
16.3 Indemnification. In addition to the indemnities provided in
Section 9.7 (as to the subject matter of which the indemnifications,
including limitations, therein, shall control), the Company agrees to
indemnify and hold harmless the Holder, its officers, directors, employees,
agents and attorneys from and against any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs, attorneys'
fees, expenses and disbursements of any kind which may be imposed upon,
incurred by or asserted against Holder relating to or arising out of (i)
Holder's exercise of this Warrant or ownership of any shares of Warrant Stock
issued in connection therewith or (ii) any litigation to which the Holder is
made a party in its capacity as a stockholder or warrant holder of the
Company; provided, however, that the Company will not be liable hereunder to
the extent that any liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, attorneys' fees, expenses or
disbursements are found in a final nonappealable judgment by a court to have
resulted from either (i) the Holder's gross negligence or willful misconduct
or (ii) actions or omissions taken or not taken by the Holder in any capacity
other than as a stockholder or warrant holder of the Company.
16.4 Remedies. Each holder of Warrant and Warrant Stock, in addition to
being entitled to exercise all rights granted by law, including recovery of
damages, will be entitled to specific performance of its rights under Section
9 of this Warrant. 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 Section 9 of this Warrant and hereby agrees to waive the
defense in any action for specific performance that a remedy at law would be
adequate.
16.5 Successors and Assigns. Subject to the provisions of Sections 3.1
and 9, this Warrant and the rights evidenced hereby shall inure to the
benefit of and be binding upon the successors of the Company and the
successors and assigns of Holder. The provisions of this Warrant are
intended to be for the benefit of all Holders from time to time of this
Warrant, and shall be enforceable by any such Holder.
16.6 Amendment. This Warrant and all other Warrants may be modified or
amended or the provisions hereof waived with the written consent of the
Company and the Holder, provided that no such Warrant may be modified or
amended to reduce the number of shares of Common Stock for which such Warrant
is exercisable or to increase the price at which such shares may be purchased
upon exercise of such Warrant (before giving effect to any adjustment as
provided therein) without the prior written consent of the Holder thereof.
16.7 Severability. Wherever possible, each provision of this Warrant
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by
or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Warrant.
16.8 Headings. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a
part of this Warrant.
16.9 Governing Law; Service of Process. In all respects, including all
matters of construction, validity and performance, this Agreement and the
obligations arising hereunder shall be governed by, and construed and
enforced in accordance with, the laws of the state of the Company's
incorporation applicable to contracts made and performed in such state,
without regard to the principles thereof regarding conflict of laws, and any
applicable laws of the United States of America. Service of process on the
Company or Holder in any action arising out of or relating to this Agreement
shall be effective if mailed to such party in accordance with the procedures
and requirements set forth in Section 16.2.
16.10 MUTUAL WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN
CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND
ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE COMPANY AND
HOLDER HEREOF WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN
ARBITRATION RULES), THE COMPANY AND HOLDER HEREOF DESIRE THAT THEIR DISPUTES
BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE
THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE COMPANY AND HOLDER HEREOF WAIVE ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed and its corporate seal to be impressed hereon and attested by its
Secretary or an Assistant Secretary.
MEDICAL IMAGING CENTERS OF AMERICA, INC.
By:
Title:
Attest:
Title:
EXHIBIT A
SUBSCRIPTION FORM
[To be executed only upon exercise of Warrant)
The undersigned registered owner of the attached Warrant irrevocably
exercises such Warrant for the purchase of shares of Common Stock of
Medical Imaging Centers of America, Inc. and herewith makes payment
therefor, all at the price and on the terms and conditions specified in such
Warrant and requests that certificates for the shares of Common Stock hereby
purchased (and any securities or other property issuable upon such exercise)
be issued in the name of and delivered to __________________________
whose address is
and, if such shares of Common Stock shall not include
all of the shares of Common Stock issuable as provided in such Warrant, that
a new Warrant of like tenor and date for the balance of the shares of Common
Stock issuable hereunder be delivered to the undersigned.
Name of Registered Owner)
(Signature of Registered Owner)
(Street Address)
(City) (State) (Zip Code)
NOTICE: The signature on this subscription must correspond
with the name as written upon the face of the
attached Warrant in every particular, without
alteration or enlargement or any change whatsoever.
EXHIBIT B
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned registered owner of the attached
Warrant hereby sells, assigns and transfers unto the Assignee named below all
of the rights of the undersigned under such Warrant, with respect to the
number of shares of Common Stock set forth below:
Name and Address of Assignee No. of Shares of
Common Stock
and does hereby irrevocably constitute and appoint
attorney-in-fact to register such transfer on the books of
Medical Imaging Centers of America, Inc. maintained for the purpose, with
full power of substitution in the premises.
Dated: Print Name:
Signature:
Witness:
NOTICE: The signature on this assignment must correspond with the name as
written upon the face of the attached Warrant in every particular,
without alteration or enlargement or any change whatsoever.
EXHIBIT A
MEDICAL IMAGING CENTERS OF AMERICA, INC.
COMMON STOCK PURCHASE WARRANT
January 16, 1996
TABLE OF CONTENTS
Page
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. EXERCISE OF WARRANT . . . . . . . . . . . . . . . . . . . . . . . . 5
2.1 Manner of Exercise . . . . . . . . . . . . . . . . . . . . . . 5
2.2 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . 5
2.3 Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . 6
2.4 Continued Validity . . . . . . . . . . . . . . . . . . . . . . 6
3. TRANSFER, DIVISION AND COMBINATION . . . . . . . . . . . . . . . . . 6
3.1 Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.2 Division and Combination . . . . . . . . . . . . . . . . . . . 7
3.3 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.4 Maintenance of Books . . . . . . . . . . . . . . . . . . . . . 7
4. ADJUSTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.1 Stock Dividends, Subdivisions, Combinations and
Reclassifications . . . . . . . . . . . . . . . . . . . . . . . 7
4.2 Other Provisions Applicable to Adjustments under this Section . 8
(a) When Adjustments to Be Made . . . . . . . . . . . . . . . 8
(b) When Adjustment Not Required . . . . . . . . . . . . . . . 8
5. NOTICES TO WARRANT HOLDERS . . . . . . . . . . . . . . . . . . . . . 9
5.1 Notice of Adjustments . . . . . . . . . . . . . . . . . . . . . 9
5.2 Notice of Certain Corporate Action . . . . . . . . . . . . . . 9
6. NO IMPAIRMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
7. RESERVATION AND AUTHORIZATION OF COMMON STOCK; REGISTRATION WITH OR
APPROVAL OF ANY GOVERNMENTAL AUTHORITY . . . . . . . . . . . . . . . 10
8. TAKING OF RECORD; STOCK AND WARRANT TRANSFER BOOKS . . . . . . . . . 10
9. RESTRICTIONS ON TRANSFERABILITY . . . . . . . . . . . . . . . . . . 11
9.1 Restrictive Legend . . . . . . . . . . . . . . . . . . . . . . 11
9.2 Notice of Proposed Transfers . . . . . . . . . . . . . . . . . 12
9.3 Required Registration . . . . . . . . . . . . . . . . . . . . . 13
(a) Suspension of Registration . . . . . . . . . . . . . . . . 13
(b) Hold-Back Agreements . . . . . . . . . . . . . . . . . . . 14
(i) Restrictions on Public Sale By Holder of Registrable
Securities . . . . . . . . . . . . . . . . . . . . . 14
(ii) Restrictions on Sale of Equity Securities by the
Company and Others . . . . . . . . . . . . . . . . . 14
9.4 Incidental Registration . . . . . . . . . . . . . . . . . . . . 15
9.5 Registration Procedures . . . . . . . . . . . . . . . . . . . . 16
9.6 Expenses; Limitations on Registration . . . . . . . . . . . . . 20
9.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . 20
9.8 Termination of Restrictions . . . . . . . . . . . . . . . . . . 22
9.9 Listing on Securities Exchange . . . . . . . . . . . . . . . . 23
9.10 Certain Limitations on Registration Rights . . . . . . . . . . 23
9.11 Selection of Managing Underwriters . . . . . . . . . . . . . . 24
10. SUPPLYING INFORMATION . . . . . . . . . . . . . . . . . . . . . . . 24
11. LOSS OR MUTILATION . . . . . . . . . . . . . . . . . . . . . . . . . 24
12. OFFICE OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . 24
13. FINANCIAL AND BUSINESS INFORMATION . . . . . . . . . . . . . . . . . 24
13.1 Information . . . . . . . . . . . . . . . . . . . . . . . . . . 24
13.2 Annual Information . . . . . . . . . . . . . . . . . . . . . . 25
13.3 Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
14. APPRAISAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
15. LIMITATION OF LIABILITY . . . . . . . . . . . . . . . . . . . . . . 26
16. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
16.1 Nonwaiver and Expenses . . . . . . . . . . . . . . . . . . . . 26
16.2 Notice Generally . . . . . . . . . . . . . . . . . . . . . . . 26
16.3 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . 27
16.4 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
16.5 Successors and Assigns . . . . . . . . . . . . . . . . . . . . 28
16.6 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
16.7 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 28
16.8 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
16.9 Governing Law; Service of Process . . . . . . . . . . . . . . . 28
16.10 MUTUAL WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . 29
EXHIBIT A - SUBSCRIPTION FORM
EXHIBIT B - ASSIGNMENT FORM