UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Medical Imaging Centers of America, Inc.
(Name of Issuer)
Common Stock, $0.01 par value
(Title of Class of Securities)
584578108
(CUSIP Number)
Mark J. Mihanovic, Esq.; McDermott, Will & Emery
2049 Century Park East - 34th Floor; Los Angeles, CA 90067-3208
(310) 284-6110
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
January 16, 1996
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Check the following box if a fee is being paid with the statement /X/.
SCHEDULE 13D
CUSIP No. 584578108 Page 2 of ___ Pages
___________________________________________________________________________
1 NAMES OF REPORTING PERSONS S.S. OR
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
General Electric Company (I.R.S. Identification No. 14-0689340)
___________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
___________________________________________________________________________
3 SEC USE ONLY
___________________________________________________________________________
4 SOURCE OF FUNDS*
OO
___________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
PURSUANT TO ITEMS 2(d) or 2(e) / /
___________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
___________________________________________________________________________
7 SOLE VOTING POWER
NUMBER OF SHARES
BENEFICIALLY 220,000 shares of Common Stock (includes 60,000 shares
issuable upon the exercise of a warrant)
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING 0
PERSON 9 SOLE DISPOSITIVE POWER
WITH
220,000 shares of Common Stock (includes 60,000 shares
issuable upon the exercise of a warrant)
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
220,000 shares of Common Stock (includes 60,000 shares issuable upon the
exercise of a warrant)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES* / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.2%
14 TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
STATEMENT PURSUANT TO RULE 13d-1
OF THE
GENERAL RULES AND REGULATIONS
UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
Item 1. Security and Issuer
The security to which this statement relates is the Common Stock, $0.01 par
value (the "Common Shares"), of Medical Imaging Centers of America, Inc., a
California corporation (the "Company") with principal executive offices located
at 9444 Farnham Street -- Suite 100, San Diego, California 92123.
Item 2. Identity and Background
This statement is filed by General Electric Company, a New York corporation
("GE") with principal executive offices located at 3135 Easton Turnpike,
Fairfield, Connecticut. GE engages in providing a wide variety of industrial,
commercial and consumer products and services.
For information with respect to the identity and background of each
director and executive officer of GE, see Schedule I attached hereto.
During the last five years, neither GE nor, to its best knowledge, any
person identified on Schedule I has, except as set forth on Schedule II hereto
(a) been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or (b) been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of which GE or such
person, as the case may be, was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation with
respect to such laws.
To the best knowledge of GE, all persons identified on Schedule I are
United States citizens, except that Paolo Fresco, Vice Chairman of the Board and
an executive officer of GE, is an Italian citizen and Claudio X. Gonzalez, a
director of GE, is a Mexican citizen.
Item 3. Source and Amount of Funds or other Consideration
In connection with a restructuring of the Company, the Company issued
to GE, pursuant to the terms of an Agreement, dated May 14, 1993 (the
"Restructuring Agreement"), between GE and the Company, an Amended and Restated
Common Stock Purchase Warrant, dated May 27, 1993 (the "Warrant), exercisable by
GE, beginning two years after the consummation of such restructuring, for
2,300,000 Common Shares upon the payment of a purchase price initially equal to
$1.14 per Common Share. Pursuant to a Warrant Modification Agreement entered
into in August 1995 by GE and the Company, GE agreed to an amendment of the
Warrant (referred to herein, as so amended, as the "Amended Warrant") to reduce
from 2,300,000 to 800,000 the number of Common Shares purchasable upon exercise
thereof in exchange for a cash payment of $450,000 to GE from the Company.
On January 16, 1996, pursuant to an Agreement and Amendment (the
"Agreement and Amendment") between GE and the Company and certain subsidiaries
of the Company, GE exercised its right under the Amended Warrant to purchase
160,000 Common Shares for a purchase price of $5.70 per Common Share (taking
into account the effect of a one-for-five reverse stock split). Under the
Agreement and Amendment, the purchase price for such Common Shares was satisfied
by cancellation of indebtedness owed by the Company to GE under a Promissory
Note, dated April 30, 1993 (the "Note"), issued by the Company to GE pursuant to
the Restructuring Agreement. In addition, the Company issued to GE, in
accordance with the Agreement and Amendment, an additional Common Stock Purchase
Warrant (the "Additional Warrant"), dated January 16, 1996, immediately
exercisable by GE for 60,000 Common Shares upon the payment of a purchase price
initially equal to $8.50 per Common Share.
The foregoing response to this Item 3 is qualified in its entirety by
reference to the Restructuring Agreement (a copy of which is attached hereto as
Exhibit 1), the Amended Warrant (a copy of which is attached hereto as Exhibit
2), the Agreement and Amendment (a copy of which is attached hereto as Exhibit
3) and the Additional Warrant (a copy of which is attached hereto as Exhibit 4),
each of which is hereby incorporated herein.
Item 4. Purpose of Transaction
GE has acquired the Common Shares owned thereby and the Additional
Warrant as an investment and in the ordinary course of business and not with the
purpose of changing control of the Company. GE intends to review on a
continuing basis its investment in the Company, including the Company's
business, financial condition and operating results and general market and
industry conditions and, based upon such review, may dispose of the Common
Shares owned thereby or the Additional Warrant in the open market, in privately
negotiated transactions or otherwise.
GE may change its current intentions, acquire additional Common Shares
or warrants exercisable for Common Shares or take any other action with respect
to the Company or any of its debt or equity securities in any manner permitted
by law. Except as described in this Item 4, GE has no current plans which
relate to or would result in any of the events described in Items (a) through
(j) of the instructions to this Item 4 of Schedule 13D.
Item 5. Interest in the Securities of the Issuer
(a) GE beneficially owns 220,000 Common Shares (including 60,000
Common Shares for which the Additional Warrant is exercisable), representing
8.2% of the outstanding Common Shares.
(b) The responses to Items 7-11 of the cover page of this Schedule
13D relating to beneficial ownership of Common Shares are incorporated herein by
reference.
(c) Except as set forth in Item 3 hereof, neither GE nor, to the best
knowledge of GE, any person identified on Schedule I hereto has effected any
transactions with respect to Common Shares within the past 60 days.
(d) Not Applicable.
(e) Not Applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with respect
to Securities of the Issuer.
GE has indicated to certain executive officers of the Company that its
current intention is to abstain from voting in the upcoming Special Meeting of
Shareholders of the Company scheduled for February 26, 1996. GE has made no
commitment to so abstain, however, and may change such current intention, or
take any other action with respect to the Company or any of its debt or equity
securities, in any manner permitted by law.
Item 7. Material to Be Filed as Exhibits.
(1) Agreement, dated May 14, 1993, between GE and the Company.
(2) Amended and Restated Common Stock Purchase Warrant, dated May 27,
1993, issued by the Company to GE, as subsequently amended.
(3) Agreement and Amendment, dated as of January 16, 1996, among GE
and the Company and certain subsidiaries of the Company.
(4) Common Stock Purchase Warrant, dated January 16, 1996, issued by
the Company to GE.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
GENERAL ELECTRIC COMPANY
By: /s/ John M. Trani
Name: John M. Trani
Title: Sr. Vice Pres. GE Medical Systems
Dated: January 25, 1996
SCHEDULE I
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS OF
GENERAL ELECTRIC COMPANY
The directors and executive officers of General Electric Company are
identified in the table below. Directors of General Electric Company are
indicated by an asterisk. Unless otherwise indicated, the business address of
each person listed below is 3135 Easton Turnpike, Fairfield, Connecticut 06431.
PRESENT PRINCIPAL
NAME OCCUPATION CITIZENSHIP
John F. Welch, Jr.* Chairman of the Board and United
Chief Executive Officer States
Dennis D. Dammerman* Senior Vice President- United
Finance States
P. Fresco* Vice Chairman of the Board Italy
and Executive Officer
John D. Opie* Vice Chairman of the Board United
and Executive Officer States
Frank P. Doyle Executive Vice President United
States
Philip D. Amsen Vice President and United
Comptroller States
James R. Bunt Vice President and United
Treasurer States
David L. Calhoun Vice President-GE United
Transportation Systems States
William J. Conaty Senior Vice President-Human United
Resources States
Lewis S. Edelheit Senior Vice President- United
Corporate Research and States
Development
Dale F. Frey Chairman and President-GE United
Investments Corporation States
Benjamin W. Heineman, Senior Vice President, United
Jr. General Counsel and States
Secretary
PRESENT PRINCIPAL
NAME OCCUPATION CITIZENSHIP
W. James McNerney, Senior Vice President-GE United
Jr. Lighting States
Eugene F. Murphy Senior Vice President-GE United
Aircraft Engines States
Robert L. Nardelli Senior Vice President-GE United
Power Systems States
Robert W. Nelson Vice President-Corporate United
Financial Planning and States
Analysis
Gary M. Reiner Vice President-Corporate United
Business Development States
Gary L. Rogers Senior Vice President-GE United
Plastics States
James W. Rogers Vice President-GE Motors United
States
Jay R. Stonesifer Senior Vice President-GE United
Appliances States
John M. Trani Senior Vice President-GE United
Medical Systems States
Lloyd G. Trotter Vice President-GE United
Electrical Distribution and States
Control
H. Brewster Atwater, Retired Chairman, Chief United
Jr.* Executive Officer, and States
former Director General
Mills, Inc.
David W. Calloway* Chairman of the Board, United
Chief Executive Officer and States
Director, PepsiCo, Inc.
Silas S. Cathcart* Director and Retired United
Chairman, Illinois Tool States
Works
Claudio X. Gonzalez* Chairman of the Board and Mexico
Managing Director Kimberly-
Clark de Mexico, S.A. de
C.V.
Robert E. Mercer* Retired Chairman of the United
Board and former Director, States
The Goodyear Tire & Rubber
Company
Gertrude G. Member of the Board of United
Michelson* Directors - Federated States
Department Stores
Roger S. Penske* President - Penske United
Corporation States
Barbara S. Prieskel* Former Senior Vice United
President, Motion Picture States
Associations of America
Frank H.T. Rhodes* President Emeritus Cornell United
University States
PRESENT PRINCIPAL
NAME OCCUPATION CITIZENSHIP
Andrew C. Sigler* Chairman of the Board, CEO
and Director, Champion
International
Douglas A. Warner Chairman of the Board, United
III* President, and Chief States
Executive Officer, J.P.
Morgan & Co. Incorporated
and Morgan Guaranty Trust
Company
SCHEDULE II
RECENT GE CONVICTIONS
8. United States ex. rel. Taxpayers Against Fraud and Chester L. Walsh v.
General Electric Company
On November 15, 1990, an action under the federal False Claims Act 31
U.S.C. Sections 3729-32, was filed under seal against General Electric Company
("GE") in the United States District Court for the Southern District of Ohio.
The qui tam action, brought by an organization called Taxpayers Against Fraud
and an employee of GE's Aircraft Engines division ("GEAE"), alleged that GEAE,
in connection with its sales of F11O aircraft engines and support equipment to
Israel, made false statements to the Israeli Ministry of Defense (MoD), causing
MoD to submit false claims to the United States Department of Defense under the
Foreign Military Sales Program. Senior GE management became aware of possible
misconduct in GEAE's Israeli F110 program in December 1990. Before learning of
the sealed qui tam suit, GE immediately made a voluntary disclosure to the
Departments of Defense and Justice, promised full cooperation and restitution,
and began an internal investigation. In August 1991, the federal court action
was unsealed, and the Department of Justice intervened and took over
responsibility for the case.
On July 22, 1992, after GE had completed its investigation and made a
complete factual disclosure to the U.S. government as part of settlement
discussions, the United States and GE executed a settlement agreement and filed
a stipulation dismissing the civil action. Without admitting or denying the
allegations in the complaint, GE agreed to pay $59.5 million in full settlement
of the civil fraud claims. Also on July 22, 1992, in connection with the same
matter, the United States filed a four count information charging GE with
violations of 18 U.S.C. Section 287 (submitting false claims against the United
States), 18 U.S.C. Section 1957 (engaging in monetary transactions in criminally
derived property), 15 U.S.C. Sections 78m(b)(2)(A) and 78ff(a) (inaccurate books
and records), and 18 U.S.C. Section 371 (conspiracy to defraud the United States
and to commit offenses against the United States). The same day, GE and the
United States entered a plea agreement in which GE agreed to waive indictment,
plead guilty to the information, and pay a fine of $9.5 million. GE was that
day sentenced by the federal court in accordance with the plea agreement.
9. Except for the foregoing, GE has not and, to the best of GE's knowledge,
none of the directors and executive officers of GE has been, during the last
five years, convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors).
10. GE has not and, to the best of GE's knowledge, none of the directors and
executive officers of GE has been, during the last five years, a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree, or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any violation
with respect to such laws.
EXHIBIT INDEX
Exhibit (1) Agreement, dated May 14, 1993, between GE and the Company
Exhibit (2) Amended and Restated Common Stock Purchase Warrant, dated May 27,
1993, issued by the Company to GE, as subsequently amended
Exhibit (3) Agreement and Amendment, dated as of January 16, 1996 among GE
and the Company and certain subsidiaries of the Company
Exhibit (4) Common Stock Purchase Warrant, dated January 16, 1996, issued by
the Company to GE
Exhibit (1)
AGREEMENT
THIS AGREEMENT is made this 14th day of May, 1993 by and between General
Electric Company, a New York corporation, acting through GE Medical Systems
("GE") and Medical Imaging Centers of America, Inc., a California corporation
("MICA").
RECITALS
A. GE is a primary supplier of equipment and services to MICA.
B. MICA has requested that GE restructure the terms of its obligations
and the obligations of its Subsidiaries to GE arising in connection with GE's
provision of equipment and services to MICA and its Subsidiaries and GE has
agreed to do so on the terms and conditions set forth herein.
C. MICA acknowledges that GE is making valuable monetary and other
concessions pursuant to this Agreement and the transactions contemplated hereby,
including without limitation (i) GE's agreement to terminate certain equipment
leases and to accept the return of the equipment subject to the leases in full
satisfaction of rent(s) due under the leases without imposition of any early
termination fees or penalties, (ii) reduction by $32,497.16 of current monthly
finance and service payments of MICA and certain of its subsidiaries pursuant to
a sale-leaseback of equipment, (iii) cancellation of MICA's November 1, 1992
promissory note to GE and acceptance of a replacement note which provides for an
interest rate of 0.0% for the period May 1993 through April 1994, and (iv)
deferral of March and April 1993 equipment and service payments owing for the
"Fee for Service" segment of MICA's business, all as more completely described
in this Agreement and the other instruments and documents to be executed in
connection with closing the transactions contemplated hereby.
NOW, THEREFORE, in consideration of the foregoing recitals and the terms
and conditions contained herein, and of any extension of credit or financial
accommodation heretofore, now or hereafter made by GE to or on behalf of MICA
and its Subsidiaries, GE and MICA hereby agree as follows:
1. GENERAL DEFINITIONS AND RULES OF CONSTRUCTION
In addition to the defined terms appearing above or defined in subsequent
sections of this Agreement, capitalized terms used in this Agreement shall have
(unless otherwise provided elsewhere in this Agreement) the following respective
meanings when used in this Agreement:
1.1 "Affiliate" shall mean as to any Person (i) any other Person which,
directly or indirectly, controls, is controlled by or is under common control
with that Person, and (ii) any Person in which, directly or indirectly, any
Person described in (i) controls, is controlled by or is under common control.
1.2 "Bankruptcy Code" shall mean Title 11 of the United States Code, as
from time to time amended, and the rules applicable with respect thereto.
1.3 "Bill of Sale" shall mean that certain bill of sale in the form
attached hereto as Schedule 1.3 whereby MICA and certain of its Subsidiaries
shall transfer the Sale-Leaseback Equipment to GE.
1.4 "Business Day" shall mean any day except Saturday, Sunday or any day
in which banks in Milwaukee, Wisconsin are required or authorized by law to
remain closed.
1.5 "Closing Date" shall mean May 21, 1993.
1.6 "Collateral" shall have the meaning assigned to it in Section 2(a) of
the Security Agreement.
1.7 "Default" shall mean any event which, with the passage of time, the
giving of notice, or both, would become an Event of Default, unless cured or
unless waived as specifically provided in this Agreement.
1.8 "Disposition" shall mean the sale, transfer or other disposition in
any single transaction or series of related transactions of any asset, or group
of related assets, of MICA or any of its Subsidiaries, other than the sale or
other disposition of inventory in the ordinary course of business. As used in
this Agreement, the phrase "series of related transactions" shall mean that the
transactions, taken as a whole, were conceived and are implemented on a
strategically integrated basis and the phrase "related assets" shall mean that
the assets are functionally related to one another.
1.9 "Distributions" shall mean, with respect to any shares of capital
stock or any warrant or right to acquire shares of capital stock or any other
equity security issued by MICA, (i) the retirement, redemption, purchase or
other acquisition, directly or indirectly, for value by MICA of any such
security, except to the extent that the consideration therefor consists of
shares of Stock, (ii) the declaration or (without duplication) payment by MICA
of any dividend in cash or in Property, directly or indirectly, on or with
respect to any such security, (iii) any investment by MICA in the holder of 5%
or more of any such security if a purpose of such investment is to avoid
characterization of the transaction as a Distribution, and (iv) any other
payment by MICA constituting a distribution under applicable laws with respect
to such security.
1.10 "Event of Default" shall have the meaning assigned to it in Section
7.1.
1.11 "Financing Statements" shall mean the Form UCC-1 or other financing
statements to be filed in the appropriate offices for the perfection of a
security interest in any of the Collateral.
1.12 "GAAP" shall mean Generally Accepted Accounting Principles applied on
a consistent basis as in effect from time to time and practices which are
recognized as such by the American Institute of Certified Public Accountants
acting through its Accounting Principles Board or by the Financial Accounting
Standards Board or through other appropriate boards or committees thereof and
which are consistently applied for all periods after the date of this Agreement.
1.12A "Harris Bank" shall mean Harris Trust and Savings Bank, an Illinois
banking corporation.
1.12B "Harris Documents" shall have the meaning set forth in Section 1 of
the Security Agreement.
1.13 "Hazardous Materials" shall mean any substance, material, or waste
that is regulated because of its hazardous, toxic, or polluting nature, by any
city, county, or other local or regional government authority, any State, or the
United States Government or any agency thereof having jurisdiction, including
any material or substance that is (i) petroleum or petroleum distillates,
including crude oil, natural gas, natural gas liquids, liquefied natural gas or
synthetic gas, (ii) asbestos, (iii) designated as a "hazardous substance"
pursuant to section 311 of the Clean Water Act, 33 U.S.C. 1251, et seq., 33
U.S.C. 1321, or listed pursuant to section 307 of the Clean Water Act, 33 U.S.C.
1317, (iv) defined as a "hazardous waste" pursuant to section 1004 of the
Resource Conservation and Recovery Act, 42 U.S.C. 6901, et seq., 42 U.S.C. 6903,
(v) defined as a "hazardous substance" pursuant to section 101 of the
Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C.
9601, et seq., 42 U.S.C. 9601, (vi) determined to be a chemical substance or
mixture that poses an unreasonable risk of injury to human health or the
environment under the Toxic Substances Control Act, 15 U.S.C. 2601, et seq.,
(vii) determined to be a Hazardous Air Pollutant under the Clean Air Act, 42
U.S.C. 7501, et seq., or (viii) listed, defined, or identified in the
regulations adopted pursuant to any of the foregoing laws.
1.14 "Indebtedness" means, as applied to any Person, without duplication
(i) all items, except items of capital stock or of surplus or of general
contingency or deferred tax reserves, which in accordance with GAAP would be
included in determining total liabilities as shown on the liability side of a
balance sheet of such Person on the date as of which Indebtedness is to be
determined, (ii) all obligations secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien to which any Property or asset owned or held by such Person is subject,
whether or not the obligation secured thereby shall have been assumed, and (iii)
all obligations of other Persons which such Person has guaranteed, including,
but not limited to, all obligations of such Person consisting of recourse
liabilities with respect to accounts receivable sold or otherwise disposed of by
such Person.
1.15 "Installment Agreements" shall have the meaning set forth in Section
2.2 hereof.
1.15A "Installment Sale Termination Agreements" shall have the meaning set
forth in Section 2.2 hereof.
1.16 "IRC" shall mean the Internal Revenue Code of 1986, as heretofore or
hereafter amended, and all regulations promulgated thereunder.
1.17 "Lease Termination Agreements" shall mean those certain Lease
Termination Agreements to be entered into on the Closing Date by GE and MICA and
its Subsidiaries, as applicable, in a form substantially as set forth in
Schedule 1.17 hereto.
1.18 "Liabilities" or "Liability" shall mean all loans, advances,
indebtedness, liabilities, and obligations of MICA and its Subsidiaries to GE,
of any and every kind and nature, whether now or hereafter owing, arising, due
or payable from MICA or its Subsidiaries to GE, whether or not evidenced by any
note, agreement, or other instrument and whether primary, secondary, direct,
contingent, fixed or otherwise, including obligations of performance, and
including, particularly, principal, interest, loan fees, charges, expenses,
attorneys' fees, and other amounts chargeable to MICA or its Subsidiaries by GE.
1.19 "Lien" shall mean (i) any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien (including tax liens,
judgment liens, liens of mechanics, suppliers, and other Persons for the
provision of goods or services, and all other liens arising under statute,
common law or judicial interpretation), charge, claim, security interest,
capitalized lease obligation, easement, encumbrance, preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever (including any lease or title retention agreement, or any financing
lease having substantially the same economic effect as any of the foregoing),
(ii) any arrangement, express or implied, under which any Property is
transferred, sequestered or otherwise identified for the purpose of subjecting
the same to the payment of Indebtedness or performance of any other obligation
in priority to the payment of general, unsecured creditors; (iii) any
indebtedness which is unpaid more than forty-five (45) days after the same shall
have become due and payable and which if unpaid would by law (including but not
limited to bankruptcy and insolvency laws), or otherwise, be given any priority
whatsoever over general, unsecured creditors; and (iv) the filing of, or
agreement to give, any financing statement perfecting a security interest under
the UCC or comparable law of any jurisdiction.
1.20 "Material Adverse Effect" shall mean any set of circumstances or
events which (i) was initiated or approved by MICA or any of its Subsidiaries
and which has or could reasonably be expected to have any material adverse
effect whatsoever upon the validity or enforceability of this Agreement or any
other agreement between MICA or one of its Subsidiaries and GE, (ii) is or could
reasonably be expected to be material and adverse to the condition (financial or
otherwise), or business operations of MICA and its Subsidiaries, taken as a
whole, (iii) materially impairs or could reasonably be expected to materially
impair the ability of MICA to satisfy the Liabilities, or (iv) was initiated or
approved by MICA or any of its Subsidiaries and which materially impairs or
could reasonably be expected to materially impair the ability of GE to enforce
its legal remedies pursuant to this Agreement or any of the Scheduled Documents.
1.21 "MaxiService Agreements" shall have the meaning set forth in Section
2.2 hereof.
1.22 "MICA Imaging" shall mean MICA Imaging, Inc., an Illinois
corporation.
1.23 "1992 Note" shall have the meaning set forth in Section 2.3 hereof.
1.24 "Note" shall have the meaning set forth in Section 2.3 hereof.
1.25 "Person" shall mean any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
institution, public benefit corporation, entity, party, or government (whether
federal, state, county, city, municipal, or otherwise, including any
instrumentality, division, agency, body, or department thereof).
1.26 "Property" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
1.27 "Release and Settlement Agreement" shall have the meaning set forth
in Section 3.1(A) hereof.
1.28 "Reserves" shall mean reserves for returns, allowances, and the like
as may be established by MICA or as may otherwise be required in accordance with
GAAP.
1.29 "Sale-Leaseback Equipment" shall have the meaning set forth in
Section 2.2 hereof.
1.30 "Scheduled Documents" shall mean, collectively, the Note, the
Security Agreement, the Warrant, the Lease Termination Agreements, the Release
and Settlement Agreement, the MaxiService Agreements and the Bill of Sale.
1.31 "Security Agreement" shall mean that certain Security Agreement in
the form attached as Schedule 1.31 hereto.
1.32 "Solvent" when used with respect to MICA, shall mean that (i) the
fair salable value of the total amount of MICA's assets is in excess of the
total amount of its liabilities (including for purposes of this definition all
liabilities, whether or not reflected on a balance sheet prepared in accordance
with generally accepted accounting principles, and whether direct or indirect,
fixed or contingent, secured or unsecured, and disputed or undisputed); (ii)
MICA is able to pay its debts or obligations in the ordinary course as they
mature; and (iii) MICA has capital sufficient to carry on its businesses and all
businesses in which it is about to engage.
1.33 "Stock" shall mean all shares, options, warrants, interests,
participations, or other equivalents, howsoever designated, of or in a
corporation or equivalent entity, whether voting or non-voting, including common
stock, preferred stock, convertible debentures, and all agreements, instruments,
any other "option" (as such term is defined in temporary Treasury Regulation
1.382-2T(h)(4)(v) promulgated under the Internal Revenue Code), or any other
"equity security" (as such term is defined in Rule 3a11-1 of the General Rules
and Regulations promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended), and documents convertible, in
whole or in part, into any one or more or all of the foregoing.
1.34 "Subsidiary" shall mean any corporation of which fifty percent (50%)
or more of the outstanding shares of each class having voting power (other than
shares having such power by reason of the happening of a contingency) is at the
time owned or controlled, directly or indirectly, by MICA.
1.35 "Supplemental Documentation" shall mean agreements, instruments,
documents, financing statements, warehouse receipts, bills of lading, and other
written matter necessary or requested by GE to perfect and/or maintain the
perfection of GE's Lien upon the Collateral and to consummate the transactions
contemplated in or by this Agreement and the Scheduled Documents.
1.36 "Termination Date" shall mean the date on which all Liabilities under
or in connection with the Note have been completely and finally paid and
discharged, whether by prepayment or otherwise.
1.37 "UCC" shall mean the Uniform Commercial Code of the jurisdiction with
respect to which such term is used, as in effect from time to time.
1.38 "Warrant" shall have the meaning set forth in Section 2.4 hereto.
1.39 Other Terms: All other terms hereinbefore or hereinafter defined,
including, without limitation, all terms defined in the preamble and recitals
hereto, shall have the meanings herein assigned to such terms. All terms used
in the above definitions and all other terms contained in this Agreement, where
the context so indicates or requires, shall have the meanings provided by the
UCC as in effect in the State of California to the extent the same are used or
defined therein. Any accounting terms used in this Agreement and not
specifically defined herein shall have the meanings given them in accordance
with GAAP, and all financial computations hereunder shall be computed, unless
otherwise specifically provided herein, in accordance with GAAP, consistently
applied. That certain terms or computations are explicitly modified by the
phrase "in accordance with GAAP" shall in no way be construed to limit the
foregoing.
1.40 Rules of Construction: Except as otherwise specifically provided in
this Agreement, the singular of any term shall include the plural, and vice
versa, the use of any term shall be equally applicable to any gender, "or" shall
not be exclusive, and "including" shall not be limiting. The words "herein,"
"hereof," and "hereunder" and other words of similar import refer to this
Agreement as a whole, including the Exhibits and Schedules hereto, as the same
may from time to time be amended, modified or supplemented, and not to any
particular section, subsection or clause contained in this Agreement. Any
reference to a "Section," "Exhibit," or "Schedule" shall refer to the relevant
Section of, or Exhibit or Schedule to, this Agreement, unless specifically
indicated to the contrary.
2. RESTRUCTURING OF OBLIGATIONS
2.1 Termination or Assignment of Equipment Leases. GE and MICA (or the
applicable Subsidiary of MICA) shall terminate or assign the equipment leases
relating to the equipment described on Exhibit 2.1 hereto on the Closing Date by
executing and delivering Lease Termination Agreements or Assignment and
Assumption Agreements with respect to such leases as provided in Exhibit 2.1.
The equipment shall be returned to GE in full satisfaction of rental payments
due under the corresponding leases, all as more specifically set forth in the
Lease Termination Agreements.
2.2 Sale-Leaseback. On the Closing Date, MICA shall sell, assign,
transfer and deliver and shall cause certain of its Subsidiaries to sell,
assign, transfer and deliver to GE, and GE shall purchase and receive from MICA
and such Subsidiaries, all of the equipment ("Sale-Leaseback Equipment") subject
to the installment sales agreements identified on Exhibit 2.2 hereto
(collectively, the "Installment Agreements") including but not limited to the
equipment identified on Exhibit 2.2, free and clear of any and all security
interests, mortgages, pledges, liens, restrictions, charges or encumbrances of
any kind or character, direct or indirect, whether accrued, absolute, contingent
or otherwise, other than liens granted to GE. The aggregate purchase price,
including applicable Illinois sales tax, for the Sale-Leaseback Equipment shall
be equal to Five Million Seven Hundred Four Thousand One Hundred Twelve Dollars
and Nine Cents ($5,704,112.09) ("Purchase Price"). MICA shall deliver an
invoice to GE in the amount of the Illinois sales tax payable in connection with
the sale of the Sale-Leaseback Equipment to GE. GE shall promptly deliver a
check to MICA in the amount of such sales tax. The remainder of the Purchase
Price shall be paid by GE by cancelling MICA or the applicable Subsidiary's
remaining obligation under the Installment Agreements pursuant to the terms of
the "Installment Sale Termination Agreements" (as defined below). Concurrent
with the transfer of the Sale-Leaseback Equipment, GE and MICA shall (i) execute
and deliver installment sale termination agreements in a form substantially as
set forth in Schedule 2.2(A) hereto ("Installment Sale Termination Agreements")
with respect to each of the Installment Agreements, and (ii) execute and deliver
lease and service agreements in a form substantially as set forth in Schedule
2.2(B) hereto (the "MaxiService Agreements"), whereby GE shall lease to MICA or
one of its Subsidiaries the Sale-Leaseback Equipment and provide service
thereon, all as more specifically set forth in the MaxiService Agreements.
Payment terms under the MaxiService Agreements with respect to the Sale-
Leaseback Equipment shall be as set forth in Exhibit 2.2 hereto.
2.3 Note. On the Closing Date, MICA shall execute and deliver to GE its
promissory note (the "Note") in the principal amount of Seven Million Four
Hundred Forty-Two Thousand Six Hundred Sixteen Dollars and Thirty-Eight Cents
($7,442,616.38) in the form attached hereto as Schedule 2.3, which amount
corresponds to the sum of (i) the aggregate indebtedness of MICA to GE under the
November 1, 1992 promissory note (the "1992 Note") made by MICA and payable to
GE in the original principal amount of Three Million Three Hundred Thirty-Four
Thousand Four Hundred Eighteen and 94/100 Dollars ($3,334,418.94) and (ii) all
payments due and owing to GE from MICA and its Affiliates under all service
agreements and equipment leases related to the "Fee For Service" segment of
MICA's business (as identified on Exhibit 2.3 hereto) for the months of March,
April and May 1993 (the "Deferred Payments"). GE's acceptance of the Note shall
reflect GE's deferral of the Deferred Payments and waiver of all penalties and
events of default under the service agreements and equipment leases identified
on Exhibit 2.3 arising from the nonpayment of such amounts in March, April and
May 1993. GE shall return the 1992 Note to MICA marked "Superseded" on the face
thereof concurrently with its receipt of the Note.
2.4 Warrant. On the Closing Date, MICA shall issue and deliver to GE its
common stock warrant (the "Warrant"), in the form attached hereto as Schedule
2.4, to acquire 2,300,000 shares of its common stock, no par value, at an
exercise price per share equal to (i) $0.45 plus (ii) the last reported sales
price of MICA's common stock, no par value, on NASDAQ on the date immediately
preceding the Closing Date. The Warrant shall be exercisable from time to time
commencing on the second anniversary of the Closing Date and ending at 5:00
p.m., California time on the fifth anniversary of the Closing Date.
2.5 Security Interest. To secure the performance of the Liabilities by
MICA and its Subsidiaries, MICA shall grant and shall cause its Subsidiaries to
grant a security interest to GE in their respective accounts receivable and in
all equipment purchased from and financed by GE or leased pursuant to capital
leases by them from GE or one of its Affiliates, free and clear of all Liens,
except the Lien of Harris Bank in the accounts receivable of MICA Imaging and
any Liens granted to GE, pursuant to that certain Security Agreement in the form
attached hereto as Schedule 1.31. Notwithstanding the foregoing, nothing in
this Agreement or in the Security Agreement shall be construed to give GE any
right to the accounts receivable of any joint venture or partnership in
existence as of the Closing Date which is an Affiliate of MICA as identified in
Exhibit 4.1(L). Pursuant to the Security Agreement, GE shall agree, in the
exercise of its reasonable discretion, to subordinate its security interest in
the accounts receivable, except those of MICA Imaging, to a new lender who
provides new capital to MICA.
2.6 One Obligation. All indebtedness, obligations, and Liabilities of
MICA to GE under this Agreement and the Note shall constitute one obligation
secured by GE's Lien upon all Collateral and by all other Liens, security
interests, claims and encumbrances heretofore, now, or at any time or times
hereafter granted by MICA to GE. MICA agrees that all of the rights of GE set
forth in this Agreement shall apply to any modification of or supplement to this
Agreement except as otherwise specifically provided in any such modification or
supplement.
2.7 Term. The provisions of this Agreement shall be in effect until the
Termination Date, unless terminated sooner in accordance with the provisions of
this Agreement. Notwithstanding any provision herein to the contrary, MICA and
GE expressly agree that the Note shall be due and payable at any time any other
Liability of MICA to GE is accelerated or terminated (except by prepayment or
final payment on the due date thereof) in accordance with this Agreement or any
other agreement evidencing such Liability, as the case may be.
2.8 Application of Payments and Collections. Upon the occurrence and
during the continuance of any Default or Event of Default, MICA irrevocably
waives the right to direct the application of any and all payments and
collections at any time or times hereafter received by GE from or on behalf of
MICA, and MICA irrevocably agrees that GE shall have the continuing exclusive
right to apply and reapply any and all such payments and collections received at
any time or times hereafter by GE or its agents against the Liabilities in such
manner as GE may deem advisable, notwithstanding any entry by GE upon any of its
books and records.
3. CONDITIONS PRECEDENT
3.1 Conditions Precedent of GE to Closing. GE's obligation to close the
transactions contemplated hereby and to perform its obligations as of the
Closing Date shall be, at the option of GE, subject to satisfaction of each of
the following conditions (which may be waived specifically in writing by GE in
whole or in part) at or prior to the Closing Date:
(A) Release and Settlement Agreement. GE, MICA and MICA's
Subsidiaries shall have executed and delivered a Release and Settlement
Agreement in the form attached as Schedule 3.1(A) ("Release and Settlement
Agreement") hereto whereby MICA and its Subsidiaries shall release any and all
claims against GE except those involving equipment and maintenance problems not
within their knowledge as of the Closing Date.
(B) Obligations. All obligations of MICA and its Affiliates under
all leases, agreements and instruments with or payable to GE that have accrued
as of the Closing Date shall have been satisfied in full by MICA or its
Affiliates, except as otherwise specifically provided in this Agreement or the
Lease Termination Agreements.
(C) Warranties True; Covenants Performed. Each of the
representations and warranties made by MICA and set forth in this Agreement and
the Exhibits attached hereto or otherwise made in writing in connection herewith
shall be true and correct in all material respects at and as of the Closing
Date, and the covenants required by this Agreement to be performed and complied
with by MICA as of the Closing Date shall have all been performed and complied
with in all material respects.
(D) MICA Consents, Approvals and Authorizations. MICA shall have
obtained all consents, approvals and authorizations of third parties necessary
in connection with the valid execution, delivery and performance of this
Agreement and the Scheduled Documents.
(E) Signing of Instruments. MICA and its Subsidiaries shall have
executed and delivered all documents and instruments required to be executed by
them pursuant to the provisions of this Agreement, including, without
limitation, all of the Scheduled Documents.
(F) Unfavorable Action or Proceeding. On the Closing Date no action
or proceeding shall be pending or threatened against MICA wherein an unfavorable
judgment, decree or order would, in GE's reasonable opinion, prevent or make
unfavorable the carrying out of this Agreement, would cause the transactions
contemplated by this Agreement to be rescinded, or would have a Material Adverse
Effect on MICA. In the event of the receipt of any communication from any
Person or any other notice (a copy of which communication or notice shall be
promptly delivered to GE) prior to the Closing Date, which communication or
notice shall in the reasonable opinion of GE threaten such action or proceeding,
GE may cancel this Agreement by giving written notice to MICA and shall
thereupon be released from any and all liability related to this Agreement.
(G) Officer's Certificate. GE shall have received a certificate of
the President of MICA, dated as of the Closing Date, in the form attached hereto
as Schedule 3.1(G) and certifying to GE the accuracy of the representations and
warranties set forth in this Agreement and compliance with MICA's covenants set
forth in this Agreement that are required to be performed as of the Closing
Date.
(H) Certificate of Incumbency. GE shall have received a certificate
of the corporate Secretary of MICA dated as of the Closing Date and certifying
to GE (i) that attached thereto is a true and complete copy of the Articles of
Incorporation and the Bylaws of MICA, as in effect on the date of such
certification, (ii) as to the incumbency and genuineness of the signature of the
officers of MICA from the date hereof to the Closing Date and bearing the
authentic signatures of all such officers who shall execute this Agreement and
the Scheduled Documents, (iii) as to the resolutions of the Board of Directors
of MICA authorizing the execution, delivery and performance of this Agreement
and the Scheduled Documents, and (iv) that such resolutions have not been
amended or rescinded and remain in full force and effect.
(I) Good Standing Certificates. GE shall have received a copy of the
Articles of Incorporation of MICA and MICA Imaging, Inc., an Illinois
corporation ("MICA Imaging"), and all amendments thereto, certified by the
Secretaries of State of their respective States of incorporation, and good
standing certificates for each such corporation, issued by the Secretaries of
State of the States where they are qualified to do business, as set forth in
Exhibit 4.1(A).
(J) Default. There shall exist no Default or Event of Default on the
Closing Date under this Agreement.
(K) Debt Holder Concessions. Holders of not less than seventy-five
percent (75%) of MICA's $11 million convertible subordinated debentures due in
1999 shall have agreed to the concessions set forth in Exhibit 3.1(K).
(L) Automatic Drafting. MICA and each of its Subsidiaries shall have
executed and delivered to GE an Authorization Agreement for Pre-Arranged
Payments (Debits) in the form attached as Schedule 3.1(L) hereto whereby GE
shall be authorized to debit the account or accounts of MICA and its
Subsidiaries that are identified in Exhibit 3.1(L) for payments due each month
under all leaseline, maxiservice, lease agreements, installment and/or service
contracts with GE.
(M) Exhibits and Schedules. The provisions of all Exhibits and
Schedules attached to this Agreement that have not been completed as of the date
of this Agreement shall be acceptable to GE in its reasonable discretion.
Further, GE shall have been given the opportunity through and including the
Closing Date to update and amend the Exhibits attached to this Agreement;
provided, however, that any amendments to such Exhibits made by GE shall be
acceptable to MICA in its sole discretion.
(N) Harris Bank Consent. Harris Bank shall have provided its written
consent to the terms of the Security Agreement.
3.2 Conditions Precedent of MICA to Closing. MICA's obligation to close
the transactions contemplated hereby and to perform its obligations as of the
Closing Date shall be, at the option of MICA, subject to satisfaction of the
condition (which may be waived specifically in writing by GE in whole or in
part) at or prior to the Closing Date, that the provisions of all Exhibits and
Schedules attached to this Agreement that have not been completed as of the date
of this Agreement are acceptable to MICA in its reasonable discretion. Further,
MICA shall have been given the opportunity through and including the Closing
Date to update and amend the Exhibits attached to this Agreement; provided,
however, that any amendments to such Exhibits made by MICA shall be acceptable
to GE in its sole discretion.
4. WARRANTIES AND REPRESENTATIONS OF MICA
4.1 Warranties and Representations. MICA warrants and represents to GE
that:
(A) Existence and Qualification; Power; Good Standing. MICA and each
of its Subsidiaries are corporations duly organized and validly existing under
the laws of the States of their incorporation. MICA and MICA Imaging are in
good standing under the laws of the States of their incorporation. MICA and
MICA Imaging have the full corporate power and authority to own, lease and
operate their respective properties and assets as presently owned, leased and
operated, and to carry on their business as it is now being conducted. MICA and
MICA Imaging are duly qualified and in good standing to do business in each
jurisdiction in which the character of their properties or the character of
their business requires such qualification, license or good standing. Exhibit
4.1(A) sets forth MICA's chief executive office, (ii) principal place of
business, and (iii) a complete list of all jurisdictions in which MICA and MICA
Imaging are qualified to do business.
(B) Authority; Binding Obligations. MICA and each of its
Subsidiaries have the requisite corporate power and authority, and have taken
all necessary corporate and other actions, necessary to enter into, execute,
deliver and perform this Agreement and all the Scheduled Documents, as
applicable. This Agreement has been, and the Scheduled Documents at Closing
will have been, duly executed and delivered by MICA and its Subsidiaries, as
applicable, and are the legal, valid and binding obligations of MICA and such
Subsidiaries enforceable against MICA and the Subsidiaries, as applicable, in
accordance with their respective terms, subject as to the enforcement of
remedies only, to limitations imposed by general principles of equity
(regardless of whether such enforceability is considered in a proceeding at law
or in equity) and the effect of applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws of general application relating
to or affecting creditors' rights generally. To the best knowledge of MICA, the
Security Agreement, along with all action required to fully perfect GE's
security interest thereunder as of the Closing Date, creates and constitutes a
valid and perfected security interest in and Lien on the now owned or existing
Collateral in accordance with the priorities set forth in the Security
Agreement, enforceable against all third parties, and, to the best knowledge of
MICA, will create a valid and perfected security interest in and Lien on all
remaining Collateral when acquired by MICA or any of its Subsidiaries, in
accordance with the priorities set forth in the Security Agreement, enforceable
against all third parties. All filings and other actions necessary or desirable
to protect and perfect such Lien and security interest in each item of the
Collateral have been duly made or taken or will be duly made or taken when such
Collateral is acquired by MICA or any of its Subsidiaries.
(C) Compliance with Laws/Agreements. The execution, delivery and
performance by MICA of this Agreement shall not, by the lapse of time, the
giving of notice, or otherwise, directly or indirectly (i) constitute a
violation of any applicable law, rule, regulation, order, writ, judgment,
injunction, decree, determination, or award presently in effect having
applicability to MICA, (ii) result in a default under or a breach of any
provision contained in MICA's Articles of Incorporation or By-Laws or, any
indenture, loan, mortgage, lease, or deed of trust, agreement relating to the
borrowing of monies, instrument, document or, to MICA's knowledge, any agreement
to which MICA is now a party or by which it is bound, the violation or breach of
which would in any of such cases have a Material Adverse Effect on MICA or
result in the creation or imposition of any material Lien, charge or encumbrance
upon any of the Collateral. MICA is not a party to, or otherwise subject to,
any provision contained in any instrument evidencing Indebtedness of MICA, any
agreement relating thereto, or any other contract or agreement (including its
charter) that limits the amount of, or otherwise imposes restrictions on, the
incurring of obligations by MICA or any of its Subsidiaries that would have a
Material Adverse Effect on the ability of MICA or any of its Subsidiaries to
perform its obligations hereunder or under any Scheduled Document.
(D) Absence of Defaults. Neither MICA nor any of its Subsidiaries
has breached any material provisions of, or is in default in any material
respect under the terms of, or has engaged in any activity which would cause
revocation or suspension of, any governmental license, franchise, permit,
authorization, and, to MICA's knowledge, no action or proceeding seeking or
contemplating the revocation or suspension of any thereof is pending or
threatened.
(E) Licenses and Permits. MICA and its Subsidiaries possess and are
in good standing with respect to all licenses (including without limitation
lending licenses), franchises, permits and other authorizations materially
necessary to continue to conduct their business as heretofore conducted.
(F) Consents and Approvals. Except as set forth in Exhibit 4.1(F)
attached hereto, no consent, approval, permit, waiver, authorization or other
action of or by any court, governmental or nongovernmental Person or entity, is
required or will be necessary in connection with the execution, delivery or
performance of this Agreement or any other document contemplated hereby by MICA
or any of its Subsidiaries. MICA shall be responsible for and shall take any
and all steps necessary, at its sole expense, to obtain all such consents,
approvals and authorizations prior to the Closing Date and shall keep GE
informed as to the status of obtaining such consents. All such consents,
approvals and authorizations shall be approved as to form by GE in writing.
(G) Liabilities. MICA has no Indebtedness and has not guaranteed the
obligations of any Person, except (i) as shown in the financial statements
delivered to GE by MICA, including all footnotes thereto, (ii) for trade
payables arising in the ordinary course of its business since the date of the
financial statements delivered to GE, and (iii) for money borrowed and other
financial accommodations from GE.
(H) Title to Collateral; Location of Equipment. On the Closing Date
(or with respect to after-acquired property, on the date acquired), MICA and its
Subsidiaries will have good, indefeasible, and merchantable title to and
ownership of the Collateral (except Collateral that is leased and not owned by
MICA and/or its Subsidiaries), free and clear of all Liens except those of GE
and those set forth in Exhibit 4.1(H) attached hereto, which Liens and GE's Lien
will be in the priority set forth in the Security Agreement. As of the date of
this Agreement and the Closing Date, the Collateral and all related books and
records, including computer programs, printouts, and other computer materials
are located only at the locations set forth in Exhibit 4.1(H).
(I) Compliance with Laws. Except as set forth in Exhibit 4.1(I)
attached hereto, MICA and its Subsidiaries have materially complied with and are
not in default in any material respect under any law, ordinance, requirement,
regulation or order applicable to their business, operations or properties, and
MICA has received no notice and is unaware of any claimed default with respect
to the foregoing.
(J) Environmental Matters.
(i) To MICA's knowledge, neither MICA, nor any of its
Subsidiaries, nor any previous owner, tenant, occupant, or user of any real
property now or previously owned or leased by MICA or any of its Subsidiaries
has used, generated, manufactured, installed, released, discharged, stored,
handled, transported, or disposed of any Hazardous Materials, on, under, in or
about the site of any such real property; and
(ii) To MICA's knowledge, MICA's and its Subsidiaries' use of
such real property complies with all applicable environmental laws and
governmental regulations, including all applicable federal, state, and local
laws, ordinances, and regulations pertaining to air and water quality, Hazardous
Materials, waste disposal, or other environmental matters, including the Clean
Water Act, the Clean Air Act, the Federal Water Pollution Control Act, the Solid
Waste Disposal Act, the Resource Conservation Recovery Act, the Comprehensive
Environmental Response, Compensation and Liability Act, and the rules,
regulations, and ordinances of the city and county in which such property is
located, the Environmental Protection Agency, and all other applicable federal,
state, regional, and local agencies and bureaus, where the failure to so comply
would have a Material Adverse Effect either as to the value of such real
property, as to MICA's or its Subsidiaries' occupancy or use of such real
property, or as to MICA or its Subsidiaries.
(K) Insurance. Set forth in Exhibit 4.1(K) attached hereto is a list
of all insurance of any nature maintained by MICA including descriptions of the
coverage, policy limits, and deductibles with respect thereto. All such
policies, unless otherwise specified, are in full force and effect and provide
coverage of such risks and for such amounts as is required by this Agreement.
There has not occurred any accident or loss or any other event known to MICA,
other than those listed in Exhibit 4.1(K), that might reasonably be expected to
result in (a) the cancellation or reduction of any insurance policies in effect,
which cancellation would, individually or in the aggregate, materially diminish
such insurance coverage, or (b) any material premium adjustment with respect to
any insurance policies identified in Exhibit 4.1(K).
(L) Joint Ventures. Except as set forth in Exhibit 4.1(L) attached
hereto, neither MICA nor any of its Subsidiaries is engaged in any joint venture
or partnership with any Person.
(M) Subsidiaries and Affiliates. MICA has no Subsidiaries and
Affiliates except as set forth in Exhibit 4.1(M) attached hereto.
(N) Financial Statements. The financial statements, interim
financial statements and balance sheets of MICA as of December 31, 1992
previously delivered by MICA to GE and required to be delivered by MICA to GE
during the term of this Agreement under Section 6.1: (i) are and will be true,
complete and correct in all material respects, (ii) present and will present
fairly and accurately the financial condition of MICA and its Subsidiaries,
respectively, and the results of their respective operations at the dates and
for the periods indicated, and (iii) have and will have been prepared in
conformity with GAAP, applied consistently for the periods specified, except
that the interim financial statements need not contain any of the footnotes
required to comply with GAAP. From and after December 31, 1992, MICA has not
made any changes in its accounting methods or practices.
(O) Litigation or Claims. Except as set forth in Exhibit 4.1(O)
attached hereto (said matters set forth in Exhibit 4.1(O) being collectively
referred to herein as "Pending Litigation"), neither MICA nor MICA's
Subsidiaries, properties, businesses or assets is engaged in or a party to or
threatened with any suit, action, proceeding, inquiry, enforcement action,
investigation, claim or demand or legal, administrative, arbitration or other
method of settling disputes or disagreements, and MICA, to the best of its
knowledge after due investigation, does not know, anticipate or have notice of
any basis for any such action. MICA has not received notice of any
investigation, threatened or contemplated, by any federal or state governmental
authority or agency, that remains unresolved. None of the Pending Litigation
has created a Lien or a claim therefor against any of MICA's Property,
including, without limitation, the Collateral.
(P) Taxes. Except as set forth in Exhibit 4.1(P) attached hereto,
all federal, state, county and other tax returns, reports and declarations of
every nature (including, without limitation, income, employment, payroll,
excise, Property, sales and use taxes, unemployment contributions) required to
be filed by or on behalf of, or with respect to MICA and its assets, including,
without limitation, the Collateral have been duly and timely filed, and will
continue to be duly and timely filed (within the time periods required by law)
by MICA, all such returns or reports are, or will be at the time of filing,
complete and accurate and in accordance with the tax laws applicable thereto and
accurately reflect all such taxes, charges and assessments required to be paid
by MICA for the periods covered thereby. No extension of time or requests
therefor or waiver thereof, have been made or are presently pending or effective
with respect to such reports, returns or taxes that will have a Material Adverse
Effect on MICA. All taxes shown to be due and payable on such returns and
reports and any deficiency, assessments, penalties and interest thereon have
been paid. All required tax estimates, deposits, prepayments and the like for
current periods have been properly made. There are no tax liens on any of the
Collateral and, to MICA's knowledge, no basis exists for the imposition of any
such liens. The accrual for taxes reflected in the balance sheets of MICA is in
the aggregate adequate to cover any and all federal, state, local or foreign tax
liabilities (whether or not disputed) of MICA for the period ended on the date
thereof and all prior periods. MICA has no dispute with any taxing authority as
to taxes of any nature which affects the subject matter of this Agreement.
There is no unassessed tax deficiency proposed or, to the best of MICA's
knowledge, threatened against MICA, and no action, proceeding or audit of any of
MICA's returns or reports by any governmental authority is pending or, to MICA's
knowledge, threatened by any governmental authority for assessment, reassessment
or collection of any taxes or assessments affecting MICA that will have a
Material Adverse Effect on MICA.
(Q) Brokers. Except as set forth in Exhibit 4.1(Q), all
negotiations relating to this Agreement and the transactions contemplated hereby
have been carried out without the intervention of any person on behalf of MICA
in such manner as to give rise to any claim against GE, its Affiliates or MICA
for any brokerage or finder's fee commission, fee or similar compensation.
(R) Transfer for Value. Section 3440.1(k) of the California Civil
Code applies to the transfer of the Sale-Leaseback Equipment contemplated
hereby. MICA acknowledges that the concessions granted by GE pursuant to this
Agreement and the Scheduled Documents constitute reasonably equivalent value for
the transfer of the Sale-Leaseback Equipment and the other consideration
delivered by MICA and its Subsidiaries hereunder and under the Scheduled
Documents.
(S) No Untrue or Inaccurate Representations or Warranties. All
statements contained in any certificate, financial statement or other instrument
delivered by or on behalf of MICA pursuant to or in connection with this
Agreement or the other documents contemplated by this Agreement (including but
not limited to any such statements made in or in connection with any amendment
hereto) shall constitute representations and warranties made by MICA under this
Agreement. The representations and warranties of MICA contained in each
Scheduled Document and each Exhibit or other written statement delivered
pursuant to this Agreement, or in connection with the transactions contemplated
hereby, are, as of the date when given, accurate, correct and complete, and do
not contain any untrue statement of material fact or omit to state a material
fact necessary in order to make the statements and information contained therein
not misleading.
4.2 Survival of Warranties and Representations. All representations and
warranties of MICA contained in this Agreement shall survive the execution,
delivery, and acceptance of this Agreement by the parties hereto and the
consummation of the transactions described herein or related hereto and shall
expire on the Termination Date.
5. COVENANTS AND CONTINUING AGREEMENTS
5.1 Affirmative Covenants of MICA. MICA covenants that at all times
during the Term:
(A) Automatic Drafting. MICA shall maintain the automatic drafting
arrangement described in Section 3.1(L) hereof and shall adequately fund the
accounts utilized in connection therewith as necessary to pay the Liabilities
when due and owing.
(B) Maintenance of Property. MICA shall, at its sole cost and
expense, keep and maintain, insure, preserve and protect its Property at any
time owned by it and useful or necessary for its business in good working order
and condition, ordinary wear and tear excepted, and shall use reasonable efforts
to not permit any waste of its Property. MICA shall notify Lender promptly of
any event or occurrence causing a material loss or decline in value of its
Property and the estimated (or actual, if available) amount of such loss or
decline.
(C) Audit Rights. MICA shall permit Lender and its agents and
representatives to enter upon MICA's premises at any time during usual business
hours (or at such other times as may be reasonably requested by Lender) upon at
least three (3) Business Days prior written notice to MICA, exercisable as
frequently as Lender or any designated representative of Lender may reasonably
request, for the purpose of inspecting all records, files and books of account
of MICA (and to make extracts from such records, files and books of account at
Lender's expense). All executive officers and other officers of MICA charged
with knowledge of the financial condition of MICA shall make themselves
available at all reasonable times to discuss, and provide all reasonable
information requested by Lender with respect to MICA's business.
(D) Compliance with Agreements. MICA and its Subsidiaries shall
perform, within all required time periods (after giving effect to any applicable
grace periods), all of their obligations and enforce all of its rights under
each agreement to which they are a party, including any leases to which they are
a party, where the failure to so perform and enforce would have a Material
Adverse Effect upon MICA. Neither MICA nor any of its Subsidiaries shall
terminate or modify in any manner adverse to MICA any provision of any agreement
or lease to which it is a party which termination or modification could
reasonably be expected to have a Material Adverse Effect upon MICA or the
Collateral.
(E) Payment of Taxes. MICA shall use its best efforts to prepare and
file all tax returns and pay and discharge at or before their due date, all
taxes, assessments and other similar governmental levies, charges, fees and
imposts, all liabilities for judgments, assessments and other governmental
charges and all other obligations for the payment of money, which, if unpaid
might become a Lien on Property of MICA or its Subsidiaries, except those being
contested in good faith by appropriate proceedings if by reason of such
nonpayment and contest no material item or portion of Property of MICA or its
Subsidiaries, including the Collateral, taken as a whole, is in jeopardy of
being seized, levied upon or forfeited prior to judgment. MICA shall maintain,
in accordance with GAAP, appropriate reserves for the accrual of any of the
foregoing obligations and liabilities.
(F) Insurance; Payment of Premiums. MICA shall, at its sole cost and
expense, maintain in full force and effect the insurance coverages set forth on
Exhibit 4.1(K).
5.2 Negative Covenants of MICA. Without GE's prior written consent,
which GE may or may not give, in its sole discretion (except as otherwise
expressly provided in Section 5.4 hereof to the contrary), MICA covenants as
follows:
(A) Future Subsidiaries. Except as set forth in Exhibit 5.2(A)
attached hereto, MICA shall not create, form or otherwise acquire any Subsidiary
unless such Subsidiary is separate and separately funded. MICA shall not make,
nor shall it permit any Subsidiary to make, any loan or advances of money to any
Person or any investment, directly or indirectly (by way of transfer of
Property, contributions to capital, purchase of stock or securities or evidences
of Indebtedness, acquisition of the business or assets, or otherwise), in any
Person in amounts exceeding Three Hundred Thousand Dollars ($300,000) in any
single transaction or series of related transactions or One Million Dollars
($1,000,000) in the aggregate. Requests by MICA to take any action that is not
permitted by this Section 5.2(A) shall comply with Section 5.4 hereof and shall
be approved or disapproved by GE in accordance with Section 5.4 hereof within
ten (10) Business Days following GE's receipt of MICA's request for consent.
(B) Distributions. MICA shall not make any Distributions. Requests
by MICA to take any action that is not permitted by this Section 5.2(B) shall
comply with Section 5.4 hereof and shall be approved or disapproved by GE in
accordance with Section 5.4 hereof within ten (10) Business Days following GE's
receipt of MICA's request for consent.
(C) Capital Expenditures. Neither MICA nor any of its Subsidiaries
shall make capital expenditures (including expenditures for capitalized leases
but excluding expenditures for routine repairs and replacements) in excess of
Three Hundred Thousand Dollars ($300,000) in any single transaction or series of
related transactions or One Million Dollars ($1,000,000) in the aggregate during
any fiscal year. Requests by MICA to take any action that is not permitted by
this Section 5.2(C) shall comply with Section 5.4 hereof and shall be approved
or disapproved by GE in accordance with Section 5.4 hereof within ten (10)
Business Days following GE's receipt of MICA's request for consent.
(D) Operating Leases. Neither MICA nor any of its Subsidiaries shall
become the lessee under any operating lease if the aggregate payments thereunder
during any one fiscal year exceed Three Hundred Thousand Dollars ($300,000).
Requests by MICA to take any action that is not permitted by this Section 5.2(D)
shall comply with Section 5.4 hereof and shall be approved or disapproved by GE
in accordance with Section 5.4 hereof within ten (10) Business Days following
GE's receipt of MICA's request for consent.
(E) Indebtedness. Except for Indebtedness outstanding on the Closing
Date, MICA shall not create, incur, assume, permit to exist or guarantee, and
will not permit any of its Subsidiaries to create, incur, assume, permit to
exist or guarantee, more than Three Hundred Thousand Dollars ($300,000) of
Indebtedness in connection with any single transaction or series of related
transactions or One Million Dollars ($1,000,000) in the aggregate in any one
fiscal year. Requests by MICA to take any action that is not permitted by this
Section 5.2(E) shall comply with Section 5.4 hereof and shall be approved or
disapproved by GE in accordance with Section 5.4 hereof within ten (10) Business
Days following GE's receipt of MICA's request for consent.
(F) Disposition of Property. Neither MICA nor any of its
Subsidiaries shall make any Disposition of its Property, whether now owned or
hereafter acquired, which exceeds One Hundred Fifty Thousand Dollars ($150,000)
in any single transaction or series of related transactions; provided that (i)
no Disposition of Property by MICA or one of its Subsidiaries in excess of Fifty
Thousand Dollars ($50,000) shall be made if the aggregate amount of all
Dispositions of Property by MICA and its Subsidiaries during that fiscal year
exceeds One Million Dollars ($1,000,000), and (ii) no Disposition of Receivables
(as that term is defined in the Security Agreement) constituting part of the
Collateral may be made. Requests by MICA to take any action that is not
permitted by this Section 5.2(F) shall comply with Section 5.4 hereof and shall
be approved or disapproved by GE in accordance with Section 5.4 hereof within
ten (10) Business Days following GE's receipt of MICA's request for consent.
5.3 Survival of Liabilities Upon Termination of Agreement. Except as
otherwise expressly provided in this Agreement, no termination or cancellation
(regardless of cause or procedure) of this Agreement shall in any way affect or
impair the powers, obligations, duties, rights, and Liabilities of MICA or GE
that accrued and remain unperformed as of the Termination Date.
5.4 Requests for GE's Consent. Any request by MICA for GE's written
consent prior to taking any action prohibited by Subsections 5.2(A), 5.2(B),
5.2(C), 5.2(D), 5.2(E), and 5.2(F) hereof as described in such Subsections,
shall be in writing and shall include a detailed description that is reasonably
acceptable to GE of the proposed action to be taken by MICA. GE shall approve
or disapprove of such request within the number of Business Days provided in the
respective Subsections identified in Section 5.2 hereof, which approval shall
not be unreasonably denied; provided, however, that GE may reasonably request
additional information regarding the proposed action to be taken by MICA and
shall have an additional period of ten (10) Business Days following GE's receipt
of all such information to consider such information.
6. INFORMATION AND REPORTING REQUIREMENTS
Until the Termination Date, unless GE shall otherwise consent in writing,
MICA shall furnish to GE at GE's address provided in Section 8.11, the
following:
6.1 Financial Statements. MICA shall prepare, or cause the preparation
of, and deliver to GE the following financial statements that have been prepared
in accordance with GAAP:
(A) Audited Year-End Financial Statements. For each fiscal year of
MICA, as soon as available, but not later than one hundred five (105) days after
the end of MICA's fiscal year, MICA shall deliver the audited consolidated
balance sheet of MICA as at the end of such fiscal year together with related
consolidated statements of operations, stockholders' equity and cash flows for
the twelve (12) month period then ended, setting forth in comparative form the
figures as at the end of and for the previous fiscal year, in each case
accompanied by an auditor's report thereon that is certified by a firm of
independent certified public accountants of recognized national standing which
report shall be in scope and substance reasonably satisfactory to GE, and, as
soon as available, but not later than seventy-five (75) days after the close of
MICA's fiscal year, an unaudited preliminary draft of the balance sheet of MICA
as at the end of such fiscal year together with preliminary drafts of such
related statements of income and retained earnings and cash flows. In case any
Affiliate shall be consolidated in the financial statements of MICA, the
statements referred to in this Section 6.1 shall be on a consolidated and
consolidating basis, in accordance with GAAP.
(B) Quarterly Financial Statements. As soon as available, but not
later than sixty (60) days after the end of each calendar quarter of MICA's
fiscal year, MICA shall deliver the unaudited balance sheet of MICA as at the
end of such quarterly period and the related statements of income and retained
earnings, cash flows and changes in financial position of MICA for the elapsed
portion of the fiscal year ended with the last day of such quarterly period,
setting forth in each case in comparative form the figures for the corresponding
periods of the previous fiscal year, prepared in accordance with GAAP, subject
only to normal year-end auditing adjustments, and in form and substance as GE
may reasonably request.
(C) Monthly Financial Statements. As soon as available, but not
later than fifteen (15) business days after the end of each calendar month, MICA
shall deliver detailed statements of cash flow and volume reports of scans by
unit as at the end of such month.
(D) Officer's Certificate. Concurrently with each delivery of said
annual audited financial statements and of the interim financial statements
referred to in subsections 6.1(B) and (C) hereof, MICA shall deliver a
certificate of MICA's chief financial officer stating that (1) in his opinion,
such financial statements are complete and correct and present fairly, in
accordance with GAAP (except for changes that have been approved in writing by
MICA's accountants or that do not have a Material Adverse Effect on MICA)
applied consistently with those followed in the preparation of the audited
consolidated financial statements of MICA and that have been consistently
applied throughout the period involved, the financial position of MICA as at the
end of such period and the results of operations and the changes in the
financial position of MICA for such period and for the elapsed portion of the
fiscal year ended with the last day of such period, in each case on the basis
presented and subject only to normal year-end auditing adjustments specified in
such financial statements (2) a review of the activities of MICA and its
Subsidiaries during the fiscal year or interim period covered by such financial
statements, as the case may be, has been made under his supervision with a view
to determining whether MICA has observed, performed and fulfilled each and every
covenant, obligation and agreement contained in this Agreement and that he is
not aware of the occurrence or existence of any condition or event that
constitutes a Default or an Event of Default, or, if he is aware of such
condition or event, the nature thereof, when it occurred, whether it is
continuing and the steps being taken by MICA with respect to such event or
failure.
6.2 Public Documents. Promptly after the sending or filing thereof, as
the case may be, copies of any definitive proxy statements, financial statements
or reports which MICA sends to its shareholders; and copies of any regular,
periodic and special reports or registration statements which MICA files with
the Securities and Exchange Commission or any governmental authority which may
be substituted therefor, or any national securities exchange.
6.3 Other Reports. From time to time and promptly upon each request,
such data, certificates, reports, statements, opinions of counsel, documents or
further information regarding the Collateral or the business, assets, financial
condition or results of operation of MICA and its Affiliates as GE may
reasonably request.
6.4 Certain Notices. MICA shall notify GE in writing promptly, but in no
event later than five (5) Business Days upon learning of (i) any litigation
commenced against MICA, its officers, directors, shareholders, or an Affiliate
of MICA, that may have a Material Adverse Effect upon MICA, the Collateral or
GE's Lien on the Collateral, whether or not the claim is considered by MICA to
be covered by insurance, and MICA shall also notify GE in writing promptly upon
learning of any threatened litigation against MICA, or an Affiliate of MICA, in
which the claim might have a Material Adverse Effect on MICA, the Collateral or
GE's Lien on the Collateral; (ii) any Default or Event of Default known to MICA,
or any event which with the passage of time or giving of notice or both would
constitute a Default or Event of Default by MICA; (iii) any default by MICA or
an Affiliate under any material agreement other than this Agreement or the
Scheduled Documents to which any of them is a party or by which any of them or
any of their properties may be bound that is reasonably likely to have a
Material Adverse Effect on MICA and the Affiliates as a whole; (iv) any penalty
assessed against MICA, or an Affiliate of MICA, by any federal, state, or local
government agency; (v) any notice received from any federal, state, or local
government agency of any violation by MICA, or an Affiliate of MICA, of any
federal, state, or local law or regulation, the commencement of any proceedings
or investigations by or before any governmental on nongovernmental body
affecting MICA, or an Affiliate of MICA, or any of their respective properties,
assets or businesses, in which the damages claimed or the potential liability
would be reasonably likely to exceed Fifty Thousand Dollars ($50,000) or which
would be reasonably likely individually or in the aggregate with other actions,
suits and proceedings, to have a Material Adverse Effect on MICA or its
Affiliates; (vi) any violation by MICA, or an Affiliate of MICA, of any such law
or regulation of which MICA becomes aware, which violation could result in the
assessment of a penalty or the revocation of a registration or license of MICA,
or an Affiliate of MICA, by any federal, state, or local government agency; and
(vii) any other event or condition having a Material Adverse Effect on (a) MICA,
(b) the aggregate value of the Collateral, or (c) the security interests created
hereunder.
7. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT
7.1 Event of Default. The occurrence of any one or more of the following
events (regardless of the reason therefor) shall constitute an "Event of
Default":
(A) MICA shall fail to make any payment of principal of, or interest
on, or any other amount owing in respect of the Note, or any of the other
Liabilities within ten (10) days of the date such payment is due and payable and
such Default continues for a period of five (5) days after notice of nonpayment
is received by MICA from GE;
(B) Except as provided in Section 7.1(A) above, MICA or one of its
Subsidiaries shall fail or neglect to perform, keep or observe, in any material
respect, any other term, provision, condition, covenant, duty or obligation
contained in this Agreement or in any of the other Scheduled Documents which is
required to be performed, kept, or observed by MICA or one of its Subsidiaries
and, with respect to any breach of any condition, covenant, duty or obligation,
and such breach shall not have been remedied to GE's satisfaction within ten
(10) days after GE has delivered notice of such breach to MICA;
(C) Any event under any agreement to which MICA or one of its
Subsidiaries is a party shall occur, which event (i) if based on the failure to
pay any amount (whether of principal, interest, or otherwise) as and when due,
(x) has caused any Person to demand payment of any part of MICA's Indebtedness
in excess of One Hundred Thousand Dollars ($100,000) before such Indebtedness
would otherwise be due, or (y) would deprive MICA or any of its Subsidiaries of
any rights to the Collateral, or (ii) if based on any other failure, event or
condition, is the basis of any notice to MICA accelerating payment of such
Indebtedness or enforcing rights in such Collateral, in any case, resulting in a
Material Adverse Effect;
(D) Any representation or warranty contained in this Agreement, any
Scheduled Document or any statement, report, financial statement, or certificate
made or delivered by MICA or any of its officers, employees, or agents to GE
shall be untrue, incorrect, or incomplete in any material respect, or shall be
misleading in any material respect, in each case, as of the time when made;
(E) The Security Agreement after delivery thereof shall for any
reason, other than any action taken by GE and except to the extent permitted by
the terms thereof, cease to create a valid and perfected Lien on, or security
interest in, any of the Collateral purported to be covered thereby as required
by the Security Agreement;
(F) The Collateral, or any portion of it, shall be attached, seized,
levied upon, or subjected to a judgment Lien, execution Lien, writ or distress
warrant which exceeds Fifty Thousand Dollars ($50,000) in value and which is not
released or bonded off by MICA before it may be executed upon, or the
Collateral, or any portion of it, shall come within the possession of any
receiver, trustee, custodian or assignee for the benefit of creditors of MICA or
any of its Subsidiaries for a continuous period of forty-five (45) consecutive
days, and the same shall not be released or otherwise cured to the satisfaction
of GE within ten (10) days thereafter;
(G) (i) MICA or any of its Subsidiaries shall (a) commence a
voluntary case or involuntary case under the Bankruptcy Code, as now constituted
or hereafter amended, or any other applicable federal or state bankruptcy,
insolvency, or similar law; (b) apply for or consent to the appointment of a
receiver, liquidator, assignee, trustee, custodian, sequestrator, agent, or
other similar official for MICA or any of its Subsidiaries for any material part
of MICA's or any of its Subsidiaries' respective assets, and any such
application or proceeding shall not be dismissed or stayed within the next sixty
(60) consecutive days; (c) make any assignment for the benefit of creditors;
(d) commence any case or proceeding for dissolution, liquidation, or
termination; (e) have concealed, removed, or permitted to be concealed or
removed, any part of its Property, with intent to hinder, delay, or defraud its
creditors or any of them, or made or suffered a transfer of any of its Property
or the incurring of an obligation which may be fraudulent under any bankruptcy,
fraudulent conveyance or other similar law; (f) admit in writing it inability to
pay, or generally not be paying, its debts as they become due; or (g) take any
corporate action for the purposes of effecting any of the foregoing; or
(ii) A case or other proceedings shall be commenced involuntarily
against any of MICA or any of its Subsidiaries in any court of competent
jurisdiction seeking (a) relief under the federal bankruptcy laws (as now or
hereafter in effect) or under any other laws, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding up or adjustment of debts, or
(b) the appointment of a trustee, receiver, custodian, liquidator or the like of
any of MICA, or any of its Subsidiaries, or of all or any substantial part of
the assets, domestic or foreign, of any of MICA or any of its Subsidiaries and
such case or proceeding shall continue undismissed or unstayed for a period of
forty-five (45) consecutive calendar days, or an order granting the relief
requested in such case or proceeding against any of MICA or any of its
Subsidiaries (including, but not limited to, an order for relief under such
federal bankruptcy laws) shall be entered.
(H) A notice of Lien, levy, or assessment with respect to all or any
material portion of assets of MICA and its Subsidiaries, taken as a whole, shall
be filed of record by the United States, or any department, agency, or
instrumentality thereof, or by the Pension Benefit Guaranty Corporation or any
Person succeeding to its functions under ERISA or by any state, county,
municipal, or other governmental agency; and
(I) MICA shall not be Solvent or shall cease to conduct its business
substantially as now conducted, or shall be enjoined, restrained, or in any way
prevented by court order from conducting all or any material part of its
business affairs for a period of time in excess of thirty (30) consecutive days.
7.2 Remedies. Upon the occurrence of an Event of Default, GE shall have
the following rights and remedies:
(A) GE shall have the right to declare all or any portion of the
Liabilities immediately due and payable, whereupon all or any portion of the
Liabilities, as appropriate, shall become due and payable without presentment,
demand, protest or further notice of any kind, all of which are expressly waived
by MICA and its Subsidiaries.
(B) GE and its agents and representatives shall have the right to
enter upon the premises of MICA, and MICA shall use reasonable efforts to cause
GE and its agents and representatives to have the right to enter upon the
premises of any other place or places where Collateral is located and kept
through self-help and without judicial process without first obtaining a final
judgment or giving MICA notice and opportunity for a hearing on the validity of
GE's claim and without any obligation to pay rent to MICA or MICA's lessee.
(C) GE and its agents and representatives shall have the right to
remove the Collateral to the premises of GE or any agent of GE, for such time as
GE may desire, in order to collect or dispose of Collateral.
(D) In addition to all of its other rights and remedies under this
Agreement and applicable law, GE shall have all of the rights and remedies of a
secured party under the UCC of the state in which such rights and remedies are
asserted, all of which rights and remedies shall be cumulative and none
exclusive, to the fullest extent permitted by law.
(E) Until GE is able to effect a sale, lease, or other disposition of
the Collateral, GE and its Affiliates shall have the right to use or operate the
Collateral, or any part thereof, to the extent that GE deems appropriate for the
purpose of preserving the Collateral or its value or for any other purpose
deemed appropriate by GE. GE shall have no obligation to MICA to maintain or
preserve the rights of MICA as against third parties with respect to the
Collateral while the Collateral is in the possession of GE. GE may, if it so
elects, seek the appointment of a receiver or keeper to take possession of the
Collateral and to enforce any of GE's remedies with respect to such appointment
without prior notice or hearing. GE and its Affiliates and agents shall act in
a commercially reasonable manner in enforcing their respective remedies pursuant
to this Section 7.2(E). The foregoing remedy set forth in this Section 7.2(E)
is subject to the rights of Harris Bank pursuant to the Harris Documents.
Accordingly, GE shall take no action pursuant to this Section 7.2(E) in a manner
inconsistent with Harris Bank's rights pursuant to the Harris Documents as in
effect on the date hereof without Harris Bank's prior written consent.
(F) GE shall have the right to sell, lease, or otherwise dispose of
all or any Collateral in its then existing condition, or after any further
assembly, manufacturing, or processing thereof, at public or private sale or
sales, with such notice as may be required by law, in lots or in bulk, for cash
or on credit, all as GE, acting in a commercially reasonable manner, may deem
advisable and as permitted by applicable law. Such sales may be adjourned and
continued from time to time with or without notice. GE and its agents and
representatives shall have the right to conduct such sales on MICA's premises or
elsewhere and shall have the right to use MICA's premises, and MICA shall use
reasonable efforts to cause any lessee of the Collateral to permit GE and its
agents and representatives to conduct sales on lessee's premises and use such
lessee's premises, without charge for such sales for such time as GE deems
necessary or advisable. The rights of MICA and its Subsidiaries under all
licenses and certificates of need, to the extent transferable, and all franchise
agreements shall inure to GE's benefit. GE may purchase all or any part of the
Collateral at public or, if permitted by law, private sale and, in lieu of
actual payment of such purchase price, may set off the amount of such price
against the Liabilities. Except as otherwise provided by law, the proceeds
realized from the sale of any Collateral may be applied by GE first to the
reasonable costs, expenses, and attorneys' fees and expenses incurred by GE for
collection and for acquisition, completion, protection, removal, storage, sale,
and delivery of Collateral, and then to any principal and interest due on the
Liabilities, as GE, in its sole discretion, may elect. If any deficiency shall
exist after the application of such proceeds, MICA shall remain liable to GE
therefor. GE and its Subsidiaries and agents shall act in a commercially
reasonable manner in enforcing its remedies pursuant to this Section 7.2(F).
7.3 Right of Set-Off. Upon the occurrence and during the continuance of
any Event of Default, GE is hereby authorized at any time and from time to time,
to the fullest extent permitted by law, upon three (3) Business Days prior
written notice to MICA, to set-off, appropriate and apply any and all funds in
the possession of GE and other Indebtedness at any time owing by GE to or for
the credit or the account of MICA, against any and all of the Liabilities of
MICA now or hereafter existing that are then due and payable, whether by
maturity or acceleration. The rights of GE under this Section 7.3 are in
addition to any other rights and remedies (including, without limitation, other
rights of set-off) which GE may have.
7.4 Appointment of GE as MICA's Lawful Attorney. MICA hereby irrevocably
designates, makes, constitutes, and appoints GE and all Persons designated by GE
as its true and lawful agent and attorney-in-fact upon and after the occurrence
of an Event of Default for the purposes set forth in this Section 7.4.
Accordingly, upon and after the occurrence of an Event of Default, GE or GE's
agent designated by GE for purposes of this Section 7.4 may, without notice to
MICA, and at such time or times as GE or said agent in its sole discretion may
determine, in the name of MICA, any of its Subsidiaries or GE: (i) take control,
in any manner, of any item of payment or proceeds of Collateral; (ii) prepare,
file, and sign MICA's or any its Subsidiaries name on any proof of claim or
similar document in any bankruptcy, insolvency, reorganization, or similar case
against any Person indebted to MICA or any of its Subsidiaries; (iii) do all
acts and things necessary, in GE's sole discretion, to fulfill MICA's
obligations under this Agreement; (iv) endorse the name of MICA or any of its
Subsidiaries upon any of the items of payment or proceeds and deposit the same
to the account of GE on account of Liabilities; (v) endorse the name of MICA or
any of its Subsidiaries upon any chattel paper, document, instrument, invoice,
freight bill, bill of lading, or similar document or agreement relating to
Collateral; and (vi) use the information recorded on or contained in any data
processing equipment and computer hardware and software relating to Collateral
to which MICA or any of its Subsidiaries has access. GE shall act (i) in a
commercially reasonable manner when exercising its rights pursuant to this
Section 7.4, and (ii) only as necessary in the reasonable judgment of GE to
protect its rights under the Scheduled Documents and to the Collateral. GE's
rights pursuant to this Section 7.4 are subject to the rights of Harris Bank
pursuant to the Harris Documents. Accordingly, GE shall not take any action
pursuant to this Section 7.4 in a manner inconsistent with Harris Bank's rights
pursuant to the Harris Documents as in effect on the date hereof without Harris
Bank's prior written consent.
8. MISCELLANEOUS.
8.1 Modification of Agreement; Sale of Interest. This Agreement may not
be modified, altered, or amended except by an agreement in writing signed by
MICA and GE. MICA may not sell, assign, or transfer, by operation of law or
otherwise, this Agreement or any of MICA's rights, title, interests, remedies,
powers, or duties hereunder or thereunder without the prior written consent of
GE, which shall not be unreasonably withheld. Any sale, assignment, or transfer
not consented to by GE shall be void and of no effect. MICA hereby consents to
GE's participation, sale, assignment, transfer, or other disposition of this
Agreement or of any of GE's rights, title, interests, remedies, powers, or
duties hereunder.
8.2 Expenses. Notwithstanding the provisions of this Section 8.2 set
forth below, each party to this Agreement shall pay its own costs and expenses,
including the disbursements and fees of their respective attorneys, accountants
and advisors, incidental to (i) the preparation and negotiation of this
Agreement and the Scheduled Documents and (ii) the closing of the transactions
contemplated by this Agreement.
Except as specifically set forth above, if, upon or after the
occurrence or existence of an Event of Default, GE employs counsel for advice or
other representation or incurs other professional costs and expenses in
connection with:
(A) any litigation, contest, dispute, suit, case, proceeding, or
action (whether instituted by GE, MICA, or any other Person) in any way relating
to Collateral, this Agreement, or MICA's affairs, including any litigation,
contest, dispute, suit, case, proceeding or action, and any appeal or review
thereof, in connection with a case commenced by or against MICA or one of its
Subsidiaries under the Bankruptcy Code or any other applicable federal or state
bankruptcy, insolvency, or similar law;
(B) any attempt to enforce any rights of GE against MICA, any other
Person that may be or become obligated to GE by virtue of this Agreement,
including any attempt to enforce such rights in connection with a case commenced
by or against any of the foregoing under the Bankruptcy Code or any other
applicable federal or state bankruptcy, insolvency or similar law; and/or
(C) the protection, collection, sale, liquidation, or other
disposition of Collateral;
then, in any such event, the professional fees arising from such services, and
all expenses, costs, charges, and other fees incurred by GE arising in
connection with or relating to any of the events or actions described in this
Section 8.2 shall be payable by MICA to GE on demand and shall constitute
Liabilities secured by the Collateral.
Without limiting the generality of the foregoing, the expenses,
costs, charges, and fees described above in this Section 8.2 may include
attorneys' fees, accountants' fees, appraisers' fees and any other professional
costs and expenses; stamp and other taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing and recording of the
Scheduled Documents; costs and expenses of UCC and Lien searches and reports;
court costs and expenses, photocopying and duplicating expenses; court reporter
fees, costs, and expenses; long distance telephone charges; air express and
other delivery charges; telegram and telex charges; secretarial overtime
charges; expenses for travel, lodging and food paid or incurred in connection
with the performance of such professional services; sales tax in connection with
the sale of equipment by MICA and its Subsidiaries to GE as provided in
Subsection 2.2 hereof. MICA agrees to save GE harmless from and against any and
all liabilities with respect to or resulting from any delay in paying or
omission to pay any such professional costs, expenses, fees and taxes.
8.3 Waivers by GE; Cumulative Remedies. GE's failure, at any time or
times hereafter, to require strict performance by MICA of any provision of this
Agreement, shall not waive, affect, or diminish any right of GE thereafter to
demand strict compliance and performance therewith. Any suspension or waiver by
GE of an Event of Default under this Agreement shall not suspend, waive, or
affect any other Event of Default by MICA under this Agreement whether the same
is prior or subsequent thereto and whether of the same or of a different type.
None of the undertakings, agreements, warranties, covenants, and representations
of MICA contained in this Agreement nor any Event of Default by MICA under this
Agreement shall be deemed to have been suspended or waived by GE unless such
suspension or waiver is in a writing signed by GE which designates the specific
suspension or waiver. The rights and remedies hereunder are cumulative and may
be exercised singly or concurrently, and are not exclusive of any rights and
remedies provided by law or which GE would otherwise have.
8.4 Waivers by MICA. Except as otherwise provided in this Agreement, MICA
waives: (i) presentment, demand, and protest and notice of presentment, protest,
default, non-payment, maturity, release, compromise, settlement, extension, or
renewal of any or all commercial paper, accounts, contract rights, documents,
instruments, chattel paper, and guaranties at any time held by GE under or
pursuant to which MICA may in any way be liable, and MICA hereby ratifies and
confirms whatever GE may do in this regard; (ii) notice prior to taking
possession or control of the Collateral or, so long as GE remains a party to
this Agreement, any bond or security that might be required by any court prior
to allowing GE to exercise any of GE's remedies; and (iii) the benefit of all
valuation, appraisement, and exemption laws. If and to the extent that any
obligation of MICA to GE shall be considered an obligation of guaranty or
suretyship, then the following waivers shall apply:
(A) MICA agrees that no election to proceed in one form of action or
against any party or on any obligation shall constitute a waiver of GE's right
to proceed in any other form of action for a deficiency, except to the extent GE
realizes payment by such action, notwithstanding the effect of such action upon
MICA's rights of subrogation, reimbursement, or indemnity, if any, against any
Person; and
(B) MICA agrees that GE shall be under no obligation and expressly
waives the right to require GE: (i) to marshall any assets in favor of MICA,
(ii) to proceed first against any guarantor or any Property of guarantor or
against any collateral, (iii) to enforce first any other guaranty obligations
with respect to, or security for, the Liabilities, or (iv) to pursue any other
remedy in GE's power that MICA may or may not be able to pursue itself and that
may lighten MICA's burden, any right to which MICA hereby expressly waives.
8.5 Further Assurances. In addition to the acts recited herein and
contemplated to be performed, executed and/or delivered by MICA, MICA hereby
agrees, at any time, and from time to time, to perform, execute and/or deliver
to GE upon request, in form and substance acceptable to GE, any and all such
further acts, additional instruments, or further assurances as may be reasonably
necessary or proper to (a) promptly implement the intent of the parties under
this Agreement, (b) promptly correct any defect, error or omission which may be
discovered in this Agreement or any Scheduled Document, and execute any and all
additional documents as may be requested by GE to correct such defect, error or
omission, (c) assure GE a valid Lien and security interest under the Security
Agreement on the Collateral referenced in the Security Agreement in accordance
with the priorities set forth therein, (d) create, perfect, preserve, maintain
and protect the Liens and security interests created or intended to be created
pursuant to the Security Agreement, and (e) provide the rights and remedies to
GE granted or provided for by this Agreement. MICA shall pay the costs of any
recording or filing of any such documents if required.
8.6 Severability. Wherever possible, each provision of this Agreement
shall be interpreted in a manner as to be effective and valid under applicable
law. If any provision of this Agreement shall be held to be prohibited by or
invalid under applicable law in any jurisdiction, such provision, as to such
jurisdiction, shall be ineffective only to the extent of such provision and the
remaining provisions of this Agreement shall remain unaffected and in full force
and effect, and such prohibition and invalidity in such jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
8.7 Parties. This Agreement shall be binding upon and shall inure to the
benefit of the respective successors and assigns of MICA and GE including any
trustee or interim trustee of MICA appointed pursuant to Bankruptcy Code section
1104 or sections 701 and 702. This provision, however, shall not be deemed to
modify Section 8.1.
8.8 Conflict of Terms. The provisions of any other related agreement and
any schedule or exhibit thereto or to this Agreement are incorporated in this
Agreement as if set forth in full by this reference. Except as otherwise
provided in this Agreement by specific reference to the applicable provision of
this Agreement, if any provision contained in this Agreement conflicts or is
inconsistent with any provision in any other related agreement, the provision
contained in this Agreement shall govern and control.
8.9 Governing Law; Consent to Jurisdiction and Venue. Except as otherwise
expressly provided in any other related agreements in all respects, including
all matters of construction, validity and performance, this Agreement and the
Liabilities arising hereunder shall be governed by, and construed and enforced
in accordance with, the laws of the State of California 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. MICA CONSENTS TO PERSONAL JURISDICTION, WAIVES ANY OBJECTION AS TO
JURISDICTION OR VENUE, AND AGREES NOT TO ASSERT ANY DEFENSE BASED ON LACK OF
JURISDICTION OR VENUE, IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA.
Service of process on MICA or GE in any action arising out of or relating to any
Agreement contemplated herein shall be effective if mailed to such party at the
address listed in Section 8.11. Nothing herein shall preclude GE or MICA from
bringing suit or taking other legal action in any other jurisdiction.
8.10 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 PARTIES WISH APPLICABLE STATE AND
FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES 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 PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT, OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER
THIS AGREEMENT OR ANY OTHER AGREEMENT.
8.11 Notice. Except as otherwise provided herein, whenever it is provided
herein that any notice, demand, request, consent, approval, declaration or other
communication shall or may be given to or served upon any of the parties by
another, or whenever any of the parties desires to give or serve upon another
any communication with respect to this Agreement, each such notice, demand,
request, consent, approval, declaration or other communication shall be in
writing and shall be delivered (i) in person with receipt acknowledged, or (ii)
by facsimile transmission, with receipt electronically confirmed during normal
business hours of recipient, and with confirmation by mailing of, no later than
one (1) Business Day following such transmission, of a copy of such facsimile,
by registered or certified mail, return receipt requested, postage prepaid or by
overnight courier, (iii) by registered or certified mail, return receipt
requested, postage prepaid or by overnight courier, or (iv) by Federal Express
or similar reliable overnight delivery service, addressed as follows:
(A) If to GE, at:
General Electric Company, acting through
GE Medical Systems
North 14, West 23833
Stone Ridge Drive, Suite 300
Waukesha, Wisconsin 53188
Attention: Investment Manager
Facsimile: (414) 548-5058
and
General Electric Company, acting through
GE Medical Systems
North 14, West 23833
Stone Ridge Drive, Suite 300
Waukesha, Wisconsin 53188
Attention: Finance Manager
Facsimile: (414) 548-5058
with a copy to:
McDermott, Will & Emery
2049 Century Park East, 34th Floor
Los Angeles, California 90067
Attention: Ira J. Rappeport, Esq.
Facsimile: (310) 277-4730
(B) If to MICA, at:
Medical Imaging Centers of America, Inc.
9444 Farnham, Suite 100
San Diego, California 92123
Attention: Chief Executive Officer
Facsimile: (619) 560-4575
or to such other addresses or facsimile transmission number as any party may
designate for itself by like notice. 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 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, the next Business Day after deposit with Federal Express or three (3)
Business Days after deposit in the United States mail. Failure or delay in
delivering copies of any notice, demand, request, consent, approval, declaration
or other communication to the Persons designated above to receive copies shall
in no way adversely affect the effectiveness of such notice, demand, request,
consent, approval, declaration or other communication.
8.12 Indemnification.
(A) MICA. In addition to any other amounts payable by MICA under
this Agreement and the Note, MICA hereby agrees to protect, indemnify, pay and
hold harmless GE and its directors, officers and employees from and against any
and all claims, demands, liabilities, damages, losses, costs, charges and
expenses (including reasonable fees and expenses of counsel) (i) that GE may
incur or be subject to as a consequence, directly or indirectly, of (a) issuance
of the financial accommodations described in this Agreement, (b) any breach by
MICA of any warranty, covenant, term or condition in, or the occurrence of any
Event of Default under, this Agreement or any Scheduled Document, including all
reasonable fees or expenses resulting from the settlement or defense of any
claims or liabilities arising as a result of any such breach or default, and
(c) involvement in any legal suit, investigation, proceeding, inquiry or action
as to which GE is involved as a consequence, directly or indirectly, of
financial accommodations described in this Agreement, the holding or owning of
any Collateral by GE, GE's execution of this Agreement and any Scheduled
Document to which it is a party or any other event or transaction contemplated
by any of the foregoing, except for any claims, demands, liabilities, damages,
losses, charges and expenses which are caused by GE's gross negligence or
willful misconduct or other activities of GE described in Subsection 8.12(B)
hereof and (ii) that are related to any claims, actions or proceedings which may
be asserted against GE in connection with the transactions contemplated by this
Agreement. The obligations of MICA under this Section 8.12 shall survive the
termination of this Agreement. In furtherance and not in limitation hereof, GE
may accept documents that appear on their face to be in order, without
responsibility for further investigation, except if GE has received any notice
or information to the contrary.
(B) GE. GE hereby agrees to protect, indemnify, pay and hold
harmless MICA and its directors, officers and employees from and against any and
all claims, demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable fees and expenses of counsel) that MICA may incur or be
subject to as a consequence, directly or indirectly, of (i) GE's gross
negligence or willful misconduct; (ii) any breach by GE of any warranty,
covenant, term or condition, or the occurrence of any default by GE under this
Agreement or any Scheduled Document, including all reasonable fees or expenses
resulting from the settlement or defense of any claims or liabilities arising as
a result of any such breach or default.
8.13 Section Titles and Table of Contents. The section titles and the
Table of Contents contained in this Agreement are merely for convenience and
shall be without substantive meaning or content, and are not a part of the
Agreement between the parties hereto.
8.14 Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be an original, all of which taken together
shall be deemed to constitute one (1) and the same agreement.
8.15 Successors and Assigns. All of the terms and provisions of this
Agreement and the Scheduled Documents shall be binding upon and shall inure to
the benefit of and be enforceable by the respective successors and assigns of
the parties hereto. GE is hereby specifically authorized to assign or sell any
or all of its rights and obligations under this Agreement to any party without
the prior written consent of MICA.
8.16 Limitation of Liability. Notwithstanding any other provision herein
to the contrary, to the fullest extent permitted by applicable law, neither MICA
nor GE shall be liable to the other party or to the other party's Affiliates or
agents, for any incidental or consequential damages of any kind to the other
party in connection with the Scheduled Documents and transactions contemplated
by this Agreement.
8.17 Integration. This Agreement, together with the Scheduled Documents,
comprises the complete and integrated agreement of the parties on the subject
matter hereof and supersedes all prior agreements, written or oral, on the
subject matter hereof, including but not limited to, that certain commitment
letter dated April 2, 1993 from GE Medical Systems to MICA. Each Scheduled
Document and this Agreement was drafted with the joint participation of the
respective parties thereto and shall be construed neither against nor in favor
of any party, but rather in accordance with the fair meaning thereof.
8.18 Confidentiality and Publicity. The parties hereto shall hold in
confidence the information contained in the Scheduled Documents and all
information related to the transactions contemplated by this Agreement, which is
not otherwise known to the public, shall be held by each party hereto as
confidential and proprietary information and shall not be disclosed to third
persons without the prior written consent of the other party. Accordingly, GE
and MICA shall not, and shall not permit any of their respective Affiliates to,
discuss with, or provide nonpublic information to, any third party concerning
this Agreement or the Scheduled Documents, except: (i) as required in
governmental filings or judicial, administrative or arbitration proceedings, or
(ii) pursuant to public announcements made with the prior written approval of GE
and MICA, and (iii) as required by law. GE shall have the right to review and
approve, which approval may be denied in GE's sole discretion, any written
characterization of this Agreement, and any transaction contemplated hereby
except GE shall not have the right to review, but shall have the right to
approve, characterizations included in governmental filings or judicial,
administrative or arbitration proceedings.
8.19 Closing. The delivery of documents and instruments on the Closing
Date as contemplated hereby shall take place at 10:00 a.m. at the offices of
GE's counsel located at 2049 Century Park East, Suite 3400, Los Angeles,
California.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and
year first specified above.
GENERAL ELECTRIC COMPANY, a New York
corporation, acting through
GE Medical Systems
By: _____________________________
Its: ________________________
MEDICAL IMAGING CENTERS OF AMERICA, INC., a
California corporation
By: _____________________________
Its: ________________________
AGREEMENT
BY AND BETWEEN
GENERAL ELECTRIC COMPANY,
A NEW YORK CORPORATION,
ACTING THROUGH GE MEDICAL SYSTEMS
AND
MEDICAL IMAGING CENTERS OF AMERICA, INC.,
A CALIFORNIA CORPORATION
TABLE OF CONTENTS
Page
1. GENERAL DEFINITIONS AND RULES OF CONSTRUCTION . . . . . . . . . . 2
1.1 Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Bankruptcy Code . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Bill of Sale . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Business Day . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Closing Date . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 Collateral . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.7 Default . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.8 Disposition . . . . . . . . . . . . . . . . . . . . . . . . 3
1.9 Distributions . . . . . . . . . . . . . . . . . . . . . . . 3
1.10 Event of Default . . . . . . . . . . . . . . . . . . . . . . 3
1.11 Financing Statements . . . . . . . . . . . . . . . . . . . . 4
1.12 GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.12A Harris Bank . . . . . . . . . . . . . . . . . . . . . . . . 4
1.12B Harris Documents . . . . . . . . . . . . . . . . . . . . . 4
1.13 Hazardous Materials . . . . . . . . . . . . . . . . . . . . 4
1.14 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . 5
1.15 Installment Agreements . . . . . . . . . . . . . . . . . . . 5
1.15A Installment Sale Termination Agreements . . . . . . . . . . 5
1.16 IRC . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.17 Lease Termination Agreements . . . . . . . . . . . . . . . . 6
1.18 Liabilities or Liability . . . . . . . . . . . . . . . . . . 6
1.19 Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.20 Material Adverse Effect . . . . . . . . . . . . . . . . . . 7
1.21 MaxiService Agreements . . . . . . . . . . . . . . . . . . . 7
1.22 MICA Imaging . . . . . . . . . . . . . . . . . . . . . . . . 7
1.23 1992 Note . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.24 Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.25 Person . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.26 Property . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.27 Release and Settlement Agreement . . . . . . . . . . . . . . 8
1.28 Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.29 Sale-Leaseback Equipment . . . . . . . . . . . . . . . . . . 8
1.30 Scheduled Documents . . . . . . . . . . . . . . . . . . . . 8
1.31 Security Agreement . . . . . . . . . . . . . . . . . . . . . 8
1.32 Solvent . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.33 Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.34 Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.35 Supplemental Documentation . . . . . . . . . . . . . . . . . 9
1.36 Termination Date . . . . . . . . . . . . . . . . . . . . . . 9
1.37 UCC . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.38 Warrant . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.39 Other Terms . . . . . . . . . . . . . . . . . . . . . . . . 10
1.40 Rules of Construction . . . . . . . . . . . . . . . . . . . 10
Page
2. RESTRUCTURING OF OBLIGATIONS . . . . . . . . . . . . . . . . . . 11
2.1 Termination or Assignment of Equipment Leases . . . . . . . 11
2.2 Sale-Leaseback . . . . . . . . . . . . . . . . . . . . . . . 11
2.3 Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.4 Warrant . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.5 Security Interest . . . . . . . . . . . . . . . . . . . . . 13
2.6 One Obligation . . . . . . . . . . . . . . . . . . . . . . . 13
2.7 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.8 Application of Payments and Collections . . . . . . . . . . 14
3. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . 14
3.1 Conditions Precedent of GE to Closing . . . . . . . . . . . 14
(A) Release and Settlement Agreement . . . . . . . . . . . 15
(B) Obligations . . . . . . . . . . . . . . . . . . . . . . 15
(C) Warranties True; Covenants Performed . . . . . . . . . 15
(D) MICA Consents, Approvals and Authorizations . . . . . . 15
(E) Signing of Instruments . . . . . . . . . . . . . . . . 15
(F) Unfavorable Action or Proceeding . . . . . . . . . . . 16
(G) Officer's Certificate . . . . . . . . . . . . . . . . . 16
(H) Certificate of Incumbency . . . . . . . . . . . . . . . 16
(I) Good Standing Certificates . . . . . . . . . . . . . . 17
(J) Default . . . . . . . . . . . . . . . . . . . . . . . . 17
(K) Debt Holder Concessions . . . . . . . . . . . . . . . . 17
(L) Automatic Drafting . . . . . . . . . . . . . . . . . . 17
(M) Exhibits and Schedules . . . . . . . . . . . . . . . . 17
(N) Harris Bank Consent . . . . . . . . . . . . . . . . . . 18
3.2 Conditions Precedent of MICA to Closing . . . . . . . . . . 18
4. WARRANTIES AND REPRESENTATIONS OF MICA . . . . . . . . . . . . . 18
4.1 Warranties and Representations . . . . . . . . . . . . . . . 18
(A) Existence and Qualification; Power;
Good Standing . . . . . . . . . . . . . . . . . . . . 18
(B) Authority; Binding Obligations . . . . . . . . . . . . 19
(C) Compliance with Laws/Agreements . . . . . . . . . . . . 20
(D) Absence of Defaults . . . . . . . . . . . . . . . . . . 21
(E) Licenses and Permits . . . . . . . . . . . . . . . . . 21
(F) Consents and Approvals . . . . . . . . . . . . . . . . 21
(G) Liabilities . . . . . . . . . . . . . . . . . . . . . . 21
(H) Title to Collateral; Location of Equipment . . . . . . 22
(I) Compliance with Laws . . . . . . . . . . . . . . . . . 22
(J) Environmental Matters . . . . . . . . . . . . . . . . . 22
(K) Insurance . . . . . . . . . . . . . . . . . . . . . . . 23
(L) Joint Ventures . . . . . . . . . . . . . . . . . . . . 23
(M) Subsidiaries and Affiliates . . . . . . . . . . . . . . 23
(N) Financial Statements . . . . . . . . . . . . . . . . . 24
Page
(O) Litigation or Claims . . . . . . . . . . . . . . . . . 24
(P) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 24
(Q) Brokers . . . . . . . . . . . . . . . . . . . . . . . . 26
(R) Transfer for Value . . . . . . . . . . . . . . . . . . 26
(S) No Untrue or Inaccurate Representations
or Warranties . . . . . . . . . . . . . . . . . . . . 26
4.2 Survival of Warranties and Representations . . . . . . . . . 26
5. COVENANTS AND CONTINUING AGREEMENTS . . . . . . . . . . . . . . . 27
5.1 Affirmative Covenants of MICA . . . . . . . . . . . . . . . 27
(A) Automatic Drafting . . . . . . . . . . . . . . . . . . 27
(B) Maintenance of Property . . . . . . . . . . . . . . . . 27
(C) Audit Rights . . . . . . . . . . . . . . . . . . . . . 27
(D) Compliance with Agreements . . . . . . . . . . . . . . 28
(E) Payment of Taxes . . . . . . . . . . . . . . . . . . . 28
(F) Insurance; Payment of Premiums . . . . . . . . . . . . 29
5.2 Negative Covenants of MICA . . . . . . . . . . . . . . . . . 29
(A) Future Subsidiaries . . . . . . . . . . . . . . . . . . 29
(B) Distributions . . . . . . . . . . . . . . . . . . . . . 29
(C) Capital Expenditures . . . . . . . . . . . . . . . . . 29
(D) Operating Leases . . . . . . . . . . . . . . . . . . . 30
(E) Indebtedness . . . . . . . . . . . . . . . . . . . . . 30
(F) Disposition of Property . . . . . . . . . . . . . . . . 31
5.3 Survival of Liabilities Upon Termination of Agreement . . . 31
5.4 Requests for GE's Consent . . . . . . . . . . . . . . . . . 31
6. INFORMATION AND REPORTING REQUIREMENTS . . . . . . . . . . . . . 32
6.1 Financial Statements . . . . . . . . . . . . . . . . . . . . 32
(A) Audited Year-End Financial Statements . . . . . . . . . 32
(B) Quarterly Financial Statements . . . . . . . . . . . . 33
(C) Monthly Financial Statements . . . . . . . . . . . . . . 33
(D) Officer's Certificate . . . . . . . . . . . . . . . . . 33
6.2 Public Documents . . . . . . . . . . . . . . . . . . . . . . . 34
6.3 Other Reports . . . . . . . . . . . . . . . . . . . . . . . 34
6.4 Certain Notices . . . . . . . . . . . . . . . . . . . . . . 34
Page
7. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT . . . . . . . . 36
7.1 Event of Default . . . . . . . . . . . . . . . . . . . . . . 36
7.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.3 Right of Set-Off . . . . . . . . . . . . . . . . . . . . . . 41
7.4 Appointment of GE as MICA's Lawful Attorney . . . . . . . . 42
8. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . 43
8.1 Modification of Agreement; Sale of Interest . . . . . . . . 43
8.2 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 43
8.3 Waivers by GE; Cumulative Remedies . . . . . . . . . . . . . 45
8.4 Waivers by MICA . . . . . . . . . . . . . . . . . . . . . . 45
8.5 Further Assurances . . . . . . . . . . . . . . . . . . . . . 46
8.6 Severability . . . . . . . . . . . . . . . . . . . . . . . . 47
8.7 Parties . . . . . . . . . . . . . . . . . . . . . . . . . . 47
8.8 Conflict of Terms . . . . . . . . . . . . . . . . . . . . . 48
8.9 Governing Law; Consent to Jurisdiction and Venue . . . . . . 48
8.10 Mutual Waiver of Jury Trial . . . . . . . . . . . . . . . . 48
8.11 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
8.12 Indemnification . . . . . . . . . . . . . . . . . . . . . . 51
(A) MICA . . . . . . . . . . . . . . . . . . . . . . . . . 51
(B) GE . . . . . . . . . . . . . . . . . . . . . . . . . . 52
8.13 Section Titles and Table of Contents . . . . . . . . . . . 52
8.14 Counterparts . . . . . . . . . . . . . . . . . . . . . . . 52
8.15 Successors and Assigns . . . . . . . . . . . . . . . . . . 52
8.16 Limitation of Liability . . . . . . . . . . . . . . . . . . 52
8.17 Integration . . . . . . . . . . . . . . . . . . . . . . . . 53
8.18 Confidentiality and Publicity . . . . . . . . . . . . . . . 53
8.19 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . 54
EXHIBITS
2.1 Equipment
2.2 Installment Sales Agreements
2.3 "Fee for Service" Service Agreements and Equipment
Leases
3.1(K) Debt Holder Concessions
3.1(L) Accounts Subject to Automatic Drafting
4.1(A) Corporate Information
4.1(F) Consents and Approvals
4.1(H) Liens
4.1(I) Compliance with Laws
4.1(K) Insurance
4.1(L) Joint Ventures
4.1(M) Subsidiaries and Affiliates
4.1(O) Litigation
4.1(P) Taxes
4.1(Q) Brokers
5.2(A) Future Subsidiaries
SCHEDULES
1.3 Bill of Sale
1.17 Lease Termination Agreements
1.31 Security Agreement
2.2(A) Installment Sales Termination Agreement
2.2(B) MaxiService Agreements
2.3 Promissory Note
2.4 Common Stock Warrant
3.1(A) Release and Settlement Agreement
3.1(G) Officer's Certificate
3.1(L) Authorization Agreement for Pre-Arranged Payments
Exhibit 2
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.
AMENDED AND RESTATED
COMMON STOCK PURCHASE WARRANT
800,000 Shares, Subject to Adjustment
May 27, 1993
THIS IS TO CERTIFY THAT GENERAL ELECTRIC COMPANY, a New York corporation
acting through GE Medical Systems, or registered assigns, is entitled, at any
one time on and after the Exercise Date and on or prior to the Expiration Date
(as hereinafter defined), to purchase from MEDICAL IMAGING CENTERS OF AMERICA,
INC., a California corporation (the "Company"), 800,000 shares of Common Stock
(as hereinafter defined and subject to adjustment as provided herein), of the
Company at a purchase price of $1.14 per share (subject to adjustment as
provided herein), all on the terms and conditions and pursuant to the provisions
hereinafter set forth. This instrument amends and restates a Common Stock
Purchase Warrant of identical tenor, except only as to an amendment to the
definition of the phrase "Expiration Date."
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.
"Closing Date" shall mean the date on which the closing occurs in the
Restructuring Agreement.
"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) the last sale price on such day as furnished by the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") or by
the National Quotation Bureau if not reported on NASDAQ, (ii) if neither such
corporation at the time is engaged in the business of reporting such prices, as
furnished by any similar firm then engaged in such business, or (iii) if there
is no such firm, as furnished by any member of the NASD selected mutually by the
Holder and the Company or, if they cannot agree upon such selection, as selected
by two such members of the NASD, one of which shall be selected by the Holder
and one of which shall be selected by the Company, (iv) if the Common Stock is
listed or admitted to trading on a stock exchange in the United States, 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 (v) 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 two (2) years following the Closing
Date; provided, however, that the Exercise Date shall be accelerated to any
earlier date upon which any of the following events occurs: (i) a tender offer
is commenced for all or part of the Company's Common Stock, (ii) the acquisition
or disposition of securities of the Company by a Person or group which would
cause such Person or group holding such securities, alone or together with such
Person's or group's affiliates, to increase their holdings above, or decrease
their holdings below, 25% of the Company's Fully Diluted Outstanding Common
Stock, (iii) the Company sells all or substantially all of its assets, or
(iv) the termination, repayment or prepayment in full of the loan under the
Restructuring Agreement.
"Exercise Period" shall mean the period during which this Warrant is
exercisable pursuant to Section 2.1.
"Expiration Date" shall mean the date five years following the Closing
Date.
"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 Holder(s) 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).
"Restructuring Agreement" shall mean that certain Agreement dated May 14,
1993, between the Company and General Electric Company, acting through GE
Medical Systems which provides for restructuring of obligations of the Company
and to which a form of this Warrant is attached as an exhibit.
"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% 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(s) 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 part of 800,000 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 9444 Farnham Street, Suite
100, San Diego, California 92123 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 (5) 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 and subject to
any burdens; 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 by operation of law. Subject to compliance
with Section 9 following said period of nontransferability, 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 Closing Date, 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 May 27, 1993, 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 said 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; Requests for Registration. 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 ten 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 law(s). 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
law(s). 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 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.
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 and/or Warrant Stock under this Section 9.3 shall become
effective only on and after the date 90 days prior to the Exercise Date and
shall expire on the Expiration Date. After receipt of a written request from
the holders of Warrants and/or Warrant Stock representing at least an aggregate
of fifty percent (50%) of the total of (i) all shares of Warrant Stock then
subject to issuance upon exercise of all Warrants and (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 ten 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 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 holders of the Registrable
Securities will not be subject to the hold-back restrictions of this
Section if the Company and the other holders of the Company's equity
securities have not complied with the provisions of subsection (b)
below.
The foregoing provisions shall not apply to any Holder if such
Holder is prevented by applicable statute or regulation from
entering any such agreement; provided, however, that any such Holder
shall undertake, in its request to participate in any such
underwritten offering, not to effect any public sale of such
applicable class of registrable securities unless it has provided 45
days prior written notice of such sale or distribution to the
underwriter or underwriters.
(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,
(i) 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. The rights of holders of Warrants and/or
Warrant Stock under this Section 9.4 shall become effective only on and after
the Exercise Date and shall expire on the Expiration Date. If the Company at
any time proposes to file on its behalf and/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, respectively) 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.
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, subject to the
next sentence, and shall use its best efforts to effect registration under the
Securities Act of such shares. 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, 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, 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; 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 Registration Statement; and
(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.
(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
covering the securities covered by 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
(a) all such expenses in connection with any amendment or supplement
to the Registration Statement or prospectus filed more than 180 days after
the effective date of such Registration Statement because any holder of
Warrant Stock has not effected the disposition of the securities requested
to be registered shall be paid by such holder; and
(b) 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 or (in the case of any registration pursuant
to Section 9.3) so furnished for such purposes by any underwriter. 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) 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 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.
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) 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.
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 of
the equitable considerations referred to in the immediately preceding paragraph.
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.
Notwithstanding any other provisions of this Warrant, the Company
shall not be liable in any case to the extent that any loss, claim, damage,
liability or expense arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission in any Registration
Statement or prospectus, if such untrue statement or alleged untrue statement,
omission or alleged omission is corrected in an amendment or supplement to the
Registration Statement and the Holder thereafter fails to deliver such
Registration Statement or prospectus as so amended or supplemented prior to or
concurrently with the sale of the securities covered by such Registration
Statement to the person asserting such loss, claim, damage, liability or expense
after the Company had furnished such Holder with a sufficient number of copies
of the same.
9.8 Termination of Restrictions. Notwithstanding the foregoing
provisions of Section 9, the restrictions imposed by this Section 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 NASDAQ or any securities exchange, 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 NASDAQ or 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 penultimate sentence of Sections 9.3 or 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 may 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
Value1 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.
9444 Farnham Street, Suite 100
San Diego, California 92123
(619) 560-0046
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 (3)
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 and/or ownership of any shares of Warrant Stock issued in consequence
thereof, 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, obligation, 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:
Name:
Title:
Attest:
Name:
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.
MEDICAL IMAGING CENTERS OF AMERICA, INC.
AMENDED AND RESTATED
COMMON STOCK PURCHASE WARRANT<PAGE>
May 27, 1993
TABLE OF CONTENTS
Page
1. DEFINITIONS................................. 1
2. EXERCISE OF WARRANT......................... 5
2.1 Manner of Exercise.................... 5
2.2 Payment of Taxes...................... 6
2.3 Fractional Shares..................... 7
2.4 Continued Validity.................... 7
3. TRANSFER, DIVISION AND COMBINATION.......... 7
3.1 Transfer.............................. 7
3.2 Division and Combination.............. 8
3.3 Expenses.............................. 8
3.4 Maintenance of Books.................. 8
4. ADJUSTMENTS................................. 8
4.1 Stock Dividends, Subdivisions,
Combinations and Reclassifications.... 8
4.2 Other Provisions Applicable to
Adjustments under this Section........ 9
5. NOTICES TO WARRANT HOLDERS.................. 10
5.1 Notice of Adjustments................. 10
5.2 Notice of Certain Corporate Action.... 10
6. NO IMPAIRMENT............................... 10
7. RESERVATION AND AUTHORIZATION OF COMMON
STOCK; REGISTRATION WITH OR APPROVAL OF
ANY GOVERNMENTAL AUTHORITY.................. 11
8. TAKING OF RECORD; STOCK AND WARRANT
TRANSFER BOOKS.............................. 11
9. RESTRICTIONS ON TRANSFERABILITY............. 12
9.1 Restrictive Legend.................... 12
9.2 Notice of Proposed Transfers;
Requests for Registration............ 13
9.3 Required Registration................. 14
9.4 Incidental Registration............... 16
9.5 Registration Procedures............... 17
9.6 Expenses; Limitations on Registration. 21
9.7 Indemnification....................... 22
9.8 Termination of Restrictions........... 24
9.9 Listing on Securities Exchange........ 25
9.10 Certain Limitations on Registration
Rights................................ 25
9.11 Selection of Managing Underwriters.... 26
Page
10. SUPPLYING INFORMATION....................... 26
11. LOSS OR MUTILATION.......................... 26
12. OFFICE OF THE COMPANY....................... 26
13. FINANCIAL AND BUSINESS INFORMATION.......... 27
13.1 Information............................ 27
13.2 Annual Information..................... 27
13.3 Filings................................ 28
14. APPRAISAL................................... 28
15. LIMITATION OF LIABILITY..................... 28
16. MISCELLANEOUS............................... 28
16.1 Nonwaiver and Expenses................ 28
16.2 Notice Generally...................... 29
16.3 Indemnification....................... 30
16.4 Remedies.............................. 30
16.5 Successors and Assigns................ 30
16.6 Amendment............................. 30
16.7 Severability.......................... 31
16.8 Headings.............................. 31
16.9 Governing Law; Service of Process..... 31
16.10 Mutual Waiver of Jury Trial........... 31<PAGE>
AGREEMENT AND AMENDMENT
THIS AGREEMENT AND AMENDMENT (the "Agreement") is entered into as of
January 16, 1996, between MEDICAL IMAGING CENTERS OF AMERICA, INC., a California
corporation ("MICA"), MICA IMAGING, INC., an Illinois corporation, MICA CAL I
INC., a California corporation, MICA CAL II INC., a California corporation, MICA
CAL III INC., a California corporation, MICA CAL IV INC., a California
corporation, MICA CAL VII INC., a California corporation, MICA CAL X, INC., a
California corporation, MICA FLO I INC., a California corporation, MICA OR I
INC., a California corporation, MICA PACIFIC, INC., a California corporation,
and AFFILIATED IMAGING NETWORK, INC., a California corporation (collectively,
the "MICA Subsidiaries" and referred to herein, together with MICA, as the "MICA
Obligors"), and GENERAL ELECTRIC COMPANY, a New York corporation acting through
GE Medical Systems ("GE Medical").
WHEREAS, GE Medical and MICA are parties to an Agreement, dated May 14,
1993 (the "Credit Agreement"), relating to, among other things, GE's provision
of equipment and services to MICA and the MICA Subsidiaries and pursuant to
which MICA executed and delivered to GE Medical a promissory note in the
principal amount of $7,442,616.38 (the "MICA Promissory Note"); and
WHEREAS, GE Medical and the MICA Obligors are parties to a Security
Agreement, dated as of May 27, 1993, pursuant to which the MICA Obligors have
granted to GE Medical certain liens and security interests; and
WHEREAS, the principal amount currently outstanding under the MICA
Promissory Note is approximately $2,700,000; and
WHEREAS, GE Medical owns a Common Stock Purchase Warrant (the "Warrant")
currently exercisable to purchase 160,000 shares of Common Stock of MICA
("Common Shares") at a price set forth in the Warrant; and
WHEREAS, MICA has proposed to GE Medical that GE Medical accept as payment
in full of the amounts currently outstanding under the MICA Promissory Note
(1) a cash payment by MICA to GE Medical of $1,425,000 and (2) application by
MICA of $912,000 of the principal amount outstanding under the MICA Promissory
Note to the exercise price payable by GE Medical in connection with the exercise
by GE Medical of its right to purchase 160,000 Common Shares under the Warrant;
and
WHEREAS, MICA has proposed that it issue to GE Medical, in connection with
such transaction, a Common Stock Purchase Warrant to purchase 60,000 Common
Shares; and
WHEREAS, GE Medical has agreed to such proposal of MICA on the terms and
conditions set forth herein;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. MICA Promissory Note. (a)(i) MICA hereby agrees that, no later than
three business days after the date of this Agreement, MICA shall make a cash
payment to GE Medical in the amount of $1,425,000 by wire transfer of
immediately available funds to an account designated by GE Medical. MICA hereby
authorizes GE Medical to initiate a debit entry for such payment from MICA's
account in lieu of such wire transfer payment.
(ii) MICA agrees that, no later than three business days after
the date of this Agreement, it will issue to GE Medical 160,000 Common Shares in
connection with the exercise by GE Medical of the Warrant. Such Common Shares
will be duly and validly issued and fully paid and nonassessable and not subject
to preemptive rights.
(b) GE Medical hereby agrees that its receipt from MICA of the cash
payment of $1,425,000 referred to in paragraph (a)(i) of this Section 1 and
160,000 Common Shares issued by MICA under the Warrant shall constitute payment
in full of all unpaid principal and accrued and unpaid interest under the MICA
Promissory Note. GE Medical agrees that, as soon as practicable after such
receipt, it shall cancel the Promissory Note held thereby and return such
Promissory Note to MICA.
2. Amendment of Existing Credit Documentation.
(a)(i) Credit Agreement Amendment. GE Medical and MICA agree that
the Credit Agreement is, effective as of the date hereof, hereby amended by
deleting from Section 1.36 thereof the phrase "under or in connection with the
Note" and substituting therefor the phrase ", including, without limitation, all
Liabilities of MICA or any Subsidiary to GE arising in connection with equipment
leases and services provided by GE to MICA or any such Subsidiary,".
(ii) Security Agreement Amendment. GE Medical and each of the
MICA Obligors agree that the Security Agreement is, effective as of the date
hereof, amended by deleting from Section 7(a) thereof the phrase "under the
Promissory Note" and substituting therefor the phrase ", including, without
limitation, all Obligations of MICA or any Subsidiary to GE arising in
connection with equipment leases and services provided by GE to MICA or any such
Subsidiary,".
(b)(i) On and after the date hereof, each reference in either of the
Credit Agreement or the Security Agreement to "this Agreement," "hereto" or
"hereof," or words of like import, and each reference in the Security Agreement
to the Credit Agreement and each reference in the Credit Agreement to the
Security Agreement, shall mean and be a reference to the Credit Agreement or the
Security Agreement, as the case may be, as amended hereby.
(ii) Except as specifically amended hereby, the Credit Agreement
and the Security Agreement shall remain in full force and effect and are hereby
ratified and confirmed.
3. Additional Warrant. MICA hereby agrees that, no later than three
business days after the date of this Agreement, MICA shall issue and deliver to
GE Medical a Common Stock Purchase Warrant (the "Additional Warrant"), in the
form attached hereto as Exhibit A, to purchase 60,000 fully paid and
nonassessable Common Shares, at an exercise price of $8.50 per Common Share,
which exercise price shall be adjusted as set forth in the Additional Warrant.
The Additional Warrant shall be executed on behalf of MICA by the president or
any executive officer of MICA under its corporate seal.
4. Representations and Warranties of MICA. (a) MICA hereby represents
and warrants to GE Medical that each of MICA Medical Technology Services, Inc.,
MICA CAL XI Inc., MICA KAN I Inc., MICA KAN II Inc., MICA OK I Inc. and MICA TX
I, Inc. (collectively, the "Dissolved MICA Subsidiaries") was a wholly-owned
subsidiary of MICA as of the execution and delivery thereby of the Security
Agreement as of May 27, 1993.
(b) MICA hereby represents and warrants to GE Medical that (i) each
of the Dissolved MICA Subsidiaries has been dissolved in accordance with the
laws of the State of Delaware or the State of California, as the case may be,
(ii) none of the Dissolved Subsidiaries is currently in existence and (iii) at
the time of the dissolution of each of the Dissolved MICA Subsidiaries, such
Dissolved MICA Subsidiary transferred all of its right, title and interest in
the Collateral (as such term is defined in the Security Agreement) held thereby
to MICA or one of the other MICA Subsidiaries.
5. Counterparts. This Agreement may be executed in counterparts, each of
which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
6. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first written above.
GENERAL ELECTRIC COMPANY,
acting through
GE Medical Systems
By:_________________________
Title:
MEDICAL IMAGING CENTERS
OF AMERICA, INC.
By:________________________
Title:
MICA IMAGING, INC.
By:__________________________
Title:
MICA CAL I INC.
By:__________________________
Title:
MICA CAL II INC.
By:__________________________
Title:
MICA CAL III INC.
By:__________________________
Title:
MICA CAL IV INC.
By:__________________________
Title:
MICA CAL VII INC.
By:__________________________
Title:
MICA CAL X, INC.
By:__________________________
Title:
MICA FLO I INC.
By:__________________________
Title:
MICA OR I INC.
By:__________________________
Title:
MICA PACIFIC, INC.
By:__________________________
Title:
AFFILIATED IMAGING
NETWORK, INC.
By:__________________________
Title:
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 9444 Farnham Street,
Suite 100, San Diego, California 92123 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.
9444 Farnham Street, Suite 100
San Diego, California 92123
(619) 560-0046
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
